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November 16, 2007

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Nadia Barhoum

Stiglitz offers a refreshing look at globalization and its impending impact on the world from an economic, social, and political angle. He addresses many hindrances to global development, of which developed nations are his primary target.

He points to the self-interested avarice of developed nations as a key factor in the underdevelopment we see around the world. Trade and intellectual property, multinational corporations, and global environmental concerns are all issues that Stiglitz speaks to in his book, hailing them as proponents for both good and evil. The currents state of international policy and decision-making largely favor developed nations and undermine or ignore the interests of developing states. For example, in the world of agriculture, Stiglitz points to those US farming subsidies that boost our own economy but simultaneously sink the local economies of many other states that export the same agricultural goods such as cotton and corn.

He often calls on the effects of negative externalities on a global scale to really illustrate the impact of state policy on other nations and also the impact of international organization’s decision-making policies on the global market and individual players. His writings are important I think mostly because they bring to the table many issues which demand urgency from the public, especially the public that has governing power to change the status quo and trajectory of such embedded institutions.

Stephen Deng

Stiglitz claims that the developed nations, along with the emergence of multinational corporations have molded the globalization to their benefit while ignoring the poorer majority of the world. He in turn wishes to see global manipulation transform into a more equal management of the world economy.
As Anthony pointed out, Stiglitz’s development recommendations have a bit of James Scott in them. Like the idea of a local, adaptable metis, Stiglitz firmly believes in policy that is custom-tailored for its respective state as well as constantly adapting to the changing world situation. However, he does outline the foundation of this framework with a strong role for governments and international institutions.

Though it may be easy, even natural, to dismiss Stiglitz’s ideas based on the idealism of it all, I think he points us in a good direction. He oftentimes believes in using the market as a tool to enforce or regulate those who have something to gain by exploiting the current world market. As someone who is involved with corporate social responsibility projects, I have seen firsthand how a restructuring of social needs into a controlled market framework can work wonders (even if it is difficult to do so). Though I may not agree completely with his exact methods, I do believe that things like market punishments for pollution allow for the social, political and economic spheres of development to move forward together.

If anything, Stiglitz gives us another perspective on globalization. He has set it up as a great opportunity for humanity. Even though we all know the neat package he has produced is not how it will pan out exactly, I do believe he has minds thinking in the right places. He recognizes that governments should have a large role in development and points to many successful examples like China, Botswana and Norway. International intuitions also have a great role to play as enforcers and norm creators which have the opportunity to append the right values to trade. Finally, the market is essential. It is a very strong tool and incentive to reinforce these goals and curb exploitation by multinational corporations.

Stiglitz gives us a streamlining of economics with social and political concerns. Each can be used as a tool by the other but in the end; weight is placed upon the absolute good. Idealistic as it may be, he places globalization as the great window opportunity of our generation to what good we can. I hope we take it.

pierre mouillon

Reading Stiglitz i think was really interesting. Indeed, in his book, he talks with a great ability about the failures of Globalization to satisfy its promises of increasing “everybody’s” wealth while at the same time insisting on its essantial aspect. He argues that globalization is not a bad thing but the way it is managed is unfair. For Stiglitz, globalization which really started in the early 90’s generates huge economic differences and inequalities not only in developping countries (because they do not really beneficiate from globalization) but also in developped ones (because only a minority already rich beneficiates to get even richer). Thus, he proposes a different view on globalization using Asia as a model where state’s intervention would be rehabilitated and where trade would be fair with a special treatments for poor countries. He also suggests a reform of the international monetary system where developping countries could be granted lower inetrest rates. I think that there is not much to disagree with it as i agree with Hye Jin that specific policies for specific regions will be more efficient than umbrella strategy. Indeed, I think specific regions should be treated differently in order to solve and satisfy their specific problems and needs. But what i think is even more important in the problem of globalization and Stiglitz mentioned it well is that leaders should be more concerned about international global welfare and not only be willing to seek advantages for their own country; poor countries should be taking advantages of every decisions made. Thus, international institutions (like IMF where the US is the only country to have a veto) should be democratized, poor countries should be more represented in order to clear the negative extarnalities that affect them and establish a sentiment of international identity.

