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Time is up for neoliberals - Joseph Stiglitz - WaPo
https://www.washingtonpost.com/opinions/2024/05/13/stiglitz-captialism-economics-democracy-book/Shared: https://wapo.st/3wy6NKy
Democracy requires a new, progressive capitalism.
Amid another election season, our impulse to debate American democracy through a single political lens is understandable. But we’d be better served considering a second closely related question too: Which economic system serves the most people?
On one side of the economic debate are those who believe in largely unfettered markets, in which companies are allowed to agglomerate market power or pollute or exploit. They believe firms should maximize shareholder value, doing whatever they can get away with, because bigger profits serve the common good.
The most famous 20th-century proponents of this low-tax/low-regulation shareholder-centric economy, often referred to as neoliberalism, are Milton Friedman and Friedrich Hayek. These Nobel Prize-winning economists took the idea beyond the economy, claiming this kind of economic system was necessary to achieve political freedom.
They worried about the growth of government in the aftermath of the Great Depression, when under the influence of John Maynard Keynes, the state was taking on new responsibilities to stabilize the economy. In “Capitalism and Freedom,” Friedman argued that “free markets” were indispensable to ensure political freedom. In Hayek’s words, government overreach would lead us down “The Road to Serfdom.”
We’ve now had four decades of the neoliberal “experiment,” beginning with Ronald Reagan and Margaret Thatcher. The results are clear. Neoliberalism expanded the freedom of corporations and billionaires to do as they will and amass huge fortunes, but it also exacted a steep price: the well-being and freedom of the rest of society.
Amid another election season, our impulse to debate American democracy through a single political lens is understandable. But we’d be better served considering a second closely related question too: Which economic system serves the most people?
On one side of the economic debate are those who believe in largely unfettered markets, in which companies are allowed to agglomerate market power or pollute or exploit. They believe firms should maximize shareholder value, doing whatever they can get away with, because bigger profits serve the common good.
The most famous 20th-century proponents of this low-tax/low-regulation shareholder-centric economy, often referred to as neoliberalism, are Milton Friedman and Friedrich Hayek. These Nobel Prize-winning economists took the idea beyond the economy, claiming this kind of economic system was necessary to achieve political freedom.
They worried about the growth of government in the aftermath of the Great Depression, when under the influence of John Maynard Keynes, the state was taking on new responsibilities to stabilize the economy. In “Capitalism and Freedom,” Friedman argued that “free markets” were indispensable to ensure political freedom. In Hayek’s words, government overreach would lead us down “The Road to Serfdom.”
We’ve now had four decades of the neoliberal “experiment,” beginning with Ronald Reagan and Margaret Thatcher. The results are clear. Neoliberalism expanded the freedom of corporations and billionaires to do as they will and amass huge fortunes, but it also exacted a steep price: the well-being and freedom of the rest of society.
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