Monday, May 1, 2017

Joseph Stiglitz' analysis of free markets

Joseph Stiglitz (1943-now) is a famous economist best known his contributions to information economics and his critique of laissez faire economic polices. Stiglitz is also the recipient of the 2001 Nobel Prize in Economics.

This post is a collection quotes from Joseph Stiglitz about economics.

Philosophy of economics

"In debate, one randomly was assigned to one side or the other. This had at least one virtue — it made one see that there was more than one side to these complex issues." (Autobiographical Essay, 2001)

"Seeing an economy that is, in many ways, quite different from the one grows up in, helps crystallize issues: in one's own environment, one takes too much for granted, without asking why things are the way they are." (Autobiographical Essay, 2001)

"Once I undertook the analysis of a problem, I often looked at it from a variety of perspectives. I approached the problem as a series of thought experiments - unlike many other sciences, we typically cannot do actual experiments." (Autobiographical Essay, 2001)

Critique of free markets

"The fall of Wall Street is for market fundamentalism what the fall of the Berlin Wall was for communism." (Interview with the Huffington Post, 2008)

"The reason that the invisible hand often seems invisible is that it is often not there." (Interview with the International Herald Tribune, 2006)

"They [free market policies] were never based on solid empirical and theoretical foundations..." (New York Times, 2007)

"The standard neoclassical model the formal articulation of Adam Smith's invisible hand, the contention that market economies will ensure economic efficiency provides little guidance for the choice of economic systems, since once information imperfections (and the fact that markets are incomplete) are brought into the analysis, as surely they must be, there is no presumption that markets are efficient." (Whither Socialism? 1994)

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