WEBVTT - Extreme Inequality is Solvable 0:00:15.076 --> 0:00:21.316 Pushkin, I may have Higgins and this is solvable Interviews 0:00:21.316 --> 0:00:24.676 with the world's most innovative thinkers working to solve the 0:00:24.716 --> 0:00:28.836 world's biggest problems. My solvable he is to address the 0:00:28.956 --> 0:00:34.796 problems of extreme inequality in the United States. That's Joseph Stiglitz, economist, 0:00:34.996 --> 0:00:39.356 public policy analyst, and professor at Columbia University, oh and 0:00:39.596 --> 0:00:44.396 Nobel Laureate. Now even a cursory look at the levels 0:00:44.396 --> 0:00:47.436 of inequality in the US can make your head spin. 0:00:48.036 --> 0:00:50.476 I'm sitting in a studio in Manhattan, which is home 0:00:50.556 --> 0:00:54.756 to many of the country's real estate moguls, media empires, 0:00:54.836 --> 0:00:58.276 and hedge fund billionaires. And I'm also just a few 0:00:58.276 --> 0:01:01.316 miles away from the South Bronx, which the two ten 0:01:01.396 --> 0:01:04.356 Census found to be the poorest district in the nation. 0:01:04.756 --> 0:01:08.636 Income disparities have become so pronounced that America's top ten 0:01:08.676 --> 0:01:12.476 percent now average more than nine times as much income 0:01:12.756 --> 0:01:15.996 as the other ninety percent of US. It's more than 0:01:16.036 --> 0:01:19.236 ten years since the financial crisis that shook our world 0:01:19.276 --> 0:01:23.196 and caused enormous suffering, and in that time, the fortunes 0:01:23.236 --> 0:01:26.516 of the richest have actually risen dramatically. The number of 0:01:26.516 --> 0:01:30.276 billionaires have almost doubled, with a new billionaire created every 0:01:30.356 --> 0:01:34.556 two days between twenty seventeen and twenty eighteen. Meanwhile, the 0:01:34.596 --> 0:01:39.076 official poverty rate for all US families has actually barely changed, 0:01:39.556 --> 0:01:42.996 with an estimated one hundred and forty million people in 0:01:43.036 --> 0:01:47.156 this country now counted as either poor or low income. 0:01:47.596 --> 0:01:51.076 Joseph Stiglett seized the US as an outlier amongst other 0:01:51.116 --> 0:01:55.276 wealthy countries, and he studies why inequality is much more severe. 0:01:55.436 --> 0:01:58.956 Here he works to understand why it is we're so 0:01:59.036 --> 0:02:02.956 far behind other comparable countries. And really he argues that 0:02:02.996 --> 0:02:06.716 it's down to our policies, that the exercise of power 0:02:06.876 --> 0:02:10.596 in the pursuit of profit has left people behind, and 0:02:10.796 --> 0:02:13.316 he offers up as solvable for that. Here he is 0:02:13.356 --> 0:02:18.356 getting into us with Jacob Weisberg, Joe, inequality is one 0:02:18.396 --> 0:02:22.596 of the most complicated and interesting problems in the world 0:02:22.596 --> 0:02:25.596 and economics, and you've just written a book about it. 0:02:25.996 --> 0:02:28.796 But I wonder if you could describe what you think 0:02:28.836 --> 0:02:32.916 the problem of inequality is in a nutshell. The problem 0:02:33.156 --> 0:02:37.316 of inequality differs, of course, in different countries, in developed 0:02:37.356 --> 0:02:42.556 countries and in developing countries. The problem in a rich 0:02:42.596 --> 0:02:48.476 country like the United States is that such a large 0:02:48.476 --> 0:02:54.876 fraction of the wealth of the country goes to so few, 0:02:55.716 --> 0:02:58.476 And that wouldn't be by itself, you might say a 0:02:58.556 --> 0:03:01.956 problem if it weren't for the fact that the people 0:03:01.956 --> 0:03:06.556 at the bottom really aren't don't receive a you might 0:03:06.556 --> 0:03:11.596 call a bare necessity of living. So it's not only 0:03:11.636 --> 0:03:16.036 that those at the top have luxuries beyond anybody's dream, 0:03:16.516 --> 0:03:21.836 but those at the bottom are not getting the necessities 0:03:21.836 --> 0:03:28.476 of life. Their children are not getting the education, the 0:03:28.596 --> 0:03:32.196 health that would lead them to live up to their potential. 