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November 16, 2007

Comments

susanna babos

Stiglitz’s book gives us a great survey on how globalization mechanisms do not equally benefit all parties that are a part of it. He argues that this is the case because already developed and economically well-off countries exercise more power, and thus influence than some other developing nations. Therefore, according to Stiglitz, the word is destabilized, both economically and politically. I actually agree with this statement because coming from an East- European country, I expereinced how more powerful countries can demand certain things from a less developed or powerful country, like my own. For example, when my country joined the European Union, which already contained all the developed countries of Europe (but Switzerland), my country was required to do certain things that were not in the country’s interest or did not benefit, but rather harm the country. For example, my country’s main exports are agricultural products, yet the European Union set maximum quotas on exports, so that they can protect other and more developed countries agricultural exports. By setting quotas on the main exports, my country’s exports were actually harmed by those in power.
Therefore, what Stiglitz suggests is a revised managing system for globalization on the base of more fair terms and agreements. Thus, corrective policies should be made in order to correct the flaws of globalization.
Yet,I cannot help but wonder, is this possible?Is it really possible to benefit the poor or the one who has less power?Is anyone willing to do that at all?Is the world ready to recognize that once the poor is not harmed but actually helped, we would all be better off?Or would we be better of at all?

Miles

Stiglitz makes an argument that makes you want to believe in everything that he is saying. I like Zaheer disagree with the blueprint of capitalism and how to spread it throughout the world. Stiglitz believes that a higher international power or organization should counsel developing nations in their economic woes. I strongly disagree with this method. Countries should be able to run their countries as they please. The United States went out and established their own form of government with no advice from others and were successful. We were successful because our freedom and beliefs allowed it to be. In a lot of these countries, particularly those in the Middle East, have stronger religious bonds. These countries have not separated religion and state. This to them is of great importance and who are we or some organization to tell them that it should be separated. Who are we to tell them to go to a economic structure that will invalidate their beliefs. I disagree with Stiglitz because I believe that countries should do economically as they please.
When globalization started in the 1990s, people were ecstatic about the effects that it would have. As Stiglitz puts it, “Globalization was to bring unprecedented prosperity to all.” Stiglitz has done a good job not really taking sides on whether he believes that globalization is good or bad. He believes that globalization has two faces, and he is correct, as Glory pointed out. I think that Stiglitz is to optimistic and needs to look more in depth at the countries that he is speaking of and realize that every country is different, with different solutions to different problems.

Edward Taylor

Joseph Stiglitz offers a very compelling argument which advocates benefits for all in our globalizing world. As Glory first pointed out, “the most important thing, in Stiglitz’s view, is to change the structure of the existing global governance through improving dialogue.” But what lies at the heart of his argument is the fact that he opposes our current model of international organizations such as the WTO which are essentially controlled by the most developed countries in the world. In another one of his books, “Fair Trade For All,” Stiglitz argues that “it seems obvious that if the developed countries truly wanted to promote development in the Doha Round they should reduce their tariffs and subsidies on the goods of interest to the developing countries (pg 13).” Stiglitz contends that developed countries like the United States strong arm the WTO to get favorable trade agreements for developing countries. These agreements are masked to appear to benefit the developing country when in fact they often hurt developing countries more than they help. An example of such an agreement is NAFTA. Stiglitz argues that “NAFTA was not really a free trade agreement. America retained its agricultural subsidies. NAFTA pitted the heavily subsidized US agribusiness sector against peasant producers and family farms in Mexico (pg 24).” Thus going back to a point made in the very first post, Stiglitz believes that decisions should be made by those who are most affected by them. Instead of the members of the G-8 making all the decisions, developing countries should have an equal say. Lastly, Stiglitz documents the pressure that developed countries are putting on developing countries to simply open up their markets because it will benefit them tremendously economically. Unfortunately this is far from the truth. “None of today’s rich countries developed by simply opening themselves to foreign trade (pg 38),” thus developing countries should have the opportunity as well to protect infant industry. The US, one of the biggest advocates of free trade today, was one of the most protected economies in its developing stages not long ago. These developing countries should have the option and ability to do the same.

