The road to freedom: Economics and the good society By Joseph EStiglitz. Allen Lane. 2024. pp. 356. £25.00 (hbk). ISBN: 978–0241687888. £13.99 (ebk). ISBN: 978‐1802065367
Year: 2024
Type: book-review
Abstract: Joseph Stiglitz'sThe Road to Freedom joins a queue of similar books arguing that capitalism is based on exploiting the weak and wreaking havoc on workers, the environment and our ethical system.Remarkably, the problems of Western liberal democracies are said to stem from the ideas of F. A. Hayek and Milton Friedman, "the most notable mid-twentieth-century defenders of unfettered capitalism … without rules and regulations" (p.xvi).Their liberal ideology is lumped together with those labelled 'The Right', neoliberals, market fundamentalists, libertarians, and conservatives.According to Stiglitz, all these claim that markets are self-regulating, offering the best protection to consumers and workers and maximising per capita economic growth.The reality, says Stiglitz, is the oppositetheir ideology has legitimised freedom for the few at the expense of the many based on myths which Stiglitz has mathematically proven through his academic articles are 'simply wrong': most markets are inefficient, exploit workers and customers and are based on property laws that favour Big Business.Despite Stiglitz's eminence as an economist, his attack on liberalism is overblown and ill-informed, and his proposal for a new era of 'progressive capitalism' is unoriginal and unconvincing.Let me begin by addressing Stiglitz's assertions that F. A. Hayek bears the blame for capitalism's woes.The title of Stiglitz's book, The Road to Freedom, pays homage to Hayek's influential book The Road to Serfdom (published by Routledge in 1944, just before Stiglitz was born).Stiglitz says that Hayek's 'ideological' claim that unfettered markets preserve political and economic freedoms is a deceptionthey undermine those freedoms and put us "on the road to twenty-first-century fascism" (p.290).For those who know anything about Hayek, this is an outrageous personal and intellectual insult in the book peppered with similar ungracious rhetoric.It is embarrassingly clear that Stiglitz has not read much of Hayek.The claim that Hayek based his political economy on perfect competition among rational humans assumed to know everything about anything is nonsense.Hayek won the Nobel Prize in economics for showing the oppositethat markets worked best when these assumptions do not hold.Hayek's liberalism is based on the 'irremediable ignorance' of individuals and their limited cognitive capacity
Source: Economic Affairs
DOI: 10.1111/ecaf.12661
Author: Cento Veljanovski
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4403353671