0:03:32.996 --> 0:03:36.036 Why is this your problem? Just when you talk about it, 0:03:36.036 --> 0:03:38.796 it doesn't sound like you're just thinking about this as 0:03:38.836 --> 0:03:40.916 an economist. Do you think of this as a as 0:03:40.916 --> 0:03:43.556 a social justice issue and a basic justice issue. It 0:03:43.636 --> 0:03:48.436 is a moral issue, a social justice issue. It's also 0:03:48.476 --> 0:03:52.956 an economic issue, because I believe that it actually weakens 0:03:53.116 --> 0:03:57.836 our overall economy. But it's a particularly moral issue in 0:03:57.876 --> 0:04:02.756 two dimensions. There shouldn't be this kind of extremes of 0:04:02.796 --> 0:04:06.796 inequality in a rich country like the United States. There 0:04:06.796 --> 0:04:10.796 shouldn't be people. Almost one out of seven Americans go 0:04:10.876 --> 0:04:15.276 to bed hungry once a month, not because they're on 0:04:15.356 --> 0:04:18.876 the diet, but because they don't have enough money to 0:04:19.436 --> 0:04:21.796 stretch to the end of the month by the food. 0:04:21.876 --> 0:04:26.516 There shouldn't be that extreme deprivation. United States is a 0:04:26.636 --> 0:04:32.916 rich country, yet life expectancy is in decline. And it's 0:04:32.956 --> 0:04:36.836 not because we aren't doing the most advanced research that 0:04:37.036 --> 0:04:42.156 has taught us how to extend life. It's not because 0:04:42.156 --> 0:04:46.796 there's an epidemic going on. It's because our economic and 0:04:46.796 --> 0:04:52.516 our social system is depriving large fractions of America are 0:04:52.516 --> 0:04:57.756 the basic necessities of life, including healthcare, but also adequate nutrition. 0:04:59.196 --> 0:05:05.156 It's also, to me a moral issue because of the 0:05:05.236 --> 0:05:08.076 extremes of wealth. Not all, but some of the extremes 0:05:08.076 --> 0:05:13.556 of wealth originate from exploiting others. At the other extreme, 0:05:14.596 --> 0:05:17.556 some of the extremes of wealth come from exploiting people 0:05:17.596 --> 0:05:24.316 in other countries. The arms trade, where many Americans are 0:05:24.356 --> 0:05:29.076 becoming wealthy at the expense of the death of people 0:05:29.676 --> 0:05:33.436 in other countries. The drug trade, and I'm not talking 0:05:33.476 --> 0:05:37.956 about the illicit drugs, but the prescription drugs, where you 0:05:38.156 --> 0:05:43.716 have families to become wealthy beyond anybody's dream, billions of 0:05:43.756 --> 0:05:50.676 dollars giving way money to charities like art, but causing 0:05:50.956 --> 0:05:55.476 an epidemic of drug overdoses. In the United States by 0:05:55.596 --> 0:06:03.996 getting people addicted cigarette companies who develop cigarettes that are 0:06:04.116 --> 0:06:09.836 more addictive even than the natural addiction associated with tobacco nicotine, 0:06:10.436 --> 0:06:15.076 and becoming wealthy at the expense of suffering of other people. 0:06:15.316 --> 0:06:18.636 You know, it's not that this is new. We had 0:06:18.996 --> 0:06:22.916 the opium trade, and Western countries went to war twice 0:06:23.036 --> 0:06:27.876 with China to keep the market for opium open so 0:06:27.956 --> 0:06:34.276 that more Chinese would become addicted to our destructive products. 0:06:34.276 --> 0:06:37.116 And we call that free trade in the nineteenth century. 0:06:37.996 --> 0:06:41.756 But what has happened is that what was you might say, 0:06:42.156 --> 0:06:46.236 an unusual thing in the nineteenth century has become a 0:06:46.476 --> 0:06:51.796 major source of income and wealth and inequality in the 0:06:51.836 --> 0:06:57.596 United States. So those forms of exploitative enrichment are a 0:06:57.756 --> 0:06:59.836 kind of exceptions to maybe what you said a minute 0:06:59.836 --> 0:07:02.996 ago when we were getting started, which is, if people 0:07:03.036 --> 0:07:06.876 on the bottom were getting richer and doing better, we 0:07:06.916 --> 0:07:09.396 wouldn't need to worry so much about how rich the 0:07:09.516 --> 0:07:12.476 rich people are. But it's not really the case. Is 0:07:13.116 --> 0:07:16.436 inequality not a problem per se. If the tide is 0:07:16.596 --> 0:07:19.436 rising on the bottom, we don't need to worry about 0:07:19.436 --> 0:07:22.996 it rising faster or even more at the top. We 0:07:23.076 --> 0:07:27.356 do have to worry about it. A society that is 0:07:27.436 --> 0:07:30.916 more polarized, more divided, is a different kind of society. 