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November 16, 2007

Comments

Noah Castro

I agree with Ziwei and Norris as they have made many interesting points in line with my own interpretation of the position that Stiglitz articulates. In terms of the big picture, however, I disagree with Norris in that I see social integration as a necessary component of globalization. As the world globalizes economically and politically, social integration must be present as the cohesive element that replaces social conflict. I really enjoy Stiglitz point of view. When I read his previous book, Globalization and its discontents, it gave me my initial introduction to the illusive underlying infrastructure of international relations and I think this recent book explains many of the open ended queries that made the tone of the other book so mysterious (I recall being captivated as if I were reading some kind of conspiracy theory). The current book gets away from that conspiracy theory tone by revealing it as a kind of unilateral ignorance that encompasses the individual actors (movers and shakers) that dominate international policies. Stiglitz illustrates a scenario in which contemporary advocates of globalization have been pushing utilitarian policies without taking into account the consequentiality of their actions. As the world becomes more globalized the level of interdependence and the intrinsic vulnerability that is associated with such interdependence will inevitably increase within all levels of global society. That which is detrimental to developing countries, the poor populations, the environment, etc; will inevitably become detrimental to developed countries, the rich populations, and big industry.

Dorit Iacobsohn


Joseph Stiglitz

What I appreciated about Stiglitz is that he approached issues from a policymaker’s perspective. He laid out cogent plans with clear goals and steps to achieving them. What is interesting about his work is how, despite his moderate expectations and realistic objectives, he was consistently ignored and penalized for his viewpoints.

While working at the World Bank in the late 1990s, he was a strong advocate for the opening of dialogue in the World Bank and the IMF about what policy prescriptions should be applied to countries accepting aid packages. This was not unreasonable, as he had discovered that some of the policies imposed onto countries accepting aid had their economic situations worsening, while other countries not under the auspice of the IMF or the World Bank were healing economically, and at times flourishing. The response to this was an in-house conspiracy to get him to resign (which ultimately succeeded).

This demonstrates how, despite how sensible some of his ideas were, there was a vicious opposition to rational calls for opening up a dialogue on how third world countries should spend their aid, and what policies they would need to implement in order to get it. It’s as though the developing countries are puppets, and the World Bank and the IMF do not care if they jerk the strings around and slam the puppets into walls, as long as they get it to dance.

Like many of my classmates have already stated, I would agree that Stiglitz’s ideas are not outrageous; he says globalization is a process; he believes that there should be a balance between government regulation and free markets; he advocates allowing non-westernized countries the integrity to speak on their own behalf, rather than having the developed countries push their ideologies down their throats and speak for them. These are not revolutionary ideas—but the lack of clear consensus even on such an issue as calling for alternative economic solutions for aid benefit packages to third world countries—shows that he has a right to be worried, and much work still needs to be done.


Arsalan Mahtafar

Although Joseph Stiglitz believes that globalization has the potential to bring enormous benefits to the world, he points out the empirical evidence is overwhelmingly against such a claim. He doesn’t believe that the root of the problem is with globalization itself, but rather with how it has been managed. The problem with the management of globalization is that its rules have been set by special interest in advanced industrial countries. The rules governing globalization (defined in his book as the economic integration of countries, trade liberalization, and foreign direct investment) have not been created fairly, and certainly do not promote the well-being of lesser developed countries. For instance, advocates of globalization insist that developing countries should open their borders to foreign trade and investment as soon as possible, and remove protection barriers from all of their sectors. But take the banking industry as an example. Once foreign banks are able to enter developing countries, local banks can no longer compete with them and go out of business. Consequently, small and medium local businesses cannot secure loans any longer, because foreign banks prefer to give their loans to multinational corporations. As a result, the local businesses go out of business, and many people become unemployed.
Using his clear language and his compelling anecdotes, Stiglitz reveals the shortcomings of today’s governance of globalization. Through his book, he proposes plans for restructuring the global financial system, he mentions ideas for how countries can grow without degrading the environment, and provides a framework for free and fair trade.
Overall, I completely agree with his analysis on globalization. Some of his anecdotes echo Polanyi and it seems that his overarching conclusion is that global economic integration should be done slowly and carefully. He criticizes the “shock therapy” policies of Russia, and the rapid liberalization of the banking system in Thailand and Indonesia. My takeaway from the book was that globalization should not be seen as unanimous cure for development, and should not follow a one-size-fits-all method. Individual social, economic, and political situations should be taken into account, adequate systems of collecting taxes and regulation should be put into place, and effective bureaucracies should be instituted to carry out globalization reforms. Only then will globalization become beneficial to all the countries (both poor and rich) and all the people within these countries (as opposed to only special interest groups).

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