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После неолиберализма

May 30, 2019 Joseph E. Stiglitz

НЬЮ-ЙОРК – Какая экономическая система наиболее благоприятна для человека? Этот вопрос стал определяющим для нашего времени, потому что после 40 лет неолиберализма в США и других развитых странах мы уже знаем, что именно не работает.

Неолиберальный эксперимент – снижение налогов на богатых, дерегулирование рынков труда и товаров, финансиализация, глобализация – стал полным провалом. Темпы роста экономики ниже, чем в первую четверть века после Второй мировой войны, а выгоды этого роста в основном достаются тем, кто находится на вершине пирамиды доходов. После десятилетий стагнации или даже падения доходов у тех, кто находится ниже, неолиберализм должен быть объявлен почившим в бозе.

Есть как минимум три главные политические альтернативы, которые соперничают за то, чтобы прийти на смену неолиберализму: национализм крайне правых, реформизм левоцентристов и прогрессивные левые (при этом правоцентристы олицетворяют собой неолиберальный провал). За исключением прогрессивных левых эти альтернативы связаны с определённой идеологией, которая уже устарела (или должна была устареть).

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The Economy We Need PS OnPoint
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The Economy We Need

Joseph E. Stiglitz offers a blueprint for reversing inequality, restoring the middle class, and saving democracy.

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Trump’s Most Worrisome Legacy
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Trump’s Most Worrisome Legacy

Joseph E. Stiglitz thinks it's his attacks on the truth-seeking institutions that underpin economic prosperity.

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Market Concentration Is Threatening the US Economy
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Market Concentration Is Threatening the US Economy

Joseph E. Stiglitz argues that weakening competition and outmoded antitrust doctrine are boosting inequality and impeding growth.

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0 Comments on this paragraph, 83 in all 83 Comments on this article

Robert Wolff Feb 16, 2020

If I had only one button to push, it would be yours.
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rog153pr6 Jul 4, 2019

Neoliberalism Was Never about Free Markets
From the beginning, it was about watering down classical liberalism.

https://fee.org/articles/neoliberalism-was-never-about-free-markets/
- Robert Wolff Feb 16, 2020
  
  Agree. If you believe there was a yesterday and tomorrow then you are not in the Heavenly Realm of your Pure Id, which is the Ruling Realm of the Devas, who rule the Money System and subjugate all other Humans to their Reward System, as it pleases the Devas.
  
  Nothing, in the above regard, has changed since 1500 B.C. when the Bible was written and the Hindu Scriptures were written, that described the political differences between those regimes that were "In Power" and those that were "Out of Power" (Jews vs. Pharos in the West, Asuras vs. Devas in the East).
  
  The political differences between those "In Power (Autocrats)" and those "Out of Power (The People)" never was resolved, and never will be resolved except by War. This is the current supposition of Islam, and under the current rule of the West and the East versus the Middle East, this supposition is indisputable.
  
  The rule of the US since the end of WWII is another proof of the Islamic Conjecture - that the resulting victors in War rule for the next Era. How can any intellectual contest this historical truth?
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Mauricio Duran-Loriga Jun 20, 2019

Dear Prof Stiglitz,

You earned a Nobel Prize for your work in asymmetric information. Congratulations.
Nathan Rothschild earned a large part of world's wealth in ONE single day using asymmetric information, two centuries ago. See what I mean?

After this article, your nose is definitely longer than Pinocchio's! (take it with humor please, no offense intended)

Over the last 40 years, the world has been drowned with over-regulation. FACT
Over the last 40 years, taxes have increased like mad, worldwide. FACT
Over the last 40 years, welfare state has never ceased to expand, mandatory. FACT

That is more socialism than neoliberalism.

You are stuck in the ideological world of the 1950's. SO bad for the perpetuation of the species.

Mankind does not need any additional bit of ideology. The ideological battle is counterproductive for the human species. Over with that!

We need ideas that save us as species, not as ideological blocks looking for futile "victories" over our "enemies".

Get a decent job and do something useful, dear Professor.
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Prakash RP Jun 17, 2019

The author wants you to wonder ' What kind of economic system is most conducive to human wellbeing? ' And the author's answer is ' progressive capitalism '. The ' progressive capitalism ' is premised on two fundamental tenets: (1) ' Governments have a duty to limit and shape markets through ... ' ; (2) ' It is also the government’s job to do what the market cannot or will not do, like ... ' The author hasn't explained the logical premise for these tenets. Nevertheless, they appear to confirm my thesis that capitalism is crippled permanently and unable to stand erect without crutches of welfarism.
' The second priority ' ( i.e. the 2nd of the four priorities the ' progressive capitalism ' is, according to the author, based on ) ' is to recognize that the “wealth of nations” is the result of scientific inquiry – learning about the world around us – and social organization that allows large groups of people to work together for the common good. ' But capitalism is the exploitation to the highest degree, just as it's aimed at yielding as much profit ( product of unpaid labour ) as possible for capitalists, of wage workers that produce all wealth & luxuries by the sweat of their brow but have to lead a hard and humble existence befitting beasts of burden throughout their life. Evidently, the capitalist mode of production is meant to enrich the capitalists alone. It's a fact that throughout the history of capitalism, it's the working multitude, producers of all wealth & luxuries, that have made up the huge army of the deprived. The situation was really not different during ' the quarter-century after World War II '. The author, a Nobelist economist, seems, to my astonishment, to be unaware of this point.

The author believes ' [m]arkets still have a crucial role to play in facilitating social cooperation, but they serve this purpose only if they are governed by the rule of law '. Nevertheless, he hasn't clarified what sort of ' social cooperation ' indispensably requires markets, and whether the ' rule of law ' he wants to govern markets is in keeping with the laws of markets ( i.e. the invincible laws of supply & demand ), the laws to blame for uneven distribution of wealth & income. Thus, the ' progressive capitalism ' has to reconcile, if it must achieve its ambitious goal, namely, an ' economic system [that] is most conducive to human wellbeing ', the evidently irreconcilable contradiction between the ' rule of law ' and the invincible laws of markets. The author seems to have missed this point too.