0:07:31.636 --> 0:07:35.516 And there's been a lot of interesting social science research 0:07:35.596 --> 0:07:39.036 about the ways in which it differs. That people at 0:07:39.036 --> 0:07:44.436 the top feel entitled. They'll go through stoplights, they'll act 0:07:44.476 --> 0:07:48.756 in other ways that are abusive of other people because 0:07:48.796 --> 0:07:54.916 they feel entitled. People at the bottom also feel that 0:07:55.276 --> 0:07:58.356 on the one end, they're being taken advantage of, and 0:07:58.396 --> 0:08:01.956 that makes them angry, and that makes them leads to 0:08:02.036 --> 0:08:08.116 social dysfunction. But others feel giving up that the system 0:08:08.196 --> 0:08:12.076 is rigged and and they drop out. Either way, it's 0:08:12.116 --> 0:08:18.396 a socially dysfunctional outcome. So it seems to me that 0:08:18.996 --> 0:08:24.396 these extremes of inequality are destructive no matter how they originate. 0:08:25.196 --> 0:08:29.756 But I think that natural order of the economy would 0:08:29.796 --> 0:08:33.476 be that it would limit the extremes of inequality if 0:08:33.476 --> 0:08:39.436 it weren't for these abusive practices. That there is no 0:08:40.116 --> 0:08:45.116 inherent reason why you would have the magnitude of inequality 0:08:45.156 --> 0:08:47.436 that we see in the United States or we see 0:08:47.516 --> 0:08:51.236 around the world, were it not for the extent of 0:08:51.316 --> 0:08:54.716 exploitation that we see. And I always say exploitation, I 0:08:54.716 --> 0:08:59.876 mean exploitation of market power, exploitation of the vulnerable. You know, 0:08:59.916 --> 0:09:04.756 when I look at the people at the top, it 0:09:04.836 --> 0:09:12.116 is really shocking the fraction of them who have gotten 0:09:12.476 --> 0:09:16.196 a substantial fraction of their income from exploitation. Not that 0:09:16.316 --> 0:09:20.756 some of them may have made important contributions somewhere along 0:09:20.796 --> 0:09:24.156 the way of making wealth, but then they've taken that 0:09:24.236 --> 0:09:29.116 wealth and multiplied it through some process of exploitation. You 0:09:29.196 --> 0:09:31.436 and I are a few years apart, but we both 0:09:31.436 --> 0:09:33.596 grew up in America that was much more of a 0:09:33.636 --> 0:09:37.556 middle class society, and it had a few features which 0:09:37.596 --> 0:09:39.956 we sort of took for granted. One of them was 0:09:40.036 --> 0:09:44.156 that you could earn a decent middle class living without 0:09:44.276 --> 0:09:48.436 college education or without higher education. Another was that the 0:09:48.516 --> 0:09:51.676 wealth gap was just much less than it is now. 0:09:51.836 --> 0:09:56.356 People who work in working class jobs, fundamentally unskilled jobs, 0:09:57.116 --> 0:10:01.596 their salary was a larger fraction of the CEO of 0:10:01.636 --> 0:10:04.876 the company they worked for. So, looking at this first 0:10:04.876 --> 0:10:08.356 as an economist, what do you think the key drivers 0:10:08.396 --> 0:10:11.956 of that change? The key drivers of inequality have been 0:10:12.836 --> 0:10:17.316 There are many, many drivers of the growth of inequality, 0:10:17.356 --> 0:10:21.076 but the ones that I focus on a great deal 0:10:21.436 --> 0:10:28.156 are precisely this increase in exploitation, including exploitation of market power. 0:10:28.916 --> 0:10:32.836 Included in that description of market power is the fact 0:10:32.836 --> 0:10:38.636 that we have weaker unions. We've gone through a period 0:10:38.716 --> 0:10:43.116 where government has not played the role that's played in 0:10:43.156 --> 0:10:47.356 the past in curbing market power. Our corporate CEOs have 0:10:47.596 --> 0:10:51.516 learned how to exploit the weaknesses in our corporate governance. 