Josh Matthews meets Nobel laureate, Professor Joseph Stiglitz

Written by Josh Matthews, HBA

I recently had the great pleasure and opportunity to meet distinguished Columbia University Professor, Joseph Stiglitz. Professor Joseph Stiglitz was awarded the Nobel Prize in Economics for his work on the analyses of markets with asymmetric information. In the late 90’s, he was Bill Clinton’s chair on the council of economic advisers and then shortly afterwards, wrote his bestselling book ‘Globalisation and Its Discontent’ in 2002.

Professor Stiglitz is the founding chair of the University’s Committee on Global Thought and is critical on the management of globalisation and free markets without regulation. He believes a little bit of regulation creates a lot of freedom for everyone and that no regulation whatsoever is bad for our freedom.

After the global financial crisis, Professor Stiglitz was appointed as the chairman of the U.N. Commission on Reforms of the International Monetary and Financial System, where he oversaw ‘suggested proposals and commissioned a report on reforming the international monetary and financial system.’ Shortly after he was named as one of the 100 most influential people in the world by Time magazine.

He talked about how maximising shareholder value at all costs is not in the best interest of society and the country. He also believes in the economic philosophy Georgism, and that people and companies need to pay taxes in order to fund government policies to expand our freedoms. This resonates with MASECO’s B Corp values as we believe that companies can also be a force for good in society and shouldn’t only focus on maximizing profits. He went on to discuss how the world has been negatively affected by Neoliberalism which breeds selfishness, and that this system will devour itself. He referenced Adam Smith who said society can’t function without trust and stated that ‘a society will degenerate into a war of all against all’. This seems to be very relevant in the western world at the moment.

There is a growing movement against Neoliberalism in the US and a growing consensus that unfettered markets haven’t worked as well as expected. There is an alternative to free markets know as Progressive economics and ‘Progressives’ have been reticent to use the word ‘free’ when naming ideas.  In contracts ‘Neoliberals’ have been very clever on ‘branding’ phrases or terms with ‘free’ in them such as free trade, free markets, free enterprise, etc.

He went on to talk about how climate change is the ultimate externality and that ‘polluters’ are taking away our freedom. Younger people understand this, and, in some countries, the youth are suing their governments as they are not paying enough attention to their future. Climate change is a global problem which requires universal cooperation. Unfortunately, there is coercion between the powerful countries against the weak countries on this matter and it shows up in part in trade agreements that favour powerful countries.

He didn’t talk much about the asymmetry of information that he won the 2001 Nobel prize for.  But there is a great article in the FT that was published on April 29th about him, his views and his life: https://www.ft.com/content/282fd7db-081a-444b-b054-4861a41c659a

In summary, Professor Stiglitz is concerned about the historical unfettered rise of neoliberalism across the global and how this is affecting our freedoms.  He is concerned about the inequality between the wealthy and poor and externalities such as climate change.  He is encouraged by the recent recognition by many that neocapitalism isn’t the solution to the world’s problems and that we are becoming more thoughtful about globalisation and how it is affecting people and the environment.  If you are interested in learning more about his views and work, his latest book, ‘The Road to Freedom’ goes into detail about how the above matters are negatively and positively affecting our freedoms.