Globalization and Its Discontents

by Joseph E. Stiglitz

Book Overview

This insider's account of global economic policy making will be hailed as much for its courage and honesty as for its depth and insight. Renowned economist and Nobel laureate Joseph E. Stiglitz spent seven years in Washington, serving as chairman of President Clinton's Council of Economic Advisers and as chief economist for the World Bank. Particularly concerned with the plight of the developing nations, he became increasingly disillusioned as he...

• Format: Hardcover
• Language: English
• ISBN: 0393051242
• ISBN13: 9780393051247
• Release Date: June 2002
• Publisher: W. W. Norton & Company
• Length: 304 Pages
• Weight: 1.29 lbs.
• Dimensions: 1.0" x 6.5" x 9.5"

Customer Reviews

Real world vs. Ivory Tower

This is one of the best books I have read on global economics. I won't go into the highlights, because many other reviews have already done so adequately. However, let me say something to those skeptics and reviews who pan this book: There is a lot of criticism that this book contravenes "sound economic principles" and that is written for the "leftists" or lacks "academic rigor". However, keep in mind that this is written by a respected economist that actually worked outside the ivory tower as a senior official at the World Bank. He has seen how the real world works. I have been an investment banker for 12 years and I can tell you that economic and financial principles you study in school are one thing... but decisions are ultimately made by human beings - fallible human beings that have mouths to feed, mortgages to pay, people in high places that one has to keep happy in order to get that cushy corporate job after one leaves the IMF, and rich friends and family in the private sector that may benefit from "suboptimal" decisions. I have seen too many criticisms of the author elsewhere from ivory tower academics who don't have a clue about how power is really wielded and how decisions are really made at organizations. So read with an open mind. Try to set aside the Macroeconomics 101 ideology from your college days, which teach that free trade is by definition great for everybody, and hopefully you can learn a lot from this book.

Keen Insight, Bad Title, Bad Attitude

Hey Joe! You are smart but you need to grow up. Seriously! Noble Prize winning Economist, Joseph Stiglitz, offers a vehement critique of the IMF and its mishandling of specific situations leading up to and during the Asian financial crisis of the late 90s. An informative read couched in every day language. However, the title is a bit misleading. Maybe it should read, "Why I hate The IMF" or "Economic Crisis, The IMF: Oh How I Hate Them." While the IMF may be a major player in global trends, the subject of Globalization is far broader then the topic addressed in this book. For a well rounded approach to this subject see publications by the World Bank and its various "World Development Indicators" reports. These are prefaced by a broad (and truly global) report on economic, political and social trends followed by detailed quantitative data. I wonder if the title is simply a ploy to increase book sales. Some things that I found annoying: Stiglitz' tone is that of a whistle blower when in fact he is not. After reading several World Bank and IMF publications from the time period in question (late 90s) we find researchers well aware of these problems. They sought viable alternatives, and made adjustments where appropriate. Stiglitz, whose peer-reviewed contributions to economics (and especially finance) have changed the way we view things, reduces himself to a whinny stone thrower who (accurately) pinpoints the IMF's failures yet offers no viable alternative. To make matters worse, he accuses individuals within the IMF of knowingly promulgating bad policy motivated by a personal agenda. One gets the impression Stiglitz is airing dirty laundry. Frankly, compared to the prolific body of work Dr. Stiglitz has published in scholarly journals, this book is shameful, biased, peppered with self-righteous censure of a personal nature, and fails to offer anything productive.

A must-read in globalization and international finance

As a consequence of the great advances mankind achieved in the fields of communication and travel; globalization was not a choice anymore as much as an actual reality. It was not a question of whether to accept globalization or not, but rather a question of how to channel its forces to serve the benefits of all those that are involved. Global institutions such as the IMF, the World Bank, and the WTO had to be brought into existence to regulate the process of globalization. Each institute was given a main directive to pursue, and that for the IMF was the difficult task of ensuring global economic stability.Unfortunately, one does not have to be an economist to realize that the IMF failed miserably in its mission. The East Asian crisis of the late 1990's, the so-far failing conversion of Russia from communism to capitalism, and more recently, the Argentina crisis are exactly what the IMF should have prevented or, at least, significantly minimized.However, The author tells us in this book that these failures did not happen in despite of the IMF, but , shockingly, because of the IMF. And in the cases that the IMF was not the cause of the failure, it caused that failure to bloat and metastasize.What makes this book more remarkable is that the author, Joseph E. Stiglitz, is not someone to take lightly, but a Nobel prize co-winner in economics who served on the Council of Economic Advisers under president Bill Clinton and later became the chief economist and senior vice president at the World Bank.Stiglitz begins the book by explaining the specific roles of the global institutions and especially the role of the IMF. From there he describes how many developing (and few developed) nations were let down by the promises of globalization and its institutions. But, he argues, these failures are not caused by the process of globalization itself, but are products of the policies of the IMF.You would wonder though, how could the IMF with its access to profound expertise and its possession of vast wealth fail so badly in its job. Stiglitz explains that the problem with the IMF is not caused by poor knowledge or lack of funds. The problem is a fundamental one, which is caused by the fact that the IMF is not accountable to the people that are directly affected by its policies, bur rather to the US treasury who in turn is under immense pressure from the US investors. This unfair accountability lead the IMF to unconsciously replace economic science by an ideology that primarily served the interests of the US investors. This ideology is all about markets liberalization, which became an end to the IMF rather than a mean to accomplish economic stability. This change of goal, accompanied with high levels of secrecy, was the cause behind the IMF's failure.After explaining this the author delves into the cases of the Asian crisis and the failed Russian transformation. He tells in painstaking details how these crises evolved and what role the IMF played at every stage. He g