0:10:52.436 --> 0:10:56.876 There's been a systematic attempt to weaken the systems of 0:10:56.956 --> 0:11:01.516 checks and balances, including labor unions, which are important ways 0:11:01.596 --> 0:11:05.716 of making sure that ordinary workers get a voice and 0:11:06.356 --> 0:11:10.436 economic relationships. So let me just illustrated by a couple 0:11:10.756 --> 0:11:15.356 of examples. If we look at the concentration of market power, 0:11:16.236 --> 0:11:19.636 evidence is overwhelming that it's increased enormously in the last 0:11:19.676 --> 0:11:24.236 twenty years. The antitrust laws that were absolutely essential one 0:11:24.316 --> 0:11:27.196 hundred and some years ago, incurbing the market power of 0:11:27.236 --> 0:11:31.276 standard oil and tobacco monopoly and a whole set of monopolies, 0:11:31.436 --> 0:11:37.196 they've been eviscerated by fifty years, especially since the so 0:11:37.356 --> 0:11:40.676 called Reagan Revolution, well with Robert Bork, who came up 0:11:40.716 --> 0:11:43.636 with the theory of antitrust that we basically still live with, 0:11:43.636 --> 0:11:47.316 which it's very narrow definition, and the irony of that 0:11:47.556 --> 0:11:51.596 was that came up exactly at the time where economists 0:11:51.876 --> 0:11:56.556 were beginning to understand the nature of market powers, and 0:11:56.716 --> 0:11:59.196 so he was putting forward an idea. A lot of 0:11:59.236 --> 0:12:02.436 people in Chicago put forward this idea that markets are 0:12:02.556 --> 0:12:06.916 naturally competitive, and the economics profession was showing that that 0:12:07.636 --> 0:12:12.916 was wrong. And my own work was on imperfect information 0:12:12.956 --> 0:12:17.316 and showing how imperfections of information are a real barrier 0:12:17.396 --> 0:12:21.516 to the operation of the so called ideal of perfect 0:12:21.596 --> 0:12:25.516 markets that Bork and a lot of the Chicago economists 0:12:25.516 --> 0:12:30.556 focused on. Another example, though, is what's happened to CEO pay. 0:12:30.796 --> 0:12:34.516 Ceo pay has increased like a thousand percent in the 0:12:34.556 --> 0:12:39.476 last forty years, not because they've become that much more productive, 0:12:39.796 --> 0:12:44.796 and it really is undermined the underlying theory that neoliberalism 0:12:44.836 --> 0:12:48.636 and standard economics, which is based on pay being related 0:12:48.636 --> 0:12:54.076 to productivity. It really shows its power that determines productivity. 0:12:54.116 --> 0:12:57.076 And the CEOs had the power to raise their own 0:12:57.636 --> 0:13:01.796 compensation and they've taken advantage of that and they realize 0:13:01.876 --> 0:13:07.676 that the constraints aren't there. And a third example that 0:13:07.796 --> 0:13:11.836 brings out the visration of the role of government in 0:13:11.876 --> 0:13:16.156 this area is that the minimum wages wages at the bottom, 0:13:16.796 --> 0:13:20.396 adjusted for inflation, are today the same as they were 0:13:20.476 --> 0:13:23.956 sixty years ago. Now can you imagine getting no pay 0:13:24.036 --> 0:13:27.436 race for sixty years in what is allegedly one of 0:13:27.476 --> 0:13:30.916 the most prosperous countries in the world, where the one 0:13:30.996 --> 0:13:35.156 percent see their income soaring. You look at the TV set, 0:13:35.356 --> 0:13:41.196 you see how others are living doing well. Today. You 0:13:41.316 --> 0:13:45.796 work full time at the minimum wage and it's not livable. 0:13:45.836 --> 0:13:49.156 You can't even pay your rent on what you get 0:13:49.156 --> 0:13:53.516 paid as a minimum wage. Some economists look at inequality 0:13:53.556 --> 0:13:59.636 and think technology and trade and returns to education are 0:13:59.676 --> 0:14:02.836 at the center of the phenomenon, and that policy is 0:14:02.836 --> 0:14:05.236 at the margin for good or for ill. You tend 0:14:05.276 --> 0:14:08.516 to see policy as at the center rather than these 0:14:09.516 --> 0:14:13.036 tectonic factors. Is that right. That's right, and those factors 0:14:13.716 --> 0:14:18.796 are relevant. I'm not denying their relevance. Those factors themselves, 0:14:18.796 --> 0:14:22.836 of course, are a part of our political process, and 0:14:23.316 --> 0:14:30.156 politics reflects the inequality in economics. So when you have 0:14:30.316 --> 0:14:33.916 the extremes of inequality economic inequality, you're going to get 0:14:33.916 --> 0:14:39.476 a political inequality. So the way we've governed globalization where 0:14:39.596 --> 0:14:42.596 we've left the results of which have been to put 0:14:42.636 --> 0:14:47.756 downward pressure on especially on