When America’s Founders described the purpose of legitimate government, following the teaching of John Locke, as being the securing of people’s rights to “life, liberty, and the pursuit of happiness,” they clearly had in mind what were later termed “negative” rights or liberties, that is, rights not to be violated by the actions of others. What is noteworthy about these rights is that no person’s enjoyment of them entails violating anyone else’s equal rights. That is what makes them natural, providing a standard against which the validity of all purely legal rights should be measured.
By contrast, when Joseph Stiglitz, a Nobel Prize–winning economist and the chair of President Clinton’s Council of Economic Advisers, speaks of “freedom,” he has in mind a much broader conception of liberty. To think of freedom and coercion “as mere antitheses” he dismisses as simplistic. Rejecting the negative notion of freedom as too narrow, he defines it as encompassing such rights as people’s being enabled to have the economic resources they need to “live decent lives” and “live up to their potential.” But this entails that unlike the natural rights of the Declaration of Independence, such rights are not simply compatible, since providing everyone with sufficient property and influence requires reducing the possessions and income of those who have more so as to increase the resources of those with less. As Stiglitz repeatedly puts it, “the enhancement of one person’s freedom often comes at the expense of another’s.” For instance, “requiring employers to pay minimum wages” deprives them of their “freedom to pay whatever they can get away with.” But this is all to the good, from Stiglitz’s perspective, since his “ultimate objective” is to discover “what kind of an economic, political, and social system is most likely to enhance the freedoms of most citizens” by “drawing the right boundaries” on freedoms and “making the right trade-offs” among them. However, he never explains who gets to decide what the proper boundaries of freedom are, who determines the correct trade-offs, or how the relevant authority is to distinguish people’s “potential” to do good (which government should encourage) and evil or useless things (presumably, the opposite).
Stiglitz’s bête noire is what he terms “neoliberalism,” a relatively new political term to differentiate what used to be called liberalism—that is, the “classical” liberalism of the American Founders and their followers, who believe that there is an inherent connection between economic and political freedom—from the “progressive” liberalism he espouses, which has seized the “liberal” label since the New Deal. The most prominent twentieth-century advocates of neoliberalism within the economics profession, whom Stiglitz repeatedly singles out for scorn, are two other Nobel laureates, Friedrich Hayek—best known for his book The Road to Serfdom, which warned that depriving people of their economic freedom would culminate in despotism—and Milton Friedman, whose most influential work was Capitalism and Freedom. But Stiglitz’s account of their views often amounts to striking a straw man. For instance, he accuses them of advocating “unfettered capitalism,” only to acknowledge in the next sentence that “unfettered markets,” that is, “markets without rules and regulations,” are an “oxymoron,” because trade could hardly exist in the absence of governmentally enforced “rules and regulations.” Of course, neither thinker ever denied that reality. Elsewhere, in fact, Stiglitz acknowledges that both men recognized “the need for government intervention” when individual behavior causes harmful “externalities” such as deforestation or air pollution.
Stiglitz also compares such writers’ advocacy of a return to liberalism in its original sense, following the Great Depression, to “Hitler’s Big Lie.” He never acknowledges the ultimate failure of Roosevelt’s progressive New Deal policies to cure the Depression, as measured by unemployment figures. He attributes Hayek’s and Friedman’s supposed error to their having “examined the economy from an ideological perspective,” as opposed to his own “dispassionate” one. As a dispassionate observer, Stiglitz attributes to both men, “like many other conservatives”—that is, neoliberals—“an unfailingly dismal view of human nature,” suggesting that their “extreme views about individual selfishness” derive from “deep introspection.” That is, finding themselves to be deeply selfish, they then attributed their deficiencies “to everyone.”
I do not believe that any fair-minded person who had the opportunity to hear both men speak, as I did; watched Friedman’s (subsequently published) public television series with his wife Free to Choose; or read their books can reasonably conclude that they suffered from selfishness rather than being motivated by genuine philanthropy—whether or not one agrees with all their views. Repeatedly, Stiglitz obscures the distinction between basing economic policies on the presumption that human beings, when faced with two alternatives, are likely to favor their own interest—a supposition that is fundamental to economic science—and the view that people in general are purely selfish, a position that few economists would maintain in theory, and even fewer, I am confident, in practice. (I once heard the radical libertarian economist Gordon Tullock, who enjoyed playing the enfant terrible, maintain such a thesis at a political science conference—merely eliciting the audience’s laughter.)
