Making Globalization Work

by Joseph E. Stiglitz

Book Overview

Four years after he outlined the challenges our increasingly interdependent world was facing in Globalization and Its Discontents, Joseph E. Stiglitz offered his agenda for reform. Now in paperback, Making Globalization Work offers inventive solutions to a host of problems, including the indebtedness of developing countries, international fiscal instability, and worldwide pollution. Stiglitz also argues for the reform of global financial institutions,...

• Format: Hardcover
• Language: English
• ISBN: 0393061221
• ISBN13: 9780393061222
• Release Date: September 2006
• Publisher: W. W. Norton & Company
• Length: 384 Pages
• Weight: 1.55 lbs.
• Dimensions: 1.3" x 6.5" x 9.3"

Customer Reviews

Un libro excelente del Profesor Jospeh Stiglitz.

Joseph Stiglitz, premio Nobel de economía nos demuestra en este libro como podemos hacer cambios para hacer que la globalización de sus beneficios a la mayor parte de las poblaciones empobrecidas del mundo. Un libro que recomiendo al publico en general especialmente a aquellos que vivan en America latina.

Much Needed Work!

In the preface to The General Theory of Employment, Interest, and Money John Maynard Keynes wrote `The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds". In his timely and much needed Making Globalization Work Nobel Laureate Joseph Stiglitz attempts to bring the market under control and proposes a myriad of innovative mechanisms which will make `globalization work.' While I admire Stiglitz's work and his profound commitment to real social justice, it is crucial to critique his methodology and his idea of fair trade. While most of his remedies are proactive and attainable, his idealism of the market needs to be questioned. In particular, many of his proposed solutions call for using the very market mechanisms that have created this markedly unjust and stratified world. Coming out boldly against Thomas L. Friedman's The World is Flat, Stiglitz asserts that `Not only is the world not flat: in many ways it has been getting less flat'(57). All of the issues Stiglitz champions are vital and indeed, some, such as climate change, threaten our very survival as humans. Nevertheless, Stiglitz's chapters on multinational corporations and the resource curse seem to be the most misguided and lack a complete understanding of the powerful forces that will not allow such `new ideas' to be accepted. As an internationalist, I believe his recommendations are fair and just. Yet, I see very little hope in core states willingly giving up their hegemony over the periphery, even if it is for their own good. Stiglitz comes out strongly against multinational corporations, hereafter MNCs. As he puts it, they `have come to symbolize what is wrong with globalization' as they are seen by many as the `primary cause of the problem' (187). The problem is not that MNCs are powerful, it is the fact they are often more powerful than nation states. Strong MNCs challenge the autonomy of periphery states, and as is the case, the core states support them in their endeavors. Capitalism, by its very nature, is destructive to those who lack capital. Stiglitz proposes `limiting the power of corporations' (199) but their power is most dangerous in poor states, which lack the ability to limit MNCs. Yet, he neglects to show how this control will be implemented. The United States, as chief imperialist after the Second World War, has continually come to the defense of its corporations. No where is this more evident than in Latin America. In 1954, Guatemalan president Jacobo Arbenz sought to limit the power of United Fruit Company, than the largest land owner in the country and was overthrown in a C.I.A orchestrated coup d'état. To escape taxation--another ubiquitous problem with MNCs--United Fruit had declared the land to be forth a little more than half a million dollars. When the Arbenz government sought to buy the land at that price, the company asked fo

A Blueprint for Successful Globalization

In his sequel to his 2002 book, Globalization and Its Discontents, Joseph E. Stiglitz argues globalization is failing the 80 percent of the world's population who live in developing countries and the 40 percent who live in poverty. The Nobel Prize winner and former World Bank Chief Economist's objection is not to globalization itself; but to how it is managed. Stiglitz argues the United States' exerts excessive influence on the system. When poor countries seek aid, this influence attaches counterproductive economic policies and lending conditions that often undermine the borrower's sovereignty. These requirements include massive privatization, spending cuts, lower import tariffs and exposure to volatile foreign capital. Stiglitz argues these conditions are precisely what developing countries don't need when they're in dire straits. He proposes: 1. Reform of the dependence on Treasury securities, which he argues, funds U. S. over-consumption. 2. Worldwide regulation to would restrict activities and political instabilities that harm the environment. He would provide recourse when one nation's environmental actions harm other countries and compensation for maintaining their biodiversity, especially those with rainforests that spawn drugs and sequester carbon dioxide. 3. Oversight for Western banks and multi-national corporations. He argues that today's thick corporate veil relieves employees of moral responsibility. Part of the solution, he writes, is more leeway regarding worldwide class-action suits and more enforcement of intellectual property laws. 4. A shift of responsibility. Many of the problems of globalization management lies at the feet of poor countries. They must break the bribery cycle between their governments and international companies, sell their natural resources for a fair price, spend - and save - their money wisely and learn to manage currency fluctuations. This is a thoughtful book from a thoughtful individual. . It adds debate over the role of governments in the free market by providing insightful appraisals of NAFTA, the WTO, the Kyoto Protocol and other elements of today's globalization debate.