Megan Roberto

A major theme of Stiglitz work addressing globalization is the need for accurate information. This information relies, as Helen mentioned, on a diverse group taking part in the discussion and decision making process. However, as Glory asserts in her wall post, that in order for this open dialogue to take place, institutions must restructure themselves and their practices to better suit the communities which they serve.

I like, Aditya, found Stiglitz argument reminiscent of James Scott’s argument in Seeing Like a State, in which he declares that the problem with governmental institutions are always applying machine like solutions to every problem. While his assessment is at the state level I feel like his argument can be transferred to the global stage with regards to institutions such as the IMF, WTO and World Bank who regulate the state of globalization. Along the lines of Scott’s arguments, Stiglitz argues that globalization has approached all developing countries with the same strategy. The lack of communication between the governing bodies of development (IMF) and the populations of developing countries has had disastrous consequences. This lack of communication exists as mentioned before to the structure of these bodies and also the special interests of countries involved.

For development to work it is necessary to develop the optimal environment for trade. Regulations with regards to trade, taxation, bankruptcy and a sense of protectionism in the beginning must be established and allowed. The IMF, WTO, World Bank and leading countries must incubate developing markets rather than dominate them instantly. They must also seek more resourceful means of establishing markets rather than offering the same plan over and over again, whether it works or not.

Christine Wang

So I have a few random rant-like thoughts on the subject…

When Stiglitz was talking about TRIPS and how as it was in the process of being created he saw many problems in it, he said that he didn’t speak out because he “did not feel at the time that [he] could openly criticize the US government’s position because [he] was in the government.” Instead, he waited and hoped that some one else would bring it up; when no one did, he basically just shrugged and said oh well—and TRIPs was passed in its secret Geneva negotiations without a hitch.

It was a similar problem with the Argentine crisis. There were people who _knew_ privatizing social security would be disaster for Argentina. They knew it would result in trillions in deficit. So why didn’t they TELL the Argentine government?! They had the answer right there. They just didn’t pass it on…and so the Argentine government continued to receive bad advice and went ahead with it.. and its citizens had to pay the price.

Yes, dialogue is very important. It’s hard to understand why it isn’t occurring already. We have so many media tools today to help it along, to bring good solutions and sound advice to everyone who needs to hear it. Yet why did Argentina still lack that one crucial fact? And why don’t people in government, who are assuredly in a better position to see upcoming policies and the problems they may have, illuminate the problems and _do_ something about it? and realize that many, many people, in the US and across the globe, dream of making the world a better place and once someone can actually show us that there _is_ something that can be done, and it's not all just hopeless idealism, we will back them up for speaking out against political pressure?

Instead, we who have the answer are left to just hope that someone else will see the problem too—and that they, unlike us, will have the will to act on that information.