skilled wages resultant, and these 0:14:48.156 --> 0:14:51.436 large parts of America that have become de industrialized, with 0:14:51.636 --> 0:14:55.196 the deaths of despair that are leading to our skyrocketing 0:14:55.716 --> 0:15:00.636 incidents of suicide, drug overdose, and alcoholism. All those are 0:15:00.756 --> 0:15:05.436 political nature. But the reason that I emphasize that it's 0:15:05.596 --> 0:15:11.596 policy more than these exogen factors, more than technological change, 0:15:11.956 --> 0:15:15.796 is that you look around the world and the United 0:15:15.836 --> 0:15:22.556 States is an outlider among advanced countries that we have 0:15:22.836 --> 0:15:27.236 more inequality and less equality of opportunity than other countries. 0:15:28.156 --> 0:15:31.996 Those other countries have the same technology. I mean, we're 0:15:31.996 --> 0:15:36.156 part of advanced countries. They have even more open markets, 0:15:36.156 --> 0:15:39.956 so even more exposed to globalization. Why is it the 0:15:40.036 --> 0:15:44.236 United States is so much worse than these other countries. 0:15:45.156 --> 0:15:49.196 And it's our policies, and our policies are driven by 0:15:50.156 --> 0:15:54.316 our politics, which is this vicious circle that I describe before. 0:15:55.116 --> 0:15:57.556 And you know, this has been really one of the 0:15:57.596 --> 0:16:01.716 th ust of my recent book People, Power and Profits, 0:16:02.116 --> 0:16:07.436 Progressive Capitalism and Age of Discontents. It's precisely that it's 0:16:07.476 --> 0:16:12.596 the exercise of power in the pursuit of profits that 0:16:12.636 --> 0:16:15.876 has left our people behind. So we're dealing with the 0:16:15.956 --> 0:16:20.476 consequence of at least forty years of policy fanning the 0:16:20.476 --> 0:16:24.356 flames of inequality. Do you think now reversal in some 0:16:24.436 --> 0:16:29.196 of those fundamental policies around taxation, around regulation, around investment 0:16:29.676 --> 0:16:36.316 can actually reverse this trend and produce not only diminishing 0:16:36.436 --> 0:16:41.116 rate of increase of inequality, but less inequality more equality. 0:16:41.436 --> 0:16:44.156 Very much so. And I put at the flip side 0:16:44.716 --> 0:16:47.356 that if we don't do those things, things are going 0:16:47.396 --> 0:16:50.716 to get worse and worse that we have not seen 0:16:51.356 --> 0:16:55.116 the end of this increase inequality if we don't do 0:16:55.196 --> 0:16:57.716 something about it. Next. One of the reasons why I 0:16:57.716 --> 0:17:01.316 think this is a solvable problem. We know what we 0:17:01.356 --> 0:17:05.596 need to do to bend the curve to reduce inequality. 0:17:05.916 --> 0:17:09.436 And if we begin with something that I think almost 0:17:09.436 --> 0:17:13.756 all Americans would agree with is, you know, every American 0:17:13.916 --> 0:17:17.236 child should be able to live up to their potential. 0:17:18.076 --> 0:17:22.236 You should get an education and health that is not 0:17:22.396 --> 0:17:27.476 a hindrance to them. But the reality is that one 0:17:27.476 --> 0:17:31.276 in five American children are growing up in poverty, and 0:17:31.556 --> 0:17:34.516 part of that poverty is they're not getting adequate nutrition. 0:17:35.236 --> 0:17:39.436 And we live in a more economically segregated society than 0:17:39.476 --> 0:17:43.876 we were thirty years ago. And with our local education system, 0:17:43.996 --> 0:17:49.276 it means that if you are living in a poor community, 0:17:49.796 --> 0:17:52.916 you're going to get a poor education, not always, but 0:17:53.036 --> 0:17:57.956 on average, and that means your life prospects are going 0:17:57.996 --> 0:18:01.556 to be diminished. And that's one of the reasons why 0:18:01.676 --> 0:18:04.596 you know the marriage. I've said in some of my 0:18:04.636 --> 0:18:07.956 books that the American dream is a myth that the 0:18:08.636 --> 0:18:11.996 look at the numbers. The numbers tell you that the 0:18:12.156 --> 0:18:16.836 life prospects of a young American are more dependent on 0:18:16.996 --> 0:18:19.596 the income and education of experience than in almost any 0:18:19.636 --> 0:18:23.716 other advanced countries. You might say, that's an