September 24, 2016

Joseph Stiglitz

Joseph Stiglitz

Source: Wikimedia Commona

I think I too could be a Nobel Prize winner in economics”€”at least if an interview with Joseph Stiglitz in a recent edition of Le Figaro, the French newspaper, on the occasion of the publication of one of his books published in French, is anything to go by. It is not that Mr. Stiglitz said nothing that was true: Rather it was that what he said that was not actually untrue could have been said by anyone of moderate intelligence and average powers of reflection. Perhaps the Nobel Prize for Economics ought henceforth to be replaced by one for Common Sense. Unlike the one for economics, however, it could not be awarded annually, for there is nothing rarer than outstanding common sense.

The interview got off to a bad start. The interviewer asked Mr. Stiglitz whether he agreed with Marine Le Pen, the leader of the Front National, that France ought to leave the Euro. As the title of his book was L”€™Euro: Comment la monnaie unique menace l”€™avenir de l”€™Europe (The Euro: How the Single Currency Threatens the Future of Europe), and as the interviewer prefaced the question by saying, “€œYou recommend that several countries abandon the Euro,”€ the answer, prima facie, was “€œYes.”€

Mr. Stiglitz replied, however:

“€œIn general his answers were of startling superficiality. Perhaps he was having an off day.”€

No. One of the key points of my book is that the Euro ought to be the means to an end, in this case a more prosperous and integrated Europe. Now the Euro has become an end in itself. It has even become the very opposite of what it was intended to be. The problem is that, as it was constructed, the Euro has not generated prosperity but stagnation and has undermined solidarity among Europeans.


To this the interviewer correctly pointed out that he had not answered the question. He responded:

My thesis is that it could be necessary to leave the Euro to save the European project.

In other words, he agreed with Marine Le Pen”€”on this point. But instead of answering like a scholar, he answered like a politician. He continued:

The best solution would be to create the institutions which would permit the Euro to be made to work and, on this point, Marine Le Pen and I are in full disagreement.

But this was not what he had been asked. He could and should have said, “€œYes, but not for the same reason as Marine Le Pen.”€ Instead, he gave an answer that made it clear that, for him, political detestation took precedence over the truth. We can easily imagine how he might have replied if he had been asked whether he agreed with Marine Le Pen that two and two make four:

No. In everyday transactions two and two make four, but Marine Le Pen is completely uninstructed in the theory of numbers and mathematical logic, and is unaware of Gödel’s first incompleteness theorem. Therefore she has no right to say that two and two are four, and when she says it she means something completely different from what I mean when I say it.

I should also add that, in my opinion, any man who uses the phrase “€œEuropean project”€ without spelling out what it actually is, its actual denotation, ought to be publicly flogged.

In the rest of the interview, I am afraid, Mr. Stiglitz improved only a little on this sad beginning. He said one or two things that made sense, for example that the Euro was instituted just at the time when digitalization vitiated its advantages in reducing transaction costs, but in general his answers were of startling superficiality. Perhaps he was having an off day.


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