The Road to Freedom: Economics and the Good Society, by Joseph E. Stiglitz, W.W. Norton & Company, 384 pages, $29.99
Joseph Stiglitz, a former chief economist of the World Bank, believes that taxation is a prerequisite for freedom, contrary to the view that it threatens freedom. In his book The Road to Freedom, he argues that the rejection of taxation by the right, including libertarians and conservatives, poses a problem as market failures are more extensive than acknowledged by neoliberals like Friedrich Hayek and Milton Friedman. Stiglitz advocates for redistribution and regulation as the path to real freedom.
The book criticizes neoliberals who advocate for unregulated markets, arguing for the need for guardrails and societal consensus to curb wealth inequality. However, the book overlooks the expansion of the regulatory state since World War II and the continued presence of the welfare state.
Stiglitz’s claim that unfettered markets have robbed the U.S. and U.K. of political freedom lacks empirical evidence. The book could benefit from a deeper engagement with the insights of Nobel laureate Elinor Ostrom, who emphasized the importance of polycentric governance in managing public goods.
While Stiglitz’s views may resonate with some readers, his polemics against neoliberals could be more convincing with a deeper exploration of alternative governance models. The book’s defense of progressive capitalism lacks a clear roadmap on how to implement such policies in the current context.
Stiglitz does not acknowledge that Sweden, a country that ranks highly in the Heritage Foundation’s Index of Economic Freedom, is actually quite receptive to policies advocated by neoliberals.
For a deeper understanding of market liberalism, there are more recent books worth reading, such as Peter Boettke’s “The Struggle for a Better World” or Deirdre McCloskey and Art Carden’s “Leave Me Alone and I’ll Make You Rich”. These books explain the concept of freedom as understood by classical liberals. If you have doubts about the moral compass of neoliberals, “Humanomics” by Bart Wilson and Vernon Smith articulates the moral framework of Adam Smith’s tradition. For a compelling critique of capitalism, Daniel Bromley’s “Possessive Individualism” delves into how modern capitalism differs from its historical roots.
Despite the heavily regulated nature of our current capitalism, it still fares better than many real-world alternatives. The fact that so many people aspire to move to the U.S. indicates that its institutions are perceived as favorable. The border issues, often attributed to excessive regulation, highlight the strength of the U.S. institutions compared to those in other countries. It is evident that individuals are seeking greater economic and political freedom by moving to the U.S.
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