Globalization and Its Discontents CHAPTER I The Promise of Global Institutions I nternational bureaucrats—the faceless symbols of the world economic. In book: Encyclopedia of Economics and Society, Edition: 1, Chapter: Globalization and its Discontents, Publisher: Sage, Editors: Frederick Wherry, pp Globalization and Its Discontents by Joseph E. Stiglitz was published in and has. Stanford Universities among others. GLOBALIZATION AND ITS DISCONTENTS the institutions made it difficult for Congress-or anyone else-to see what was going on. Only because ofa leak was .
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reviews. Globalization and Its. Discontents. Joseph E. Stiglitz. Globalization and Its Discontents. New York: W.W. Norton & Company. xxii + pages. Globalization and its Discontents. The section on process identifies the “three c's” of process co-ordination, co-operation and communication. A process. the tradition of humanism, liberty and freedom of market and enterprise. Let us admit so. G. V. Gupta*. Globalization and its discontents by Joseph Stiglitz (ed.).
The U. In the West as factories shuttered, mechanized or moved overseas, the living standards of the working class declined. Meanwhile, in China prosperity grew, with the poverty rate falling from 84 percent in to only 12 percent by Political and economic elites in the West argued that free trade, global markets and production chains that snaked across national borders would eventually raise all living standards.
But as no alternative vision was offered, a chasm grew between these elites and the mass of blue-collar workers who saw little improvement from economic globalization.
The backlash against economic globalization is most marked in those countries such as the U. Expanding free markets Over the decades, politicians enabled globalization through trade organizations and pacts such as the North American Free Trade Agreement, passed in The most prominent, though, was the European Union , an economic and political alliance of most European countries and a good example of an unfolding political globalization.
They signed the Treaty of Rome in to tie former combatants into an alliance that would preclude further conflicts — and form a common market to compete against the U.
Over the years, more countries joined, and in the European Union EU was created as a single market with the free movement of goods, people and capital and common policies for agriculture, transport and trade. Access to this large common market attracted former Communist bloc and Soviet countries, to the point where the EU now extends as far east as Cyprus and Bulgaria, Malta in the south and Finland in the north.
With this expansion has come the movement of people — hundreds of thousands of Poles have moved to the U. The EU is now at a point of inflexion where the previous decades of continual growth are coming up against popular resistance to EU enlargement into poorer and more peripheral countries.
Newer entrants often have weaker economies and lower social welfare payments, prompting immigration to the richer members such as France and the U.
Cultural backlash The flattening of the world allowed for a more diverse ensemble of cultural forms in cuisine, movies, values and lifestyles. Cosmopolitanism was embraced by many of the elites but feared by others. In Europe, the foreign other became an object of fear and resentment , whether in the form of immigrants or in imported culture and new ways.
Sadly, this is not provided as the book lacks any solid analysis or even balanced insight with its unrelenting criticism of globalization.
The book is a polemic. Yet the polemical writing comes at the expense of substance. For a distinguished economist, Stiglitz makes a succession of lightweight and debatable points including a simplistic criticism of globalization as having failed to end world poverty.
International institutions are blamed for their market-based, efficiency-first views, but local dictators and corrupt governments are not analyzed as the more likely causes of poverty and misuse of external loans.
Probably this reflects the experience of Stiglitz at these institutions and his lack of insight into corruption and government maladministration as he flew around on a world tour of key political and economic trouble spots. In other words, Stiglitz is the typical visiting expert who meets the leaders on their best behavior but fails to see what is really going on.
Here, no knowledge is displayed of the vast literature on the theoretical and empirical analysis of the performance, operations and strategies of multinational enterprises. When Stiglitz says that foreign multinationals quash local small business p. When he says that the abuse of strong local competition policy results in monopolies and that local workers are displaced, he wrongly criticizes multinationals instead of the corrupt or inept local governments. In fact, the evidence of international business researchers suggest that foreign multinationals help to offset local monopolies, transfer technology, stimulate growth and improve the efficiency of developing countries.
But for Stiglitz ignorance is bliss and ill-informed criticism of multinationals can be launched without any regard for the actual evidence on their performance and behaviour. In fact, Stiglitz does not address most of the real issues in globalization; besides the lack of analysis into multinationals there are no data on world income inequality, trade and development, the causes of economic growth, etc. Instead, his book is really a technical critique of policy at the IMF in the s.
He criticizes the high interest rate and tight fiscal policy applied as conditions to IMF loans to countries experiencing currency crises.
He also attacks IMF and World Bank conditions favoring privatization before the institutions and legal frameworks were in place to make markets work. It is also pursuing the interests of the financial community. This means that the IMF has objectives that are often in conflict with each other . The global financial community apparently did not see the IMF's track record as one of conflicted interests or consistent failure: IMF managing director Stanley Fischer and Treasury Secretary Robert Rubin both left for multimillion-dollar jobs at Citigroup.
Stiglitz believes the IMF and World Bank should be reformed, not dismantled—with a growing population, malaria and AIDS pandemics, and global environmental challenges, Keynes' mandate for equitable growth is more urgent now than ever. He advocates a gradual, sequential, and selective approach to institutional development, land reform and privatization, capital market liberalization, competition policies, worker safety nets, health infrastructure, and education.
Different countries will need to follow different paths.
Selective policies would direct funds to programs and governments which had success in the past. He also points out "global governance without global government," and suggests that we need to recognize the inequities of the "global economic architecture.
Lastly, democratic disciplines are needed to ensure that financial institutions serve general interests. Debt forgiveness should be extended, building on the success of the Jubilee Movement. Since the IMF loans primarily benefited foreigners and government officials, he argues it is unjust and onerous that citizens of developing nations be heavily taxed to pay them off. Not coincidentally, Stiglitz believes that promoting local and international democracy is fundamental to reforming global economic policy.
Democracy aids social stability, empowers the free flow of information, and promotes a decentralized economy upon which efficient and equitable economies rely.
For Stiglitz, promoting democracy comes before promoting business. Thus rather than working for equity and extermination of poverty, financial institutions become spokespersons of the financial community.
The procedures and rhetoric of financial institutions widen the gap between developed and developing, which resulted from undemocratic paternalism and lack of accountability, transparency. Undemocratic paternalism is inflicted through ideology, assuming the model IMF presents is universally applicable.
Moreover, lack of accountability and transparency is pronounced in unfair trade agenda, the Uruguay round. The North, EU and US achieved bilateral conventions called Blair House Agreement to circumscribe the regulations imposed on subsidization of agriculture, leading to the failure of Uruguay round and exposing developing countries to greater risk and volatility.
Criticism[ edit ] Globalisation and Its Discontents has earned praises from many reviewers. A seminal work that must be read. He is not a global pessimist, but a realist - and instead of placing him in a neat box labelled 'important contribution to the debate,' we should listen to him urgently.
It certainly stands as the most forceful argument that has yet been made against the IMF and its policies.
It is designed to provoke a healthy debate and… shows us in poignant terms why developing nations feel the economic deck is stacked against them. For instance, D. MacKenzie claims in the libertarian journal Public Choice that Stiglitz mischaracterizes government failures as market failures.