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Learn the key ideas of the book by Joseph Stiglitz

People, Power, and Profits

How the capitalist system works and what are our prospects for the future

The Western economy, particularly in America, is based on the principles of capitalism and the free market. Since the Second World War, certain mechanisms have been created that have made a few people very rich at the expense of many - the middle class. The divide between rich and less rich continues to grow and the recent wave of populism gives us no reason to hope for better things to come. In People, Power and Politics, Nobel Prize winner Nobel Prize winning Joseph Stiglitz shows us how we ended up in this situation, highlighting both economic and political situations. He affirms that it is indeed from politics that change must come.

People, Power, and Profits
Read in 13 min.
Listen in 16 min.

Many useful tips to:

  • Understand how and why the western capitalist economy has failed.
  • Analyse the defects of the capitalist system on which our economy is founded.
  • Develop a few hypothetical interventions that could change the situation and avert the worst.

The author of the book:

Joseph E. Stiglitz is an economist and winner of the 2001 Nobel Prize for economy. He was Senior Vice President and Chief Economist of the World Bank and he was chairman of the US Government’s Council of Economic Advisers during the Clinton presidency. In 2011, Time Magazine included him on its list of the 100 Most Influential Individuals in the World. Today he teaches economics at Columbia University and is Chief Economist of the Roosevelt Institute.

IDEA CHIAVE 1/12

Capitalism is the invisible hand of the market

It is no secret that things aren’t going so well in the Western world, both from an economic and a social point of view. Of course, we could just stop and look at figures such as the GDP and data related to import and export, but this data wouldn’t give us an accurate picture.

In many countries the divide between rich and poor continues to increase and a growing part of wealth is distributed among just a small few. This has led to the erosion of the middle class, the elimination of social mobility and increased discontent in our population.

One of the principles that capitalism is based on is the free market. The idea is that if a market is left free to operate in natural conditions, without any government intervention, it will spontaneously reach optimum conditions. The actions of all the players in the market will reach a natural balance that will lead to optimum distribution of resources and profits.

However, this theory has not been confirmed by the reality that we currently see. What we are actually witnessing is very different. We have seen large companies and corporations take advantage of their dominant positions to influence politics and increase their advantage, thus increasing their power in the market and becoming literally untouchable.

But how did we get to this point? How is it possible that capitalist ideas and promised wealth for all, have had such unjust results? And above all, what can we do to change things?

  

The key ideas of "People, Power, and Profits"

01.
Capitalism is the invisible hand of the market
02.
A nation that knows how to create wealth and truly prosper
03.
Old recurring mechanisms
04.
The centralisation of economic resources does not benefit anyone
05.
How we lost our way
06.
The “invisible hand” that does not exist
07.
How to manage globalisation without demonising it
08.
The real problem – the financial sector
09.
The threat of new technologies
10.
The importance of governments – and why they need to be supported by the people
11.
Quotes
12.
Take-home message
 
 
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