' Otherwise, individuals can get rich by exploiting others, extracting wealth through rent-seeking rather than creating wealth through genuine ingenuity, ' observes the learned author. The Nobelist economist's silliness seems to know no bounds. He is evidently unaware of the fact that the ' progressive capitalism ' is essentially capitalism, and so it has to be based on the exploitation of wage workers by capitalists and thus enrich the capitalist class and deprive the working class. As regards ' rent seeking ', I'd like him to awake to the fact that things like ' rent seeking ' have existed throughout the history of capitalism to contribute to the enrichment of capitalists. It's also evident that the Nobelist economist is not against your ' get[ting] rich by exploiting others ' if you create ' wealth through genuine ingenuity '. It's clear as day that ' progressive capitalism ' is NOT opposed to ' exploiting others '. It's also clear as day that according to the ' progressive capitalism ', wealth is NOT created by workers by the sweat of their brow ; wealth is created by the capitalist class ' through [their] genuine ingenuity '. This thesis should move every sensible guy to ask for examples in defence of it and how many capitalists known to the author have accumulated wealth ' through genuine ingenuity '. The term ' ingenuity ' is, as far as I know, synonymous with ' genius ', ' inventiveness ', ' skill ', etc. Thus, ' ingenuity ' seems to be a sort of calibre that belongs to scientists, researchers, technologists, economists, etc, all of whom are salaried people, hence belong to the BORN-poor working class. The scientific discoveries and technological inventions and innovations are the product of these people's ' ingenuity ' and hard labour. And the economic development of a country is the product of the ' genuine ingenuity ' and hard work of these people and numerous workers that sweat blood to produce all wealth & luxuries. But Joseph E. Stiglitz tells us that the ' genuine ingenuity ' is the property of capitalists who must exercise this faculty, under ' progressive capitalism , to create wealth. What then would scientists, technologists, so many other ingenious people do under the ' progressive capitalism ', I wonder.

' Many of today’s wealthy took the exploitation route to get where they are, ' further says the illustrious author. It's followed by this statement by him: ' Progressive capitalism seeks to do precisely the opposite. ' Does he really want us to believe that the ' progressive capitalism ' of his vision won't allow the exploitation of wage workers by capitalists ?

' Economic power and political influence are mutually reinforcing and self-perpetuating '— I wholeheartedly subscribe to this view of the author.

Very intriguing is this remark by the Nobelist author: ' economies with less inequality actually perform better. Progressive-capitalist reforms thus have to begin by curtailing the influence of money in politics and reducing wealth inequality. ' It's clear as day from this that ' progressive capitalism ' is aimed at just some reforms meant to reduce the ' wealth inequality ' to some extent, say, by a nanogramme or by a microgramme, because, the author believes, ' economies with less inequality actually perform better. ' Thus, ' progressive capitalism ' isn't aimed at ridding humanity of the evil of the exploitation of producers of all wealth & luxuries by some idlers called capitalists and the evil of widening wealth inequality and thus ridding humanity of the greatest and gravest social INJUSTICE , namely, the most disgusting and distressing fact that in a class-ridden society, the poor millions that sweat blood to produce all wealth & luxuries but have to lead a hard and humble existence befitting beasts of burden throughout their life were all BORN poor to be exploited by the BORN rich & the BORN super-rich, which fact is NOT attributable to any faults or failings of theirs while the fact that the rich & the super-rich were all BORN rich & BORN super-rich to exploit the BORN poor and grow richer and richer is NOT attributable to any noble or creditable acts or achievements of theirs. Would the author explain why this ' progressive capitalism ' is superior to communism that aims at ridding humanity of all these evils of capitalism ?
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j. von Hettlingen Jun 11, 2019

Joseph E. Stiglitz says neoliberalism endorsed by conservatives like Ronald Reagan and Margaret Thatcher must be “pronounced dead and buried,” because it had played a major role in a remarkable variety of crises in advanced economies: tax cuts for the rich led to offshoring of their weath; budget cuts caused the welfare system to collapse, affecting the poor and needy; ecosystems deteriorrate thanks to deregulation; free market, globalised economy and the financial meltdown of 2007 8 gave rise to Brexit and Trump’s election in 2016
Critics blame the left for failing to come up with a solution, driving working class into the arms of nationalists and far-right populists. Across Europe, social democrats have become irrelevant in recent years and suffered major losses in elections. As neoliberalism had failed “spectacularly” in the past forty years, it is time for a change and the author sees three alternatives – far-right nationalism, centre-left reformism, and the progressive capitalism of the left.
Nationalists and far-right populists embrace nativism and anti-immigrant sentiments. They insist on national interests, rejecting globalisation, while blaming migrants and foreigners for all of their woes – job losses, growing economic inequality and poverty. Yet in Trump’s case, his “America First” serves more the plutocrats than the working class families, lowering taxes for the rich, while “shrinking or eliminating” social programmes.
The author says, the centre-left represents neoliberalism with a “human face,” bringing the economics of the “Third Way” adopted by Bill Clinton and Tony Blair into „the twenty-first century.” Clinton and Blair claimed their centre-right approach was a social democratic response to the demands posed by globalisation, composed of increased public investments on the one hand and “sound” public finance on the other. The centre left seeks to make “only slight revisions to the prevailing modes of financialization and globalization.”
As the first two alternatives remain “beholden to some form of the ideology that has (or should have) expired,” the progressive left may offer a better option with its version of capitalism, which the author says, has a “radically different economic agenda, based on four priorities” – to restore the balance between markets, the state, and civil society; to recognise that the “wealth of nations” is based on science and knowledge, with social organisation allowing large groups of people to work together for the common good; to address the growing problem of concentrated market power; and to sever the link between economic power and political influence.
Much harm has been done during the four decades of neoliberalism, that there is no room for the return of far-right populists or liberals, as their economic nationalism or free-market utopia with a nightwatchman state would only “guarantee more stagnation, inequality, environmental degradation, and political acrimony, potentially leading to outcomes we do not even want to imagine.”
The author believes progressive captitalism is the “most viable and vibrant alternative” to what has so far failed. This alternative represents the “best chance” to escape the “current economic and political malaise.” It remains to be seen whether Democrats and their allies in Europe will be able to come up with a “comprehensive” agenda that focuses on “education, research, and the other true sources of wealth” while protecting the environment and fighting climate change.
Not to forget is that the West faces enormous challenges from China and Russia – two illiberal world powers, that seek to disrupt the Western-led global order. Any change would only be possible when Trump is gone.
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D. V. Gendre Jun 11, 2019

Interesting, to whatever socialist country you look, i. e. Venezuela, North Korea, former Soviet Union, Cuba etc., the only thing that works are black markets! It gives many people the necessary relieve to bear the harsh reality in a planned economy.

