CEU Hosts Nobel Prize Winner Joseph Stiglitz in Vienna

On September 28, Central European University’s (CEU) Department of Business and Economics with President and Rector Shalini Randeria hosted Professor Joseph Stiglitz on campus in Vienna where he presented a lecture titled Freedom and Coercion, Opportunity and the Economy: Neoliberalism, the Individual and Society.

Opening the talk, Randeria admired the work of Stiglitz, who is a Nobel Prize Winner in Economics. She stated, “It’s precisely that rare capacity for combining sharp critique with proposals of fundamental policy reforms that informs many of Professor Stiglitz’s books.” Randeria further highlighted the hallmarks of Stiglitz’s scholarship, noting the exemplary hybrid of robust argument and socially sensitive engagement which calls for a reckoning with neoliberalism.

One of the primary arguments Stiglitz raised is that a certain degree of coercion is needed to enhance overall freedom. “When you think about distribution, redistribution expands some peoples opportunities at the expense of contracting other people’s opportunities, and we have to make judgements about that.” Advocating for government intervention to regulate such redistribution, Stiglitz addressed what a system that preserves liberty and freedom might look like.

He maintained that some degree of coercion can be good for everyone. For example, regulations such as traffic lights, which limit one’s options, lead to a society function of safe and productive transit. Social pressure is another form of coercion he highlighted, emphasizing that, for example, when someone doesn’t litter due to persuasive social signals for the purpose of social responsibility, this type of coercion is actually a form of solidarity.

“If you make investments in public goods, you increase everyone’s opportunity sets and increase their freedom,” said Stiglitz. To do so, he suggests that some coercion to channel resources is needed, which in turn expands what people can do with their lives. “That’s an important aspect of freedom, that it may require coercion. It’s a kind of contradiction,” Stiglitz added.

The professor further built his argument for sufficient government interventions into free markets by explaining the moral illegitimacy of assets and their returns which entail stolen wealth, as well as the pitfalls of profit maximization through exploitation, which ultimately limit freedom. “There is this alternative economic system that has a better chance of creating a good society and it’s going to be associated with more regulation, more public investment and a broader ecology of institutions.”