Joseph Stiglitz: “Don’t do another dose of real austerity.” © Dan Dietch

For the past week or so, the Nobel Prize-winning American economist Joseph E Stiglitz has been in the UK promoting his new book, The Great Divide. The title refers, of course, to inequality, which Stiglitz thinks saps democratic legitimacy and undermines the economy. Indeed, the economics of inequality is the principal theme of the essays and articles collected in the book. “Sustained economic growth,” Stiglitz writes, “can’t happen when the vast majority of citizens have stagnant incomes.”

The Great Divide focuses mainly on the United States, but Stiglitz doesn’t think the UK is “much different” where major economic trends are concerned. And he’s not afraid of pronouncing on British affairs either, particularly on the conduct of macroeconomic policy in this country. When he met Prospect last week, the conversation ranged widely, touching on recent developments in British politics among other subjects. Here are some highlights. (A longer version of the interview will appear in the July issue of the magazine.)

• On Ed Miliband and Labour Stiglitz agrees with Ed Miliband’s assertion that inequality is the “most economic problem”. Why does he think that theme failed to resonate in the recent general election campaign? “A couple of reasons. One of them is that obviously personalities matter. They either engage the people or they don’t. Secondly, the e…
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