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Joseph Stiglitz Calls to Abolish the Capitalist Church of Self-Interest

Can the ideology of capitalism bend to a stronger ideology of justice and love?

Cash payment is not the sole nexus between man and man. ~Thomas Carlyle

Even after a terrible financial crisis exposed their folly, the High Priests of Old Time Economics still speak the cold, barren language of self-interest. Acting solely in your own interest, they preach, is the key to efficiency and human well-being.

Not Joseph Stiglitz. Wednesday night, the Nobel Prize-winner spoke to a packed chapel at New York City’s Union Theological Seminary, which, along with the Institute for New Economic Thinking (INET), a New York-based think tank, hosted the first conversation in a brand-new series meant to change the way we understand economic issues.  Union Theological Seminary president Dr. Serene Jones, INET Executive Director Robert Johnson, Professor Gary Dorrien of Union Theological Seminary and Columbia University, and Betty Sue Flowers, Director of the Lyndon Baines Johnson Library and Museum, joined Stiglitz to talk about the topic at hand: “Economics & Theology.”

Sound like a strange combination? In today’s atmosphere of fundamentalist religious fervor, it’s easy to forget the great traditions of progressive Christianity that have made economic justice a central focus. I was raised in the bosom of North Carolina’s Pullen Memorial Baptist Church, where the legendary liberal firebrand W.W. Finlator carried the message emphasized by Dr. Martin Luther King – namely that it was the duty of Christians to fight on behalf of the poor, to protect the workers, and to end discrimination in all forms.

“Every society grapples with moral issues,” said Johnson as he introduced Stiglitz. “And Joe might be our ‘Grappler-in-Chief.’”

The Grappler-in-Chief got interested in economics not because he was dazzled by mathematical equations, but because he wanted to find a way to solve the sociological problems he saw growing up in Gary, Indiana, where he noticed that discrimination stood in the way of America’s ideal of equal opportunity for all. His parents told him that the two most important things in life were to use your mind and see what you could do to serve others. And so he did both. 

Lately Stiglitz has focused on the alarming gap in the U.S. between those at the top and everyone else, an interest which led to a prescient  Vanity Fair article on the dominance of the 1 percent in May 2011, and most recently to a new book,  The Price of Inequality. Commenting on Mitt Romney’s declaration that 47 percent of the nation was nothing more than freeloaders, Stiglitz said, “the real divide is between those who see the country as a community and those who don’t.”

That divide keeps increasing, and according to Stiglitz, the heart of the problem is our corrupt political system. “It’s the politics, stupid,” said Stiglitz, noting that while the same economic forces operate around the world, the U.S. stands out for our lack of social mobility and economic injustice. What makes the difference between a more equitable country like Sweden and America? Rules and regulations that favor the wealthy, said Stiglitz. He pointed out that such a trend is not only economically destructive, but morally indefensible.

“Our largest banks engaged in practices aimed at blacks and Hispanics,” said Stiglitz. “They did so without moral restraints.” He observed that the criminal behavior of the financial sector has warped our sense of justice, undermining the promise of the Pledge of Allegiance, which calls for justice for all. That promise, he indicated, rang hollow to people who had been evicted from their homes through no fault of their own in the wake of a crisis created by the banking industry.

So why does this immoral behavior continue? How do we break the cycle? Members of the panel discussed the difficulty of letting go of myths that give us comfort. Rob Johnson talked about the rags-to-riches Horatio Alger story as a “necessary illusion” that staves off anxiety in the face of mounting economic challenges.  He observed that to realize that America is no longer the place where anyone can move to the top is to suffer a great sense of loss and mourning. People will keep clinging to such myths long after they have been disproven to avoid the pain and uncertainty of facing unpleasant truths.

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