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Whither Socialism?

Joseph E. Stiglitz

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Jul 20, 2012 Gregg Wingo rated it it was amazing

This is perhaps Stiglitz' masterpiece since he is now devoting himself to popular works on current economic events. Written in the midst of Eastern Europe's transition out of communism, it reflects on the problems of market systems and, necessarily, on socialism. It is a profound look at the spectrum of capitalism from neo-liberalism to market socialism.

If you can remember your first economics course you will recall that it began with a set of fundamental assumptions, one of which was informatio This is perhaps Stiglitz' masterpiece since he is now devoting himself to popular works on current economic events. Written in the midst of Eastern Europe's transition out of communism, it reflects on the problems of market systems and, necessarily, on socialism. It is a profound look at the spectrum of capitalism from neo-liberalism to market socialism.

If you can remember your first economics course you will recall that it began with a set of fundamental assumptions, one of which was information is equally available to all parties in the market at no cost. However, we know that in the real world this is not the case. Marketing and arbitrage are expensive and profit making activities that focus on the asymmetry of information in the marketplace. Stiglitz has spent his professional life researching and exploring the difference between the theoretical and the factual conditions of information in the market and developed the field of information economics into a science.

This is not a mathematical text but rather like Smith and Marx before him Stiglitz has committed empirical research and synthesized an explanation of the real nature of capitalism. He critiques the failures of real world markets to achieve the efficiencies envisioned by classical and neo-liberal economists and gives credit to both Marx and Schumpeter for their realization of the importance of technological innovation in the evolution of markets. He also pays homage to the intellect of Keynes by analyzing the different roles of government intervention in the various forms of capitalism present in contemporary societies.

This is a manifesto for serious and balanced government intervention in order to ensure that markets are competitive for the benefit of both buyers and sellers. It is also an excellent work for introducing the reader to the empirical knowledge that has been generated in the field of economics since Marx. While the author provides philosophical reflections this is not the point of the book for it is actually a work of a scientist not a philosopher.

This is not an easy read but it is a worthwhile one. ...more

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