Joseph E. Stiglitz

[Stiglitz's autobiography at nobelprize.org]
[His homepage at Columbia University]
[Wikipedia entry]

[2006 interview]

In this 2002 interview he criticizes the policies of the IMF and World Bank.

Unit 6--Globalization: Two Sides of the Same Coin

An earlier post had a link to a short encyclopedia article on globalization. Unit 6 is a difficult read, but you will find many of the same arguments discussed in the book are repeated in this longer encyclopedia article --and a Japanese version is available. The introduction of Wayne C. McWilliams and Harry Piotrowski's popular textbook, The World Since 1945, is available as a pdf at the publisher's website. An excerpt:

Meanwhile, both superpowers began rearming, and a relentless arms race was soon under way. Each claimed that security—both national and global—lay in military strength, but that the other’s armaments threatened world peace. Thus they justified the building of massive arsenals containing thousands of nuclear weapons far more powerful than the ones used against Japan in 1945. Their arsenals have long since been large enough to destroy each other many times over and possibly extinguish human life on this planet, and yet year after year they continued piling up more weapons, spending at a rate of millions of dollars per day. When they decided to scale back their nuclear arsenals, they found out that the genie was already out of the bottle, that even poor Third World nations had the capability to build and launch them.

The military standoff between the nuclear powers brought about a precarious truce between them, but the rest of the world was not free of war. On the contrary, there have been more than one hundred wars since World War II, and many of these lesser wars, though contained geographically and limited to conventional weapons, carried the potential of igniting a larger conflagration. Indeed, the combatants were all too often clients of the major powers and were armed by them.

Equally dangerous to the safety and well-being of humanity was the growing gulf between the world’s rich and poor, between the industrially advanced nations of the North and the underdeveloped nations of the South. In the South, often referred to as the Third World, one finds the world’s lowest standards of living, lowest economic growth rates, lowest levels of education, lowest rates of life expectancy, and the highest population growth rates and infant mortality rates. Thus, millions of the inhabitants of the Third World are dreadfully impoverished, malnourished, disease-ridden, and unable to live productively and in dignity. Governments of Third World nations struggled, usually ineptly, to lift their countries from such impoverishment, and while some have made marginal progress, many others were merely marking time or slipping even further behind. Many of these countries contracted enormous foreign debts they were unable to pay, and their indebtedness threatened the financial stability of the wealthier nations of the North. Economic failure made the Third World more volatile politically and more vulnerable to intervention and militarization by the superpowers. Nearly every war fought since World War II was fought in Third World countries, and all were fought with weapons supplied by industrialized nations.

You should know a little about the IMF (International Monetary Fund), The World Bank (Wikipedia) The Washington Consensus, The 1997 Asian Currency Crisis, anti-globalization movements, and the main criticisms of globalization. Note that globalization of a sort has been going on for thousands of years (e.g. the Silk Road), and that periods of globalization has alternated with periods of deglobalization, periods when the international flow of people, goods, and money has slowed down.

In the current financial and economic crisis, the largest since the 1930s, our understanding and attitudes toward the financial institutions which caused the crisis, the Washington Consensus, the IMF, and the World Bank may be changing. Some observers have called this the collapse of American capitalism, comparable to the collapse of communism. Time will tell. Others have pointed out that the official response to the crisis in the United States is quite different--even opposite--to the economic austerity that the IMF imposed on the Asian countries in the 1997 currency crisis. Is it hypocrisy or is the US economy so different that it requires different measures to recover?