Rules matter when it comes to freedom, says Nobel Laureate Joseph Stiglitz
Progressives must reclaim the principles of freedom from the right, according to Nobel Laureate Professor Joseph Stiglitz, who addressed a packed audience at SOAS University of London this week.
Discussing his new book The Road to Freedom: Economics and the Good Society, the world-renowned economist criticised the free-market economy and the myth of trickle-down economics, arguing that fairness is both a shared responsibility and the key to economic freedom for all.
Drawing parallels between government neglect and economic hardship in US red states, Professor Stiglitz illustrated that populism grows not where governments have done too much, but too little. The notion that a self-regulating market would result in anything but an unequal distribution of wealth and power, he said, falls apart under economic analysis.
He said: “Let me make it clear, there never was a theory behind trickle-down economics and there never was much evidence for it. Now, I guess there's some evidence for trickle-up economics, and our current administration in Washington is working very hard to make sure money trickles up.”
Using the examples of gun control and the COVID-19 pandemic, he highlighted how the overly individualistic, conservative understanding of freedom has also led to a rapid decline in quality of life. The right to bear arms means children feel less safe in schools, while refusing to wear a mask or get vaccinated means more people become hospitalised. Professor Stiglitz questioned which freedom was more fundamental to society.
The existence of these trillion-dollar companies is proof that we’re doing something wrong.
Drawing on the US’s mega-rich corporations, he warned against the perception of monopolies as an indicator of economic success: “The existence of these trillion-dollar companies is proof that we’re doing something wrong. It is evidence that we have ineffective anti-trust policies and ineffective competition policies, that have led companies to get for themselves enormous amounts of money.”
Professor Stiglitz pointed out that this position is worsening under the leadership of Donald Trump, who disregards not only the rule of law but fundamental economic theory. This breakdown in governance, he says, is likely to outlive Trump’s time in office, as it has empowered those with autocratic tendencies and harmed the US’s reputation abroad.
Trump doesn’t have monopoly on stupidity, and he doesn’t have a monopoly being a demagogue.
Reflecting on the US’s place in the world right now, the Nobel Laureate said: “Trump’s tearing up of the rule of international economic law will have short-run and long-run consequences – no one can or should trust an agreement that they make with the United States. Trump doesn’t have monopoly on stupidity, and he doesn’t have a monopoly being a demagogue. We have a large supply of would-be demagogues... and I can assure you, we have the capacity to produce more.”
The event was organised by the SOAS Development Leadership Dialogue, which brings people and disciplines together in dialogue in order to generate more effective and inclusive development strategies. The next DLD event, a panel conversation on illicit finance and its impact on development, is taking place on the 5 June.
Image credit: Anne Di John
