This popular post was originally published April 5, 2011.
Joseph Stiglitz is a left leaning, big government, 68-year-old Nobel Prize winning economist with a life long sinecure at the magnificently wealthy Columbia University. His recent essay in Vanity Fair, “Of the 1%, By the 1% and For the 1%“, is an incoherent mish-mash of boring class politics. In a winding series of bizarre conflations and assertions (for example, Iran and Russia have economic equality equivalent to America) he concludes that if only we could make the “top 1%” less wealthy, we would have a better society. Most important, we could finally leave the really important decisions to Government Technocrats, who shockingly happen to come from places like the aforementioned magnificently wealthy Columbia University.
My initial reaction to the essay was my usual sense of mental numbness when the Left talks about economic inequality. Similar essays have been written by hundreds of lesser mortals than Stiglitz over the decades and all have the same predetermined conclusion. The argument goes something like this: “Everyone in the country is economically worse off, or barely better off, than 10 years ago (or 20 or 30 years ago) except for the ‘top 1%’ (or 5%, or 10% etc.) because of Republican Party policies.” The solution is more government involvement in the economy. Economic statistics about growing disparities among “quintiles” and “percentiles,” which are always misunderstood, are trotted out as proofs. The policy prescriptions always include higher tax rates “for the wealthy” and more “government investment” in education, technology, health care, etc., etc. While few actually call for the execution of the “top 1%,” Stiglitz does darkly warn that throughout history the “top 1%” often learn ‘too late’ that their fate is bound up with the other “99%.” I wonder what percentile Stiglitz is in? My guess is he makes the cut at the “top 5%,” thus still safe from the hordes.
My second reaction was to laugh out loud. I realized I was reading this essay, not in Mother Jones or The Nation, but in Vanity Fair. Vanity Fair is a gossip and culture magazine of the rich, by the rich and for the rich. It is owned by Conde Nast, in turn which is owned by S.I. Newhouse, listed by Forbes as the 130-something richest guy in the world. Further, its readership is among the wealthiest in all of magazinedom. According to Media Max, the magazine brags to advertisers that the median income of its mostly female readers (about 80%) is $160,000 and a relatively youthful 41 years old. One wonders how much Stiglitz demanded to be paid for his essay. My guess is he would have gladly paid to have the essay printed for the all the high society attention it garners. Then again, maybe he was just trying to warn his readership to surrender before the Bastille is stormed.
My third reaction was to realize this essay was one of the most absurd of its kind. It set new standards for distortion of facts to reach a basic “government knows better” conclusion. If that is what Stiglitz thinks, then he should just say it. But distorting economic statistics to demonstrate one’s point is manipulative and worse than the supposed sins of the “top 1%.” As Thomas Sowell points out in his recent book Intellectuals and Society, economic inequality obsessives, like Stiglitz, almost always resort to the old trick of “confusing statistical categories with flesh-and-blood human beings.” These economic categories are usually divided into “percentiles”; for example, from the “top 20% to the bottom 20%.” The categories are also almost always defined in terms of “households” rather than individuals. The presumption in these kinds of essays is that real humans are stuck in one or the other percentile, as if predetermined by fate, and that household size is immutable through time.