Feeble Critiques

Abstract

When twin crises erupted on Wall Street and Main Street, each one of them fierce in itself but far more frightening when they interacted, populists rushed forward to celebrate demise of capitalism and, for added gratifica tion, plunge their pitchforks into its dead corpse. Since then, they have had their champagne parties. By now, however, fizz is gone and rush to judgment by capitalism's obituarists has left us with tattered myths and egregious fallacies that invite scrutiny and refutation. I can do no better than begin by citing a prominent populist, an icon to madding crowd who would like to drive a stake through capitalism and glo balization (which is viewed, not without some justification, as an international extension of capitalism). I am speaking of my Columbia University colleague Joseph E. Stiglitz. In 2001 he shared Nobel Prize in Economics with remarkable George Akerlof of Berkeley, who pioneered study of asymmet ric information with his brilliant paper on the for lemons, first to draw on insight that sellers of used cars (i.e., lemons) had more information than buyers, a situation that would generally lead to market failure. In long sweep of failures, with virtually every generation