The rigid guilds in the old ages were not distroyed by some wise bureaucrat, academic or even monarch who changed the law in favour of the people. They were in decline long before such law was established because of all the black markets forming in those rigid ages.

It seems that people prefere to form markets in the absence of the government even if it is illegal and yet some academics like Stiglitz still dream of more and more government intervention i. e. socialism. I hope no one really takes this guy serious anymore.
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Michael Public Jun 10, 2019

There are two ways this can be done. The Venezuelan way or the Scandinavian way.
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John Sweeney Jun 5, 2019

Hmmm... the 700,000,000 Chinese lifted out of poverty, gazillions in east Asia, and the absence of true poverty in the Western world would argue that Neo-liberalism made more progress than any system in history -- in, what, 30 years? The only real-world debate now is whether authoritarian capitalism (and globalism) or democratic capitalism will win the world. Stiglitz is stuck in the 1930's.
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John Doyle Jun 5, 2019

The seeds for reform are present in the existing economic structure. All you have to do is divest it of the neoliberal overcoat. Simple enough to return to having bigger fiscal deficits. The fiscal space is huge, so the resources are present today. They can expand as employment is fixed with the Job Guarantee [2% unemployment] Then we can have better social services. It's is a scandal that wealthy countries have citizens sleeping rough. Eminently affordable in fact. This new direction is all set out in MMT. Read up and learn, {Avoiding straw men]
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Larry Stevens Jun 4, 2019

Here's a fisking:
"What kind of economic system is most conducive to human wellbeing? "

We might ask "which one has been the most conducive to date?" The answer is ...neoliberalism.

"The neoliberal experiment ...has been a spectacular failure."

Again, compared to what? Stiglitz gives us no model to learn from, only vapor. Is he claiming "it was better before Reagan"? During stagflation? Neoliberalism came about because LBJ's big government was its own disaster. Obviously, every system that involves human has deep, inherent flaws. The question is how to minimize them.

"Four priorities: The first is to restore the balance between markets, the state, and civil society. Slow economic growth, rising inequality, financial instability, and environmental degradation".

Is Stiglitz claiming that these are equally important? If not, what is the order? If growth is the most important, that may mean the others take a back seat. But the more interesting question is how to resolve conflicts among his goals. The market doest that every day. What is Joe's proposal?

"Markets still have a crucial role to play in facilitating social cooperation"

Not sure what "social cooperation" even means in this context. Is that really what markets are about? How about allocating capital, shifting resources from losers to winnere. How about setting prices?

"Many of today’s wealthy took the exploitation route to get where they are."

Where is the evidence for that? I'd say a lot more took the grit + talent + luck route.

"the third priority: addressing the growing problem of concentrated market power. By exploiting information advantages, buying up potential competitors, and creating entry barriers, dominant firms are able to engage in large-scale rent-seeking to the detriment of everyone else."

Yes, we have a monopoly problem, as seen in the Internet giants. But is it rent-seeking or exploiting network effects? And is the way to address rent-seeking to increase the power of government (the avenue via which rent-seeking occurs) or to increase (neoliberal) competition?

"The rise in corporate market power, combined with the decline in workers’ bargaining power, goes a long way toward explaining why inequality is so high and growth so tepid."

Like to see some evidence of this. I was under the impression that slow growth and high unemployment were the real culprits. Now that the economy is back in balance, those trends appear to be reversing.

"sever the link between economic power and political influence"

While this sounds wonderful, it has never happened in any society that I know of. It's absurd to even talk about. Maybe you could cite Venezuela, where government strip-mined the )economically dominant) national oil company and succeeded in collapsing output and inducing mass starvation in the country with the world's largest oil reserves. PDVSA certainly has no political influence these days...

“one dollar, one vote”

Clinton had vastly more resources than did orange man in 2016, so I guess we don't have to spend much time on this one.

"economies with less inequality actually perform better"

That's a pretty broad claim. Is it true? What major economy is performing better than the US? China? Inequality is exploding there.

"There is no magic bullet that can reverse the damage done by decades of neoliberalism."

Neoliberalism has made the US the richest economy in the world. We lead in endless areas. Lifespan is not one, but we dominate the internet, biotech, electric/autonomous cars, and many others (ok, not mass transit). Our living standards (measured by everything from housing to mobiity) are far higher than our competitors. Are Americans heading for Europe, or are Europeans heading here?

"A comprehensive agenda must focus on education, research, and the other true sources of wealth."

Yup.

"it must provide public programs to ensure that no citizen is denied the basic requisites of a decent life."

Absolutely, but how do you get there? Is it by handing out money or by finding ways to increase families' ability to make their own way? Isn't it scarily easy to stumble into unintended consequences? Sure, increase the minimum wage, but why stop at $15? Why not $100? Then everybody would have lots of money. Right? That's a caricature, but what I'm really asking is how does government decide what the number should be? Should it be the same in Manhattan and Mobile? (Nothing else is...)

In the end, this reads as a rant, whining that not everything is perfect and that some increase in government would make everything better. Stiglitz is a brilliant economist, as he has shown over and over. Nothing in this piece is brilliant. C'mon Joe, bring it! How do we get cheaper health care with better outcomes (not by M4A. Duh)? How do we deal with internet monopolies? How do we increase families' financial security? How do we level the global playing field? How do we grow without destroying the climate?
- ron smith Jun 24, 2019
  
  Post-Keynesians took economics in search of differential equations. That would allow for the sort of certainty available to physics (here a gentle reminder: Einstein was appalled that physics is ultimately a bit of a gamble). That led to nonsense economics centered on Markov Chains of Normally Distributed Randomness. Inasmuch as human games, meaning business in its many forms, are adaptive, Neoliberal economists (post-post-Keynesians) have gone far away from reality.
  
  China is proof that it is possible to breed some capitalism with lots of tyranny and still create a strong economy. Hitler proved much the same thing but it seems to escaped the notice of the historically illiterate who remarked above that the Nazi economy accomplishments, on a rate-of-return basis, dwarfed what the Chinese have done. On the other hand, the Russians continue to prove that tyranny is not a guaranteed solution to any problem other than freedom.
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D. V. Gendre Jun 4, 2019

I have rarely seen an academic that is so biased (see his marxist quote "Many of today’s wealthy took the exploitation route to get where they are."), so far from reality, so narrow minded in economics but has such an influence in this field.