American but 0:18:23.796 --> 0:18:27.276 that's where we are. But we could reverse that. We 0:18:27.356 --> 0:18:30.476 are the only country among the advanced countries that doesn't 0:18:30.516 --> 0:18:34.836 recognize the right to access to healthcare as a basic 0:18:34.916 --> 0:18:41.476 human right. And that's solvable. There are so many other 0:18:41.596 --> 0:18:47.156 aspects of our economic and social organization that have led 0:18:47.196 --> 0:18:53.596 to this perpetuation of inequality. Is limited equality of opportunity 0:18:54.196 --> 0:18:56.836 that is leading to the kind of despair and large 0:18:56.836 --> 0:19:00.596 fractions of a country. So you talked about healthcare, Let's 0:19:00.636 --> 0:19:04.076 talk about education from anute, particularly higher education. One of 0:19:04.116 --> 0:19:08.156 the interesting debates, say inside the Democratic Party, although not 0:19:08.236 --> 0:19:12.516 always articulation it is, first of all, whether the goal 0:19:12.596 --> 0:19:15.596 should be for everyone to get some higher education, which 0:19:15.596 --> 0:19:18.516 I think Barack Obama stated as a goal at one 0:19:18.556 --> 0:19:20.916 point in his presidency, although it's not one he made 0:19:20.916 --> 0:19:23.836 a lot of progress towards, especially given how much more 0:19:23.876 --> 0:19:29.116 expensive college has been getting or as opposed to that 0:19:29.916 --> 0:19:32.836 make everything better for people who are never going to 0:19:32.916 --> 0:19:35.516 college and accept that reality. Do you think the goal 0:19:35.596 --> 0:19:39.236 should be for all Americans to have higher education of 0:19:39.276 --> 0:19:43.236 some kind? Well, my view is one wants to have 0:19:43.316 --> 0:19:46.156 the education that allows everybody to live up to their 0:19:46.196 --> 0:19:50.316 potential and that leaks to a more efficient economy. The 0:19:50.436 --> 0:19:53.716 fact is that we are so far from that goal 0:19:54.516 --> 0:19:57.996 that that's what we should be focusing our attention on. 0:19:58.676 --> 0:20:01.836 You talked about the expense at the end of World 0:20:01.916 --> 0:20:05.796 War Two, when we had a debt GDP ratio that 0:20:05.876 --> 0:20:08.356 was much higher because we have borrowed money to fight 0:20:08.476 --> 0:20:11.436 the ward. We didn't say would we afford we fought 0:20:11.476 --> 0:20:13.956 the war. We wound up with a duck GDP ratio 0:20:13.956 --> 0:20:17.036 of one hundred and thirty percent, and we said, at 0:20:17.076 --> 0:20:20.916 that point, everybody who fought in the ward, which was 0:20:20.916 --> 0:20:24.076 at virtually every man a lot of women, you could 0:20:24.116 --> 0:20:27.956 get as much education at the most expensive school for 0:20:28.076 --> 0:20:32.396 which you are qualified, we could afford it then, I 0:20:32.436 --> 0:20:34.756 think we can afford it now. It's a matter of choice, 0:20:35.316 --> 0:20:40.876 and we chose to say this is your return for 0:20:41.036 --> 0:20:45.236 having fought for your country. But it also facilitated the 0:20:45.276 --> 0:20:50.676 transition from a rural agriculture economy to a manufacturing what 0:20:50.796 --> 0:20:55.156 made us dynamic in the second half of the twentieth century, 0:20:55.196 --> 0:20:57.996 and we're not doing that now. And what is very 0:20:58.036 --> 0:21:02.276 clear is that we have now fallen behind other advanced 0:21:02.276 --> 0:21:10.116 countries who have made one form or another of opportunity available, 0:21:10.316 --> 0:21:14.956 you know, some day, whether it's technical education or college education, 0:21:15.476 --> 0:21:18.196 you know, trying to design a system that's appropriate to 0:21:18.236 --> 0:21:22.796 their economy and to their circumstances. European countries, particularly the 0:21:22.836 --> 0:21:26.556 Northern European countries, are far more equal, and they have 0:21:26.716 --> 0:21:30.756 higher rates of happiness that seem to reflect simply, among 0:21:30.756 --> 0:21:35.196 other things, that they are more equal societies. People sometimes 0:21:35.236 --> 0:21:39.396 make the argument, well, those are homogeneous societies. They have 0:21:39.676 --> 0:21:42.276 maybe higher rates of immigration now, but there are people 0:21:42.596 --> 0:21:48.316 their countries that haven't had the range of life experiences 0:21:48.316 --> 0:21:51.156 and types of people that we have in the United States. 