Globalization and Democracy

This new book by Joseph Stiglitz discusses many of the issues of his earlier work, "Globalization and Its Discontents." The previously described discontents have become more pressing in the interim. Stiglitz reminds us again that globalization and economic growth are bypassing a large number of people in the developing world; in fact, some of the so-called developing world is not developing at all. He facetiously points out that a cow in Europe earns more than half of the people on the planet. The $2 a day subsidy of the European cow is equal to the the cut-off line defining poverty, and half of the earth's inhabitants live below this level. This example illustrates the ostensible unfairness of the current system. European, American, and Japanese multinationals, and the trade negotiators who represent them, argue for freer trade yet they refuse to relinquish agricultural subsidies. This is very unfortunate for the developing world since about 80 percent of their economies are agricultural. Nothing would help them more than if the rich countries stopped subsidizing their agriculture and opened their markets to imports. Economically this is a good idea, politically the it is a non-starter. The French will not be importing Brie and the Japanese will not be importing rice. This seems to be the case with many of Stiglitz's ideas: they sound reasonable and fair, but unfortunately fairness is not a priority for many trade negotiators. Stiglitz's proposal for a global reserve system is another example of a good idea whose time has not yet come. Today, when countries set aside money for a rainy day, the currency of choice is the US dollar, which for the time being is relatively stable and strong. The only problem is that the US is financing these global reserves at the rate of $2 billion a day - a truly unsustainable trend. Stiglitz's solution, borrowed from John Meynard Keynes, is to create a universal currency. In good times reserves can be held in this currency and in bad times these reserves can be drawn. Sounds eminently reasonable but Uncle Sam is not going to give up the the reins. What Stiglitz is doing is calling for greater democracy in the global trading system. Currently the global trading system is stacked in favor of the rich nations, especially the US. This is not to say that rich nations don't have their issues - they do. What is important in this book is that the poor countries should be given a better deal. Much has been writtem about bad governance in the developing world, and much of it is true; however, aggravating these problems are unfair trade agreements. Stiglitz is important because he gives a voice to the developing world's vulnerablity. For example, when poor countries are forced to open up their markets to foreign banks, their local banks are put out of business, and, as a consequence, local lending suffers. More democracy in the global trading system would go a long way in alleviating some of these unjustices. Th

Very Helpful in Understanding Globalization

Most discussion of globalization consists of uninformed opinion that is not worth listening to or reading. Not so with "Making Globalization Work" - the author is a Nobel prize-winner in economics and has worked at the IMF and the White House. He provides an excellent summary of the current problems with globalization, and a number of suggestions for improvement. Stiglitz tells us that the world is in a race between economic and population growth, and so far population growth is winning - at least in absolute numbers of people, and especially when China is excluded. The IMF is not democratic - the U.S. has effective veto. Further, it has focused on inflation, rather than wages, environment, unemployment, or poverty (recently it did make poverty reduction a priority). Advanced industrial countries (AIC) have been allowed to levy tariffs on goods produced by developing countries that were, on average, four times those on goods from other AICs. Developing countries were also forced to abandon subsidies for their nascent industries while AIC were allowed to continue their enormous agricultural subsidies. The top 1% of U.S. farms get 25% of the subsidies (averaging over $1 million/), while the bottom 80% get less than $7,000/. Thus, the program is NOT key to saving the family farm, and in fact hurts them more by increasing land prices that in turn require greater use of fertilizer and capital to utilize profitably. Further, the U.S. has used trade agreements to force patent protection for drugs (increasing AIDs deaths) and for eg. Microsoft. Finally, Stiglitz recognizes that globalization does produce losers within the U.S., especially those with less education. He proposes more progressive taxation to support an improved safety net for those affected. However, my one criticism is that Stiglitz does not offer an estimate of what market equalizing wages would be like in the U.S. I suspect they would be so low and affect so many that it would destabilize our nation. Free market development can be difficult - eg. firms using plastics or steel are not likely to develop without a local supplier, and those local suppliers look for assured demand before building. Further, banks are often less interested in leading to new industries than financing speculative real estate or lending to the government. Korea and Taiwan believe in the importance of free markets, but both stepped in to create world-class producers of steel (Korea) and plastics (Taiwan); meanwhile, during the early days of these industries they limited undercutting imports. Thus, "free enterprise" is not always the answer. TIght money and budgets (the IMF prescription) were used to bring down hyperinflation in Russia after the USSR was broken up; this was accompanied by rapid privatization, resulting in a giveaway of its most valuable assets and quick capital flight (partly due to fear privatization would be reversed). Aftrica has fared poorly due to a less educated populace, l