In fact, the presumption that people are likely to respond to economic incentives is no different from James Madison’s explanation in Federalist No. 51 of why the Constitution’s authors embodied a set of “checks and balances” to prevent one branch of the government from violating the rightful authority of another: “if men were angels,” no government would be needed at all. This did not prevent Madison from elsewhere observing that republican government, more than any other form, depends on a considerable degree of virtue among the populace, or the “trust” that Stiglitz groundlessly claims that market economies undermine. (Sometimes, Stiglitz’s ad hominem attacks on Friedman appear to be the product of mere envy, as when he complains that a celebrated article by the latter on the social responsibility of corporate managers was more influential than critiques published by him and allies.)
But Stiglitz doesn’t think well of the Constitution or the Declaration of Independence, either. “When Americans sing their national anthem with the words ‘the land of the free and the home of the brave,’” he explains, they are guilty of self-deception. Findings in “recent years” show that at the time of the Founding, “there was freedom for some” but its antithesis for others, such as slaves and indigenous peoples. “Evidently,” Stiglitz concludes, the country’s “patriots” championed “not freedom for all, or some generalized sense of freedom, but rather freedom for themselves,” specifically freedom from the British king’s rule and the taxes he imposed (Stiglitz’s emphasis). “From our vantage point,” he remarks, “it is hard . . . to see how a society seemingly so deeply committed to freedom allowed slavery to continue,” considering many people’s awareness at the time of its “moral outrage.” Here, Stiglitz is simply out of his depth. No serious historian maintains that voters in the Southern states, heavily dependent on slavery, would have agreed to ratify a Constitution that abolished it. He seems unaware of the compromises that Southerners were compelled to make, such as leaving Congress with the power to abolish the importation of slaves after 1808. Indeed, it was the authors’ use of euphemisms so as to avoid ever using the word “slave” that enabled both Frederick Douglass (in his Fourth of July Oration) and Abraham Lincoln to portray the Constitution, as Douglass proclaimed, as “a glorious liberty document.” That the Founders were unable, in 1787, to fully live up to the principles of the Declaration does not mean that they didn’t sincerely hold to them, making that document an unprecedented public statement of the illegitimacy of slavery, which they ultimately expected to be banned. Indeed, slavery was abolished in the Northern states within a few years of ratification.
But Stiglitz has a curious source for his own, ostensibly superior understanding of freedom: the Italian Marxist Antonio Gramsci, whose posthumously published Prison Notebooks became the intellectual root, along with the writings of German émigré Herbert Marcuse, of what the postwar German Marxist Rudi Dutschke called the “long march through the institutions” that would enable Marxism to triumph in Western democracies without the need for violent revolution. Stiglitz applauds Gramsci’s “insights” into the fact that “our societal ideology” is the root of “the power of the elites” that he himself aims to overcome. Indeed, Stiglitz applies Gramsci’s insights to further delegitimize America’s claim to a commitment to freedom by maintaining, absurdly, that our economy was “built on enslaved labor”—hardly the source of the industrial wealth that made it possible for the Union to achieve victory in the Civil War—and that its “legal structure was designed to enforce slavery.” Then why did the Northern states abolish it so soon?
One must, indeed, doubt Stiglitz’s own commitment to freedom when he portrays our country as needing to attain a middle way, through expanded governmental controls, between communism and “Reaganism-Thatcherism.” Since, according to Stiglitz, the power of business monopolies denies Americans any actual “consumer choice,” we are apparently just as unfree under “neoliberalism” in his judgment as we would have been under communism! It “boggles” Stiglitz’s mind, as it did Gramsci’s and Marcuse’s, that so many Americans continue to believe in the efficacy of “‘free’ enterprise” or imagine that their country is “the land of opportunity.” The likeliest explanation for this mass delusion about the benefits of economic freedom, which is shared by “a vast majority of people in advanced countries,” is that their mindsets have been shaped by “pundit[s],” nearly all of whom believe it, being challenged by “only a few academic economists and some radicals on the Left.”
The remark last quoted illustrates just how remote Stiglitz’s musings are from the real world. His unworldliness is further illustrated by the claim that “the rich” use their wealth to dominate public opinion through their control of Fox News. Only “the Right,” according to him, has the power to shape public opinion—despite polls showing that upwards of 90 percent of both professional journalists and college professors lean heavily leftward. So “ruthless,” indeed, are today’s “neoliberals,” he observes, that many of them favor the use of school vouchers, designed to enable the less-well-off to escape our deficient inner-city public school systems, over increases in teacher pay! This reflects his more general claim that public enterprises typically display more innovativeness than do private ones—another assertion that most readers will likely find laughable.