Quote:"Growth is lower than it was in the quarter-century after World War II, and most of it has accrued to the very top of the income scale."
First of all one has to see this on a global scale! There where much more poor people on this planet back then. But the populist left is disregarding the development in China, India, South East Asia, South America etc. Even Africa is better off today then it was in the 25 years after WWII. This is the reality.
Second, the years after WWII where certainly more "Neoliberal" then everything that came afterwards! Today almost every single task is regulated by the government, yet Mr. Stiglitz still claims that we live in a world created by neoliberals! NO Mr. Stiglitz, we live in a world created by regulators as you! Or what do you think do all this representatives in the capitals? Our politicians are the mass-producers of regulations!
In my entire career I worked for several private companies and I can not think of one year where financial, technical or other regulations / laws did decrease! One, living in the real world, must be blind not seeing this.
Before WWI the government sector was at about 5 - max. 12% in the Western world. Today we reach easily 30 - 50% and yet there are populist academics that claim we live in a Neoliberal world?

Mr. Stiglitz implies that the evil rich are the root cause of being poor. This is leftist populism and propaganda! Facebook, Google, Microsoft and all the other successful companies on a free market can not steal money or income from others! The only one that can do so is Stiglitz' beloved government. So whatever the owners of those successful companies earn is given them voluntarily by the consumers!

And if Mr. Stiglitz' beloved government produces disincentives or moral hazards with its regulations... hey don't worry its the economy and the rich that are to blame!

When do the people finally wake up and are not only sensitive to right wing populism but finally also to left wing populism and propaganda?
- ron smith Jun 24, 2019
  
  Go learn some history and some economics. Your comments are without merit.
  - D. V. Gendre Jun 24, 2019
    
    Dear comrade Smith. Thanks for sharing such insightful critisism and profound thoughts. I really can see the profound considerations and merit in your comment.
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Yoshimichi Moriyama Jun 4, 2019

If you break into a bank with a gun, you would be arrested and put in jail even in America. If you break arming yourself with neo-liberalism, you would be welcomed by tellers and get away with millions of dollars. Neo-liberalism is an American and capitalist-world's philosophy. It is perhaps futile to argue with it, against or for it on the level of philosophy.
Neo-liberalism is a social and political institution and performs an important function in delivering economic gains and losses to disparate classes. It is fertile to see through it analytically, not on the level of philosophy but in terms of how it is working in a given social, political and economic context.

The key-tone of American culture is Calvinist and Protestant, so when the devil speaks as he always does from neo-liberalism Americans are easily fooled.
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Chandrashekar Tamirisa Jun 3, 2019

The best course of action for adaptation to climate change, natural resource scarcity, and the Fourth Industrial Revolution is to target full automation in agriculture and de-industrialization with the exception of green energy, telecommunications, clothing, health, green building/housing, and fully automated green transportation technologies. Humanity has to return to agriculture. All of these should be in a nearly 100% circular economy. Then the GDP will be whatever it is with little import for sustainability and societies will enjoy significant leisure. The economic model for this scenario has to be determined. This is the globalization we need.
- ron smith Jun 24, 2019
  
  Here's hoping you can make it happen.
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Manu Oquendo Jun 3, 2019

Free.... what? Seems to me today's academia has frogotten what freedom really is.
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Elizabeth Pula Jun 3, 2019

1. No, more economists, and more people need to read this:

https://carnegieendowment.org/chinafinancialmarkets/78496

2. then more economists, as a professional group, need to acknowledge their own misunderstandings of what Pettis clarifies, and

3. then there needs to be a concerted effort to re-message the mis-messaging that has been occurring TOO LONG, by many economists that don't really have a clue about what they are writing, and talking about. They are so far off-base, that they don't event realize that they have lost the point of anything about economics, as a theoretical base.
Because the essential point has been lost, they really can't even address the real issues about capitalism, and that includes Progressive and Supressive capitalism from all angles, curves, squares, and flat-lines.
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Jay Kay Jun 2, 2019

The traitorous philosophy of Globalism, foisted upon an unsuspecting West by an international cabal of traitors, is at the root of most of the West's ills.

The Globalist engineered sacrifice of the West's manufacturing base, IP, trade terms, working class and middle class, in order to artificially fuel the rise of modern Communist China has not been lost on The Western People.

Nor have The Western People been blind to the Globalist engineered importation of millions of illegal and 'legal' immigrants that are innately and violently hostile to the West and its values.

Alas the apogee of the Globalist disease has now passed, and Western recovery is now in full swing.

Soon, justice will be metered out to those who betrayed us.
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Ben Leet Jun 2, 2019

". . . access to work and a living wage . . ." Certain "requisites of a decent life." Yes, I agree. Stiglitz glosses over the extremity of the problem. Even in the US where the average "disposable" (or after-tax) income is $47,000 per capita, a sizable portion have trouble acquiring the basics. (See BEA.gov, Table 2.1) So, $47,000 times 4 persons in a family equals $188,000 average income after federal taxes. The USCensus shows $94,000 is the median for a four person family, before taxes. So we have rabid inequality. And the United Way charity report ALICE shows that 40% of household cannot afford seven basics: food, housing, utilities, transportation, phone service, health care, child care. 40% means 131 million people. The United Way has offices in almost every county in the U.S. and their study is thorough, and it does not strictly accord with USCensus data. But even the author of the Supplemental Poverty Measure stated that 30% (in 2013) could "not achieve a safe and decent standard of living." (Kathleen Short) The Washington Center for Equitable Growth shows that in 34 years, 1980 to 2014, in the US the lower-earning 50% of adults had an income increase of 1%, from $16,000 to $16,200, while the top 1% tripled its income, from $420,000 to $1.3 million per year. During the 34 years, the 40% above 50th percentile got 32% of growth, the top 9% got 32%, and the very top one percent got 36% of income growth. And if you look at wealth, since 2009 it has doubled from $48 trillion to $109 trillion, and the top 5% own 75% of all financial assets. So again we have an extreme, which Stiglitz does not emphasize. Stiglitz glosses over the extreme predicament we face. Now, "access to work and a living wage" pertains to Mexico, China, Indonesia and so forth. Our trade system does nothing to encourage this shared prosperity. Half of humanity survives on $4 a day on average, says the Pew Research Center. That's about $1,500 a year per person, or $6,000 for a family of four. Is that a "living wage"? Naturally he does not want to appear to have burning hair, but my hair is burning, my pitchfork is ready. "Rabid inequality" -- or foaming at the mouth. I wish he might point out how extreme things have become. He sounds complacent, at least to me. My blog: http://benL88.blogspot.com
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giovanni Iacono Jun 2, 2019

