Jim Stone: How Academic Research Can Address Wealth Concentration and Inequality

Cathy and Jim Stone (Photo courtesy of the Stone Foundation)

The Graduate Center announced on Thursday a $9.5 million gift from the James M. and Cathleen D. Stone Foundation, bringing the Stones’ total support for The Graduate Center’s Stone Center on Socio-Economic Inequality to $14.36 million since 2016. The goal of the Stone Foundation is to promote a more knowledgeable and inclusive society, and as part of the Stones’ commitment to academic research, they support five university-based centers in the United States and one in France. 

Jim Stone, who holds a Ph.D. in economics from Harvard University and is the founder and CEO of the Plymouth Rock group of insurance companies, recently spoke to The Graduate Center about the importance of research on rising inequality and wealth concentration, and about how the Stone Center benefits from being a part of The Graduate Center and CUNY:

The Graduate Center: In recent years, both income and wealth have become even more concentrated in the United States. What do you see as the consequences of these trends? Why is wealth concentration, in particular, such a threat to the functioning of democracy? ‚Äč

Stone: The drift of disproportionate asset holdings toward the pinnacles of wealth carries a society away from meritocracy, productivity, empathy, and mobility. Carried far enough in a privately funded political environment, skewness in wealth distribution can ultimately undermine social cohesion and our democratic ideals. Excesses of wealth concentration, which are too seldom studied due to difficulties in measurement, are even more worrisome than income disparities because the inequalities of wealth are so many times greater than those of income. And wealth, more than income, determines socioeconomic class and tends to set up lifetime disparities among people that begin at birth and are hard to overcome. The more a society’s wealth is held tightly in the hands of a few over generations, the less becomes the reward for hard, honest work by everyone else.

GC: When did you first become interested in economic inequality and in supporting academic research as a way to increase awareness of this issue and develop policy solutions? Why is it particularly important for researchers to make data and analysis related to wealth concentration available to the public?

Stone: I have been interested in inclusiveness, fairness, and equity for as long as I remember, but my specific interest in income and wealth inequality took shape when I served as insurance commissioner of Massachusetts in the 1970s. It was in that role that I began to focus systematically on the widening income and wealth gaps in our society. The disparities have only grown wider over the past five decades. Meanwhile, as an economist, I was disappointed to discover how little academic attention was given to addressing the problem, particularly with respect to wealth accumulation. There has been recent improvement in that regard, and I am pleased in particular to see the recent expansion of availability to datasets, but the topic of vastly unequal wealth distribution, its causes and consequences, remains understudied.

GC: How do you think the Stone Center gains from being located within CUNY — the country's largest urban public university — and from The Graduate Center setting?

Stone: CUNY, as a public institution available to all, is in itself a force for greater equality and meritocracy. And CUNY and LIS have already played a leading role in data dissemination and analysis on this topic. The Graduate Center at CUNY has, I believe, assembled the most distinguished and talented faculty corps anywhere in the world with a primary focus on wealth and income inequities. I foresee more and more talented graduate students and postdocs coming from around the world to study alongside CUNY’s scholars. More than many other institutions, moreover, The Graduate Center recognized from the start the importance of addressing wealth and income inequality from an interdisciplinary perspective. My wife Cathy and I are honored to be helping the center grow, and we look forward to seeing its impact and reputation multiply.
 

Submitted on: FEB 25, 2021

Category: General GC News