Inequality and Instability: A Study of the World Economy Just Before the Great Crisis

TUE, MAY 8, 2012 (58:48)

As the reach of financial markets extends across the U.S. and the globe, interest rates, debt, and debt crises become the dominant forces driving the rise of economic inequality almost everywhere. The "super-bubble" that investor George Soros identified in rich countries for the two decades after 1980 became a super-crisis for the majority of the population, not just in the U.S. but the entire world.

Economist James K. Galbraith discusses his book, Inequality and Instability: A Study of the World Economy Just Before the Great Crisis. In it he argues that finance is the driveshaft that links inequality to economic instability. The book challenges the viewpoint that technology is behind rising inequality. It also challenges those who have placed the blame narrowly on trade and outsourcing. Inequality and Instability presents evidence that the rise of inequality mirrors the stock market in the U.S. and the rise of finance and of free-market policies elsewhere.

+ BIO: James K. Galbraith

James K. Galbraith teaches at the LBJ School. He holds degrees from Harvard and Yale (Ph.D. in economics, 1981). He studied as a Marshall Scholar at King's College, Cambridge in 1974-1975, and then served in several positions on the staff of the U.S. Congress, including Executive Director of the Joint Economic Committee. He was a guest scholar at the Brookings Institution in 1985. He directed the LBJ School's Ph.D. Program in Public Policy from 1995 to 1997. He directs the University of Texas Inequality Project, an informal research group based at the LBJ School.

Galbraith's new book is The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too (2008). He is the author of Balancing Acts: Technology, Finance and the American Future (1989) and Created Unequal: The Crisis in American Pay (1998). Inequality and Industrial Change: A Global View (Cambridge University Press, 2001), is coedited with Maureen Berner and features contributions from six LBJ School Ph.D. students. He has co-authored two textbooks, The Economic Problem with the late Robert L. Heilbroner and Macroeconomics with William Darity, Jr.

Galbraith is a Senior Scholar of the Levy Economics Institute and Chair of the Board of Economists for Peace and Security, a global professional network. He writes a column for Mother Jones, and occasional commentary in many other publications, including The Texas Observer, The American Prospect, and The Nation.

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