but progressive capitalism is the one that has been pursued in Europe by the social-democratic parties (the European PSE with the French socialists, German social democrats, Italian Democrats, British Labor, who have governed the European Union allied with the EPP European People's Party (Christian Democrat ) (German CDUs, French Republicans, Forza Italia, British Conservatories) in the last twenty years, yet the critical points that Prof. Stiglitz noted for US neoliberalism, especially in relation to low economic growth, are significant in Europe, and sovereignist and right-wing political movements are advancing: in Italy the first party in the last European elections was the Lega (and its leader Salvini), a right-wing sovranist party, which is in government together with the 5-star Movement, a movement that is certainly neither left nor progressive, certainly populist. And the Lega took the votes because it promised to lower taxes, introducing the Flat tax, which in the real lowers taxes to the rich. I am for progressive capitalism, but unfortunately the populist sovereignist rights are having more and more consensus in Europe (and also in England where the first party is Farange's party, a populist and sovereignist right-wing leader, head of Brexit)
- ron smith Jun 24, 2019
  
  And then there is always Donald Trump.
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Peter Barz Jun 2, 2019

The author – like some of his erstwhile standard bearers for neo-liberal nepotism and in time not to get caught out by the incoming tide – tries to jump ship by picking up ideas that are not his own - but have been discussed in the (persecuted) underground for the last 50 years at least. He did not credit them then, either.
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Robert Ley Jun 2, 2019

It has also lead to taking millions of people out of poverty and in that more global sense has been a rousing success. It would have been helpful if he had been clearer that he was talking about results within Western nations.
- Uphaar Dooling Jun 4, 2019
  
  I believe you might enjoy "Politics As Usual" by Thomas Pogge. The entire book is dedicated to breaking down the false narrative that our current economic and global arrangement is the best possible arrangement and challenging the notion of "success" in recent economic development.
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douglas ungredda Jun 2, 2019

Problem is finding the right institutional balance to make sure that the fourth key item on the progressive agenda (link between economic power and political influence) stays severed Even progressive regimes find it almost impossible to reach such a balance. Like arbitrating in a beauty pageant, there must be rigid rules to avoid conflicts of interest.
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John Sli Jun 2, 2019

"The neoliberal experiment – lower taxes on the rich, deregulation of labor and product markets, financialization, and globalization – has been a spectacular failure."

NOT AT ALL! Never over the past 50 years those economies have accumulated more wealth at all social levels.
- John Doyle Jun 5, 2019
  
  tell that to the 48Million US citizens on food stamps, the 50% who have no savings living in negative equity. The homeless and other scandals present in the country. Yes there is wealth, but it's all gone to the top wealthy cohort.
  - ron smith Jun 24, 2019
    
    Very gently stated, sir!
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S Larson Jun 2, 2019

How do you spell naive?
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Chandrashekar Tamirisa Jun 2, 2019

America must make all it needs within USA and only engage in trade in natural resources it is deficient in and agricultural products. This may raise prices but it is fair to the American industry and workers. In fact, all countries should also adopt this as their trade policy and the world trade rules should be changed to this effect. Multinational corporations would still be able to operate around the world but within countries to make what the countries need rather than deploy global production chains. It is a better approach to develop countries and raise living standards around the world than the current predatory global trading system.
- Manu Oquendo Jun 3, 2019
  
  In fact this the end of this "globalization" mandate. The sooner the better,
  Free trade only lasts while it is advantageous for the Empire.
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Evan Schein Jun 2, 2019

Dr. Stiglitz, whose got time for normative economics these days, no one!
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nigel southway Jun 2, 2019

I would say Trumps approach is more correct, agressive and appropriate than this progressive left stuff … most of it is the same stuff.. but Trump is attacking the global trade much more effectively. And we need to avoid the trap of a useless focus on climate change... we need less controls... not more ....and if we produce everything we consume then wealth will be redistributed more, and external arbitrage will be avoided.... Go Trump... and Joe...... stop inventing yet another wheel and why not get behind the fact that you now agree that Global free trade is not working ..so support Trump as you do almost now agree on most important topics..
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John Doyle Jun 2, 2019

Really the structure of the existing economy is perfectly adaptable to a well being future. All the ways to better the Neo'liberal agenda are present already. What has to change is the economists themselves.They are the fly in the ointment with unrealistic models and proposals that are the crumbling blocks of today's neoliberalism. Then we need the political will to work for the common good and not for wealthy donors and the rentier class. There will only be change without the political will if the economies force the changes.The "new" theory called MMT is the existing structure of the economy since the start of FIAT money. in 1971. Right now the disfunction in American society is verging on the catastrophic; 50% of the population are in negative equity, 48 Million need food stamps The US is 'the world's richest poor country ' It's hard to imagine how far its middle class is fallen.It's the middle class that is the engine driving an economy forward. The rentier class hardly need to lift a finger anf the poor are frantically trying to not be forced into the streets
So the text book for advancement is Macroeconomics by Prof Bill Mitchell and L randall Wray and Martin Watts by Red Globe Press. Alrady sold out new editions are coming on line. All we need to know is in that book. Get it. Read it. Act on it.
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Jon Quirk Jun 2, 2019

Whether growth has occurred or not depends which country you are speaking from. Growth, in many developing countries, including China, has even very impressive over the past two decades.

The trend has been that, over this period, the richest, most developed countries have not experienced inclusive growth; indeed wages and salaries have stagnated - the inevitable balancing out of wages around the globe.

Is Mr Stiglitz a racist and believes that inherently Europe and the US and other rich countries have a divine right to earn a multiple of wages paid, for example, China?

The same flaw in logic is in the Picketty analysis.

