The Price of Inequality, Book Review Example

Background Theme

The capacity of the society to welcome the changes that comes along with modernity has actually created a sense of distinction on how human individuals develop into the changes happening in their environment. Not all changes however are pleasant. The truth is that most of these changes created a more specific impact on the manner by which the society has been divided according to class and status. Economy has become one of the most important points of measure that defined the being of human individuals. Relatively, this specifically created a gap between the rich and the poor which Joseph Stiglitz pointed out in the book that he has authored under the title “The Price of Inequality”.

In the presentation that follows, a discussion on the said reading material shall be given attention to. Pointing out the facts about social inequality, Stiglitz tries to expound the issues that relatively connect the condition of the situation that the world has to deal with hence instantiating the actual effects of social imbalance. Through this particular reading, the discussion herein would intend to both expound on the issues and comment on how Stiglitz represent each situation in consideration with the truth of the society.

About the Author

Joseph Stiglitz is a known commentator on social issues as he writes about the different matters that concern people around the globe. Being situated in the United States, most of his written works are mirroring the American society and how much they are likely able to define themselves along with the different changes occurring in the society that they are living in. Being able to give indicative and informative presentation of the most disturbing issues in the society, Stiglitz has been awarded the 2001 Nobel Prize for Economics. Seeing the parallel connection between the economy and human behavior has created a great impact on how Stiglitz writes about the realities of modern human living. Using the same caliber of concentration on how he observes the human society, his book on social inequality has also become a great source of realization in consideration with the way the assumption of modern living has been connected relatively to the economic situation in the society.

About the Book

Pointing out the most common yet relatively disregarded problem in the American society, the book of Stiglitz tries to create a sense of distinction on how the world and the modern system of living has provided a great source of imbalance in the lives of the people. Globalization, although deemed to be among the most important elements that brought about social growth is also noted by Stiglitz in this reading to be the source of the impending social unrest especially among those who are oppressed. Here, he argues that developments in the human society cannot be fully accounted for due to the fact that there are issues that remains unclear and undefined especially with regards the situation of the poor and the less fortunate in terms of economic wealth.

Chapter Summaries

Chapter 1: America’s One Percent Problem

The term ‘one percent’ is used by Stiglitz in this reading to represent the faction of the society where the elites belong to. This specifically implies that out of the many population in the United States, only one percent of it are actually able to get the best out of life. Although developments have been swarming the lifestyle of the modern world, only those belonging to the one percent of elitists are actually able to enjoy the benefits of such situation. Joseph Stiglitz points out in this chapter that the individuals belonging to the said faction of the society also have problems. One of which is how they should spend their money. Relatively, such problem gives way to the production of many other products offered to the society. The industries take advantage of the said problem to create specific ‘modern needs’ for those who able to buy the products that they are creating and offering in the market.

This then invokes the individuals belonging to the higher grid of the economy to buy more and supposedly ‘enjoy life’ better. On the contrary, this creates more problems to those belonging to the middle and the lower tier of the economy. People on these particular factions already have issues to deal with. Getting by with their basic needs already is a struggle and with what the upper tier enjoys, feeling more oppressed is the resulting end of such disparity. It is through this that social inequality becomes the source of the distinctive existence of social insecurities.

Chapter 2: Rent Seeking and the Making of Unequal Society

Who rents, who buys? Those who cannot buy have no choice but to rent. For many years, the capacity of individuals to buy often defines their capacity of taking their stand in the community. Relatively, people are stereotyped based on their possessions and the things that they are able to purchase from the market. Some basic needs that cannot be bought fully by those belonging to the middle and lower tier of the economy are then rented. For instance, housing facilities, cars and sometimes even dresses are being rented by these individuals. Because of their inability to buy ‘stuffs’, the rental industry becomes distinctively effective in providing them what they want and what they need. However, not all are able to rent. There are those who cannot even afford to rent anything and are forced to settle for what the small amount of their earnings could buy them.

Chapter 3: Markets and Inequality

Stiglitz points out that if there is anyone or anything that benefits well from social disparity, it is the commercial industry. The commercial industry creates several products according to the division of the population in relation to their economic status. The creation of gadgets for instance has become a booming industry at present. However, due to the fact that most of these gadgets are expensive, several lower tier producers have sprouted in the market offering lower priced gadgets that are also less in function and quality compared to those that are being appreciated and bought by the individuals belonging to the upper tier of the economy. Through the use of advertising, influencing the minds of the people in consideration with how they are supposed to spend their money and where they are supposed to spend it becomes the winning end of the commercial industries.

