Fri, Nov 08, 2019 - Page 9 News List

The end of neoliberalism nears, as does the rebirth of history

By Joseph Stiglitz

Neoliberalism bore little resemblance to the “open society” that Karl Popper had advocated. As George Soros has said, Popper recognized that our society is a complex, ever-evolving system in which the more we learn, the more our knowledge changes the behavior of the system.

Nowhere was this intolerance greater than in macroeconomics, where the prevailing models ruled out the possibility of a crisis like the one we experienced in 2008.

When the impossible happened, it was treated as if it were a 500-year flood — a freak occurrence that no model could have predicted.

Even today, advocates of these theories refuse to accept that their belief in self-regulating markets and their dismissal of externalities as either nonexistent or unimportant led to the deregulation that was pivotal in fueling the crisis.

The theory continues to survive, with Ptolemaic attempts to make it fit the facts, which attests to the reality that bad ideas, once established, often have a slow death.

If the 2008 financial crisis failed to make us realize that unfettered markets do not work, the climate crisis certainly should: Neoliberalism will literally bring an end to our civilization.

However, it is also clear that demagogues who would have us turn our back on science and tolerance will only make matters worse.

The only way forward, the only way to save our planet and our civilization, is a rebirth of history. We must revitalize the Enlightenment and recommit to honoring its values of freedom, respect for knowledge and democracy.

Joseph Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and chief economist at the Roosevelt Institute, a New York City-based think tank.

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