Roushani Mansoor

In all three of Stiglitz’s pieces, the main point he argues is for a holistic approach to currently developing countries. The economic policies that these countries enacted were adopted from industrialized, rich nations. However, they all failed and produced disastrous results, such as the rich getting richer, because these developing countries did not have the necessary social and political institutional infrastructure to manage these economic policies. Stiglitz makes his argument apparent in his Remarks on the Occasion of the 50th Anniversary of the Treaty of Rome by stating “the problem today with globalization is that economic globalization had outpaced political globalization.” In his discussion about the European Union, he attempts to show that to have an equal economic globalization, countries need to have the institutional infrastructure, much like what the EU has established. This new European identity has helped to strengthen the values which help to define Europe. Stiglitz believes that when these developing nations look to international financial institutions like the IMF or the World Bank, they experience catastrophic consequences. These international organizations implement arbitrary guidelines, such as opening up the market, that send most nations into a political whirlwind. This “liberalization of countries’ economies before the establishment of institutional infrastructure leads to financial disaster.” Market power and wealth gets concentrated into the hands of very few, never at the disposal of the government to improve internal infrastructure. I think this is along the same lines as Zakaria’s argument in his The Rise of Illiberal Democracy. Countries implement liberal economic policies on their path to becoming democracies without the necessary infrastructure leading to the suppression of basic human rights and social justice. One remedy Stiglitz offers is the need for outside parties to be involved as a free dialogue on important topics, such as economic development, allows leaders to hear differing views of possible consequences of policy decisions, outlined in Achieving More Equitable Globalization.
I agree with Zaheer’s statement that there is no such thing as a blueprint for capitalism. I think Helen and Glory understand part of Stiglitz’s belief that more opinions and views are needed in international financial institutions. However, his main objective is to demonstrate that multiple opinions are needed within a single country and that paths developed countries have taken are not “one size fits all.” Moreover, Helen’s worry over groups trying to provide the most convincing argument instead of taking other’s views into account is unfounded. Look at the United States at the time of the writing of the Articles of Confederation and then the Constitutions. The two main groups, the Federalists and the anti-Federalists sat basically at opposite ends of the spectrum on a multitude of issues. Both sides were trying to provide the most sound and persuasive argument and in the end, the majority conceded some of their demands and allowed for some of the ideas of the minority. However, the most important aspect, what Stiglitz argues for, is that these discussion took place and a variety of opinions were able to be expressed.

Carolina Merizalde

Joseph Stiglitz masterfully presents the importance of the interdependence between politics and economics, showing that an effective government does not only rely on numbers, percentages, and other economic figures but it ought to gather enough information about its social conditions to create policies that truly fit the needs of its population. Stiglitz demonstrates through a myriad of examples the major role that dialogue should play on policy-making and strategy-planning as well as proving that one cannot rely solely on International Institutions (IMF, World Bank). Furthermore, he emphasizes the need for different perspectives to make wiser decisions.
In my opinion, Stiglitz succeeds in verbalizing what so many of his predecessors have been trying to hint at. He clearly pinpoints the limitations and achievements of international financial institutions, but most importantly he suggests the need for policies that stop benefiting the developed nations at the expense of others (those from the third world that are invariably dependent on them), policies that promote greater economic and political cooperation at a global scale, and the foundation of economic structures that stem from the specific socio-cultural and historical conditions of every country rather than from Western ideologies.
As Zaheer exposed earlier, there is no blueprint for capitalism; for that reason, governments should focus on obtaining more information within their boundaries, learn from the success of other countries, and by combining these results they can produce a development strategy that fits them best. In that process, dialogue could serve as a political tool that can bring people together through general consensus; avoiding ideological polarization and division among political parties. In like manner, the future of our globalized world also lays on the efficient amalgamation of local knowledge with the experience acquired by international agencies, such as the World Bank, to produce a more accurate assessment of the real needs of each nation.
Economic projections are mainly based on inflation, unemployment, and economic growth. However, they are missing the thorough analysis of the socio-political aspect of society. These numbers present a reality but do not provide a solution; thus, it is necessary to take a closer look at what is happening in the labor markets, what is happening with the workers, why are they unemployed. If these things are studied, then the government will know if an emergency employment plan should be the alternative or an intensive campaign of vocational training or new credit lines, etc…
In this sense, Stinglitz hits on one of the most important points that most financial institutions have disregarded for a long time: the need for credit availability. In the particular case of Latin America, the implementation of loans as microcredit for small farmers and medium-sized credit for small and medium-sized businesses could offer new channels of investment, generating new sources of employment, and fostering greater economic stability for the nation as a whole.
Consequently, the region needs to resort to the formulation of development strategies and follow them since they ceased doing it after the ISI period. In doing so, their economies could be revitalized, their growth stimulated, and their people could eventually enjoy the same lifestyle provided by developed countries at home, providing a solution to the current immigration problems in the US and Europe.
Accordingly, it becomes evident that one of Stinglitz's greatest contributions is showing us that in order to bring about development changes, both politics and economics have to be considered as mutually dependent and so it is the fusion of their understanding that will allow for effective policy-making.

