GLOBALIZATION AND ITS DISCONTENTS

 
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Due to massive media coverage, many people are familiar with the controversy and organized resistance that globalization has generated around the world, yet explaining what globalization actually means in practice is a complicated task. For those wanting to learn more, this book is an excellent place to start. An experienced economist, Joseph Stiglitz had a brilliant career in academia before serving for four years on President Clinton's Council of Economic Advisors and then three years as chief economist and senior vice president of the World Bank. His book clearly explains the functions and powers of the main institutions that govern globalization--the International Monetary Fund, the World Bank, and the World Trade Organization--along with the ramifications, both good and bad, of their policies. He strongly believes that globalization can be a positive force around the world, particularly for the poor, but only if the IMF, World Bank, and WTO dramatically alter the way they operate, beginning with increased transparency and a greater willingness to examine their own actions closely. Of his time at the World Bank, he writes, "Decisions were made on the basis of what seemed a curious blend of ideology and bad economics, dogma that sometimes seemed to be thinly veiling special interests.... Open, frank discussion was discouraged--there was no room for it." The book is not entirely critical, however: "Those who vilify globalization too often overlook its benefits," Stiglitz writes, explaining how globalization, along with foreign aid, has improved the living standards of millions around the world. With this clear and balanced book, Stiglitz has contributed significantly to the debate on this important topic. --Shawn Carkonen

This powerful, unsettling book gives us a rare glimpse behind the closed doors of global financial institutions by the winner of the 2001 Nobel Prize in Economics.When it was first published, this national bestseller quickly became a touchstone in the globalization debate. Renowned economist and Nobel Prize winner Joseph E. Stiglitz had a ringside seat for most of the major economic events of the last decade, including stints as chairman of the Council of Economic Advisers and chief economist at the World Bank. Particularly concerned with the plight of the developing nations, he became increasingly disillusioned as he saw the International Monetary Fund and other major institutions put the interests of Wall Street and the financial community ahead of the poorer nations.Those seeking to understand why globalization has engendered the hostility of protesters in Seattle and Genoa will find the reasons here. While this book includes no simple formula on how to make globalization work, Stiglitz provides a reform agenda that will provoke debate for years to come. Rarely do we get such an insider's analysis of the major institutions of globalization as in this penetrating book. With a new foreword for this paperback edition."He is one of the most important economists of modern times."?Nicholas Stern, Chief Economist and Senior Vice President, World Bank"Penetrating, insightful.... A seminal work that must be read."?George Soros"Whatever your opinions, you will be engaged by Stiglitz's sharp insights. A must read."?Juan Somavia, Director-General of the International Labor Organization"This book is everyone's guide to the misgovernment of globalization. Stiglitz explains it here in plain and compelling language."?James K. Galbraith, The University of Texas at Austin"Entertaining, insightful, and well-written.... Makes a compelling case."?Foreign Affairs"A war story from inside the halls of the White House and the World Bank, the confession of a powerful economist with a political conscience and a healthy degree of common sense."?Lenora Todaro, The Village Voice"Accessible, provocative and highly readable... Brings an insider's insights into the crises of the 1990s and beyond."?Alan Cowell, New York Times"[Stiglitz's] rare mix of academic achievement and policy experience makes Globalization and Its Discontents worth reading."?Michael J. Mandel, BusinessWeek"Provocative, readable, and sure to earn Stiglitz persona non grata status in certain corridors of power."?Kirkus Reviews"A great tour of the complexities of economic policymaking. Getting a top economist to subject the US Treasury and the IMF to withering scrutiny... is good for the long-term health of the system."?William Easterly, Financial Times"[A] smart, provocative study... Impassioned, balanced and informed... A must-read."?Publishers Weekly"[Stiglitz] is not a global pessimist, but a realist?and instead of placing him in a neat box labeled 'important contribution to the debate,' we should listen to him urgently."?Will Hutton, The Guardian [UK]"Development and economics are not about statistics. Rather, they are about lives and jobs. Stiglitz never forgets that..."?Frank Bures, Christian Science Monitor"[W]ill surely claim a large place on the public stage."?Benjamin M. Friedman, The New York Review of Books"A fresh, much-needed look at how these institutions-primarily the International Monetary Fund-affect policy... Stiglitz has done important work..."?Anna Lapp?, San Francisco Chronicle"[An] urgently important new book."?George Scialabba, Boston Globe

Customer Reviews:

  • Well written critique of globalization for non-specialists
    The subject of Joseph Stiglitz's widely reviewed and bestselling book "Globalization and Its Discontents" is the costs and consequences of free market "fundamentalism".

