A New Social Contract
After 40 years the economic doctrine of neoliberalism has reached a dead end. But not for everyone. The 500 richest people in the world, all of whom are billionaires, gained a combined $1.2 trillion in wealth in 2019. Advocates of neoliberalism preach a kind of economic fundamentalism, i.e., markets rule, tax cuts for the rich, deregulation, privatization and austerity. As Ganesh Sitaraman in The Nation magazine reports, “Neoliberal policies created gaping inequality, unleashing the economically powerful to reshape politics, markets, and society to serve their own interests. Neoliberalism’s radical individualism sapped society of community and solidarity, leaving people lonely and isolated, ultimately pushing us to retreat into tribal identities. We can now see,” Sitaraman concludes, “that its results were disastrous.” What needs to happen? It’s time for a new social contract.
Joseph Stiglitz, University Professor at Columbia, is the recipient of the Nobel Prize in economics. He was chair of the Council on Economic Advisors under Bill Clinton. He also served as senior vice president and chief economist of the World Bank. His efforts to move the bank in a more progressive direction got him fired. He is the author of Globalization and Its Discontents, The Price of Inequality and People, Power, and Profits.