If the richer nations want to earn more then they need to continually upskill and differentiate "their" labour from that available anywhere else and create scarcity for such skills by investing capital into such niche opportunities.
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Herman Pitts Jun 2, 2019

I would argue that the neo-liberal agenda was hijacked by the progressive left and by the corportists who between them fatally damaged the effort. At the core of true liberalism, the central tenet is commitment to individual freedom. The regime that has emerged over the post-war era is increasingly dominated by swelling bureaucracies, over-reaching central governments and intrusive supra-government agencies.

Describing an oligarchy of big government, trans national financial institutions and the military-industrial industrial powers as Neo-liberalism is at best a fantasy and at worst a concerted effort to forward deliberately misleading propaganda.
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jagjeet sinha Jun 2, 2019

LIBERAL CAPITALISM WITH THE TRUMP TOUCH
Professor Stiglitz earns respect by his single minded pursuit of the Truth.
In recommending Progressive Capitalism, he has recognized what Trump sensed.
The Marginalized Majority of Europe and America both are in awe of China.
Authoritarian Capitalism perhaps best describes China - says Ian Buruma.
Both Stiglitz and Buruma seem to have identified Collective Wealth creation.
The recycling of wealth is at the core of Collective Wealth Creation.
The problem is not Globalization - but the unequal benefits that followed.
In ensuring inclusiveness, the existing liberal capitalism was amiss.
The Central Bank Governors exhausted the tools Democracy gave.
It was this inability of Governors that has led to calls for departure.

Once this apparent lacuna is identified, all that remains is the remedy.
The role of State Capitalism had withered away in the euphoria over Private sector.
Private Sector cannot overcome lacuna in Fiscal Architecture.
The Governor for Fiscal Architecture does not exist.
Recycling of wealth creation is as important as its creation.
Trump is assuming the role of the Governor for Fiscal Architecture.
Because The Marginalized Majority had Democracy to realign Economics.

China's template has Two Governors - PBOC and CDB.
China Development Bank perhaps the pillar of China's template.
Infrastructure Assets are central to Authoritarian Capitalism.
Collective Wealth Creation need palpable evidence in Infrastructure solutions.
America did not have an American Development Bank like the CDB.
The Second Governor ensures Infrastructure solutions for the collective.
Infrastructure Assets that remain in the domain of State Capitalism.
The responsibility for Fiscal Architecture ensures recycling of wealth.
Trump is instinctive in articulation of this need that Democracy signals.
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abay mesfin Jun 1, 2019

"Progressive capitalism" was essentially what Ethiopia tried to implement (under the name "developmental state") with significant positive achievements under the late PM Meles Zenawi. Now we have a new leader whose reforms and policies are more in tune with the wishes of the Neo-liberal camp and the country is heading towards a crisis...
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dan bright May 31, 2019

median income keeping pace with inflation is not the stable situation, and making that the goal is one thing that leads to extreme inequality

the stable situation is median income keeping pace with inflation PLUS productivity increases

that's one thing your solution needs to include
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Robert Wolff May 31, 2019

Difficult for me to understand Stiglitz' difference between the "Center Left" and "Progressive Capitalism". Bot support Capitalism and gains of the Working Class in America, and both have the identical strategy to equalizing income (Capitalism for the Rich, government subsidizes for the poor - the same policies expressed by the "Center Left" and their ideology of Centrism.)

I am sticking with Trump's conclusion that America must return to Classical Capitalism - widespread wealth through sharing of the benefits of Capitalism to all, growing wages for workers and a return to the nuclear family as the basis of American society.

The abovementioned all means eliminating the US 'Balance of Payments' deficit, which in turn means eliminating US trade deficits - exactly the issue that Trump's tariffs are addressing.

The "Center Left" is synonymous with "Progressive Capitalism" which we always, and still do, call CENTRISM.
- Elizabeth Pula Jun 1, 2019
  
  WOW-RE:"I am sticking with Trump's conclusion that America must return to Classical Capitalism - widespread wealth through sharing of the benefits of Capitalism to all, growing wages for workers and a return to the nuclear family as the basis of American society."
  
  That would be nice IF that were a true conclusion. The present actions on the part of one man has only been USING the office of the Executive for his own, and only his personal interests at the extreme expense, and increasing detriment to every other family that consists of members that are US citizens. He is only establishing himself as a very corrupt dictator, while extending the entourage of the few that view him and theirselves as especially entitled, and they are ensuring that that status quo continues. I include Democrats within that label of "entourage". The Neoliberals, and Neoconservatists are milking "THE SYSTEM" for every cent they can put into their own pockets, while guaranteeing that more and more workers, NEVER can even contemplate the opportunity of survival beyond temporary subsistence.
  
  I do not think, nor believe that I am exaggerating any word that I wrote above, in this comment. 06/01/2019
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- Alan Luchetti Jun 1, 2019
  
  Progressive capitalism is MMT for centrists. Centre left is neoliberal macro for centrists. There is a world of difference.
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- Paul Friesen May 31, 2019
  
  Sorry, but there is not going to be a return to "classical capitalism" because there is no return to classical technology. We need an economy that can deal with today's and tomorrow's technology, not the technology of the 1950's which created productive jobs for all and needed the help of everybody to produce its output.
  
  Blaming foreigners for "stealing" jobs may make some people feel good for a bit but it's not going to help as artificial intelligence emerges. Our failure so far to understand what is going on and build an economy that can deal with it is the real problem - not foreigners and immigrants.
  - Mircea Zaharia Jun 2, 2019
    
    I agree with you.Not protectionism but open markets and competition between global firms and nations are the key to world economic growth!I am a romanian teacher of high school economics.
    - Paul Friesen Jun 4, 2019
      
      I agree that those things are helpful, but I do not think they will be enough in future. We will need ways to distribute the things the economy produces that do not rely on work. As less and less work is needed, and as fewer people can find anything they can do that cannot be done better by a machine, we are going to need something like a basic income paid for by sales taxes. We will need to think of everybody as having some right to the products of the increasingly automated economy - not just the shrinking number who can still find something useful to do, or who have managed to claim ownership of something.
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  - Norm Conrad Jun 2, 2019
    
    If current tech universally displaces large scale manufacturing, why does large scale manufacturing exist throughout Asia, Eastern Europe, Latin America, etc.?
    - Paul Friesen Jun 4, 2019
      
      I agree with Elizabeth. Current technology is just not good enough to displace many workers yet. My concern is about the future.
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    - Elizabeth Monosowski Jun 3, 2019
      
      Lower wages and few social benefits to local workers make these places still competitive in mass production for global markets at this moment. The AI tech revolution may also change this in the long run, as low-skilled labor would be massively replaced by the new machines. Humans might become "obsolete", with the ensuing social, economic and political tensions. We are heading to dangerous times...
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    - Oeufs Bruns Jun 2, 2019
      
      Game. Set. Match.
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  - Elizabeth Pula Jun 1, 2019
    
    You're on the right track...
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  - Mad Sarmatian May 31, 2019
    
    Sorry no, you are completely mistaken. 'Centrist capitalism' (or widely known as neoliberalism) seeks to keep government out of markets as much as possible, regulations light to non-existent (self-regulation is 'just fine'), considers the accumulation of 'great wealth' to be a virtue, markets and their 'price discovery' mechanism as an effective way to organize society at large, and I could go on and on.
    
