Brendan Moore, Roosevelt’s Center Director for Economic Development, introducing Joseph Stiglitz.

Last night, the Roosevelt Institute here at Columbia sponsored a talk by world-renowned economist Joseph Stiglitz. Bwog sent first-year Sarah Kinney to cover the event. After getting lost in the wrong Warren building—and convincing the hosts to let her into the jam packed lecture room—she finally settled in to hear what Stiglitz had to say. Keep on reading for some deliciously woke and nerdy insight. 

On Thursday evening, well over a hundred students flooded the second floor of Warren Hall in anticipation of The Roosevelt Institute’s premier speaker: Nobel Prize winning economist Joseph Stiglitz. The Roosevelt Institute is “a progressive, nonpartisan, student-run think tank” with a firm presence on Columbia’s campus, hosting weekly discussions on prominent issues such as school choice, immigration, and income inequality. Stiglitz was their first guest-speaker of the semester, and his resume isn’t half bad. Aside from being a professor here at Columbia, Stiglitz was Chairman of the Council of Economic Affairs under President Clinton, Chief Economist of the World Bank from 1997 to 2000, and recipient of the Nobel Prize in Economic Sciences in 2001. After a brief introduction by Roosevelt President Adem Sengal and Roosevelt Center Director for Economic Development Brendan Moore, Stiglitz kicked off his talk.

Stiglitz began by addressing what nearly every American has been thinking for quite a while: “A lot of people haven’t done very well for a long time.” He rattled off facts about stagnating income growth, noting that the median income in the US is the same as it was 25 years ago (and that the median income for males is lower than it was 40 years ago). So, then, what is it that’s gone wrong? Stiglitz says it’s that those in the top 1% are progressively getting a larger and larger piece of the economic pie. “Trump is trying to say it’s all NAFTA and globalization,” Stiglitz said. “But he’s just wrong.”
Speaking on NAFTA, Stiglitz did point out a few of its flaws, such as the investment agreement clause (widely known as “chapter 11”). This clause allows corporations who lost revenue based on government regulations to sue that government in exchange for compensation. In other words: if the US passes a law that says all cigarette cartons must be clearly labeled with a health warning, and a South American tobacco company consequently experiences a dramatic drop in sales in the US, that company can sue the US government. This is the primary reason why Stiglitz also opposes the Trans Pacific Partnership, or TPP; TPP contains a chapter 11 clause.
Addressing globalization, Stiglitz pointed out that growing global economic interaction isn’t a main cause of income inequality, either. Although countless manufacturing jobs have been shipped overseas, the main source of job loss (or job transition) isn’t the shutting down of factories. It’s technology—and the US witnessed a similar shift about 150 years ago, when agricultural technology emerged that allowed the work of 100 farmers to be done by ten and a tractor. Americans who spent all their time in the country then moved to the city. What we are experiencing today is just another transition of our economy, from agricultural-based (back then), to manufacturing-based (transitioning out of), to service-based (where we’re headed).
After explaining how and why Trump’s economic claims are wrong, he spoke again on the President’s policies… or lack thereof. “We have a President who doesn’t understand economics, let alone a lot of other things,” Stiglitz said. “There is a real risk that things will get worse… All of this is threatening a global trade war, which is the worst of all possible things… People would stop investing, and it would be very, very bad.”

Full house for Joseph Stiglitz in Warren Hall.

On that optimistic note, Stiglitz opened the floor for questions. First, Brendan Moore asked Stiglitz why he thinks that studying—let alone specializing in—income inequality is still somewhat taboo for modern economists. Stiglitz had a candid response. “Well, I wrote my thesis on income inequality,” he said. “And quite frankly, my thesis is the best thing ever written on the topic.” However, Stiglitz said that he wasn’t meaning to brag. He was adamantly frustrated that no one has written anything better in the last 40 years. “For a long time, distribution of income didn’t change very much,” Stiglitz said. But now, he noted, it’s changing quite rapidly. It should no longer be a boring field of study for economists.
The next question was close to home. Columbia student Allie O’Keefe presented some striking facts: only 21.1% of Columbia students’ families fall in the bottom 60% of US income distribution, while 13.4% of Columbia students’ families reside in the top 1%. Her main question was, how can we—as a group of economically privileged students at an elite university—begin to understand the concerns of people suffering from economic inequality, and especially those suffering right here with us, on a campus where they’re underrepresented? Why is the student body of Columbia—as well as of elite private universities in general—so misrepresentative of the greater US income distribution? Stiglitz responded by saying that the main issue stems from economic barriers to quality education, most notably deficiencies in our primary and secondary public schools. He also stated an unpopular fact: “A student from a rich family who performs poorly in school will wind up with a higher income than a student from a poor family who excels in school.” Stiglitz emphasized that although the US often prides itself on equality of opportunity and the American Dream, we actually have the lowest levels of opportunity equality of any advanced country in the world. Stiglitz looked at the room full of bright-eyed, educationally privileged students and encouraged them to widen their horizons not by studying abroad or interning downtown, but by simply looking in their backyard. “Go see mid America. Go see the South,” Stiglitz said. “You won’t like what you see.”

Photo via the Roosevelt Institute.