Thursday, 10 July 2008

Are you serious Mr. Stiglitz?

Over at the Austrian Economists blog Peter Boettke asks Are you serious Mr. Stiglitz? Given what Stiglitz wrote I'm hoping, no.

Boettke quotes Lord Skidelsky on Stiglitz. Skidelsky wrote
he lacks the eloquence, urgency, and passion of the preacher, while he has too often abandoned the rigor of the scientist.
Boettke writes
Stiglitz is also scandalously sloppy as a public intellectual.
The main target of Boettke's attack is Stiglitz's recent op-ed piece that claims that Neo-Liberalism has reached its end. Boettke writes
In this op-ed he actually claims that neo-liberalism was never supported by economic theory nor economic history. Instead, neo-liberalism was a political doctrine supported by interest groups. So much for the Nobel winning ideas of Hayek, Friedman, Stigler, Buchanan, Coase, Becker, Lucas and V. Smith. So much for the empirical evidence on the governmental causes of the Great Depression, the historical record on economic performance and political tryanny under communism, the failed efforts at development planning in Africa and Latin America, etc.
Boettke continues by pointing out
Not only does he dismiss in this latest op-ed an entire stream of intellectual history in economics from Adam Smith through J. B. Say and Bastiat to Mises and Hayek, and the other thinkers I named, but he is trying to dismiss without any data analysis the positive benefits of market reforms for much of the world over the past 30 years. Again, lets remember this is just an op-ed -- though of course one written by a thinker that is internationally recognized and respected as an economist. Thankfully, Andrei Shleifer's "The Age of Milton Friedman" will be published in the Journal of Economic Literature, and it contains data and argument that demonstrates the empirical record is contrary to what Stiglitz suggests so professional opinion has yet to be completely swayed over to Stiglitz's opinion on theory and evidence.
While I would hope Stiglitz is not serious, I fear he really is and, sadly, people will listen to him because of who he is. The battle for classical liberalism goes on.

1 comment:

Matt Nolan said...

I have to admit that Stiglitz talk in Wellington disappointed me immensely.

Here was an intelligent economist bagging inflation targeting because "we can't do much about the world price of oil going up" - so central banks were wrong. He Ignored that central Banks will realise that this was:

a) a price level shock, not inflation
b) potentially a change in relative prices

As a result the Bank will look past it (if expectations are effectively anchored).

He seems to have dumped intellectual rigor for populist statements