If stability and efficiency required that there existed markets that extended infinitely far into the future - and these markets clearly did not exist - what assurance do we have of the stability and efficiency of the capitalist system?
Interpretation
The quote questions the assumptions of stability and efficiency in capitalism without infinite market scenarios.
Joseph Stiglitz's quote critically examines the foundational beliefs of capitalism, suggesting that if the ideal conditions for stability and efficiency—namely infinite future markets—are not present, then we must question the stability and efficiency of the capitalist system itself. It implies that the capitalist framework relies on unrealistic expectations that may not hold true in practice.
In practice
This quote could be used in a discussion about economic policy during a conference on capitalism.
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 real bosses in the capitalist system of market economy are the consumers. They by their buying and by their abstention from buying decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor. They are no easy bosses.
Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.
I have come to a resolution myself as I hope every good citizen will, never again to purchase any article of foreign manufacture which can be had of American make, be the difference of price what it may.
What I did not know yet about hunger, but would find out over the next twenty-one years, was that brilliant theorists of economics do not find it worthwhile to spend time discussing issues of poverty and hunger. They believe that these will be resolved when general economic prosperity increases. These economists spend all their talents detailing the process of development and prosperity, but rarely reflect on the origin and development of poverty and hunger. A a result, poverty continues.
I believe myself to be writing a book on economic theory which will largely revolutionize - not, I suppose, at once but in the course of the next ten years - the way the world thinks about economic problems.
I truly believe that capitalism was created to help people live better lives, but sadly over the years it has lost its way a bit. The short-term focus on profit has driven most businesses to forget about the important long-term role they have in taking care of people and the planet.
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