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November 16, 2007


Rowena Tam

Stiglitz’s argument is very convincing for those who hope for a future that can work together as a cohesive globe. Unlike some previous writers, Stiglitz not only portrays the problem, but also devises a way for the problem to be possibly fixed. He notes a lack of communication as a major problem and I would have to agree. Without communication, there is no way of knowing what the other party is doing. Stiglitz provides the solution to beat the prisoner’s dilemma. Discussion allows both parties to receive the most benefits for themselves and for the community as a whole. Dialogue then fosters a sense of community and allows people to acquiesce their pride and unite. The interdependence of the communities actually creates self-betterment. With a world goal communicated to everyone, all individual nations have a desire to reach their best potential to help achieve the goal. Stiglitz idea of enlightenment creates a basis for which tolerance can unite countries and allow countries to live in the desired “harmony.”

Yet the fault in his argument is sometimes found in the fault of socialist ideas. There is this desire to find peace and harmony, but it requires a lot of dedication not from one person, or even a group of persons, but rather a movement on all people across the globe. His ideas are a good realization of the necessity to educate humanity on the interdependence of this only world we live in.

Julia Lohmann

I too found Joseph Stiglitz’s point of view quite refreshing. As others have mentioned, I appreciated that he did not condemn globalization, but merely called for a new and deeper understanding of the processes contained in that term. In his speech concerning the EU, he outlines 5 main concerns that I agree should truly be recognized in today’s world: democracy, social justice, solidarity, environmental awareness, and tolerance. Especially because his main emphasis is economics, it is surprising that he makes a point of showing these are major issues in our world today. He points out that the EU has made leaps and bounds economically, but is prouder of the triumphs it has made in terms of human interests. He condemns the United States for its recent hypocrisies concerning social justice, and reminds us that economic gains are not the most important goals in this life. What truly struck me was one of the simplest points he makes: GDP per capita is not an accurate measure of success. He shows that while the US’s GDP per capita has risen steadily over the years, most Americans today are worse off than they were 5 years ago. If more of the major political and economic thinkers in our world took this point of view, I feel it would solve many of the issues the US is struggling with. All together, I find his ideas to be the most timely and the most important that we have read so far. Unlike other authors, he can see beyond the numbers and direct impact of economic policies, and is thinking of the well-being of the entire human race.

Jay Bessette

This was my favorite reading by far mostly because it has to do with what is going on right now in the world. Stiglitz’s break down of the Chinese New Economic Model for the next 5 years was fascinating. I have often wondered how and why this country with the world’s largest economy is still a third world nation and has so many peasants and starving people. The breakdown and analysis made total sense. Because China is so focused on its export market it is not doing enough at home to create a consumer base for it’s own products.
Not only does China need to wean itself off its dependency on exports but has to start investing in its people via making loans easier to get for small business to expand as well. I also thought it was very interesting that China does not want their currency to appreciate because it would take away from scarce money allocated for development even though they are sitting on a trillion dollars in reserves. I personally feel that China should open its lending to more companies and small businesses so that there is developmental growth in smaller markets and poorer regions.
Currently China loans a lot of money to the US so that the people here will continue to buy the Chinese exports, that is really a brilliant plan plus the country makes money off from the US when they pay back the debt with interest however I agree with Stiglitz that China should spend more money on health care, education and housing.
In regards to innovation Stiglitz points out that there should be more emphasis on resource efficiencies and not labor efficiencies and that “China needs to have an innovation system which puts greater emphasis on prizes and government funded research and less emphasis on patents.” It is high time for China to start focusing more on the benefits of efficiency for all people and to diminish the earnings gap between the rich and very poor.

elisabeth miller

I just wanted to say that I could not find this book anywhere that I tried to, which has been a problem with several books in this course. So I was unable to do the reading, but i'm sure Stiglitz had some good arguements. Just wanted to let everyone know I didn't forget about the assignment.

Samira Ghassemi

Stiglitz beautifully illustrates why different organizations such as the IMF and WTO are not helping and if anything, are making the situation for less developed countries worse off. Instead of having the more industrial countries helping (such as the G8 nations, which account for more than half of the world's economy), they "actually created a global trade regime that helped their special corporate and financial interests." Ziwei even pointed out that these leaders would probably not commit to anything, if it were going to cost them.