Kent Yamane

In Making Globalization Work Joseph Stiglitz proposes some very interesting ideas. He wants a more equally distributed globalization. There are still to many poor in a world where there is an abundance of wealth and resources. The way that free markets work keeps the rich wealthy and does not allow the underdeveloped countries to tap into this wealth. Stiglitz proposes that the developed powers open up their markets to the underdeveloped countries without the developed powers moving in on the smaller markets. He also proposes slow growth, nothing like the “shock therapy” that went on in Russia where there were immediate changes to the markets and it increased unemployment and inflation. This is to drastic of a change, it needs to be little by little so that the economy and country can survive and still keep what is its own. Everything has to be adapted to the country, and there will be changes that are made that are unique, but the underdeveloped countries will find what works for them and move on in their own direction, other students talked about this mold of capitalist economies when there truly isn’t one, each country is different and will proceed in different ways to entrench itself in the global market.
I totally agree with Miranda, that globalization has increased the insecurity of underdeveloped countries and that this breeds protectionist policy, smaller countries should be slightly intimidated when entering into the global market, the more developed countries have a huge advantage over the smaller ones and will exert their power.

Stephen Yang

I agree with Joseph Stiglitz on many points, mainly because I feel he presents things well, and it just makes sense. However, at the same time, I find myself asking the same question that Aditya asked: Is dialogue really enough? I think Stiglitz knows that it's not THE answer, but it is certainly an important assisting factor. But that is for globalization and the general improvement of the global community. And yet, I find it interesting that dialogue in a different sense is brought up as one of the many factors when Stiglitz analyzes China in "Towards a New Model of Development". I'm referring more to the Information Systems section. Yes, I know that's not a large point of his piece, and yes, I know that doesn't really have anything to do with the aforementioned "dialogue." I just thought it'd be an interesting mini segway (someone please tell me how to spell that word).

Anyway, I agree with Stiglitz that freedom of information is important, especially for a "vibrant, responsible media" to be effective. However, an interesting thing to note is that the media in China may have access to information, but I don't think it can be the "responsible" media that Stiglitz mentions because it most certainly does not have too much freedom in a country where information is still under the control of the government. Then again, when Stiglitz writes that he has been trying to understand the problems which imperfect information poses for the functioning of a modern economy, I feel like he is focusing more on imperfect information between firms and within the government.

Nicholas DeGroot

I would argue, unlike my class mates, that Stiglitz presents a case that Globalization is a positive development that allows countries to share their comparative advantages for the benefit of the globe (that it does not have to be a zero sum game). The present ongoing neoliberal failure to deliver the promises of globalization to many has been the result of special-interest-hijacked politics and plain and simple poor economic theory. Stiglitz points to the period of recession in global trading that occurred between world wars as evidence that globalization is not inevitable. Yet he states that the current state of global affairs make it so that the countries of the world will have to adapt to the global system at some point in time. The question, Stiglitz says is not whether countries will globalize, but if they can manage to do it before potential and impending global disasters or if we must haphazardly piece together a global system in the aftermath.

Stiglitz has taken up the important task of alerting society to the tasks that must be undertaken in order to preserve domestic and through our interconnectedness, global security. I think the man does a great job of presenting the problems along with options for resolving them (unlike Robert Reich). Our country needs to actively pursue the vital items identified by Stiglitz. We need to get on board with carbon emission reduction targets. We must work toward openly, transparently and democratically sharing the world’s resources without exploiting any populations. Provide medical assistance without breaking a country’s back. And his idea of a global greenback is beautiful. It would require much additional reform of global government, but this is the right path that we need to be on.

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