John Keh

Joseph Stiglitz does a good job at analyzing the effects of globalization. His insights are not only full of detail, but they brought me to think about the occurrences of the 1990’s and early 2000’s in a new light. Having lived through this era at a young age, I was never able to see overarching globalizing factors that had contributed to the development and growth of the age. Stiglitz provides a different and a more encompassing view of what has come to pass in the last decade or so. Each individual country develops in its own unique way. Stiglitz makes that a lot more apparent to me throughout his essays. Developing countries have a hard time trying to emulate the developed countries. In many ways, developed countries even prey upon the developing nations for more economic prosperity. Stiglitz is able to set out a framework for these developing countries and even those countries not yet fully integrated into the global market. Increased government involvement is a necessary step in order to provide to push and guidance in the underdeveloped country. Reading through Stiglitz’s mainly helped me gain incite as to the situation that these developing nations are faced with and possible solutions.

Amitha Harichandran

Stiglitz main message is, as others have stated, that there is no one solution for the economic problems of developing countries. Policies, such as the Washington Consensus, are simply too broad and therefore ignore the local details of each country. Danielle argues that this criticism has already been made, and that Stiglitz adds nothing of substantial value, however, I feel that by providing such a detailed example through China, Stiglitz is able to backup his criticism. Despite the fact that other countries had simply tried to imitate the economic institutions of successful companies, China was able to recognize, that even though a market economy may perhaps be the answer, it needs to be modified in order to succeed.

As we discussed in section, I believe that one of the main problems in policies such as the Washington Consensus, is that you have people that are not familiar with the details of the situation trying to offer the solution without taking into consideration what those who are living through it think. While there are basic measures that need to be taken in all countries, much of it needs to be customized. There is a reason, why Africa is struggling more than other developing nations in the struggle against poverty; and this needs to be addressed by a solution that specifically addresses the needs in Africa. But it is impossible for those in the World Bank and IMF to understand the exact problems that plague Africa. Again, I agree with Stiglitz that economic success is intertwined with political and social policies. No economy can succeed with a corrupt government or with severe education and healthcare problems. This is why one solution cannot work, there are too many differences in not only economies but societies.

Lastly, I am glad that Stiglitz addressed the environmental problems caused by globalization. Most often, this is because developing countries lack proper environmental regulations. Therefore, wealthier nations take advantage of this in order to make a profit. However, what they often fail to realize is that this is something the whole world will eventually have to pay the price for. It is important that instead of trying to exploit the faults of these developing nations, developed countries must help raise standards in all areas, whether it is environmental, social or political.

Tal

Joe Stiglitz makes quite a compelling argument about world economy and market capitalism. I personally agree with Stiglitz because I think that there is much room for global development. One of the arguments that I thought he wrote about quite articulately was in relations to the transfer of knowledge. It is important to consider that in an ever growing global world so much information is exchanged by so many different means. Sometimes it is easy to overlook the many different facets of communication we have in our lives such as the facebook, email, phones, texts, faxes, beepers, televisions, and even ads placed on the AC transit are forms of communication. This point is quite important to understand as it lends itself to the increase of a modern society and ultimately to a world of development.

It is important to note that many of the things that make up my list such as facebook and the AC transit are luxuries we as Americans have, but just because we have access to them it doesn’t mean that as we continue to develop that other nations will continue to develop. Other nations development does not directly tie into the development of the United States. I think that within this notion, is where Stiglitz overlooks the problem of globalization and development. Many of the underdeveloped countries in the world today have problems with diseases, free trade, their economy, and even their social and political lives. Stiglitz mentions some of these problems but he does not provide an answer or solution as to how one should go about trying to fix the problem.

A recurring theme in this class is that one solution does not apply to all nations, we have learned them from different organizations such as the IMF and the World Bank who attempt to bail out nations in trouble but do so by using the same diagnosis on all of them- which is wrong. I think that if Stiglitz’s ideas such as certification schemes, or different ways to trade were to be more details nations might be able to apply his ideas more.
It is important to note that many of the things that make up my list such as facebook and the AC transit are luxuries we as Americans have, but just because we have access to them it doesn’t mean that as we continue to develop that other nations will continue to develop. Other nations development does not directly tie into the development of the United States. I think that within this notion, is where Stiglitz overlooks the problem of globalization and development. Many of the underdeveloped countries in the world today have problems with diseases, free trade, their economy, and even their social and political lives. Stiglitz mentions some of these problems but he does not provide an answer or solution as to how one should go about trying to fix the problem.

