I don't have as high an opinion of Joe Stiglitz as does Peter Boettke. I seem to have caught Stiglitz out on rather facile, indeed irresponsible errors committed in his eagerness to convince us of a world abounding with market failure. However, I'm not going into greater detail on this issue now. Rather I'd like to draw your attention to what I think is a very perceptive point made by Boettke:
Since 2008, and before, [Stiglitz, G.T.] has been constantly complaining about neo-liberal policy and how its lack of attention to the appropriate regulatory framework and disregard for fundamental policy priorities has produced the mess we are in. In fact, he made the argument very simply even while he was in positions of tremendous political power in the Clinton administration and at the World Bank --- if only the world would listen to me, and engage in the appropriate interventions then the mess would be avoided. But who were the so-called neo-liberals that weren't listening to him? What neo-liberal thinker had the same powerful positions that he held? Did F. A. Hayek or Milton Friedman actually come back from the grave to serve as head of the CEA or as Chief Economist at the World Bank? Or did all this disruptive inequality and global imbalance happen on the watch of other thinkers.
The current mess in the US is six decades in the making ... The promisory politics that exploded after WWII ... rests completely with [...] Keynesianism [...]
Stiglitz is right to stress that bad ideas result in bad public policy which in turn results in bad economic, political and social outcomes. But, Stiglitz has misidentified what the bad ideas are, and his narrative mischaracterizes the nature of public policy for the past 6 decades and in particular the last 2 decades. We have not experienced a period of neo-liberal neglect and arrogance, but instead a waffling back and forth between conservative and liberal Keynesianism [...]
This has been the public policy hegemony for the past 60+ years. It is time that this alternative narrative be listened to, rather than the same old story that emerged from the Keynesian follies so many decades ago.
Read the entire article here.