Stiglitz's cure for world economic malaise appears contradictory

-       Robert McLean

Joseph E. Stiglitz.

Joseph E. Stiglitz understands the cause of climate change, or does he?

The American Nobel laureate in economics and University Professor at Columbia University seems to be aware that unbridled capitalism and its push for never-ceasing growth is the root of the world’s troubles, but here he suggests the world’s malaise will be “cured” through an increase in aggregate demand.

His “cure” appears to be contradictory.

However, as the former Chairman of President Bill Clinton’s Council of Economic Advisers and a former Senior Vice President and Chief Economist of the World Bank, I bow to his unquestioned understanding of world economics.

“The only cure for the world’s malaise is an increase in aggregate demand. Far-reaching redistribution of income would help, as would deep reform of our financial system – not just to prevent it from imposing harm on the rest of us, but also to get banks and other financial institutions to do what they are supposed to do: match long-term savings to long-term investment needs.”

Maybe I misinterpret what he says here in this essay published by “Social Europe” - Why The Great Malaise Of The World Economy Continues In 2016 – but I urge you to read it and arrive at your own conclusions.

Much of what he says makes complete sense, such as “Far-reaching redistribution of income would help, as would deep reform of our financial system” and maybe the increase in “aggregate demand” he discusses is what is needed to escape the “world’s malaise”.