THE ROAD TO FREEDOM

The Nobel laureate contrasts the reigning predatory system of capitalism with a kinder, gentler form.

“Without strong regulation, neoliberalism will destroy our planet,” writes Stiglitz, author of The Price of Inequality and Freefall, explaining that it is a social obligation to constrain those who would exercise that destruction. A conservative economist of the Milton Friedman bent would cry that personal freedom is being victimized, but the author convincingly argues that social freedom matters: “The Right claims to be the defender of freedom,” he argues, “but…the way they define the word and pursue it has led to the opposite results, vastly reducing the freedoms of most citizens.” By way of example, Stiglitz writes about opposing the bailout of the big banks during the 2008 financial crisis, noting that their exercise of “freedom” meant foolish risk-taking that left American taxpayers holding the bag—thus reducing their freedom. A truly free market, he argues, is one that goes beyond the tenets of neoliberalism and the idolatry of GDP and addresses things such as inequality and remedies for it by using progressive taxation, which, he allows, “may…constrain the opportunity set of the rich” while leveling the deprivations the poor suffer, which in turn amount to the loss of freedom as well. Along the way in this accessible thesis, Stiglitz argues that the social contract, so scorned by libertarianism, merits revising and renewing. He notes that “there is no moral legitimacy to market incomes,” which by their very nature are based on exploitation, and that property rights, enshrined as holy objects by the Chicago School, “are always circumscribed,” with limits rightly placed on them so that they do not harm others—all with an eye to scrapping a zero-sum game for one with more winners.

A solid case for a progressive capitalism based on cooperation for the common good.