Making Globalization Work by Joseph E. Stiglitz Summary and Reviews
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Book Reviews of Making Globalization Work
Book Review: Offering plenty of social and political insights on how to fix it.
Summary: 5 Stars
Fifteen years ago individuals, communities and governments alike applauded the rise of globalization as a movement which would bring with it stable governments and a better lifestyle: today it's become associated with inequality, poverty, and crisis. Making Globalization Work examines both the ideals and the realities - pro and con- of the process, identifying the management of globalization efforts as key barriers to success at the social level, and offering plenty of social and political insights on how to fix it. College-level collections, in particular, will find it a powerful acquisition which will reach both business and history students with its analysis of globalization's past, present and future.
Diane C. Donovan
California Bookwatch
Book Review: Really doesn't say that much
Summary: 3 Stars
The biggest problem with Making Globalization Work is that it's very light on actual content. Plenty of issues are dealt with at the level of mere assertions, simplistic models and examples, and there is much that amounts to making insider claims (according to Stiglitz, "the Clinton administration was engaged in a grand battle to enhance access to health care for Americans"). The gist of the book seems to be that globalisation can be made work better if we just make better policy. There are a couple of better sections in the book, namely the chapter on intellectual property (which is actually quite good), as well as bits on trade barriers and natural resources as a source of income. However, mostly even the good material's not very insightful or rich in information. If in some paper you must quote a Nobelist, you might be able to get that quote from this book, but for actually learning on the topic, you'd have to look someplace else.
Stiglitz seems to be saying that the organisations already in place, the IMF and the WTO, are essentially humanitarian organisations, and that they could therefore be used to push through and enforce better policy. There is limited criticism of the two in the book, mostly good intentions backfiring and abuses of the IMF and WTO by powerful interests. There is no serious analysis or argument why what "failed" in the past should work better in the future.
Stiglitz does stress the importance of democracy and transparency every now and then, even emphatically at times. This is important because many of his more concrete propositions, like making foreign aid to developing countries conditional on good behaviour, fail to convince especially with the limited elaboration of power relations and possible abuses. However, considering some of his examples, he's quite ambiguous and contradicts himself at times. He does talk about special interests benefiting from the current emission levels, meaning Big Oil and so on. But when talking about a tax on CO2 emissions, businesses and the people seem just as culpable; after all, corporations and consumerism are largely just for the good of the people. All this obscures and underplays the class aspect of globally acting concentrated capital. Stiglitz writes that "[o]ne of the main purposes of the WTO is to create a level playing field...", forgetting to mention it's a level playing field, on which the strongest businesses prevail, where costs will be universally minimized, where there will be even more sweeping exploitation of people and the environment.
In reading the book, I gave the author the benefit of the doubt every time I could, so my point here is not to look for malicious intent. The point is that, it's typical for a writer somehow misguided, not very well learned on a topic, or who otherwise just hasn't internalized many issues and their interrelatedness very well, to use ambiguous language, to have an anti-democratic expression slip in even when usually stressing the importance of democracy. All this makes the book of relatively little value. According to Stiglitz, production in developing countries is highly inefficient, and making it efficient means turning developing countries into top-of-the-line Western societies by having them skip over some phases of Western industrialization. Compared to the idea of actual leapfrogging, whereby developing countries would take the best of what the West and technology have to offer and combine that with what's good in their more organic societies, essentially creating new, different, and sustainable societies like there're no example of yet, Stiglitz's proposals translate into something else than an actually sustainable future.
"While increasingly more corporations see business social responsibility as a matter of good business, for many firms, their executives and employees, social responsibility is as much a moral issue as an economic one. Companies can be thought of as communities, people working together in a common purpose--say, to produce a product or provide a service. And as they work together, they care about each other, the communities in which they work, and the broader community, the world, in which we all live. This means that a company may not fire a worker the moment he is no longer needed, or that it may spend more money to reduce pollution than it is absolutely required to do by law. These companies may gain, of course, not just by avoiding the negative publicity described earlier; they may benefit from the higher quality labor force that they attract and improved morale: their workers feel better about working for a company that is socially responsible.... Regrettably, in a world of ruthless competition, incentives often work against even those with the best of intentions." pp. 198-199.
Book Review: Way too theoretical
Summary: 4 Stars
I am a stereotypical Massachusetts Democrat, and I still find Stiglitz to be a bleeding heart liberal. It's not that I don't agree with his thesis that International institutions such as the World Bank and the IMF often do far more harm than good to poor countries, in effect selling them "loaded dice", its just that his solutions can be as unfair to American workers as they are to everyone else.
