By Aseem Shrivastava
Climate and Capitalism
August 30, 2008
Time was when writers lampooned economists for “knowing the price of everything but the value of nothing.” Today, they seem to be unaware even of the price of things!
(Original title: (Stiglitz and Sen: Profit and Pain”)
An economic transaction is a solved political problem. Economics has gained the title of queen of the social sciences by choosing solved political problems as its domain. — Abba Lerner
Nobel economist Joseph Stiglitz has recently expressed his views on the ongoing food crisis around the world. Given his pre-eminence in the profession and his vast experience as an advisor to governments, his views deserve to be scrutinized carefully.
The Stiglitz diagnosis
Stiglitz traces the problem of inflation in food and energy prices around the world to the policies that have been enacted in the US and elsewhere during the past few decades. He finds fault with the massive financial deregulation and generous tax cuts for the rich in the Anglo-Saxon world since the Thatcher-Reagan years, attributing to them rightly the “huge increase in inequalities in most countries,” the dramatic fall in household savings rate in the US, significant declines in employment prospects for most people everywhere and most worryingly, threats to nutrition standards even in the so-called developed world. A less flattering catalogue of global failures would be hard to summon.
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