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 losing end of the scale, every engagement—be it with employers, businesses, or government entities—feels exploitative. This perspective fosters a cycle of mistrust and caution, ultimately stifling cooperation and innovation in society. The implications of such distrust are profound, suggesting that a more equitable economic landscape is essential for restoring faith in social and economic systems.
