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Daniel Dennett, the renowned philosopher of science, proposed four steps for critiquing an intellectual opponent: First, one should attempt to re-express the opponent’s position so clearly, vividly, and fairly that the opponent would say, “Thanks, I wish I’d thought of putting it that way.” Second, one should list any points of agreement, particularly those that are not widely acknowledged. Third, one should highlight anything learned from the opponent. Only after completing these steps is one permitted to engage in rebuttal or criticism.
It seems that Nobel laureate Joseph Stiglitz did not even pass the first step in critiquing Friedrich Hayek in his latest book, The Road to Freedom: Economics and the Good Society. Hayek is mentioned 44 times throughout the book, primarily in the first three chapters and the final chapter. What is remarkable, however, is that the portrayal of Hayek in this book seems to describe entirely different individuals. This inconsistency prompts me to comically ask: “Is Hayek in the room with us?”
In this article, I will not discuss whether Stiglitz’s Road to Freedom is actually a road to serfdom (though I believe it is) as that topic has been thoroughly examined in works by David Gordon on the Mises Institute website. Instead, I will focus on how Stiglitz mischaracterizes Hayek and fundamentally misunderstands his contributions—not just to economics but to the social sciences as a whole.
This is a book review, albeit, along only one dimension of Stieglitz’s book The Road to Freedom: Economics and the Good Society. That dimension that the review concentrates on is the role of knowledge in economic exchanges. Stieglitz misses the very first step, he cannot state Hayak’s theory murkily, note even near clearly because he may not be familiar with Hayek’s theories. The knowledge question in economics is the one thing that Hayek is widely renown for, so, to miss on that point is inexcusable. If I were grading Stieglitz on this book he would not get a passing grade.