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Whither Socialism?

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"A disproportionate amount of the best in modern economics is Stiglitz's creation. This book uses it to illuminate a classic question concerning the organization of the public side of our lives. Judged in terms of both depth and reach, this elegantly written volume is never less than what we have come to expect for one of the most significant social thinkers of our time." -- Partha Dasgupta, University of Cambridge " "Whither Socialism?" is to be recommended. It offers deep new thinking on a big subject: the role of the state. It is rigorous and accessible, a rare combination." -- "The Economist" 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 Hide synopsis

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