    'Progressive capitalism' sees markets as open to abuse as any other area of human behavior and therefore in need of a lot of regulation (and self-regulation is an oxymoron), considers the accumulation of 'great wealth' to be harmful and the surest path to oligarchy, that markets have their place, but social organization being the worst possible and most harmful 'application' of them, etc.
    
    So really they are closer to the category of 'opposites' then what could be called 'synonymous'.
    - ron smith Jun 24, 2019
      
      I do wish you would leave reality out of this discussion. After all, how many others have broached that foul topic? :-)
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Emanuel Müller May 30, 2019

If progressive capitalism amounts to bringing the private interests under the control of the public interests, wouldn't it be more aptly named Socialism with Chinese characteristics with Western characteristics, or SWCCWWC?
- Rajnish W Jun 2, 2019
  
  No, because it doesn't advocate public or state ownership of capital or assets. It merely acknowledges that there is more to life than money and markets and brings in other factors relevant for human life, through state intervention. The methods found so far, however, appear inadequate. Perhaps we need to create a more evolved state or a better system of representation before we can depend on the state to actually perform this role.
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- Oleksii Antoniuk Jun 1, 2019
  
  The article does not propose socialism. The author talks about the balance between markets and public interests, where the interests of BOTH are considered. "It is also the government’s job to do what the market cannot or will not do."
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Ariel Tejera May 30, 2019

Nation States are becoming more of a nuisance, unable to implement voters demands, and to stand up to big capital or big tech. So, Parties crumble and elections produce presidents of the entertaining kind. That doesn't depend on ideological colors. Worse, problems are more and more of the global kind (drug traffic, climate, pollution, species extinction, etc). Shorter story... Apocalypse looms.
- Elizabeth Pula Jun 1, 2019
  
  You sure are seeing through the entertainment.
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Abdella Abdou May 30, 2019

Interesting comment, but that robot becoming human scares me.
- Paul Friesen May 31, 2019
  
  I don't think robots will become human in the sense of having human emotions and motivations - only human abilities. There would be no point in giving a robot intended to build cars behaviors that mimic jealousy or anger or love. There would be plenty of reason to give it a sensation of touch, to allow it to do things like fitting parts together despite small misalignment or variation in size. There would be plenty of reason to give it the ability to learn from its mistakes.
  
  Humans have intelligence, but we also have many other things that are part of being human that I don't think anyone would want in a robot. I figure those things would just be left out.
  - Elizabeth Pula Jun 1, 2019
    
    It's sure going to get interesting when robo-semi's- that are periodically controlled by remote-real human beings to accomplish complicated maneuvers- crash into real drivers on-the-road because the remote real human being took his eyes of the computer screen for a snack. I guess collateral damage will give more robo-garbage trucks more opportunities to clean up the mess. Then more options can be sold by Corporate INSIDERS of the Private Financial Holding Companies as they spin another absolutely-no- way-to-really-contribute-to-economic-growth-activity-platform onto the public market, so unsuspecting "retail investors/workers" can really lose any hope of any retirement benefits, as the only funds left to "invest/draw-down" are 401k's and pension funds.
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Paul Friesen May 30, 2019

"Unless government takes a more active role than neoliberalism prescribes, these problems will likely become much worse, owing to advances in robotization and artificial intelligence."

Definitely true. But this does not go nearly far enough in understanding the nature of the problem we face and the ways in which the structure of our economy must change to deal with it. "Robotization" is already upon us in a very limited way. But "you ain't seen nothin yet".

Driverless vehicles seem likely to be the next big disruptors, ending the jobs of millions around the world. Who will re-train these people for other work, and what will that work be? But that will still be only the beginning of the beginning.

The real sleeper is artificial intelligence that will be able to learn like a human, with the fine motor skills and senses that humans have. It will come. If nature solved the problem of how to do that by a process of trial and error, I do not believe it will be beyond our abilities for much longer. We need an economic system that can still function when it comes. And a system that can do that would provide a better outcome today, too.

We need to get rid of the idea that people should only be paid based on what they contribute. Right now, it of course makes sense to base some of what people are paid on what they contribute, but some are already able to contribute little or nothing, and their numbers will grow as production is taken over by artificial intelligence. We need to consider the ownership of all the historical technology that has been produced to be shared by everyone, and pay people based on that ownership. For instance, a sales tax could be imposed on all goods produced to reflect the historical knowledge embedded in it. The sales tax would be returned to the people through a mechanism like a basic income or negative income tax.

Such a system would produce a fair outcome now, and be able to adapt as the need for work disappears.
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Per Kurowski May 30, 2019

From Wikipedia: “Neoliberalism include policies such as austerity, deregulation, and reductions in government spending in order to increase the role of the private sector in the economy.”

In 1988, The Basel Accord introduced risk weighted capital requirements for banks. The risk weight of the sovereigns were set at 0%, meaning banks did not have to hold capital when lending to governments, and the risk weight for citizens at 100%, meaning that banks had to hold 8% when lending to for instance entrepreneurs.

Is that “deregulation”? No way, it is blatant missregulation?

The US debt was then in 1988 about $2.6 trillion, now it owes around $22trillion and still has a 0% risk weight.

So all these regulations in place for over three decades are complete anathema to neoliberalism.

Professor Joseph Stiglitz who in 2009 served as chairman of the U.N. Commission on Reforms of the International Monetary and Financial System should know about this.

