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November 16, 2007

Comments

David Grande

Joseph Stiglitz’s thoughts on the modern world are definitely words that seemed to please people who feel that the world is on its path to perfection. With previous writers mentioned in this course, Stiglitz’s argument is greatly organized as he portrays the problem and also adequately tries to explain its solution. But that is where it ends as far as praise on my part.

Knowing that Stiglitz has a great political and economic background, it is hard to disagree with him. His idea of advancing less developed countries through the process of communication and group planning/implementation requires huge manpower scattered all over the world. That is where the problem lies, as political leaders of the rich countries do not want to give up their elite position for the well being of others. As sad it seems, it is the world we live in, as greed, hate, and power fills the characteristics of many world leaders.

This desire to have peace, humility, and eventually harmony in the world requires this devotion from a large group of people that seems is impossible to achieve in today’s world. If the powers of the world can align themselves and communicate with the less developing countries, the ideas proposed by Stiglitz has a chance to be realized. But as mentioned before, they are too idealist and optimistic in today’s world to be taken seriously.


Nathaniel S. Aylard

The Stiglitz’ articles were a joy to read but his ideas do not seem novel or original. The reality is someone from the North (ie developed countries) is finally exposing the problems of mainstream economic thought (neo-liberalism) which developing countries have experienced all along. They just never had the means to escape. Nonetheless, neo-liberalism is the belief that private enterprise and limited government is the solution to growth. This is referred to by some as the Washington Consensus, the “magic bullet” that should lead an economy toward development. However, it appears that it has been losing its magic as countries fail to shoot themselves into high levels of growth. There appears to be something wrong with these “universal” principles; maybe they are not as universal as Stiglitz (and others like Rodrik) express. Thus, in a sense Stiglitz is not only criticizing the shortfalls of this particular stream of thought but also the lack of responsibility by the North to establish a fair global economic environment. I agree with Stiglitz that politics has shaped our current world.

It seems that the only countries that were able to escape the negative aspects of globalization (for the most part) had followed their own model of economic development. This was illustrated by Stigliz’ remarks in “Towards a New Model of Development” of the peculiar path China took with its “feeling the stones” approach. However, the world is much different from when China and the Asian Tigers pursued development. It seems something else will be required than just states finding the right balance of politics and economics. Regionalization appears to be the next option for some providing bigger markets, a greater labor supply, and possibly a bigger savings base. Not to mention such a move could provide more space for some highly dense populated countries. Moreover, such movements could change balances of power opening up windows of opportunity to help reshape the current environment in their favor. Nonetheless, the North needs to take responsibility for shaping the current global village and understand “another world is possible”. Perhaps we will see a mix of these two if regions begin to play a greater hand in international politics forcing countries like the US to play a more benevolent and fair role.

Krista Ellis

I think that the Stiglitz reading has been most relevant to the various topics we have discussed in section. Most specifically, the need for dialogue and the understanding of the interconnectedness of politics and economics to achieve a more equitable globalization. He finds fault with the World Bank and IMF for not recognizing the inevitable interconnectedness of politics and economics, which we as PEIS students can only agree with. He criticizes their top down implementation approach and the neglect of local wisdom and information in decision making, thus making an argument similar to Scott’s. Increased dialogue, and not just from the world ‘experts,’ allows for more information; an essential component of free market economics which relies on the ‘consumer’ being fully informed. Not only does dialogue and the opening of information affect developed and developing markets, free information is important for other progress, argues Stiglitz. The pharmaceutical companies’ use of patents limits the freedom of information, having drastic impact on worldwide research and development. Stiglitz brings up the example of AIDS patients in Africa in this example; withholding information is, in their case, a death sentence. As PEIS students, we must agree with Stiglitz that globalization will only be equitable through increased dialogue and understanding. Institutions like the IMF ignore this by creating hard-line rules to get loans, and one simply cannot create a blueprint for worldwide economic success. I think Stiglitz’s argument for increased dialogue is the purpose for studying a field like PEIS; developing cultural, historical, economic and political understanding for individual nations in order to begin to find ways to foster successful development.

Morgan Brewer

From Stiglitz’s “Remarks on the occasion of the 50th Anniversary of the Treaty of Rome” we see that he believes that Globalization is leading to a broader imagined community. Harkening back to Anderson’s “Imagine Communities” this is a developing sense of global nationalism. Rather than a citizen of a city, state, or country, people are starting to realize that they are citizens of Earth. As such, Stiglitz declares that we also have responsibilities as citizens of Earth (or as human beings), such as to help those less fortunate, while retaining ideals of sustainability. On a related note, Stiglitz’s view of a country’s progress is, as my classmates have already stated, not just from a purely economic perspective. This humanitarianism from a prominent (Nobel Prize winning) economist is unexpected, to say the least. In the aforementioned address Stiglitz’s commends the progress that the European Union has already made, but demands more. Not only expecting, but insisting that the effects of globalization be toward the improvement of the lives of all humans, Stiglitz neither commends nor denounces globalization, but sees it as an opportunity. This is what truly amazed me. Not only does he not choose a side, he does not even really enter into the argument, but simply sees the process happening and is trying to direct it toward communal good.