But a likelier explanation of why Americans, regardless of how large a welfare state they favor, continue largely to prefer free markets to Stiglitz’s “social democracy” can be found in Deirdre McCloskey’s trilogy The Bourgeois Virtues, Bourgeois Dignity, and Bourgeois Equality, which shows how the living standards of ordinary people have been transformed by market economies over the past two centuries, and Phil Gramm’s coauthored Myth of American Inequality, which refutes Stiglitz’s claims that our system deprives poor people of the material requisites of a decent life or the opportunity for advancement. As for his denial that we enjoy “consumer choice,” has Stiglitz ever shopped at Walmart or Amazon, at one extreme, or the luxury stores on New York’s Fifth Avenue, on the other?
The scariest aspect of Stiglitz’s program to any true liberal, “neo” or otherwise, however, is his account of the need for society to limit the freedom of speech and discussion regarding public issues. In a section titled “The Limits of Tolerance,” he complains that that virtue is excessively “stretched” nowadays “when misguided beliefs—verifiably false based on the best science—get translated into action.” He attributes our country’s “ideological divides” to the unfortunate effects of popular denials of the “overwhelming evidence” of the “enormous costs” imposed by climate change, for instance, or doubts about government explanations of the source and treatment of COVID-19. On climate science, he is evidently unaware of the former Caltech theoretical physicist and Obama energy scientist Steven E. Koonin’s book Unsettled, or the writings of the Copenhagen Consensus director Bjorn Lomborg, who believes that climate change is a problem, but one the rapidity of which has been exaggerated, and one that is best addressed by further research. As for COVID, the attempt by the former National Institute of Allergy and Infectious Diseases director Anthony Fauci to suppress all challenges to his accounts of both its origin and the best behavioral responses to it, such as distancing and mask-wearing, were subsequently exposed as false and misleading. But Stiglitz, obviously no scientist, maintains that “if we believe in science, we have to believe that not all views” on issues like climate change “should be given equal weight,” since science itself “is fundamentally undemocratic.”
Well beyond science, Stiglitz laments that social media platforms have resisted content regulation by others on the ground that it would violate “some basic political set of rights,” including politicians’ right “to spew venom and falsities.” Such an assertion “strikes the wrong balance” between the politicians’ freedom of speech and society’s freedom from harm. To remedy the situation, Stiglitz calls for more egalitarian economic policies that by promoting “solidarity,” as the French revolutionaries professed to do, “will allow us to reach greater consensus” on public issues, “including what kinds of statements and actions are untruthful and socially harmful” and how “the dissemination of those statements be restricted consistent with other values.”
The problem of how unmitigated expressions of racial or religious hatred, or incitements to crime and violence, whether online or off, should be restrained is a longstanding one that cannot be addressed here. What is strikingly illiberal, however, is the open-endedness with which Stiglitz invites us to adopt a “consensus” on which political statements are “untruthful” and hence should “be restricted” to accommodate other (unspecified) “values” such as those of the French Revolution. History is evidently not his specialty, either.
But this returns me to the theoretical problem with which I began: Stiglitz’s desired replacement of negative liberties, or the protection of each individual’s life, liberty, property, and ability to pursue happiness against denials either by despotic government or other private individuals, with open-ended (but ill-defined) “positive” rights of some members of society to redistribute the resources of others, or limit their speech and expression, just to realize the “potential” of the beneficiaries. This isn’t chiefly an economic program, but a political one. Indeed, frustrated at the failure of his fellow Americans so far to see the light, near the conclusion of the book Stiglitz disparages our country’s political system thanks to its more than 200-year-old Constitution, which gives some parts of the country “disproportionate political weight” and allegedly enables states “to partially disenfranchise some citizens through gerrymandering and voter suppression,” thus leaving us only with “a façade of democracy” that “cannot survive.” (Note the direct challenge to Lincoln’s Gettysburg Address.)
As American history has shown, our system always allows for political debate regarding how far beyond the protection of negative liberties government’s action should extend. Our constitutional regime has allowed for a gradual expansion of government’s scope at both federal and state levels, from rivers and harbors legislation, progressive taxation, a social safety net, onwards (for better or worse) to today’s vast bureaucratic state. The scope and direction of government in a democracy will necessarily be a matter for political debate. But to elevate an ostensible right to self-realization (its limits undefined) over the natural rights that our Constitution was designed above all to secure is not, as Stiglitz maintains, to promote “compromise,” but to ensure the sort of maximal class conflict so much desired by Gramsci and his cohorts as a prelude to proletarian dictatorship.
