Joseph Stiglitz: a proponent of development with shared prosperity

In September of 2011, I received a call from my friend from school Kaushik Basu. Kaushik was then the Chief Economic Adviser to the Government of India based in Delhi. He said that his famous economist friend from New York, Joseph Stiglitz would be in Calcutta with his wife Anya Schiffrin and would I host them for dinner at the Bengal Club?
I said my wife and I would be delighted to. I was a great admirer of Stiglitz and had just read his book Freefall. In this book, Stiglitz discussed the causes of the 2008 recession/depression and proposed reforms that were required to avoid a repetition. Interestingly, although he was a former Chief Economist of the World Bank which evangelizes free market, he advocated government intervention and regulation in a number of areas. Stiglitz is not just a recipient of the Nobel Memorial Prize in Economic Sciences in the year 2001.Based on citations, he is one of the three most influential economic thinkers in the world.
In late October 2011 again, I received a call that the date would be 9th November and that Joe’s father-in-law Andre Schiffrin and his wife Maria, would also be joining. As I was not an economist, I felt it would be a good idea to invite Dr. Asim Dasgupta to the dinner at the Bengal Club. In May 2011, the Left Front had lost the elections ending its 34 years of rule and Dr. Dasgupta was no longer the Finance Minister. But both Dr. Stiglitz and Dr. Dasgupta had completed their PhDs at MIT and knew each other as alums of the same alma mater.
Stiglitz has a keen and curious mind. My daughter had just gone to study computer science at an American Liberal Arts College, not to a big University. Stiglitz put our minds at rest by saying, “People outside the US do not understand the phenomenon of Liberal Arts College well. A liberal arts college aims to impart a broad general knowledge and develop general intellectual capacities, in contrast to a professional or technical curriculum. I was from a small town in Gary, Indiana and went to a liberal-arts college called Amherst. It was a great learning experience. I still associated with Amherst as a member of their Board of Governors.”
He narrated his experience of working with Paul Samuelson, a legendary professor of Economics at MIT. One day, Samuelson told him that Joe was the finest economist that Gary, Indiana had ever produced. Joe thought this was somewhat sarcastic, because Gary was then a small, crumbling steel town near Chicago with a population of barely 80,000.
Later, he discovered what a great compliment Samuelson had paid him. Samuelson himself was born in Gary, Indiana and was the first American economist to receive Nobel Memorial Prize in Economic Sciences. Besides Samuelson, Kenneth Arrow also a Nobel-prize winning Economist grew up in Gary and his nephew Larry Summers had Gary connections as well.
Stiglitz is interested in works of art as well. There is a painting called The Gypsy Fortune-Teller by Joshua Reynolds at the Reynold’s Room in the Bengal Club. Stiglitz was fascinated by the painting. The sly glance of the gypsy, the earnest attention of the woman and the innocent looks of the child make it a very beautiful painting. Reynolds painted the original in 1778. There is a controversy whether the painting hanging on the walls of the Bengal Club is an original or a copy. It is claimed that original is in the private collection of the Duchess of Dorset. Did Joshua paint two identical pieces?
Stiglitz was fascinated by the painting, its history and the controversy and intrigue surrounding it. After drinks at the Reynold’s Room, when we moved to the main dining hall, Dr. Asim Dasgupta joined us for dinner. Predictably, the discussion drifted to politics and why the left Front had been trounced in the general elections by the Trinamool and Congress Party combine.
Dr. Dasgupta laboured hard to explain with data and statistics that the combined vote shares of the two anti-Left parties was behind the debacle. I peppered the discussion by saying that because of a blunder by Prakash Karat the General Secretary of the CPI (M), the Congress Party had been driven into the waiting arms of Trinamool. I added that the common people were worried about their daily needs and living conditions, they were not bothered by the fine print of the nuclear agreement with the US which became a deal-breaker for the Left.
At this time, Stiglitz asked if the forcible acquisition of land of the peasants for inadequate compensation was a key reason for the election debacle of the Left? He had managed to cut through the clutter of masses of data and plunged to the heart of the issue. He asked searching questions on alternative livelihood of the displaced peasants, how they would be compensated and whether the quantum of compensation would provide them with adequate inflation-adjusted earnings.
While conceding that industrialization was essential for creating employment, Stiglitz consistently expressed the view that a fair deal was necessary for the farmers and use of legal provisions or force to displace them would be both unfair and politically counter-productive. Dr. Dasgupta tried to explain that the setback was temporary and that the Left would soon bounce back. Stiglitz was not convinced.
While we were finishing the dessert in an old British-built club that still embraced many of the archaic rules and traditions, I asked him what would be his lasting memory of our city. He said he had gone to the Coffee House where he saw a poster that read “Occupy Wall Street. Occupy All Streets. It is not a crisis of capitalism, capitalism is the crisis”!
“It was interesting coming to Calcutta and seeing the echo of Occupy Wall Street here. It is quite a global movement,” said the university professor at the Columbia Business School with a smile.