Obviously a man of action, Joeseph Stiglitz is pushing the ones who can act to do so, in every way possible, toward a non-utopian better world

Andrew Epstein

Like Julia said before me, I was very much reminded of James Scott during this week’s reading of Stiglitz. Both writers are very intriguing and it seems that Stiglitz, like Scott, truly understands the moral and economic dilemma that the world faces when we try to fit the mold of western government, in this case neo-liberal thinking, into countries where this mold simply will not fit. Furthermore, unlike some authors we have read before who introduce a societal problem but fail to come up with a realistic solution to the issue at hand, I feel Stiglitz succeeds in providing a plausible solution to stymie the negative aspects of globalization and the introduction of neo-liberal thought into the modern world. His idea to cease a foreign policy that merely stems from western beliefs and perpetuates a cycle in which developed countries continue to benefit and pull away from those that are weaker, is both a true and necessary idea as we look toward the future. Stiglitz criticism of the IMF and World Bank are also valid. As Madeleine said, these institutions perpetuate a state of global governance where not all the countries are involved in making decisions on how they themselves are to be ruled. By leaving the small and often weaker countries out of the decision making it helps keep these countries small and weak and continues to put them at a disadvantage on the global scale. Furthermore, the IMF and World Bank are representatives of westernized countries and will obviously sway towards western thinking. The reality is however, this thinking is not always the best option and I think Stiglitz does a very good job of both recognizing this and posing a solution of international discussion which will further develop those countries that are weaker.

Jazmin Segura

Just like Julia mentioned above, I found Stiglitz argument against globalization to be fascinating and very convincing because rather than condemning globalization, he pointed out its flaws and most importantly he provided us with possible solutions to “make it work better”. I was personally intrigued by his work on Dialogue and Development because he successfully argues that the lack of diversity in the table that makes important decisions negatively affects hundreds perhaps even thousands of innocent peoples. This problem is especially important to me because it directly applies to my concentration which is the failure of economic development in Latin America. Many Latin American countries like Mexico have followed economic reforms like NAFTA that have benefited a few (elites) and at the same time have marginalized thousands of poor farmers in rural areas. Indeed, there needs to be “more voices at the table” and this can include NGO’s academia etc…in order to represent as many people as possible that are expected to be affected by any decision taken. This is especially true because local people/representatives know more than foreign government officials or representatives from international institutions like the WTO and IMF. Like precious postings, I found this argument to be very resembling of James Scott’s high modernism. It seems like both are suggesting a more localized approach rather than a global/international one. Moreover, I consider that Stiglitz goes beyond the criticism but actually gives a possible solution which is not to have purely local decisions but rather a more holistic approach as “local knowledge” is vital for making decisions and “knowledge from the outside world…very limited but important.”
Another point I wanted to comment on is the issue of “universalism” and the remarkable argument that he makes about the failure of “one size fits all policies”. Stiglitz has been one of the very few people I have read that points out that economic institutions/reforms have to be adapted to each nation because “circumstances, and history differ, but so, too, to a large extent its objectives.” He point out that there is not simple solution that can be applied to the rest of the world, in fact to achieve a successful global economy there needs to be a far more complex prescription. For example the Export-led growth worked for the East Asian countries but not so much for others. Going back to the example of Latin America, it is clear that all the attempts made to catch up and become more like the US have failed and this includes ISI, Washington Consensus and now the Neo-liberal approach. Therefore, I feel as though there needs to be dialogues to come up with a developing strategy that doesn’t seek to become just like the United States but rather a strategy that can take into account the local needs, obstacles, and objectives in order to become a developed region.

Kieran M. Duffy

"Eventually," states Joeseph Stiglitxz "we should be working toward the creation of international legal frameworks and international courts--as necessary for the smooth functioning of the global economy as federal courts and national laws are for national economies" (207).

I agree fully with Stiglitz. I think that this is not only a great idea but a certainty with the turn of events that we are seeing with today's rapidity of globalization. I almost want to state that in two-hundred years, because of the integration of so many differant countries with one another from an economic and political standpoint, with less conflict, there will be one system of courts with appointment from perhaps representatives from the top ten coutries, we may find that we will have a United States of the world.

This is a little overstated, or maybe a lot. However, I feel that as we continue to see cooperation such as today after an event like Abu Dhabi, easing Citigroup hemoraging with a $7.5 billion capital investment is a small step in that direction, and in time as our planet detetiorates, and free trade spreads, much of the sceptisicm that Stiglitz makes note of will slowly dissapear as we are left no choice but to cooperate with one another and exchange goods and services. Thus, if there is to be an international system of courts to maintain checks and balances on countries with monopolies such as Russia, China, the United States, and OPEC, smaller impoverished countries can achieve a greater status in the international system of trade develop better infrastructure and bring up standards of living which he states "some 40% of the worlds 6.5 billion people live in poverty" and also that "while those who benefit from the current system will resist change..forces for change have already been set in motion" (13).