How does the market respond to this? The approach of the commercial industries has already been proven true through many decades and still creates a great impact up to these days. The growing inequality in the society seems to provide more benefits for the commercial industry as it struggles to produce more products that will not only fit the needs but would also fit the budget of their target buyers according to their economic identity.

Chapter 4: Why it Matters

Inequality, although considered a side issue, is a huge matter that must be given attention to. The emergence of social Darwinism [which imposes on the poor getting poorer and the rich getting richer] could cause a source of commotion in the future years. The pyramid of social disparity gets tighter as the standard of belonging to the upper tier of the economy becomes harder to bear. Some sociologists admit that what makes the modern economy work is that disparity among humans in relation to their capacity to spend. Likely, the argument is based on the idea that if everyone was rich, then no one would be motivated enough to work anymore, on the other end, if everyone was poor, then no one is left to buy what the market offers. Basically, if this happens, the cash flow in the market would not push for a continuous cycle anymore.

Stiglitz however points out that massive division in the market creates problems as well. The oppression of those who cannot buy as much as they might want to becomes the source of insecurity that makes a distinctive condition of low self-confidence. This later on is expected to affect the psychological bearing of the society that weakens both morality and the distinction of human values. Nevertheless, when it comes to economy, it is hurtful to know that the virtues and values of good living is set aside for the sake of gaining more profit.

Chapter 5: A Democracy in Peril

The government is a form of association that is established by the people-for the people. This particular idealism of democracy is assumed by Stiglitz to be lost especially in connection to how the American society is being governed upon. He imposes that with politics and commerce getting along together, people are left to be led by those who can control the government and the people in it, the ones belonging to the upper tier of the economy. Here, he exposes that the ones who have the power of ‘money’ are also the ones who are able to direct the release of funds for serving the public’s welfare. It is then assumed that it is them who are able to decide who gets the best out of what the government offers.

Chapter 6: 1984 Is Upon Us

Stiglitz defines the year 1984 as the year of social peril. Even though the growth of the commercial industry could be considered a sense of success for the modern society, its impact on the lives of the people has been proven hurtful to the being and the behavior of human individuals living during the said era. The dawning of a new system of living could be better for those who can face the challenges it offers, and yet it could be harmful to those who are already struggling to survive during these years of social living.

Chapter 7: Justice for All: How Inequality is eroding the Rule of Law

Even justice is being evaded by the power to pay. People who cannot buy their freedom are locked up in jail even for the smallest causes of being tried in court. On the other hand, those who are rich enough seem to find their way around the court and thus are able to control the way their right to freedom is recognized. Sadly, these rich individuals are the ones having the larger share of crimes in the community, and yet they are roaming free in the society as if they have done nothing wrong at all.

Chapter 8: The Battle of the Budget

The division of wealth among the people and the services that they receive is often defined through the economic barriers that they are subjected to. In the United States, the ones who are in charge of the government’s financial reserves also decide upon the said division of budget allotted for the assistance of the poor. However, as mentioned in the previous chapter, Stiglitz points out that a higher force of control is considered by the government which is most often than not considered to come from those who are able to ‘pay more’.

Chapter 9: The Macroeconomic Policy and a Central Bank by and for the 1 Percent

It is amazing what the one percent of the population can do to control the lives of the other 99% of the American population. Here, Stiglitz exposes the different anomalies that are existing in the Central Bank and how such anomalies affect the share of wealth that the lower-edge earners receive from the said social entity.

Chapter 10: The Way Forward: Another World is Possible

Change is needed. This is the message that Stiglitz tries to echo all throughout his writing. His desire to call out to his readers and the authorities to find a way to make a balance on how the pyramid of economic budgeting is arranged is specifically pointed out in every page of his writing. It is through this approach that he hopes that even the oppressed members of the community be given the chance to enjoy what the modern world offers without being pressured simply to survive life as it is.

Overall Critique

The writing of Stiglitz is strong enough to define the truths behind the anomalies of the modern society especially in consideration with the issues of economic disparity. It is true that money and the capacity to use it for personal satisfaction has become an effective source of measurement that humans today use to define themselves and the people living around them. Through this writing, Stiglitz’s implication on how the government should provide a better source of economic balance echoes the desire to make it possible for all to enjoy what the society has to offer. Equality is not desired, and yet a balance on how the needs, the wants and the rights of all the members of the society is provided for is being hoped for. Relatively, it could be said that this writing is both practical as it does present a good mirror of the society’s overall reality, not only in America but around the globe as well.

Reference:

Stiglitz, J. (2012). The Price of Inequality: How Today’s Divided Society Endangers Our Future. W. W. Norton & Company.