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W. W. Norton & Co. N.Y. 2010, 361 pgs., end notes
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This is a polemical diatribe that seeks to show that the cause of the
financial crisis of 2008 was due to the greed of individuals, especially in the
financial community, operating in a viscious 'free market' and not due to
government policy. The author proudly claims he is a Keynesian and student of
Paul Samuelson. One can obtain a view of the author and book by noting the
great adulation he receives from Paul Krugman.
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In end note on page 353 Stiglitz writes: "Paul Samuelson was one
of the greatest economists of the twentieth century. He played a central role
in introducing Keynesian ideas into the United Staes, especially through his
textbook, Economics: An Introductorfy Analysis, which was the bible for
economics students for a quarter century beginning from 1948, when it was first
published." Well, I believe Keynesian ideas were already fairly widely
spread among American economists before Samuelson, but his text book, which I
had the unpleasant chore of reading as an undergraduate in economics in 1954,
was indeed 'the bible' and source of so much misunderstanding about
political/economy.
One can still read Samuelson today to learn the history of the problems in
political policy. And one should read this book of Stiglitz to see how
Keynesian theories continue to distort analysis for political purposes.
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Stiglitz is correct in his attack on the 'efficient market' theory. But
this 'efficient market' concept has nothing to do with a 'free market' concept.
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