Asia, China, and India,nearly half the world population, are shining examples of the positive side of being integrated into the global economy, and while standard of living could be better, they have rissen steadily over the last few years.

Vaishnavi Jayakumar

Stiglitz, unlike what some of my peers have suggested, is not launching a crusade against the evils of globalisation. Rather, he argues that while there is so much to be gained from globalisation, industrial countries like the US and Europe must be more effective at “coping with globalisation” to offset the inequities faced both within industrial countries as well as in developing countries. Stiglitz’s main argumentfor government intervention lies in his view that “economic consequences of globalisation (are outpacing) our ability to understand and shape globalisation, and to cope with these consequences through political processes”. His approach to globalisation strikes me as particularly mature while avoiding the knee jerk shrill denunciations of this phenomenon. While we are all aware of the inequities perpetuated by completely free markets, Stiglitz makes it clear that he is not proposing complete government intervention, but instead a system of exchanging information that allows us to “extract the contingencies that are the relevant ones for a particular country”, pointing to China as a specific example.

His solutions therefore seek to maximise the benefits of globalisation while minimising its fallout. I admire his domestic policy recommendations, which do not recommend import substitution or excessive protectionism, but instead focus on redistributing wealth generated by globalisation and trade liberalisation. It reflects his understanding that globalisation does increase the overall incomes of participating countries but that unfettered, leads to more severe income inequalities. “Without strong government re-distributive policies, unskilled workers may well be worse off”. Such recommendations strike me as more nuanced and sophisticated than blanket calls for protectionism or turning a blind eye to the fallout from globalisation.

Ellen Guan

I, like many of my classmates before me, believes that Stiglitz offers the most comprehensive and balanced theories we studied thus far. His main concerns seem to be centered on three things – 1) globalization seems to leave out the developing nations, 2) how to counter global warming economically, and 3) the dangers of the US reserve.

All three of his concerns are near and dear to all of us. As globalization expands, the more powerful players unavoidably take advantage of the developing countries as each of them fights for most benefits to their firms. Many of the policies then determined leaves out the developing countries, which lack the technical or geographical capabilities to develop and export their goods.

I am currently taking an economic geography class and we have visited many of the same concerns that Stiglitz have for the developing countries, particularly their inability to efficiently compete on the global market due to exporting difficulties. I find Stiglitz to be ingenious in incorporating his ideas on alleviating global warming with helping the developing nations in the global market.

Through his envisioned system where firms will be taxed for their pollution, not only does it help alleviate global warming, it also helps the firms in the developing countries to compete with other high tech firms which now have to bear a cost closer to the actual production cost.

Since we are limited to 400 words, I would like to quickly touch on the last main argument for Stiglitz. Stiglitz has drawn out for us the reality in today’s world – the dollar in not as powerful and stable as it used to be due to the fact that developing countries has consistently used the US dollar as a reserve currently, which puts US in danger of over-borrowing.

I have always thought that even though we are aware of the major problems in society (ie. inequality), it is unrealistic if we only sit around and talk about the same solutions (that is not realistically applicable) over and over again. Yet Stiglitz actually pointed out a problem and offered a viable solution – he argued for the creation of a universal currency. Not only will this aid globalization, it will also solve the US reserve problem.

All in all, Stiglitz has offered many viable solutions to different problems we face today, and all of them tie together with each other – the emissions tax helps the developing countries perform better in the global market, the universal currency can be used for emission taxing, and the US reserve problem can be solved with the universal currency.

Tessa Berman

Stiglitz’s pieces point what I find to be the most frustrating aspect of studying political economies: everyone is a critic yet few proactive solutions arise out of such commentary. While it can be extremely satisfying to stick it to the IMF or World Bank, what fundamental changes have these institutions undergone besides changing the rhetoric of their conditionality and lowering their visibility in the face of justifiable criticism? While it is easy to valorize Stiglitz’s commentary and jump on board his politically sensitive, socially aware bandwagon, it would seem that the fight against technocracy is never ending. In reality, it is hard to be taken seriously without declaring oneself an ‘expert.’ It is this dynamic which makes suggestions such as increased openness, or dialogue, or responsiveness harder to actualize than statistics-based proposals to decrease poverty, increase employment, or restructure political systems. Speaking the economic language of development, international relations, etc., is required to break into such policy dictating circles as national governments, international institutions, and even the majority of non-governmental organizations. The lining of Stiglitz’s argument is a reminder that we must be aware of our own historically and geographically specific biases and limitations in order to work towards the global human society Stiglitz alludes to.

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