Stiglitz on Adam Smith & democratic socialism

Joe Stiglitz in the Washington Post:

Adam Smith, the founder of modern economics, recognized how, if unregulated, businesses would conspire against the public interest by raising prices and suppressing wages. Yet he also suggested that at times markets would lead, as if by an invisible hand, to the well-being of society. Now we understand why markets often fail to deliver on their promise and why Smith’s invisible hand often seems invisible: because it simply isn’t there. Modern theories of industrial organization have taught us how firms construct barriers to entry to enhance their market power. Twenty years into this new century, the empirical evidence is overwhelming: There is increasing market concentration in sector after sector, with increasing profits and increasing markups in prices….

A key component to the democratic socialist agenda is democracy. Democracy is more than having elections every four years. It includes systems of checks and balances — ensuring that no one, not even a president, has unbridled power — and a deep belief that no one can be above the law. It also includes protections of the rights of minorities, and a Congress and a healthy news media holding everyone to account. But it also embraces fair representation, because a system of voter suppression, gerrymandering and money-dominated politics, where the views of the minority can dominate the majority, is antidemocratic.

Read more here.