Stiglitz: Moral deprivation, all the apples in the barrel are rotten and capitalism is broken

when i read stiglitz' book, globalization and its discontents, in 2003, it opened my eyes... that was the first year i worked in international development and i was witnessing first-hand a lot of different dynamics that i was trying to make sense out of... sitting in a former communist country and watching the mad scramble to shift to a market economy would have simply been undecipherable chaos for me if i had not had stiglitz as a guide... i was left with a deep impression of a profoundly moral person of great intellect who was nonetheless gifted in making hugely complex forces understandable in ways that upheld what i had come to believe was basic common sense... i'm pleased to see him still out in front as a rational, moral force at a time when the quasi-religious ideology of capitalism is collapsing under its own weight...

this is an excerpt from a daily beast article quoting stiglitz from his latest book, from cairo to wall street: voices from the global spring...

If no one is accountable, the problem must lie in the economic system. This is the inevitable conclusion and the reason that the protesters are right to be indignant. Every barrel has its rotten apples, but the problem, as MIT Professor Susan Silbey has written, comes when the whole barrel is rotten.

Much of what has gone on can only be described by the words moral deprivation. Something wrong had happened to the moral compass of so many of the people working in the financial sector. When the norms of a society change in a way that so many have lost their moral compass—and the few whistle-blowers go unheeded—that says something significant about the society. The problem is not just the individuals who have lost their moral compass but society itself.

What the protests tell us is that there was outrage and that outrage gives hope. Americans have always had an idealistic streak, reflected both in the instruction in schools and in political rhetoric. Kids read the Declaration of Independence, “all men are created equal,” and they read the words literally, all men, white and black, and they believe them. They recite the Pledge of Allegiance, which promises “justice for all,” and they believe it.

[...]

The political system seems to be failing as much as the economic system, and in some ways, the two failures are intertwined. The system failed to prevent the crisis, it failed to remedy the crisis, it failed to check the growing inequality, it failed to protect those at the bottom, and it failed to prevent the corporate abuses. And while it was failing, the growing deficits suggested that these failures were likely to continue into the future.

Americans, Europeans, and people in other democracies around the world take great pride in their democratic institutions. But the protesters have called into question whether there is a real democracy. Real democracy is more than the right to vote once every two or four years. The choices have to be meaningful. The politicians have to listen to the voices of the citizens. However, increasingly, and especially in the United States, it seems that the political system is more akin to “one dollar one vote” than to “one person one vote.” Rather the correcting the market’s failures, the political system is reinforcing them.

[...]

[P]rotesters are asking for so little: for a chance to use their skills, for the right to decent work at decent pay, for a fairer economy and society. Their requests are not revolutionary but evolutionary. But at another level, they are asking for a great deal: for a democracy where people, not dollars, matter; and for a market economy that delivers on what it is supposed to do. The two demands are related: unfettered markets do not work well, as we have seen. For markets to work the way markets are supposed to work, there has to be appropriate government regulation. But for that to occur, we have to have a democracy that reflects the general interests, not the special interests. We may have the best government that money can buy, but that won’t be good enough.

i will put stiglitz' argument into my own words... i believe he's making a case for a return to the concept of the common good, a concept i believe has been under constant assault by the social darwinian mindset of our super-rich elites... we can't get back to it fast enough to suit me...

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