In the chapter, Making Trade Fair, Stiglitz blatantly states, as Reich had stated, international trade is not a zero-sum game and there can be winners on both sides. In order for less developed countries to improve their economies, the benefits and costs of trade must be shared more evenly. In the other article, the Washington Consensus imposed stronger safety nets only after Dani Rodrik's "augmented" version, but as the 19th out of 20 suggestions. As Rodrik put it, these countries will have to undergo serious domestic changes in order to promote further entrepreneurship and institution building. Neither Rodrik or Stiglitz believes that with trade liberalization, automatic changes will occur and the illusion of growth "trickling" down to benefit everyone. I believe (and also have gathered ideas from other classes) that aside from everything else, some of the more important factors of growth for developing countries should be the amount of savings within a country, level of technology, education of workforce and how fast the workforce is growing. Savings in a country will enable future investments and a better educated workforce empowers a country with the capability of being more productive. Before, I could say that Stiglitz had received a Nobel Peace Prize as an economist, but after reading Making Globalization Work, I grew pretty fond of him. His attempt to spot out the flaws of globalization and pushing his resourceful ideas to hopefully make the changes needed is not only admirable, but it was very informative.

Sarah Dryden

In my experience, Joseph Stiglitz is one of the most articulate economists to examine globalization, or to champion the disadvantaged in our global system. He discusses the weaknesses inherent in an application of liberal market policies to all states, arguing that no one solution can be applied to all countries with the same results. Stiglitz’s position seems so intuitive to me, after reading his papers. Why would China, a country whose historic values and culture are distinctly different from those of the U.S., be able to apply liberal market tactics and achieve the same result? Simple differences in authority distinctions, social interactions, and value of material goods can completely change the way a market economy works. Stiglitz effectively reveals why China is in need of a “New Model of Development,” different from those held up by Western countries and “consistent with China’s distinct circumstances and objectives.” In the very first post, Eric calls this a “religion” of liberal marketization; that term seems very reflective of the current global state of mind.

In order to create these more relevant “New Models” specific to each country’s set of goals and values, Stiglitz’s emphasizes the importance of dialogue, unbiased third-party advice, global community, and participatory democracy. In my opinion, he truly views the future in terms of global involvement in creating global solutions. One might say that he is calling for a global democracy, in which each citizen of each state participates in creating policy and goals for the benefit of the entire world. A good example is his discussion of environmental concerns. Because we all share the earth, and it’s not something we can “experiment with,” Stiglitz advocates the involvement of all countries in solving our environmental problems. Another distinction he makes that supports this sort of global viewpoint is between human rights and individual rights; while we create institution to create individual rights, these can sometimes obstruct the enforcement of inalienable and universal human rights. He calls for us to include all humans in policy decisions, and points to the European Union as an entity committed to defending these human rights (such as the Convention on Torture). Like Karina, I think that one of our primary goals should simply be a unified society – this will eventually lead to solutions for the rest of our diverse issues. However, Rowena makes a good point when she says that such global goals need the dedication of all to accomplish. Nothing can be done for the world if the world doesn’t participate.

Another interesting thing about dialogue that Stiglitz discusses is the tendency for dialogue to create viewpoints that are “propelled toward the center.” This as opposed to the polarized views that result when we are surrounded by like-minded people. I think this is especially relevant for the United States, which is facing increased polarity between self-proclaimed Democrats and Republicans. By labeling oneself as one side or the other, politically-minded people associate themselves exclusively with like-minded people. According to Stiglitz, this causes the two viewpoints to move further apart. The U.S. could take a lesson from such observations, and attempt to de-emphasize political labels in favor of opinions.

Andrew Gurwitz

Stiglitz’s analysis of the liberalizing globalization of the end of the twentieth century really pulls together many of the readings from the semester. Stiglitz frames globalization not as an instrument to develop countries, but as an instrument to expand the industrialized ones. Globalization has done little to fundamentally address the development of these countries, other than to open their markets to a set a rules written to favor the industrialized world. Understanding Polyani is important to understand that “free” markets does not simply imply freedom. In fact, there is no freedom of choice for countries to take measures and establish regulation that well protect and develop their industries and markets. Free markets are mandated by the powerful so as no provisions can be enacted so as to eclipse their growth. In forcing other countries to live by its standards of free markets, industrialized countries not only overlook their own subsidies, tariffs, and protections that blunt their own commitment to free trade and markets, but also neglect the ways in which their own centralized, protectionist governments initially established an environment where their industries could develop and become successful before being exposed to harsh open market. Milton Friedman’s trouble in reconciling the necessity for centralized government to establish norms and develop structure in consensus with the completely free society he extols. While at some point a transition from one to the other may be advantageous, free market advocates must not dismiss the necessity of centralized government to establish and develop the means by which it will flourish. As James Fallows described in the Far East, calculated government sheparding of nascent industry has proved a successful means for producing competitive industries in the globalized free market. In reading Stiglitz, it is clear that more must be done to understand to develop countries to compete on the raised playing field of the industrialized world. The opposite, the imposing industrialists going down to their playing field – pros vs. amateurs – seems an obviously unfair fight and of a certain bullying, imperialistic quality.

