Mer om Verdensbanken og Stiglitz.
Trond Andresen
*****************************************
Published on Tuesday, October 16, 2001 by the Inter Press Service
Nobel Laureate Encourages Global Justice Movement
Joseph Stiglitz, whose critiques of free market fundamentalism cost him
a senior job at the World Bank in 1999 but won him the Nobel Prize for
economics last week, has succinct advice for the global justice
movement: Keep it up.
by Tim Shorrock
WASHINGTON - Joseph Stiglitz, whose critiques of free market
fundamentalism cost him a senior job at the World Bank in 1999 but won
him the Nobel Prize for economics last week, has succinct advice for the
global justice movement: Keep it up .
''The recognition that the trade agreements of the past have been unfair
is one of the important lessons of the anti-globalization movement,'' he
says. ''I think it's something that will stick with us. And if we go
forward with another round of trade talks, it will shape our
discussions.''
Regardless of whether a new round of comprehensive trade negotiations is
launched next month at the World Trade Organization ministerial meeting
in Qatar, he says, the United States and other rich countries should
follow Europe's 'everything but arms' agreement by opening their markets
to the least developed countries (LDCs) ''and say, for the poorest
countries, we aren't going to wait for a round of trade. To show our
good faith, we will commit ourselves to the poorest countries, opening
up our markets
immediately.''
''It's not a question of negotiation. The amount that it would hurt the
developed countries is so small,'' he adds. ''It would provide an
opportunity for them (the LDCs) to produce something with a market.''
As for the International Monetary Fund (IMF), which Stiglitz has rebuked
for its myopic focus on ''old problems'' like inflation, he proposes a
new direction that would return the institution to its post-World War II
mission of addressing real-world problems, such as the recession that
has deepened since the events of Sep. 11.
''It's time for the IMF to worry about the global economic slowdown and
provide the liquidity that would allow for global expansion,'' Stiglitz
says. He urges the IMF to target the substantial funds it controls
towards ''global economic needs'' such as the ''fight against terrorism,
the fight for a better global environment, the fight for a more equal
world that would reduce the disparities between the haves and the
have-nots.''
Stiglitz's advice and analysis will receive more attention now that he,
along with U.S. economists George Akerlof and Michael Spence, has won
the 2001 Nobel Prize for economics. The award, announced Oct. 10 in
Sweden, was made for their research in the 1970s and 1980s showing that
markets, when
mixed with imperfect information, fail to allocate resources fairly.
Governments, they concluded, have an obligation to address this problem
by playing a stronger role in the market system.
''Joseph Stiglitz's many contributions have transformed the way
economists think about the working of markets,'' the Nobel committee
said in making the award. Stiglitz now is a professor of economics at
Columbia University in New York.
During the Clinton administration, he served as chairman of the Council
of Economic Advisers and was later appointed chief economist of the
World Bank. There, he earned the wrath of then Treasury Secretary Larry
Summers, the administration's chief proponent of the IMF, by publicly
criticizing
the fund for bailing out rich investors and driving Asia into a
depression during the financial crisis of 1997 and 1998. The Bank fired
him, reportedly on Summers's orders, in 2000.
Stiglitz explains the relationship between his theories and his analysis
of the Asia crisis thus: The crisis was sparked when banks refused to
roll over loans in 1997 to South Korea and Indonesia. ''That was a
financial market imperfection caused by information,'' he says. ''So the
credit markets were not working well. The economics of information
provided an explanation for why that was the case.''
Asked what he would say to Summers and IMF and World Bank officials who
disliked his critique of the so-called ''Washington consensus'' on
market liberalization, Stiglitz chuckles at ''the irony'' of the
situation.
''In the 1970s and 1980s, the period for which I got the prize, there
was an increasing recognition of the problems of the market
fundamentalist model,'' he says. ''The Washington consensus, which was
based on market fundamentalist ideas, lived on as an institutional
position and became solidified . just when academia was saying these
ideas do not provide a good description of the economy.''
Stiglitz says the George W. Bush administration has recognized that the
IMF bailout policies did not work and were, in effect, ''corporate
welfare'' for investors funded ''by taxpayers not in the United States
but in Russia, Brazil and other countries, who ended up paying the bills
(for) the people doing the bad lending.''
But recent actions by the Bush administration, he adds, underscore that
''special interests do have a lot of influence'' in Washington.
Specifically, he criticizes the administration's decision earlier this
year to investigate whether imports have injured the U.S. domestic steel
industry, an action that is likely to lead to import quotas on foreign
steel.
''You can't help but raise questions when someone says 'I believe in a
market economy' and then announces he wants to set up a global steel
cartel,'' he says.
Stiglitz also is sharply critical of the United States and Europe for
subsidizing agriculture and refusing to liberalize trade in certain
industries, such as ocean shipping.
During the next trade round, he says, ''what I would like to see is
redressing some of the imbalances of the past and going forward with far
more sensitivity to the needs and concerns of the developing
countries.''
Agriculture is one area where developing countries hold a comparative
advantage ''but they can't compete into markets where there are these
huge subsidies in the United States and Europe.''
In the area of services, he notes that wealthy countries like the United
States have only agreed to open financial services. ''Which country is
the major exporter of financial services? United States. What services
were not opened up? Construction services, maritime services, services
of unskilled labor that are of concern to the developing world. Those
remain closed.''
This is why the issues raised by the anti-globalization movement are so
important, Stiglitz says. He points to the pharmaceutical industry,
which became the target of developing countries and anti-globalization
critics for selling life saving drugs at prices that ordinary people and
the poor could not afford. Agreements proposed by the U.S. Trade
Representative would have supported the companies' pricing policies, he
adds.
''The global outrage was so strong that they (the companies) made an
agreement to make them available,'' he told IPS. ''It was a global
outrage, a civil society movement, that stopped that.''
He says he first became aware of the imperfections of markets while
working as an economist in Kenya in the 1960s.
''The period that I spent in Kenya really provided a lot of inspiration
for the work that I did over the subsequent years,'' he says. ''You
cannot live or spend time in a country like that without thinking a
great deal about unemployment, about how markets don't work. And it
turned out that many of the ideas that I developed in Kenya, when
modified, applied as well to developed countries.''
Copyright c 2001 IPS-Inter Press Service
This archive was generated by hypermail 2.1.2 : 11-07-02 MET DST