The problem is that the World Bank and IMF are largely funded by American taxpayers, but they are substantially controlled by Multinationals, who are only concerned with their own profits. If we can't develop a system that is fair to people, not corporations, then we should return to bilateral and private programs. Right now, we are spending a lot of money to make enemies. The Bush administration can do that on its own.
Book Review: Excellent review of trade inequalities, a little rough on pharma & biotech
Summary: 4 Stars
Mr. Stiglitz' book is excellent in framing the inequities of economies in the developed and developing world. I'd highly recommend this book to anyone even casually interested in the world economy, or interested in global forces that are affecting their community. Stiglitz' review of trade negotiations is especially interesting, since he puts them in political and historical contexts. My only qualm is in his discussion of intellectual property, where he reams the big pharma companies for only researching drugs that they will be paid for selling. His argument that patent exclusivity doesn't really encourage innovation rings somewhat hollow. However, on a whole this book is excellent. It's noble attempt which gives mostly clear mandates for world leaders and trade negotiators to level to international playing field in a way that improves the standard of living for developing AND developed countries simultaneously.Book Review: Expert advice on managing Globalization
Summary: 5 Stars
There is a breed of economists who have what can only be described as a mystical reverence for the market. To them Adam Smith's `invisible hand' is not a merely a literary conceit but an actual force like electromagnetism or gravity. Following the advice of Milton Friedman these economists would privatize literally everything from primary education to road maintenance to social security. The government would act as a modest referee deciding property rights as well as defending borders. This is the mindset under which the IMF and World Bank operate. It's the "Washington Consensus", a one-size-fits-all solution to all economic problems and it's been active for decades using the indefatigable wisdom of the "free market" to solve all the world's ills.
The problem is that the "Washington Consensus" as instituted by the IMF and World Bank has had disastrous results in many countries around the world most notably Russia. As the chief economist of the World Bank from 1997 to 2000, Joseph E. Stiglitz is probably a pretty decent source to go to for on why so many countries AREN'T booming after instituting IMF imposed "structural adjustments". The author gives Argentina as an example of a country which received an A+ rating from the IMF for following the Washington Consensus only to face financial calamity a few short years later.
As the author puts it, the one of the main problems is that, "the Washington Consensus prescription is based on a theory of the market economy that assumes perfect information, perfect competition, and perfect risk markets". Mr. Stiglitz writes, "policies have to be designed to be implemented by ordinary mortals". Economists seem to have become so enamored by the blackboard theories behind pure free market economics that they ignore the reality of its results. Even worse, when economies follow the IMF's prescription and fail they're blamed for not adhering CLOSE ENOUGH to the IMF/World Bank dictates.
The other main problem is that the Washington Consensus is being instituted in countries that simply do not have the institutions necessary for a free market economy including strong property rights, an established tax base and the means to enforce the rule of law. The shock treatment in Russia allowed money to flow freely in order to stimulate foreign investment but all it caused was the money to drain right out. The IMF/World Bank are very inflexible for instance they admonish countries for deficit spending, in order to stimulate the economy, even when a country has accrued a considerable amount of savings. At the same time the IMF/World Bank encourages low tax rates meaning that even modest economic stimulants can push a country into deficit spending. The scary thing is that even if a country doesn't currently have loans with the IMF/World Bank they can still fear bucking the Washington Consensus given that a poor report from the IMF/World Bank can potentially scare away foreign investments.
The author wisely points out that economic growth is only real if it is sustainable. American neo-conservatives love to crow about their pro-growth support but growth is pointless if you destroy the environment and rip up all the natural resources in a few decades. Using GDP as the de facto benchmark of a countries economic progress can be very misleading. As a case in point the author offers up oil production. The faster a country can rip oil out of the ground the higher its GDP will rise but in truth the country may well become LESS valuable as its resources are depleted. Compounded that with environmental damage, that isn't being factored into the equation, and a country can become poorer as its GDP rises. This is not just some abstract case but a situation that occurs frequently.
The author discusses a lot more topics including the often anti-democratic nature of the IMF/World Bank, issues of asymmetric globalization between developing and developed nations, the stifling nature of over patenting, subsidies versus tariffs. For an economics book I found it to be very readable and extremely enlightening. Mr. Stiglitz is clearly on the progressive side of the political spectrum which is evident by his concern for the inequity in globalization. Fortunately the IMF and World Bank seem to be adjusting somewhat to the reality that strict adherence to the Washington Consensus isn't the end all be all solution. Hopefully this is a sign that the times are a changin'. Hopefully.