Regulatory reform must move beyond limiting the damage that the financial sector can do and ensure that the sector genuinely serves society.
Interpretation
Regulatory reform should focus on making the financial sector beneficial to society rather than just controlling its negative impacts.
Joseph Stiglitz emphasizes the importance of moving past merely restricting the harmful actions of the financial sector. He advocates for reforms that ensure the financial system actively serves societal needs, thereby enhancing its positive contributions rather than simply limiting its potential for harm.
In practice
During a debate on financial regulations, a speaker might use this quote to highlight the need for more socially-focused financial policies.
Free migration within Europe means that countries that have done a better job at reducing unemployment will predictably end up with more than their fair share of refugees. Workers in these countries bear the cost in depressed wages and higher unemployment, while employers benefit from cheaper labor.
I don't think we can have democracies that work where most of the people are not benefiting economically, where most of the people are worried about their job security.
Let me put it very forcefully: No large economy has ever recovered from an economic downturn through austerity. It's not going to happen in the United States, and it's not going to happen in Europe.
What separates developing countries from developed countries is as much a gap in knowledge as a gap in resources.
One of the arguments I make for the failure of the euro is that, at the time it was being constructed, there was a 'neo-liberal' ideology which said that all we need to do to make this thing work is to get deficits low, keep inflation low, and take down barriers, and then everything would be fine.
Trump sees the world in terms of a zero-sum game. In reality, globalisation, if well managed, is a positive-sum force: America gains if its friends and allies - whether Australia, the E.U., or Mexico - are stronger. But Trump's approach threatens to turn it into a negative-sum game: America will lose, too.
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
They will come to learn in the end, at their own expense, that it is better to endure competition for rich customers than to be invested with monopoly over impoverished customers.
When you bring in multi-brand retail items into the country, you're not just bringing the products, but you're also harming local manufacturers.
THE CORRECTION, when it finally came, was not an overnight bursting of a bubble but a much more gentle letdown, a year-long leakage of value from key financial markets, a contraction too gradual to generate headlines and too predictable to seriously hurt anybody but fools and the working poor.
The world needs banking but it does not need banks.
I'm just saying that if you understand how the economic machine works, it just works like a machine. There are cause-effect relationships.
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