    Winner of the 2001 Nobel Prize in Economics, Stiglitz argues in "Globalization" that the policies of the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO), enrich wealthy nations at the expense of the developing world.

    The IMF, World Bank, and WTO were created at the United Nations Monetary and Financial Conference (Bretton Woods) in July 1944 to increase global wealth by liberalizing international trade. Nevertheless, many signatory governments succumbed to pressure from domestic producers and were either slow to liberalize trade or actually increased trade barriers.

    As the Soviet Union began to crumble in the 1980s, however, renewed attention was given to international trade liberalization. Neoliberal economists gained considerable influence in the IMF, U.S. Treasury, and other powerful organizations, and turned their policies toward monetarism and supply-side economics and against government participation in the economy. Countries adopting these doctrines have slashed taxes, reduced or eliminated social programs, privatized public services, and, especially in the developing world, experienced great social, political, and economic turmoil.

    Stiglitz argues that since the 1980s the IMF, WTO, the U.S. Treasury, and other influential bodies, have pushed a neoliberal agenda with little knowledge or concern for the states affected. He contends that proponents of "globalization" are neoliberals so hidebound by their ideology they ignore the reality of the developing world when prescribing economic policies.

    Stiglitz begins his critique of globalization by noting that privatization of public services is the first tenet of neoliberalism. He generally agrees with neoliberals that industries operated by governments are not as efficient as those run by businesses. He points-out, however, that governments - especially those in developing nations - often run industries because the private sector has failed to deliver the essential services industries provide, and argues that privatization in the developing world increases unemployment and results in the transfer of valuable capital assets from countries that need them most.

    Trade liberalization is the second tenet of globalization scrutinized by Stiglitz. According to neoliberals, liberalizing international trade increases global wealth by forcing countries to shift capital from less to more productive uses. Stiglitz, however, claims the IMF and other proponents of globalization create economic and social havoc in the developing world by forcing countries to liberalize trade before they have developed the institutional, technological and financial infrastructures necessary to support the emergence of internationally competitive enterprises. Stiglitz also notes the hypocrisy of Western countries - the principal proponents of globalization - pushing trade liberalization for goods they produce but balking at removing import restrictions on products from the developing world.

    Stiglitz concludes his broad analysis if globalization by examining the role of foreign investment in the developing world. Neoliberals argue that developing economies benefit from foreign investment because, among other things, it reduces the cost of financial capital, increases the transfer of technology from the "first" to the "third" world, and forces developing nations to make reforms attractive to investors. By contrast, Stiglitz argues that foreign investment can create instability because foreign lenders offer better rates than domestic lenders, fail to lend to small and medium enterprises, and are immune to discipline by the host nation's central bank.

    Joseph Stiglitz's "Globalization and Its Discontents" is a good survey of the costs and consequences of globalization. Its greatest strength is that it is an intelligent and well-written critique of globalization from a pro-capitalist perspective. Essentially, Stiglitz contents that globalization has met with a groundswell of protest from around the world because its neoliberal authors forgot that economics is a social science, and that it must therefore concern itself with the welfare of people not just corporations.

    By failing adequately to address education, welfare, the environment, and the redistribution of income and opportunity in the "developed" and "developing" worlds, the IMF, the World Bank, the WTO, the U.S. Treasury, and other neoliberal institutions, have neglected the most important wants and needs of the world's people....more info