Christina Adranly

Stiglitz's present article has perhaps been the most interesting, honest, thought-provoking article we have read to date. And like previous posters, I appreciate his well-thought out honesty and was impacted greatly by his "re-personalization" of the world order. I agree wtih Stiglitz's diagnosis that one of the primary fallacies of the liberal democratic order of today's world is universal liberation; in my view, in its propagation and almost cult-like adherence to impersonalization of the market, commodification, and contractualism, liberal political economy has forgotten to pay attention to the human aspect of society and culture.

Moreover, as Stiglitz effectively notes, it is impossible to apply a universal model of capitalism to all countries. Stiglitz uses the example of China to illustrate that Westernization can mean different outcomes for different societies. Initiating free markets and democratizing politics does not necessarily mean a complete "liberalization" of all aspects of society and culture. Instead, capitalism can be adapted to specific national needs and objectives; it is possible for multiple varieties of capitalism to exist. Our nation can learn from China in the same way that China learns from us, and through this transnational exchange of knowledge a pluralistic order is achieved in which political, economic, social, and cultural disparities are embraced, and whose positive aspects are able to be molded to encompass each respective society's value structure.

Norris Tran Duc

I found many of Stiglitz’s arguments to ring true and his opinions are remarkably unselfish. I actually thought it was very optimistic and extremely humane of him to think of others, and mostly, of the developing nations. Stiglitz argues that the current state of liberal democracies need to be reformed to improve the situation that is currently plaguing the world, that is, the increasing income gap internationally between developed and developing states and domestically, between the rich and the poor. He emphasizes liquidity and transparency of education and knowledge, while extending the idea of increasing access and opportunity to develop sustainable credit, as well as the overall encompassing idea of economic development, rather than just economic growth, with a side of environmentalism.

I agreed with Stiglitz on many of those platforms, and I enjoyed the fact that he did not believe that the system we currently had was the best possible (as reverberated by Fukuyama.) Stiglitz mentioned the flaws of some international institutions that did not want to meddle with politics, such as the IMF and the World Bank, due to the taboos of their charters. Furthermore his statement of international institution flaws rings true, especially on the issue of the unfortunate dynamic between the World Bank, NGO’s, and states. Sometimes the World Bank designs projects which inherently have flaws. NGOs leech onto those flaws and their arguments are taken seriously by state lawmakers. For fear of reputation and government shareholders’ money plummeting, the World Bank backs out along with its social and environmental safeguards that were initially inputted, and so, the NGOs actually end up doing more harm to the developing nation than good.

Furthermore, Stiglitz’s desire to strive for a common goal of seeing ourselves all as citizens of the world (like the Europeans apparently do in the European Union) seems very optimistic, almost too optimistic. Stiglitz implies also that to aid developing countries, they must not simply copy and paste all the systems that work for the West, but must adapt and manipulate them accordingly to suit their personal and unique situation. He emphasizes that there needs to be dialogue and an exchange and transfer of ideas and knowledge, in order to improve and create a better society, moving towards greater development and growth, rather than just growth on its own. Furthermore, I agree with him that there needs to be reforms dealing with intellectual property regime, and his argument that “thousands of people will die unnecessarily” due to selfish monopolization of common good knowledge is discouraging, but not surprising that someone who spent that much time and effort to cure breast cancer wouldn’t want some form of selfish compensation.

Colin Zealear

I concur with all of you whom have already expressed their admiration of Stiglitz’s work and will add on by saying I am most likely focusing our second paper on his ideals. My major concentration is imminently connected to the sensitive subjects that Stiglitz so eloquently discusses and the answers, in my view, brilliantly the questions about such matters that arise. It seems obvious that eventually, so long as capitalist ideals remain a powerful force, the world economy will have to expand as it grows, if that makes sense, to accommodate the insatiability of the human race. This domino effect will either demand more structure or it will collapse.
I also agree with several others in the class who elaborated Julia’s connections to other authors’ works that we have read previously this semester. He paints a middle ground, which is how I would like to see it happen, and places emphasis on the markets ability to succeed when open internationally and not just within a nation. Capitalism strives when competition is strongest. The problem is the age old prisoners dillemma and the people at the top who are controlling developmental agencies like the IMF and World Bank are afraid they will lose in a literally free market, and not a figurative one.
To me, Stiglitz does a good job portraying an international anti-neoliberal future, but as Madeleine pointed out, these governing bodies are indeed bias, apart from the psychological hindrances of greed and intolerance. Stiglitz does a better job explaining an international human community and is more convincing about an international connectivity of socio-economically similar people than when he eludes to international governing organizations prior success. He is not wrong in arguing that these associations should exist, but they need, for the common good of all mankind, need to be cooperative and, as they claim to, be open and free to discussion and scrutiny otherwise they will never be respected enough to gain legitimate power. Only then could these institutions be successful and only then will we be in control of our species destiny, apart from maybe the environment.

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