Slate Money Extra: Live Q&A with Joseph Stiglitz

Podcast: Slate Money
Host: Felix Salmon
Guest: Joseph Stiglitz (Nobel laureate economist)
Date: April 30, 2019

Episode Overview

This special live episode features Felix Salmon in conversation with Nobel Prize-winning economist Joseph Stiglitz, held at a Barnes & Noble in New York. The discussion revolves around Stiglitz’s new book People, Power, and Profits, which he calls a manifesto for a “progressive capitalist” economic agenda for the Democratic Party entering the 2020 election cycle. Key topics include the concept of progressive capitalism, market power, labor rights, government intervention, inequality, the legacy of trade, and public policy proposals such as the job guarantee, universal basic income, student loan forgiveness, healthcare reform, and the Green New Deal.

Key Discussion Points and Insights

1. Progressive Capitalism: What Does It Mean?

[02:29 – 05:32]

• Stiglitz: Distinguishes “progressive capitalism” from both old-style socialism and laissez-faire capitalism. Progressive capitalism uses the market’s energy but shapes and tempers it with active government intervention to better serve society.
  • “Socialism as it was in the past was about the ownership of government, of the basic means of production...Nobody is talking about that.” [03:13]
• U.S. economic growth (rising GDP) hasn’t translated into gains for the majority: “The bottom 90%...has had almost stagnant income for more than three decades...real wages...at the bottom are the same today...as they were 60 years ago.” [03:30]
• Other countries have better harnessed markets and government together—the U.S. should do likewise.

2. Why Is a Radical Reworking Needed?

[05:32 – 09:43]

• Recent Democratic presidents’ incrementalism (“tweaking”) hasn't solved deep problems.
  • “Obama’s heart was in the right place, but he was too conservative...He actually told me at one point...‘I’m just too conservative to do that.’” [06:47]
• Problems include growing market concentration, arbitration clauses eroding access to public courts, and weakened worker bargaining power via globalization and legal frameworks.
  • “You actually have to give away your right to use the courts...Supreme Court keeps supporting the fact that you...signed away your rights to adjudication by public courts.” [07:36]

3. Globalization, De-Globalization, and Discontent

[09:43 – 11:42]

• Globalization put stress on U.S. workers; lack of industrial and labor market policies made things worse.
  • “Deglobalization done without active labor market policies...is going to have the same effect because...we will lose our competitiveness in many areas of manufacturing.” [10:42]
• Decoupling and protectionism could repeat these mistakes without proactive support for affected workers.

4. Breaking Up Big Tech & Market Power

[11:42 – 14:25]

• Stiglitz advocates breaking up firms like Facebook and forcing the spinoff of major subsidiaries, but notes even this may not address issues of natural monopolies in data (e.g., algorithms and network effects drive concentration).
  • “With social media...the problem is...the structure...comes from the networks, the interactions...The more data you have, the more economic power you have.” [13:02]
  • On price discrimination: “That actually undermines the efficiency of the economy...one of the arguments for the efficiency of the market economy is that everybody pays the same price.” [13:44]

5. Evaluating Democratic Policy Proposals

[14:36 – 23:00]

Student Loan Forgiveness and Free Tuition

[14:36 – 18:32]

• Praises proposals like Warren’s for free tuition and targeted loan forgiveness as solutions to macroeconomic drag caused by student debt; points to income-contingent repayment as an equitable path forward.
  • “If we could afford [free college] then, when our income per capita was actually a fraction of what it is today, why can’t we afford it today?” [16:25]

Universal Basic Income vs. Jobs Guarantee

[18:32 – 21:42]

• Critical of Universal Basic Income (UBI): “For most people, work gives them dignity...universal basic income...is intended to shift our focus away from the obligation to give work opportunities for everybody.” [19:07]
• Strongly prefers a universal jobs guarantee to address economic need and dignity, especially for care sectors.

Reparations

[21:42 – 23:00]

• On reparations: recognizes moral imperative but advocates increased spending and support for historically discriminated groups via jobs and education, rather than direct payments.

The Green New Deal

[23:00 – 25:57]

• Supports the Green New Deal's urgency and scale; sees it as a parallel to wartime mobilization.
  • “We have to marshal all of our resources, our underutilized resources, get rid of some of the inefficiencies that result from corporate power and redirect them to what is a national, a global emergency, the problem of climate change.” [25:46]

Audience Q&A Highlights

Worker Co-ops and Stakeholder Capitalism

[26:01 – 29:14]

• Stiglitz affirms the value of co-ops and criticizes the U.S. focus on profit-maximizing corporations:
  • “The way our market economy works shapes who we are as people...co-ops not only behave better economically, but they also change the nature of who we are.” [28:02]
• Credit unions (co-ops) fared better during the financial crisis than for-profit banks.