0:21:51.356 --> 0:21:53.396 You don't buy that I don't buy that at all. 0:21:53.436 --> 0:21:55.756 I mean, first of all, they have more diversity than 0:21:55.796 --> 0:21:58.276 we often give them credit. For seventeen percent of the 0:21:58.316 --> 0:22:02.556 people in Sweden our immigrants, so they've they've actually opened 0:22:02.596 --> 0:22:06.076 up their doors, brings things to Iraqi refugees. We cause 0:22:06.196 --> 0:22:10.036 the war in Iraq, they picked up the pieces when 0:22:10.076 --> 0:22:15.716 we refuse to do that. But the question of homogeneity 0:22:15.836 --> 0:22:19.476 may affect the design of the system. You have to 0:22:19.556 --> 0:22:23.396 have a system that's maybe somewhat more complex if you 0:22:23.476 --> 0:22:29.716 have a very heterogeneous population. But I'm absolutely convinced that 0:22:29.796 --> 0:22:35.756 we can have a system that provides more opportunity within 0:22:35.796 --> 0:22:40.356 a very diverse society. There's absolutely no reason why you 0:22:40.396 --> 0:22:44.476 can't have access to healthcare for all, Why a rich 0:22:44.516 --> 0:22:51.196 country can't provide nutrition, adequate nutrition for all, Why we 0:22:51.236 --> 0:22:55.396 can't have adequate housing for all. If it goes to 0:22:55.836 --> 0:22:58.796 the extremes of inequality that we have in the United 0:22:58.836 --> 0:23:02.556 States and the forms in which inequality arises. When I 0:23:02.596 --> 0:23:06.876 say that is the extremes of the wealthy United States 0:23:06.956 --> 0:23:11.276 is held by the top one percent. That's twice the 0:23:11.396 --> 0:23:15.596 number as in other advanced countries, including countries that are 0:23:15.636 --> 0:23:18.436 growing just as fast or fast in the United States, 0:23:18.436 --> 0:23:21.556 and obviously you have a higher sense of well being 0:23:21.916 --> 0:23:24.996 than in the United States. So in my mind, I 0:23:24.996 --> 0:23:30.316 don't see any reason why diversity is any reason for 0:23:30.516 --> 0:23:35.316 an impediment for providing an embeddiment. If we were very poor, 0:23:35.396 --> 0:23:39.116 that would be another argument. But there the argument would be, well, 0:23:39.156 --> 0:23:41.876 if you're a poor country, you provide housing for everybody, 0:23:41.876 --> 0:23:44.836 but a lower standard than you are when you're rich. 0:23:45.196 --> 0:23:48.116 But what is remarkable by the United States. We're a 0:23:48.196 --> 0:23:51.116 rich country, and we really don't provide even a lower 0:23:51.156 --> 0:23:55.916 standard of housing and food and education than countries that 0:23:55.956 --> 0:23:58.996 are much poorer than US can provide. So maybe it's 0:23:58.996 --> 0:24:02.836 not homogeneity in an ethnic sense or even social cohesion, 0:24:02.916 --> 0:24:05.876 but what does countries have at least one point a 0:24:05.876 --> 0:24:10.076 political consensus that those things should be run. And even 0:24:10.116 --> 0:24:15.076 as political conflict and polarization the same phenomenon that we've 0:24:15.076 --> 0:24:19.276 experienced have increased there, they've maintained that consensus. I mean, 0:24:19.356 --> 0:24:22.716 in Great Britain, the consensus that the national health service 0:24:23.196 --> 0:24:26.116 is something that kind of everyone supports at some level, 0:24:26.196 --> 0:24:28.756 or that the vast majority of the country does. That's 0:24:28.796 --> 0:24:31.956 been maintained in the United States. You know, it's it's 0:24:31.996 --> 0:24:34.996 been a fight for seventy years, and we've never had 0:24:35.036 --> 0:24:39.956 an overwhelming majority in favor of the right to healthcare. Well, 0:24:40.396 --> 0:24:43.796 some of those things are changing now. But part of 0:24:43.796 --> 0:24:46.756 the problem in the United States is this disconnect between 0:24:47.436 --> 0:24:51.316 what people want and our political system, and that comes 0:24:51.876 --> 0:24:56.076 I attributed that partly to the way we have extremes 0:24:56.076 --> 0:24:58.876 of economic inequality and we have a political system that 0:24:59.316 --> 0:25:03.556 helps translate those extremes of economic inequality into political inequality. 