Michael PImentel

Stiglitz ideology serves a beautifully pragmatic marriage of the various ideological gems that I've come to support throughout classical/modern political economic discourse. More specifically, Stiglitz presents an amalgam ideology which I perceive to be representative of John Stuart Mill's stance on the importance of public discourse, Scott’s view on the inefficiencies of centralized "one size fits all" policy decisions, and Polanyi's call for compassionate economics in which we realize the responsibility we possess for our brethren. Beyond this, Stiglitz garners more of my support for his assessment of environmentally conscious policy ratifications and his revisions to the concept of property rights.

Taking a page from Mill, Stiglitz, throughout his presentation at the Carter Center repeatedly asserts the importance of dialogue, that is, the importance of facilitating discussions in which the participants of those discussions hold varied ideological preferences. Like Mill, whom I agree with wholeheartedly on the relevance of public discussions, Stiglitz believes that “Dialogue is important; it enhances the likelihood that good decisions get made” and that “Having dialogue is important both to provide better information, knowledge, but also as an important check against the role of ideology in development, which has been a real source of problems.”

Like Scott, Stiglitz discusses how terribly “one size fits all policy decisions” are for the nations that adopt them for they are inefficient and negligent toward local knowledge. Stiglitz expresses his concern for expecting nations to take on equal policies to promote growth and its well-being. Capitalism is undoubtedly spreading, but as Stiglitz explains “One has to recognize that "one size fits all policies" almost never work and that transplanting institutional arrangements (such as America's intellectual property regime to China would be a mistake. Some adaptation is always required; but in many cases, given the differences in circumstances and objectives, the differences in the appropriate institutional arrangements are so large that it would be a mistake to begin with, say, the American model as template.” As Vera pointed out, coming up with individual plans for various economies would be substantially more difficult than our current system, but there is much to be said about getting a policy right the first time, rather than working through trial and error.

I relate Stiglitz to Polanyi, not because their beliefs are intrinsically tied, but because both thinkers look beyond numerical economic computations and take into account the well-being of the people that policies influence. It can even be argued that Stiglitz argues in the same manner as Jessica Stern in regard to globalization in seeing that peace is a function of equality. In his address at the Carter Center, Stiglitz states “for if we who share this small planet are to live in peace, we must see ourselves as not only citizens of our local communities and our nations, but of this world.” I applaud Stiglitz for taking on humanist issues.

Furthermore, Stiglitz offers an interesting system for property rights which seeks to expand the benefits of technological breakthroughs. In the US, property rights are produced through patents which create temporary monopolies. These monopolies drive up the prices of their goods and severely limit the accessibility to these goods. Under Stiglitz analysis, a better system, especially for China, would be to hand out monetary incentives for breakthroughs rather than granting a monopoly. Working under Stiglitz model, the incentives for R&D still exist, but people aren’t disadvantaged or financially excluded from its benefits.

Yet given my unbridled enthusiasm for much of what Stiglitz suggests, I was thoroughly put off by his call to incorporate monetary policy in the workings of
our political monolith. Perhaps my reservations stem from a lack of comprehensive knowledge in regard to the benefits of such a system, but it is my contention that monetary policy is kept out of the hands of elected officials in the political arena in order to prevent the lags, which mar fiscal policy. While I understand his point that our current system which houses an independent central bank is entirely inconsistent with what we as a democracy preach, I do not believe that this inconsistency provides a compelling reason to do away with a system which for much of its existence has done a fair job.

