5 June 2014

Africa: Stiglitz Tells French Economic Forum 'World Can No Longer Ignore Inequality'

The Nobel prize-winning economist Joseph Stiglitz says inequality around the world has reached a level that can no longer be ignored, adding his voice to a debate recently reignited by French economist Thomas Piketty's bestselling book.

Interviewed by RFI, Stiglitz pointed out that inequality is not just about the extreme differences in income between people but also about the differences in opportunities available to them.

The big question today, he said, was how to create societies with equal opportunities for all.

Stiglitz made his comments this week on a visit to France where he is attending the Tiger Forum in Toulouse, a gathering of researchers from around the world.

In his new book "Creating a learning Society", he says that most of the improvement in living standards over the last 100 years was not linked to the accumulation of capital or even better redistribution of resources, but to greater knowledge.

Stiglitz said he wrote the book because when he was chief economist at the World Bank he realised that the gap between developed and developing countries was very much about a disparity in knowledge.

He told RFI that support for education in these countries is central to development and noted that the World Bank and donors have given much to primary education. He emphasised that the priority now is secondary and university education and the creation of think tanks and research centres.

"An important idea in economics is that countries learn by doing," he said, "the only way to learn to make steel is to make it. But if you de industrialise, you will not learn how to make products. So the policies arising from the Washington Consensus kept Africa at the same industrial level as 40 years ago. Which probably had a negative effect on the acquisition of knowledge."

"You cannot leave everything to the market. You can have a strong mining sector but unfortunately mines today do not create much employment, they do not lead to the kind of jobs which could be the basis of robust long-term growth.

Stiglitz welcomes the growing interest in the issue of inequality among economists: "What has happened over the last five or ten years is interesting.

At last it is being recognised that that rising inequality is a problem. Inequality has increased in most developed economies over the last 30 to 35 years. It is now at a level which can no longer be ignored."

Commenting on the huge success in the United States of French economist Thomas Piketty's new book, Capital in the Twenty-First Century, which has become a bestseller in only five weeks, he noted that people appeared more and more concerned about the issue of inequality around the world.

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