Global Poverty and Trade Agreements

[29:14 – 33:16]

• Audience criticizes lack of focus on global poor.
• Stiglitz highlights the highly concentrated global wealth:
  • “26 people from around the world have as much wealth as the bottom 3.9 billion people...” [30:31]
• Argues U.S. trade deals benefited corporations but harmed both U.S. and global workers.

Military Budget and “Military-Industrial Complex”

[33:39 – 35:56]

• Military spending criticized as vastly out of proportion to current threats.
  • “We were spending massive amounts of money on weapons that didn’t work against enemies that didn’t exist. The basic fact is the Cold War is over. Nobody has trumped that.” [34:13]

Corporate Taxes and Breaking Up Monopolies (Amazon, Facebook)

[36:04 – 44:04]

• Corporations like Apple, Google, and Amazon avoid taxes via global tax arbitrage; Stiglitz supports a global minimum tax.
  • “There’s a global consensus that there are ways of dealing with this problem called profit shifting.” [38:18]
• U.S. law is too weak on monopoly and abuse of market power; calls for antitrust modernization.
  • “Our courts have taken the view...that markets are naturally competitive. So don’t worry...Competition is suppressed all the time.” [41:57]
• Facebook's acquisition of Instagram seen as anti-competitive—calls for forward-looking antitrust law.

Healthcare and “Medicare for All”

[44:07 – 49:15]

• Stiglitz supports a public option (extended Medicare) alongside private insurance, focusing on universal access and efficiency.
  • “Our health care system is extraordinarily inefficient, that we pay roughly 18% of GDP...Canada, France spend about 11% of GDP. We get worse outcomes than France or Canada. Why? Well, there’s a lot of inefficiency...pockets of market power.” [44:24]
  • Private sector already rations care; public system would need fair allocation but not to the point of denying needed treatment.

Notable Quotes & Memorable Moments

• On the false binary between capitalism and socialism:
  “What they’re talking about is trying to reshape the market economy to serve ordinary citizens...for the last 40 years the market economy has not been working for most citizens.” —Joseph Stiglitz [03:13]

• On incrementalism in U.S. policy:
  “Obama’s heart was in the right place, but he was too conservative. He actually told me at one point…‘I’m just too conservative to do that.’” —Stiglitz [06:47]

• On the inefficiency of U.S. healthcare:
  “Our health care system is extraordinarily inefficient, that we pay roughly 18% of GDP…we get worse outcomes than France or Canada.” —Stiglitz [44:24]

• On global wealth inequality:
  “26 people from around the world have as much wealth as the bottom 3.9 billion people...” —Stiglitz [30:31]

• On co-ops and moral character:
  “Co-ops not only behave better economically, but they also change the nature of who we are. They do encourage more cooperative behavior and that…will change the nature of our society.” —Stiglitz [28:02]

Timestamps for Key Segments

• Progressive Capitalism Defined: [02:29 – 05:32]
• Obama/Admin Policy Limitations: [05:32 – 09:43]
• Globalization & Deindustrialization: [09:43 – 11:42]
• Facebook/Big Tech and Market Power: [11:42 – 14:25]
• Student Debt & Higher Education Policy: [14:36 – 18:32]
• Universal Basic Income vs. Jobs Guarantee: [18:32 – 21:42]
• Reparations & Racial Inequality: [21:42 – 23:30]
• Green New Deal/Economic Mobilization: [23:30 – 25:57]
• Audience Q&A: Worker Co-ops: [26:01 – 29:14]
• Audience Q&A: Global Inequality/Trade: [29:14 – 33:16]
• Audience Q&A: Military Spending: [33:39 – 35:56]
• Audience Q&A: Corporate Taxes/Monopolies: [36:04 – 44:04]
• Audience Q&A: Healthcare: [44:07 – 49:15]

Conclusion

This unique Slate Money Extra offers a dense, wide-ranging, and highly relevant discussion of bold economic ideas as Stiglitz critiques America’s economic status quo and proposes a transformative, government-energized alternative. He offers sobering statistics on inequality, market power, and global poverty, all while pressing for urgent policy renewal around jobs, healthcare, climate, and corporate regulation. Audience questions added depth on co-ops, global justice, military spending, and the realities of building an equitable economy.

The episode is a must-listen for anyone curious about left-of-center economic policy and realistic reform proposals for American capitalism.