A ‘superficial’ and ‘misguided’ version of freedom has captured the American right. Joseph Stiglitz considers the alternatives
- Written by Christopher Pollard, Sessional Academic in Sociology and Philosophy, Deakin University
“Freedom is a core human value,” writes Joseph Stiglitz in his new book The Road to Freedom: Economics and the Good Society. “But many of freedom’s advocates seldom ask what the idea really means. Freedom for whom? What happens when one person’s freedom comes at the expense of another’s?”
Reflecting on the famous slogan of American jurist James Otis – “taxation without representation is tyranny” – Stiglitz observes with concern that many on the contemporary US right seem to have arrived at the view that “taxation with representation is also tyranny”.
This type of thinking has increased over the decades, extending from Ronald Reagan’s claim that “markets are the solution, government is the problem” to Ted Cruz’s call to abolish entire government departments – including the IRS, the Department of Education and the Department of Energy – and Ron Paul’s assertion that “the more government spends the more freedom is lost”.
Something, argues Stiglitz, has gone awry with the conception of freedom here.
Review: The Road to Freedom: Economics and the Good Society – Joseph Stiglitz (Allen Lane)
In The Road to Freedom, Stiglitz critiques what he sees as the “superficial” and “misguided” interpretation of freedom that has gained ascendancy in the period of neoliberal globalisation. This view, he says, is held in common by the assortment of conservatives, libertarians and other right-of-centre people that make up the US right.
Focusing on the US, he argues that the way the idea has been defined and pursued has led to the opposite of “meaningful freedom”. It has failed “to give due recognition to how interdependent people are in a modern economy” and led to a vast reduction in the “freedoms of most citizens”.
The most important value
Stiglitz has a long resumé, which includes serving as chair of the Council of Economic Advisers during the Clinton administration. He is a former senior vice president and chief economist of the World Bank and is currently a professor at Columbia University. He was awarded a Nobel Memorial Prize in Economic Sciences in 2001. In 2011, he was named by Time as one of the world’s 100 most influential individuals.
The author of many works and a longstanding critic of the neoliberal turn in economics and public policy, Stiglitz is perhaps best known to a wider public for his bestselling book, Globalization and Its Discontents (2002). There, he critiqued the neoliberal global trade order, which he argued was exploitative, hindered developing economies and was driven by faulty assumptions about how markets work.
Joseph Stiglitz.
Fronteiras do Pensamento, via Wikimedia Commons, CC BY-SA
A deeper understanding of freedom
Stiglitz notes the way neoliberal policies have freed corporations to “exploit consumers, workers and the environment”, and freed trade to “accelerate de-industrialization” in the US. The combination of key economic developments, such as globalisation and monopolisation, and the resulting concentration of economic power, have played a significant role in “increasing inequality, slowing growth and reducing opportunity”.
These massive inequalities are socially corrosive. The incentives of neoliberal capitalism, Stiglitz writes, “have done much to weaken trust”, which has led to a “narrowing of vision and values”. They engender selfish and dishonest behaviour. “Without adequate regulation, too many people, in the pursuit of their own self-interest, will conduct themselves in an untrustworthy way, sliding to the edge of what is legal, overstepping the bounds of what is moral.”
This has led, in turn, to the rise of populism. “The challenges and attacks on democracy have never been greater in my lifetime,” Stiglitz warns. “Trump is what neoliberalism produces.”
Neoliberal capitalism, he emphasises, “does not enhance freedom in our society”. It obstructs the understanding people have about “how their actions might constrain the freedom of others”. In general, it “curtails the freedom of the many while it expands the freedom of the few”. As such, Stiglitz argues for “a deeper understanding of the meaning of freedom”, seeking to “strengthen democratic debate of what economic, political and social system will best contribute to the freedom of the most citizens”.
A key problem is simply an inadequate view of markets. Stiglitz points out that the concept of “unfettered markets” is an oxymoron, because it is the state and its laws that provide the framework within which people transact. “Without rules and regulations enforced by government, there could and would be little trade,” he observes. “Cheating would be rampant, trust low.”
The view that “competitive markets are efficient” is also mistaken, because they are subject to contingencies of imperfect information and incomplete contracts. So too is the belief that “markets on their own would somehow remain competitive” – a proposition that simply ignores “the experiences of monopolization and concentration of economic power”.
Without well-designed regulation to ensure competition, Stiglitz argues, “firms on their own will subvert competition in one way or another and power becomes more and more concentrated”. In addition, he highlights “critical market failures” – for example, in protecting the environment and managing natural resources. Regulation is thus necessary to “prevent exploitation of each other and the environment”.
Freedoms, negative and positive
A key part of what Stiglitz wants us to see is that the rules and regulations that govern economies are not “laws of nature”. The economic forces that both enable and constrain our individual choices and actions in a market economy are significantly shaped by socially determined policy choices.
The simplistic neoliberal view fails to appreciate how political freedom and economic freedom, in fact, work together. Instead, this view reduces our political freedom to its own “narrow” economistic version. This has led to the well-rehearsed TINA (“there is no alternative”) theme in public political discourse. What is impaired is “a critical societal freedom” – the “freedom to choose an economic system that could, in fact, enhance freedom for most citizens”.
Stiglitz discusses Isaiah Berlin’s distinction between “negative” and “positive” freedom. Negative freedom refers to “freedom from” – freedom from hunger or state coercion, for example. Positive freedom means “freedom to do” – that is, having the opportunity and resources to be able to choose and act for oneself.
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