0:25:03.636 --> 0:25:06.196 So if you look at some of the major issues 0:25:06.276 --> 0:25:10.956 that our country faces, gun control, vast majority believe there 0:25:10.956 --> 0:25:14.356 ought to be gun controlled. You talk about bank regulation, 0:25:15.116 --> 0:25:17.876 some seventy five percent of the people thought we needed 0:25:18.036 --> 0:25:22.116 stronger bank regulation than we got out of the crisis 0:25:22.636 --> 0:25:24.676 when we passed what was called the doct Frank bell 0:25:24.756 --> 0:25:29.356 Ink twenty and ten. Minimum wage seventy five percent or so. 0:25:29.676 --> 0:25:32.396 I think we ought to have higher levels of minimum wage. 0:25:32.476 --> 0:25:35.356 We can't get it through Congress. It's only through rass 0:25:35.476 --> 0:25:38.716 roots movements in Seattle and San Francisco and New York 0:25:38.756 --> 0:25:42.036 that we're getting getting it. But if you ask what 0:25:42.116 --> 0:25:46.436 do people think, there's rocking census on non unanimity, but 0:25:46.516 --> 0:25:48.956 a brock in census on a lot of these issues, 0:25:48.996 --> 0:25:51.516 I could go down a long list. I don't think 0:25:51.556 --> 0:25:55.796 we have as polarized society. I don't want to say 0:25:55.796 --> 0:25:59.436 that we have a unanimity, but we have two thirds 0:26:00.116 --> 0:26:03.396 three four people. And if you focus then on the 0:26:03.476 --> 0:26:06.996 young people whose country this will be in the future, 0:26:07.676 --> 0:26:10.476 you know, overwhelmed homingle. They think we ought to be 0:26:10.516 --> 0:26:13.676 doing something about climate change, which is a real threat 0:26:13.716 --> 0:26:16.596 to their future, and yet we can't get climate change 0:26:16.596 --> 0:26:21.516 of legislation through What country has the optimal system of 0:26:21.596 --> 0:26:25.276 taxation or level of taxation from the point of view 0:26:25.276 --> 0:26:29.396 of solving inequality or preventing the growth of inequality. Well, 0:26:29.436 --> 0:26:32.836 I don't know the optimum, but I think the Scandinavian 0:26:32.876 --> 0:26:39.516 countries overall have figured out systems that are working better 0:26:39.796 --> 0:26:43.756 for their people. Their tax rates are much higher, but 0:26:43.796 --> 0:26:46.836 they get a lot for it. So you know, we 0:26:46.956 --> 0:26:49.556 often say, well, look at their tax rates so much 0:26:49.636 --> 0:26:54.556 higher than the United States, but we forget privately, we 0:26:54.636 --> 0:26:57.836 have to pay for healthcare twenty percent of GDP they 0:26:57.876 --> 0:27:01.756 put it, that's part of the government pensions. They get 0:27:01.756 --> 0:27:04.836 a lot larger fraction of their old age pension out 0:27:04.876 --> 0:27:08.476 of the government. People in the middle class and upper 0:27:08.476 --> 0:27:13.196 middle class, say privately education. When you start putting all 0:27:13.276 --> 0:27:17.636 that together, you realize that they're getting a good deal 0:27:18.316 --> 0:27:22.076 in Scandinavia. And one of the reasons why they're happier. 0:27:22.756 --> 0:27:25.196 They don't have to worry about if their kid gets sick, 0:27:25.316 --> 0:27:27.236 are they going to be able to afford the doctor. 0:27:27.756 --> 0:27:30.916 They know it will be taken care of. They know 0:27:31.556 --> 0:27:34.996 if the husband gets sick and isn't able to say 0:27:35.316 --> 0:27:38.396 to send their kid to college, he'll be taken care of. 0:27:39.036 --> 0:27:42.876 Their children don't depend on how well their parents are 0:27:42.916 --> 0:27:45.556 doing in order to get an education to live up 0:27:45.596 --> 0:27:50.436 to their potential. It really takes a huge burden off 0:27:50.436 --> 0:27:53.596 of them. And you know, in economics we talk about 0:27:54.116 --> 0:27:58.876 today the consequences of cognitive burdens and impairing ability to 0:27:58.916 --> 0:28:02.796 make good decisions and being productive. One of the reasons 0:28:02.836 --> 0:28:05.196 why some of these countries are actually turning out to 0:28:05.236 --> 0:28:09.836 be more innovative and more productive across the board is 0:28:09.876 --> 0:28:12.476