So what neoliberalism is he here referring to? The politically correct scapegoat one?

https://perkurowski.blogspot.com/2016/12/that-we-suffer-under-thumb-of.html
- Chris Herbert Jun 1, 2019
  
  Not a little criticism. The $22 million you cite as debt has a second side: it is the wealth of creditors. It is accumulated savings as much as it is accumulated debt. So there is that to consider. Secondly, debt is not intrinsic to federal spending. Third, taxes are not intrinsic to federal spending. Taxes reduces wealth for those taxed. Congressional spending creates new money, dollar for dollar. Not debt. Congress spends money into existence and taxes money out of existence.
  - Per Kurowski Jun 1, 2019
    
    $22 trillion ☹
    Will those who have saved by investing in that debt, when they want to convert it into purchase power again (money), will they, in real terms, be able to recover what they paid for it?
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Yoshimichi Moriyama May 30, 2019

American neo-liberalism and economics need to be psychoanalyzed; and then we will really know what they truly are. They are in symbiosis.

"The most realistic of American economists, he (Thorstein Veblen) never failed to ask of the institutions which he examined: how do they work? (Henry S. Commager, The American Mind.)"
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Jag Patel May 30, 2019

The post-second world war experience has repeatedly vindicated the view that the single most powerful driver of prosperity is profit-seeking businesses trading within a law-governed and competitive market economy.

However, in the new millennium, the recently exposed frailties of capitalism are all too evident in markets in which the government is the main or only customer, which happen to be some the most closed in the world, with significant barriers to entry. Indeed, such markets are more often than not, dominated by just a handful of players, the Select Few.

Consider, for a moment, the market in defence equipment.

Even Parliament’s own Comptroller and Auditor General, who is responsible for auditing Whitehall departments, has come around to the view that there is unhealthy market concentration in the defence industry. In an oral evidence taking session at a select committee hearing last year,* Sir Amyas Morse, who was previously Commercial Director at the Ministry of Defence, said:

“I do think there has been an unhappy and unhealthy tendency for market concentration to happen, and I do not think the Government have done very much to prevent it.”

He went on to say:

“Up until quite recently, you would see very considerable contractor concentration. The most extreme example, if you look for a long-term historical example, is what has happened in defence, where we used to have quite a lot of British defence companies, and now there are very few. Whenever an outsider won a contract, they would be taken over …...”

Market concentration occurs when a small number of firms capture a significant portion of the market in particular line of goods or services. It is the manifestation of a lack of competition in the market and because these firms are confident that no one can take their market share, they see no reason to invest in innovation, product research and development, create intellectual property or upskill employees.

The government has a duty of care here. Not only has it presided over market concentration in defence, but it has also failed to maintain a sufficiently diverse range of genuinely independent players for each product line, by allowing a contractor to be taken over by one of the Select Few, immediately after unexpectedly winning a MoD contract – be it an equipment supply contract, or an outsourced service provision contract.

What is especially worrying about this nonchalant attitude towards goings on in the market is that, there is a lack of appreciation in government about the link between able and willing participants in the open market, industry competitiveness and its relevance to securing value for money for public expenditure – despite its long-standing policy of using fair and open competition to select the winning contractor from a choice of industry teams, on the basis for value for money.

This can be explained, in part, by the fact that those charged with administering public funds have no idea of how free markets work, not least, because they have not spent a single day of their lives in the Private Sector – and yet, they have been put in charge of spending taxpayers’ money to the tune of £15 billion per year to buy defence equipment, outsourced services and labour from the Private Sector. Further, there is a reluctance on the part of some people in the pay of the State to use the instrument of competition as a tool, because it creates winners and losers – reflecting their deep-rooted socialist tendencies. It would also explain why 58% of new MoD contracts by value were placed on a non-competitive basis in 2016/17, up from 36% in 2010/11.

Worse still, the judgements made by these people, as it relates to the expenditure of public funds, are distorted by the fact that they will end up in the Private Sector to pursue a second career, later on. So, it comes as no surprise that MoD employees are, without exception, likely to look upon defence contractors favourably and treat them leniently because they are completely reliant upon them for their subsequent career choices, when their time in public service comes to an end, or their employment contract is terminated abruptly by political edict.

This mass migration from MoD to the defence sector via the ‘revolving door’ has resulted in the entire population of defence industry workers to be staffed by people who were previously in the pay of the State – and with it, destroying the competitive culture which is at the very heart of free market capitalism.

And what is the evidence for this? Just look at the make-up of any meeting between MoD and contractors (at every level of the hierarchy). It always ends up as a gathering of people who are currently in the pay of the State, and people who were previously in the pay of the State!
@JagPatel3

* See answer to Q503, oral evidence from Sir Amyas Morse before the Public Administration and Constitutional Affairs Committee, Inquiry into Sourcing public services: lessons to be learned from the collapse of Carillion, HC 748, 24 April 2018 http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-administration-and-constitutional-affairs-committee/sourcing-public-services-lessons-to-be-learned-from-the-collapse-of-carillion/oral/82098.html
- Elizabeth Pula Jun 1, 2019
  
  With the folding of Carillon, all of the debt is now being assumed by the workers. In the US, all of the debt of the below-junk bonds floating by corporations, EX. TESLA, will be the next biggest dump onto the workers.
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- Elizabeth Pula Jun 1, 2019
  
  A lot of validity in your comments. However, RE:"markets in which the government is the main or only customer"In the US, the government is becoming the main and only customer, WHILE the few are churning what is left of public corporate business transactions into their private financial holding groups. Also note, that the next step in the US will be to further deny any type of "government" spending to contribute to any education systems that have been the main-stream that created the community bases for social-contract communities within the individual states of the United States as a nation. The tax bases are so severely eroded. If anyone thinks that philanthropy is going to pave the roads, then mass delusion is real and the only icing on the imaginary cake. Everybody is definitely on-their-own, and retail-investor-beware.
  
  The last tax cuts were the big set-up for double and triple-taxation to the max of every worker earning less than $60,000 gross annually.
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- Alan Luchetti Jun 1, 2019
  
  Utterly false. The keynsian mixed economies before 1980 outperformed the neoliberal economies after 1980. In terms of growth, employment and equality.
  - Elizabeth Pula Jun 1, 2019
    
    That's true. The present transition into IT operations systems has removed critical ACCESS of opportunity at the community levels, as all revenue streams have and are being consolidated only to the first monopolizers of software platforms. Their business models based on theft of personal data is criminal. It will collapse. Just depends if the collapse is gonna be soft, hard, or unimaginably cruel.
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