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Professor Joseph Stiglitz on Australian investment in people, infrastructure and technology for future prosperity – June 2014

Professor Stiglitz has a colourful history of which he should be proud. In this excellent 15 min ABC Lateline interview with Steve Cannane he discusses a number of core economic issues in a way only Joseph Stiglitz can.

I find his ability to synthesize complex and sometimes competing issues into a picture of basic common sense, a very unique talent.

In this interview Stiglitz discusses the principle and the pros & cons of a nation investing 'appropriately' in its people across all levels as the core to future prosperity:

One of the reasons the US has not been performing as well as it should is that if you're not lucky enough to be born with the right parents, able to give you a good education, your prospects are really bleak. The likelihood that you'll be able to live up to your potential are really very small.

  On corporate waste:

...a lot of people talk about the waste in government. The private sector waste a lot. And in fact, no government has ever wasted money on the scale of America's private financial system, which has cost us trillions of dollars. But if you don't make these investments, you're wasting resources.

On social & wealth inequality:

Australia ranks about fifth among the advanced countries in the level of inequality after tax and transfer... you're not worst... inequality in the standard measure Gini is twice that of the best-performing countries. ...inequality has reached a level where it's actually having adverse effects on countries like the United States and other advanced countries.

On the economic distribution of human resources effort & brainpower:

...more resources go into speculation. The result of that?: an economy that has an excessively large financial sector, an economy that's excessively is unstable, excess activities in speculation, and, less of our scarcest resource, our most talented young people, fewer of them are going into research, into the kinds of things - transistors, lasers - all these basic research that would improve our standard of living. Why go into those low-paying research jobs if you can make a lot more money after tax in speculation?

The interview continues into discussion on corporate tax avoidance and the Carbon Tax... please refer to the website for video and a full transcript of this excellent interview.

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