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Making Globalization Work

A review of the new book by Joseph Stiglitz

The Independent, 15th September 2006

Books about globalisation are ten a penny these days, but all of them overlook one intriguing aspect of the process: its effect on publishing. The irony is that, as with this latest example, books slamming neoliberal economics and its damning impact on economies and culture around the world are becoming part of the process they attack.

This latest offering from Nobel Prize-winning economist Joseph Stiglitz is a case in point. Penguin, a very British publisher, has opted to drop the English language in favour of its American variation. So instead of ‘globalisation’, we get ‘globalization’ throughout. While we’re at it, we get ‘privatization’, ‘centers’, ‘labor’ and ‘honored’ too. An example of the global corporate economy encouraging the homogenisation of language, or simply old-fashioned bad editing? You decide.

Joseph Stiglitz has become something of a poster boy for mainstream critics of an increasingly out-of-control global economy. Many of his supporters, not to mention his publishers, portray him as a ‘radical’ – an uncompromising critic of global casino capitalism with uncompromising alternatives to it. Doubtless this is a necessary ruse to increase sales of what is, at the end of the day, a weighty tome about tariff regimes, debt, resource extraction and development models, written by an affable, bearded economist with no great talent for literary expression.

It’s not actually true though, as Stiglitz himself happily admits in Making Globalization (sic) Work. For here, as in his previous best-seller, Globalization And Its Discontents, Stiglitz comes not to bury capitalism but to save it – from itself. He is a straight-down the line, old fashioned, compassionate Keynesian economist. He believes in markets, but believes also that they need regulating. He believes that poor people should be helped out of poverty, and that well-regulated economic growth can do it. He believes that big companies should be held to account. He believes we need new global rules to make this happen. He demonstrates why, and how things might change, in precise and well-informed prose. But however right he is, his clarion call – ‘there are limits to markets’ – is hardly ‘workers of the world unite!’

This should be read, then, not as an exciting manifesto for radical change, but as the latest contribution by a serious and highly-respected economist to the ongoing debate about globalisation. That debate itself has moved on rapidly since Stiglitz won the Nobel Prize for Economics five years ago. Back then, only activists, protesters and determined radicals openly attacked economic globalisation. The Washington Consensus still ruled the intellectual roost. These days, the slogan of those protesters – ‘Another World Is Possible’ – has become a chapter heading in Stiglitz’s book, under which he politely but firmly takes apart the intellectual case for unfettered markets.

Stiglitz’s argument is simple: the current model of globalisation doesn’t work. It has five key flaws, he says: the rules of the game are unfair, and designed to benefit rich countries and Western corporations; ‘globalisation advances material values over other values, such as concern for the environment or for life itself’; global trade rules have undermined the sovereignty of poor countries; market-led growth does not benefit everyone, and often increases inequality; and the American globalisation model which has been forced on the poor has caused both damage and resentment.

In every case, Stiglitz is demonstrably correct and his proposed solutions are many, and detailed. They include forcing rich countries to open their markets fully to poor countries, with no expectation of reciprocity; allowing poor countries to protect and subsidise infant industries, as rich countries once did; removing agricultural subsidies in rich nations; enforcing strict new rules on global environmental protection; reforming corporate governance to make multinationals more accountable and stepping up debt relief for the poorest countries.

It’s a keenly argued and yet strangely deflating list. Is this what all those protesters were tear-gassed on the barricades for? Globalisation, concludes Stiglitz, is currently something of ‘a pact with the devil’, but ‘this not how it has to be.’ To prove it, he descends here as a mild-mannered avenging angel, his well-argued solutions carved on shining tablets of stone. They demand, and deserve, a serious hearing. If only they were a bit more inspiring.