Whither Socialism? (Wicksell Lectures)

The rapid collapse of socialism has raised new economic policy questions and revived old theoretical issues. In this book, Joseph Stiglitz explains how the neoclassical, or Walrasian model (the formal articulation of Adam Smith's invisible hand), which has dominated economic thought over the past half century, may have wrongly encouraged the belief that market socialism could work. Stiglitz proposes an alternative model, based on the economics of information, that provides greater theoretical insight into the workings of a market economy and clearer guidance for the setting of policy in transitional economies.

Stiglitz sees the critical failing in the standard neoclassical model underlying market socialism to be its assumptions concerning information, particularly its failure to consider the problems that arise from lack of perfect information and from the costs of acquiring information. He also identifies problems arising from its assumptions concerning completeness of markets, competitiveness of markets, and the absence of innovation. Stiglitz argues that not only did the existing paradigm fail to provide much guidance on the vital question of the choice of economic systems, the advice it did provide was often misleading.

The Wicksell Lectures

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Expanding on the Wicksell Lectures he presented at the Stockholm School of Economics in April 1990, Stiglitz (economics, Stanford U.; member, President Clinton's Council of Economic Advisers) explores the issues of both economic policy and theory now confronting nations in transition from market socialism to market economies. He presents a critique of the dominant neoclassical or Walrasian economic model, and presents his own alternative paradigm, based on an economics of information which delves more deeply into the theoretical and practical workings of market economies, socialism, and market socialism. Annotation c. Book News, Inc., Portland, OR (booknews.com)