I’d never noticed this before, but when you Google the name Joseph Stiglitz – as I did some time ago when I went online to order his latest book – one of the frequently asked questions that pops up is this one: ‘Is Joseph Stiglitz a socialist?’ From a Dutch perspective that’s a somewhat amusing question, because most of the policy proposals that Joe Stiglitz has been putting forward through the years are considered quite mainstream in the Netherlands:
– That some government intervention is needed to correct market failures.
– That markets and globalization can be a force for good, but not always, not everywhere, and certainly not unconditionally.
– And that we need countervailing powers – like unions, like government regulation – to keep market powers in check.
It is currently en vogue to criticize capitalism, to debate its flaws, to advocate a reset. Well, tonight’s guest has been saying this for years.
He is an outstanding economist. He won the 2001 Nobel Prize in Economics, together with George Akerlof and Michael Spence, for their analysis of markets with asymmetric information – that’s when one group of people knows more than the other, which happens quite often. Joe Stiglitz is currently professor of economics at Colombia University. He is also an advisor to governments all over the world. He is an outstanding writer and public intellectual. He has always combined his academic work with an active role in the public debate: as board member of the Bill Clinton’s Council of Economic Advisers in the roaring nineties, as Chief Economist of the World Bank.
And I think a lot of us in this room remember how he, as World Bank Chief Economist at the turn of the century, had epic disagreements with his counterparts at the International Monetary Fund on their standard cocktail of higher taxes and tight monetary policy for developing countries that were going through a crisis. Joe Stiglitz labelled this IMF-policy as ‘market fundamentalism’ – not everybody was too happy about that. In Globalization and its Discontents (published in 2002) Joe Stiglitz explained why globalization wasn’t working for everyone. In The Euro and its Threat to the Future of Europe (published in 2016) he stated that in order to save the European project we probably need to redesign the euro completely, and the economic and political rules surrounding our currency. In The Great Divide (published in 2015) he warned about growing inequality in income and in wealth and how this affects the social fabric.
And now there is People, Power and Profits, in which Joe Stiglitz analyses how the American system of capitalism has broken down and has failed to raise the standard of living for the majority of people in the US. He describes how the rules of the game have been stacked in favor of the haves over the have-nots. How countervailing powers have been wiped out. And how monopoly power, mishandled globalization and poor financial regulation have made it possible to exploit workers.
People, Power and Profits is his agenda for progressive capitalism. It’s a political agenda, because Joe Stiglitz believes that politics and economics can’t be separated. It’s a radical book, a call to action. It’s a great read: it’s insightful, it’s thought-provoking and it’s convincing. It is my honor and my pleasure to introduce to you Joseph Stiglitz.