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Joseph Stiglitz: Economics rockstar (illustration by Michael Daley)

When the self-described Marxist and newly-appointed shadow chancellor John McDonnell addressed the Labour conference in September, he told delegates that the party needed to “prove to the British people that [Labour] can run the economy better than the rich elite that runs it now”. He went on to unveil an Economic Advisory Committee of “some of the world’s leading economic thinkers” to advise Labour on strategy. At the top of McDonnell’s list was an economist whom he described as having “unchallengeable expertise” — Joseph Stiglitz.

Stiglitz’s name, along with that of Capital in the Twenty-First Century author Thomas Piketty, prompted cheering among the delegates in the conference hall — an unusually enthusiastic reception for economists who have spent their careers researching, respectively, asymmetric markets and wealth distribution. But Stiglitz is by now used to such receptions. He has become something of an economic rockstar in recent years, with a cult-like following from fans won over by his characterisation of inequality as the dangerous result of the “unjust policies and misguided priorities” of a vindictive “one per cent” (he claims credit for the popularity of that phrase).

Though Stiglitz worked for President Bill Clinton and as chief economist of the World Bank in the 1990s, it was the Nobel Prize in economics he shared with George Akerlof and Michael Spence in 2001 that brought him widespread recognition. He has since used that fame to fashion himself as a leading public intellectual, publishing more than two dozen mass-market books and picking up more than 40 honorary degrees along the way — accolades he makes a point of mentioning ad nauseam in his latest volume, The Great Divide (Allen Lane, £25).

More recently, Stiglitz has revived his career as an adviser to elected politicians. Perhaps American decision-makers have stopped listening to him, because he has increasingly set up shop overseas, counselling Nicola Sturgeon’s SNP government, Alexis Tsipras’s Syriza-led coalition in Greece, and, now, the Corbynistas. These left-wing leaders use Stiglitz’s name to add a veneer of credibility to the policies they peddle, but one would be wise to take his relentlessly anti-austerity message with a grain of salt.

While Stiglitz has succeeded in building his own international profile, his interventions into European politics have proved to be woefully under-informed. Recycling old arguments, Stiglitz has repeatedly prescribed simplistic solutions to complex problems, failing to grasp even the most basic characteristics of the political and economic systems he is assessing, all the while legitimising fiscally irresponsible parties. 

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Zim Babwe
January 1st, 2016
6:01 PM
Heard of Stiglitz, but who the hell's LAUREN FEDOR?

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