The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz Read Free Book Online Page A

traditionally been provided by employers. This inefficient and antiquated system has contributed greatly to the reality that the United States has the most inefficient and poorest-performing, overall, health care system among the advanced industrial countries. The problem with our health care system is not that we spend too much; it’s that we don’t get value for our money and that too many people don’t have access to health care. Obama’s health care reform partially addressed the latter problem, though court challenges combined with cutbacks in public support may undermine the effectiveness of the reforms. But it did little (at least in the short run) to improve efficiency. 11 Our high costs are due in part to rent seeking by insurance companies and the pharmaceutical industry. Other countries have curbed these rents. We have not. Other countries not as well-off as the United States have managed to provide universal access to health care. Most countries treat access to medicine as a basic human right. But even if one doesn’t approach the issue from this principled perspective, our failure to provide access to health care increases the inefficiency of our health care system. In the end, with much delay, we do provide some health care to those who are in desparate need. But it happens in emergency rooms, and costs are often much increased as a result of the delay in treatment.
    Lack of access to health care contributes significantly to inequality, and this inequality in turn undermines the performance of our economy.
    Strengthening other social protection programs. The crisis has shown how woefully inadequate our unemployment insurance system is. We shouldn’t have to have a major political battle, in which the unemployed are held hostage, every few months as financial support for extended unemployment insurance comes to an end. The new reality is that, given the magnitude of the recession of 2008 and given the magnitude of the structural transformation our economy is going through, there will be large numbers of long-term unemployed for the foreseeable future.
    Government programs (like the earned-income tax credit, Medicaid, food stamps, and Social Security) have proven very effective in reducing poverty. More spending on these programs could reduce poverty even more.
    Tempering globalization: creating a more level playing field and ending the race to the bottom
    Globalization and technology both contribute to the polarization of our labor market, but they are not abstract market forces that just arrive from on high; rather, they are shaped by our policies. We have explained how globalization—especially our asymmetric globalization —is tilted toward putting labor in a disadvantageous bargaining position vis-à-vis capital. While globalization may benefit society as a whole, it has left many behind—not a surprise given that, to a large extent, globalization has been managed by corporate and other special interests for their benefit. Too often, the response to the threat of globalization is to make workers even more worse-off, not just by cutting their wages but also by lowering social protections. The growth of the antiglobalization movement is, under these circumstances, totally understandable.
    There are myriad ways in which globalization could be brought back into a better balance. 12
    In many countries the onslaught of hot money moving in and out of the country has been devastating; it has caused havoc in the form of economic and financial crises. There is a need for regulations on cross-border capital flows, especially of the short-term, speculative kind. For most countries some restrictions in the unbridled flow of capital would create not only a more stable economy but also one in which capital markets would exert a less heavy hand over the rest of our society. This may not be a policy that is easily available to the United States. But because of the dominant role we play in the global economy, we do