Highly readable critique of the Washington consensus

I have worked for both development banks and for Wall Street, and have been heavily involved in Russia for the last ten years, and a more than interested observer in the financial crises of the emerging markets since 1991. I also have a decree in economics. I haven't read much economics since I left university, and the first think I want to point out is that this book is highly readable if you have a little economics knowledge, and has rekindled my interest in the subject. I read it on the beach, and at no point does it drag.I think that there are two main points that Stiglitz makes. The first is that standard IMF policy has tended to approach countries in financial crises with the same rather crude economics as that used on Wall Street, which leads them to think like bank managers rather than economists. If you force a country with a fiscal deficit to reduce government spending, then this will reduce aggregate demand, which will reduce government income, and make the deficit worse, inflicting more pain on the population. The reason that the IMF does this, is that it is meant to restore confidence in the markets, but once a crisis starts, foreign investors tend to bail out anyway, so all it buys you is breathing space. You should accept that the foreign investors are gone, and focus on growth. The other thing that I got from the book is the hypocrisy of the US administration, which forced policies on emerging markets, which it would not itself accept. In fact, the IMF more or less took instructions from the US Treasury during the 1990s, and certainly my sense at the time was that the actual IMF staffers were very frustrated at the policies that the US government forced them to follow. The point though, is that while the US government was battling the balanced budget amendment at home, on the reasonable grounds that it limited their freedom to manage demand, they were essentially forcing a balanced budget amendment on the emerging markets via IMF conditionalities. I remember attending a Paris Club meeting, where the Fund said that they were aware that budget deficits could be beneficial - this was never reflected in the lending policies that the Treasury forced on them. Other examples are forcing central banks to focus only on inflation, and forcing emerging markets to open their markets, while protecting US farmers from imports.The above is an oversimplification of the whole book, and others may get a lot more on other subjects, such as the political process of crisis management, and the specifics of the East Asian economies, which are less of a priority for me. When you are a specialist in a subject, you always find that non-specialist books tend to be wrong about your own subject. I certainly found plenty to disagree with in the sections on Russia, which is my special subject. However, the arguments were cogent (he is a Nobel prize winner, after all) and I found myself looking at my own subject in a new way, and it was interesting to read a bro

An immensely informative book! Highly recommended!

I could not put this book down after I got my hands on it! Mr. Stiglitz is a Nobel Laureate in Economic Science who had the chance to serve both in the Clinton Administration and also in the World Bank. He therefore had much insights and experiences to impart to the readers. This book did not disappoint. It is packed with fascinating anecdotes and his interpretations of the events relating to the global economy, global finance and global institutions during his tenure as an economic adviser to the White House and the Chief Economist at the World Bank. He articulates the original roles of the public institutions such as the IMF, the World Bank and the WTO and shows how they do not live up to their supposed mandates. He exposes the disastrous policies of the IMF which had led countries after countries, on its crusade to impose the Gospel of Market-Fundamentalism, into desolation and devastation. Martyrs made out of the IMF's ideologically-driven zeal and unaccountable behaviors littered the trail on which the IMF carried out its missionary programs. Dr. Stiglitz also highlighted how the IMF and U.S. Treasury, and the Wall Street embellished their misdeeds with tricly phrases, chopped logics and misinformation; how the U.S. decision-making bodies pushed the developing countries to open up for trade while erecting trade barriers themselves to protect the vested commercial interests in the U.S.'s constituency. The chapters on the East Asian Crisis and the Russian situation are especially fascinating. One inevitably gets drawn into the stories as they unfold in the book. However, this book is far from being a cynical and unconstructive compilation of complaints and indictments. Building a more just, more equitable, and sounder global economic and financial arrangement is in the front and center of the book. Dr. Stiglitz points the way forward with a unique vision and a touching passion. His compassion and his belief in how globalization and economic science can improve the welfare of the poor and the disadvantaged shine through. As a trained economist, I highly recommend this book to all those who are concerned or simply curious about the excesses and the potentials of globalization and its future. This book is full of insights and gems of economic reasoning. For those who have trainings in economics, it is a very good book to show how economic thinking is applied to real world situations. For those who do not know much about economics, read this book slowly will also yield significant dividends in understanding our world and the huge stakes involved in the process of globalization. Five stars!!!