The increase in inequalities corrodes trust; It has an economic impact similar to that of a universal solvent. Create an economic world in which even the winners are cautious. And the losers ... in every transaction, in all contact with a boss, a company or a bureaucrat, see the hand of someone who wants to take advantage of them.
In "The Great Divide: What to Do About Unequal Societies," Joseph E. Stiglitz discusses how rising inequalities undermine social trust. He compares the economic ramifications of these disparities to that of a universal solvent, implying that they seep into every aspect of economic life. This pervasive insecurity creates a climate where even those who benefit from the system remain wary, impacting overall economic interactions.
Stiglitz emphasizes that for those on the...