Inequality today is worse than what the United States experienced during the Gilded Age at the end of the 19th century, says Joseph Stiglitz. “The wealthiest person in that era was Rockefeller. And his wealth really doesn’t compare to that of Elon Musk, Larry Ellison, Jeff Bezos, and some of the new billionaires,” explains the economist, who won the Nobel Prize in Economics in 2001, in a phone interview. “Their political influence under Donald Trump is also unprecedented, with Musk being the clearest example.”
For Stiglitz, 83, the sense of social responsibility shown by many Gilded Age magnates — who contributed to the public good by supporting the creation of libraries, universities, and research centers — stands in stark contrast to the libertarian ideology embraced today by so many figures in Silicon Valley. He describes this ideology as “an extreme version of ‘I did it on my own and leave me alone.’” “The utter degree of selfishness is mind-boggling, when of course they didn’t do it on their own, it was government research that led to the internet and led to much of the innovations from which they’re making their money,” he explains.
Question. Many people expected modern institutions to be better able than those of the 19th century to withstand pressure from economic power. Has that expectation proved wrong?
Answer. Our Congress in the late 19th century was fairly corrupt, but I’m quite sure there was never an onslaught on democracy such as that which is occurring under Trump and the oligarchs that are sustaining him. There are very worrisome dimensions, like the suppression of free speech that has occurred with Ellison taking over CBS and trying to take off the air very profitable programs like Stephen Colbert’s. This is something I don’t think we ever saw in the Gilded Age. I don’t know whether our institutions are stronger or weaker; what is clear is that they’re not strong enough.
Q. You are contributing to the creation of an International Panel on Inequality to improve information on wealth concentration. Is there a lack of information?
A. Just as reliable information from the Intergovernmental Panel on Climate Change lays the groundwork for more urgent, more-targeted, and better-designed policies, we want to achieve the same with the International Panel on Inequality. One number that has resonated from our report is the magnitude of the concentration of wealth, with only 1% of all the wealth created in the last quarter-century going to the bottom 50%. That’s a dramatic statistic that helps frame how bad things have gotten. Another statistic that we talk about is the trillions of dollars that will be passed on from one generation to the next. We will not only have an oligarchy, we will have an inherited plutocracy.
Q. Whenever taxes on corporations and the wealthy begin to be debated, exemptions quickly appear that risk neutralizing their redistributive and revenue‑raising power. How can that be prevented?
A. You’re absolutely right. The first thing is to be clear about the principle of taxes. And secondly, we have to be aware that the wealthy are going to try to put in loopholes. So these are not effective policies. We know that, and we have to guard against that. We’re advocating a global minimum wealth tax of 2%, which is both a fair and not complex tax. If you have $100 million, you should be earning at least 6% return. So if you’ve already paid 33% on the gains from that return, you won’t have to pay this tax, because that amount will be equivalent to the 2% we’re proposing as the minimum tax. And a 33% tax on their income on capital is lower than the tax that many higher-income people pay on wages.
Q. You know there will be resistance to any tax of this kind.
A. I was scandalized in some of the discussions I had when I was in France that so many wealthy people were willing to openly say that they were tax avoiders, that they didn’t want to pay even that 2% minimum tax. When it was discussed in the National Assembly, they put in all kinds of exemptions that made the tax not applicable to a very large fraction of the wealthy people. So it’s true, this is a constant battle, but we know the tricks. Because we have the experience of what’s happened in France, we know the ways that people will try to evade it with loopholes. We need to have a good discussion to close those loopholes.
Q. That may serve a redistributive purpose, but it won’t put an end to the political influence of billionaires…
A. True. To achieve that, we have to get money out of politics, particularly in the United States, where investments disguised as campaign contributions yield high returns for billionaires. Second, we can’t allow the wealthy alone to control the media. There have to be good public broadcasting systems and support for investigative reporting. Thirdly, both social media and artificial intelligence have to pay for the news and information they steal from legacy media. That would give a better revenue stream to the legacy media and result in a more diversified press. And finally, Europe needs to create its own media ecosystem: it can’t rely on X or Facebook. It has to have its own independent and partially public platforms so that people pay their taxes and receive all the information they need.
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