Joseph Stiglitz, 2001 Nobel Prize in Economics and served as Chief Economist of the World Bank from 1997-2000.
What do you think it is about the U.S. that makes it so hard to achieve corporate responsibility?
I think it’s basically a vicious cycle in which we’ve gotten ourselves, because the corporate executives control the corporations. The corporations have the right to give campaign contributions. So basically we have a system in which the corporate executives, the CEOs, are trying to make sure the legal system works not for the companies, not for the shareholders, not for the bondholders – but for themselves.
So it’s like theft, if you want to think about it that way.
These corporations are basically now working now for the CEOs and the executives and not for any of the other stakeholders in the corporation, let alone for our broader society.
You look at who won with the excessive risk-taking and shortsighted behavior of the banks. It wasn’t the shareholder or the bondholders. It certainly wasn’t American taxpayers. It wasn’t American workers. It wasn’t American homeowners. It was the CEOs, the executives. And they use all kinds of language that quite honestly is deceptive.
The top 2% of Americans receive 75% of all returns on wealth: interest, dividends, rent and capital gains.
There’s really no room left for illusions. We live in a gangster state, and our days of laughing at other countries are over. It’s our turn to get laughed at.
The prevailing central assertion of these theologians for many decades has been that an entity called the ‘Free Market’ efficiently allocates resources and maximizes prosperity, is ‘self-correcting’, i.e. it maintains itself in an ‘equilibrium state’ from which goodness flows, and it works best when government intervenes the least. Taxes and regulations can only damage its mystic perfection.
They make a large number of assumptions, all of which happen to be rather obviously false. They build an elaborate edifice of theory based on those assumptions. Then they forget that the assumptions are false and insist that reality corresponds to their theory, even though anyone can see that it does not.