Stephanie Loville

Standard of living seems to be the problem and place of contention. It is standard of living that I think sparks people to even be interested in economics in the first place. How can we increase profit in order to gain the revenue to live at a more or less comfortable level? Although it seems that conspicuous consumption may seem to dominate the scene especially in light of American capitalism I think that it is important to being noting that the standard of living within the US is very much skewed and off balance. A large percentage of the nation is living below the poverty line and there is not much attention paid to raising these families to a more comfortable level. It seems that we always focus on equality on this international scale as if all is in equal balance in America.
In this, I think that Stigltz is absolutely right as Jennifer and Zack have already pointed out that it is more than just income that matter but it is also about the standard of living. I think that economics has to potential to be used in a very unique and helpful way in order to improve social situation. The proper implementation of economic polices can work to offer greater freedoms.
I know that the topic was on globalization and I have seen and understand the many wonderful advantages and benefits to globalization, but I just think that sometimes in the race to get ahead we fail to look within and look at making sure that the needs of our own are met. Perhaps this lends reason for the disillusionment that Stigltz has with globalization. I can see how capitalist countries put developing countries at a disadvantage, but I would not be one to argue that these capitalist nations are at such a great advantage as they say or not everyone at least. This may be slightly pessimistic and perhaps even those at the bottom of a capitalist economy are better than those in underdeveloped nations but I would argue that richest top 5% of capitalist society have placed the rest of society at a great disadvantage as well and have even allowed for those in these middle and lower classes to be overlooked in the grand world scheme of broadening economic freedom by raising living standards. (The fact that Stigltz chooses to focus on this inequity on the global scene proves it further)

Christiaan Strong

Stiglitz describes the state of emerging nations and the trade rules that are holding them back from advancing onto the world stage with stronger nations. He finds that advancement of these developing nations hindered by stronger nations is not only a hindrance for the emerging nations but also for others on the world stage. Stiglitz finds that while many of the problems experienced by developing nations are created by stronger nations holding them back the solution can also be found through open and productive dialogues between them. This dialogue, however, is not merely limited to government, as is mostly not the case, but intended to be created by a sort of world society acting on the best interests that will propel the advancement of both nations. A lack of communication has distanced nations and their mutual resolve to advance each other. Issues of progressive policies such as environmental concerns are often limited to discussions within the single state and are not discussed on a world stage, thus hindering the progress that could be made for all citizens of the world. After all the sustainability of the environment is a global issue that demands attention from all the world’s citizens. I agree with Stiglitz sentiment that a productive and open-minded dialogue between nations is the key to beginning to correct any type of deficiencies on the world stage. He provides evidence from studies that show the increased polarization of political groups when a parties lack communication between themselves. Yet, the same two parties become more understanding and united on issues when an open-minded dialogue is created. This is analogous to what is needed on the world stage. While many have commented that Stiglitz proposed solutions are nothing knew they are still clearly detailed and must be realized on the global level not just national.

David Guarino

I sincerely believe Stiglitz's great contribution (both to our class' syllabus and more generally) is his emphasis on dialogue-as-process in policymaking. The reason for this is that he is fighting against an entire school of thought, implicit within the economics profession, that world-class economists know best, and domestic politicians are simply the representatives of interest-groups, and are therefore forever beholden to selfish ends.

Much work in formal/positive political-economy has gone into showing how policies are arrived at by various aggregation schemes, treating politicians as rational actors seeking to maximize their own interests in a political system which rewards their winning political showdowns. Economists love these models (more and more) because they are A> highly mathematical, B> grounded in rational-actor analaysis, and C> implicitly critical of non-market (that is, democratic/political) logics of decision-making.

But only once have I ever seen an economics paper on the incentives faced by researchers, and never have I come across a (mainstream) paper on the social/bureaucratic incentives and cultural pressures of ostensibly technocratic bodies like the IMF and World Bank.

Stiglitz deconstructs the "us and them" mentality so rampant among world-class economists replacing it with "we're all lacking information". The Washington Consensus was a lesson that the simplification of reality necessary in policymaking gets out of control on the world-stage rather quickly. As Scott (and Friedman!) points out, bureaucratic systemization of knowledge will always favor "rules-of-thumb" and we need to balance this tendency with the accepted input of local knowledge.

Perhaps my favorite anecdote (if I remember correctly) was when the IMF told South Korea in 1998 to cut its budget expenditures to stop deficit-spending when the government's finances were in the black already (copy / replace-all in MS Word isn't a good idea in policymaking).

Stiglitz tells us we're all facing asymmetries of information. Having an abundance of cross-country regression data doesn't replace actual knowledge of the local economic elite's negotiating norms. Nor, however Scott may feel, can a lack of systematized knowledge be made up for with loads of anecdotal experience.

So dialogue, process, democracy - these are the paths. No one is above it. Not even Stiglitz. The beauty of his writing is that he has the street-cred among the economics-disciples that when he says "not even me", they have to stand up and listen.

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