This week we tip our hat to Nobel Prize-winning economist Joseph Stiglitz, who once helped calculate the true cost of the Iraq War, and more recently has been calling attention to the radical redistribution of wealth from middle- and working-class Americans to the richest among us.
Stiglitz writes in his new Vanity Fair article titled “Of the 1%, by the 1%, for the 1%” that, in terms of income inequality, the U.S. now ranks up there with Russia and Iran, while Europe has become the new land of opportunity. Thus he gives the lie to the time-honored myth of the American meritocracy, which seems to come in handy whenever the powerful elite want to justify their vastly disproportionate share of the nation’s wealth.
Stiglitz’s careful and forceful refutation of the so-called “marginal-productivity theory,” or the idea that higher incomes are somehow directly correlated with “higher productivity and a greater contribution to society,” as he puts it, deserves to be restated in full here:
It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.
These words may seem too harsh for Vanity Fair’s readership, but whatever compelled the editors that be to slip this piece into their glossy magazine between its society pages and Ralph Lauren ads, we’ll take it. Our own editor in chief, Robert Scheer, made Stiglitz’s exposé the centerpiece of his column last week, aptly titled “The Peasants Need Pitchforks.” We find the econo-whiz a worthy recipient of our top weekly honor for this sentence alone, not to mention the rest: “But one big part of the reason we have so much inequality is that the top 1 percent want it that way.” Boom.
Check out Stiglitz’s illuminating discussion about America’s growing economic rift on “Democracy Now!” here.