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.
When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.
In the 1930s, unemployed working people could anticipate that their jobs would come back.
Large corporations, of course, are blinded by greed. The laws under which they operate require it - their shareholders would revolt at anything less.
Regulation has gone astray. . . . Either because they have become captives of regulated industries or captains of outmoded administrative agencies, regulators all too often encourage or approve unreasonably high prices, inadequate service, and anticompetitive behavior. The cost of this regulation is always passed on to the consumer. And that cost is astronomical.
Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. Believe me, it will be enough.
The real bosses, in the capitalist system of market economy, are the consumers.
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