I have just finished reading The Price of Inequality, by Joseph Stiglitz (Nobel price in economics 2001). Despite the author being a "pundit" and someone who has advised to governments, hence could be accused of being part of "the problem", I found this book a compelling analysis of the failures of the new right wing economic theorists. Though not shying away from more technical analyses, the book also makes some points with utter clarity, while not overgeneralizing: "Taxing bad things (like pollution) is intrinsically more efficient than taxing good things (like work)" (my paraphrase). "Rents (things like government subsidies or tax breaks to particular industries) are inefficient and at the same time contrary to the principles of free-market capitalism itself" (again, my paraphrase). Clearly he sees the prevalence of rents (things like regressive taxes, military spending, unlimited campaign contributions, being motivated by power politics, and not defensible even if one accepts de-regulation -which he does not accept anyway.

The book is repetitive in places. On the other hand, there are many examples where the author explains with lucent and simple prose why bad ideas are bad and are hurting the economy, that it's beautiful, although at the same time very frustrating - isn't anyone in power reading this stuff?? For myself, I can only conclude that there is indeed a class war going on, on the part of the rich to shut everyone else out. It is well understood that owners benefit from high unemployment in the short term, giving them leverage to lower wages or other forms of compensation without losing productivity. In the long term of course this leads to societal breakdown if not outright revolution. But who takes the long term any more? Stiglitz may not be an outright socialist, but he makes it clear that he considers the purpose of the economy as being to benefit the greatest number of people, not to create the greatest amount of total wealth regardless of how that wealth is distributed.

One point that does bother me, as with other economists the author downplays or ignores the role of cheap energy as a driver of wealth production in the post-WWII world. When the US hit peak oil in the 1970s, world oil prices went up almost immediately as OPEC now had the economic leverage to raise those prices without the US keeping prices low with its own supply. Although higher oil prices raise profits, they also raise costs for just about everything we buy including food, clothing, housing etc. I have yet to see a hard-core economist explain how we can expand "wealth" distribution to the entire population, even with fairer tax codes, etc, in the face of higher intrinsic costs of production of all goods. The economists who do in fact address rising oil prices and coming oil shortages, seem to think on the whole that endless growth is impossible. If the human population keeps growing, but total wealth does not, then obviously people overall will get poorer, even if some ("capitalists" say) get richer.