Joseph Stiglitz: The Price of Inequality
http://www.alternet.org/books/155738/joseph_stiglitz%3A_the_price_of_inequality/
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The failure of markets
Markets have clearly not been working in the way that their boosters claim. Markets are supposed to be stable, but the global financial crisis showed that they could be very unstable, with devastating consequences. The bankers had taken bets that, without government assistance, would have brought them and the entire economy down. But a closer look at the system showed that this was not an accident; the bankers had incentives to behave this way.
The virtue of the market is supposed to be its efficiency. But the market obviously is not efficient. The most basic law of economicsnecessary if the economy is to be efficientis that demand equals supply. But we have a world in which there are huge unmet needsinvestments to bring the poor out of poverty, to promote development in less developed countries in Africa and other continents around the world, to retrofit the global economy to face the challenges of global warming. At the same time, we have vast underutilized resourcesworkers and machines that are idle or are not producing up to their potential. Unemploymentthe inability of the market to generate jobs for so many citizensis the worst failure of the market, the greatest source of inefficiency, and a major cause of inequality.
As of March 2012, some 24 million Americans who would have liked a full-time job couldnt get one.
In the United States, we are throwing millions out of their homes. We have empty homes and homeless people.