  • Hilarious!!!
    The writer beautifully ignores all the positives of globalization and magnifies the negatives. I had the opportunity to hear Mr. Stiglitz speak at my undergrad institution. Such rhetoric as presented in this book reek of a old formula, "create controversy and sell a lot of books", call me to demanding but I expected a better analysis from the former director of the world bank ...more info
  • Not Really Very Anti-Globalization
    Stiglitz's view of globalization is shaped by his experience at the World Bank, where he had an excellent view of the IMF. This book is essential reading in what I call the "competing worldviews" genre. This book is not broadly about globalization in the sense that it does not systematically analyze the impacts of the globalization of technology (cheap communication, Internet, etc.), transportation (cheap jet travel, migration, etc.), and finance -- the three elements I think of as "globalization." He mostly studies the globalization of finance, and even within that, he studies the experience of countries who give up currency and capital controls. This is the aspect of globalization with the least obvious benefit and the most obvious negative effect. His discussion of the globalization of finance is centered on the IMF, the primary advocate of the so-called Washington Consensus. He makes a great case that the IMF has mismanaged globalization of finance. I would say that he does not strongly condemn financial globalization per se. He certainly does not rail against the globalization of technology and transportation. Those who cite the contents of this book as reasons to fight globalization are misguided -- this book really only lays out the reasons why the IMF has failed. And he isn't even in favor of abolishing the IMF. A broad discussion of globalization includes discussions of the benefits of lowered communications costs, increased levels of travel, and much more. Please read Stiglitz for the best discussion of finance, but read Freidman's Lexus and the Olive Tree to get a good picture of the broad sense of globalization. I would have awarded 5 starts if Stiglitz had given better overall context to his discussion of the IMF and global finance within a broader discussion of globalization....more info
  • Good critique of globalization
    This is a well-argued critique of liberal ideology at the IMF. Stiglitz documents and explains the flaws and the mistakes that happens when ideology replaces proper economic analysis. Stiglitz however at times assumes a self-righteous stance which might be a reflection of his anger at the IMF. Nonetheless, it was a good analysis of present economic situations....more info
  • an important mainstream critique
    "Globalization and Its Discontents" is an impressive critique of the Washington Consensus and international economic institutions. Even more so because the author is not only an eminent economist, but also an insider on the issues that are being discussed. Some of the things it covers are the historical context, the East Asian financial crisis, and Russia's transition from central planning to a market economy. Stiglitz demonstrates how a combination of unwillingness to consult, market fundamentalist ideology and financial interests led to terrible outcomes. Everyone who has taken an introductory macroeconomics course will be surprised to find out that the IMF pushed contractionary policies during downturns. The Russian experience underscores the importance of cautious and contextual policies that create the institutions necessary for a market economy. Besides retrospective insights, Stiglitz provides a list of alternative policies that could yield a much better result in the future.

    It may be less revolutionary now than it was in 2002: many mainstream economists such as Dani Rodrik have come out against the Washington Consensus since and the influence of the IMF seems to have decreased prompting economist Dean Baker to say that "No one needs the IMF anymore" ("The IMF: A Sandbox to Play In", April 10, 2007, Truthout). It may also have its share of flaws, most notably a somewhat naive sounding belief that getting closer to the free trade ideal (which includes cutting subsidies to agriculture so that the poor countries could better compete) will help developing countries a great deal. Many developing countries are in fact net importers of food and cutting agricultural subsidies in rich nations might actually increase prices that they pay for food. Nevertheless, "Globalization and Its Discontents" is an accessible and very interesting book that provides lessons about the need for open dialogue and contextual approaches to development. Not to forget that with the impact that this book has had it is also already a piece of history....more info
  • Numerous good ideas, largely sunk by poor presentation
    This book begins with a clear mistake, namely its title. It focuses almost exclusively on the International Monetary Fund, a miniscule segment of the subject of globalization. I would be kinder to this book almost a priori if Stiglitz had made it clear from the outset that he was writing about the IMF, instead of writing the title and introduction for a book on globalization and then about a tenth of the actual book. This lack of clarity extends to the rest of the book, which can be disorganized, repetetive, and sometimes even rambling. The documentation is also largely insufficient. At the risk of sounding arrogant, I think my own writing is generally better than this.

    All of that is a real shame, because if you take the time to look, there actually is a devastating critique of many IMF policies in this book. Stiglitz makes a convincing case that IMF prescriptions often fly in the face of good economics and common sense. I don't necessarily agree with everything he says; in the chapter on Russia, the only area I'd previously read about, there are a few questionable points. Nevertheless, almost all of his major arguments are sound as far as I can tell, and I certainly respect him as an economist.

    Many of the criticisms I've seen levelled against the content of this book seem to be based on misunderstandings of Stiglitz's policy recommendations. For instance, it's been argued that the IMF could not have established "rule of law" in Russia. That's true up to a point, but the IMF could have pressured the government to move in that direction to a greater extent than it did or, more likely, simply paced its economic reforms with existing political reforms instead of implementing them a a time when they did little good. It's also worth noting that Stiglitz has other criticisms of the IMF's Russian policy which do not involve rule of law.

    I also didn't get the feeling, as some did, that Stiglitz was mainly out to settle scores. It's a stretch to say that he accuses Stan Fischer of corruption. He simply points out that Fischer is involved with financial institutions and therefore tends to see things from that point of view.

    I have serious concerns about the policies of the IMF, WTO and World Bank, as well as their lack of accountablility and transparency. I would dearly like to see a cogent criticism of those organizations from a credible economist, rather than the borderline-incoherent radical leftists we often seem to get. Stiglitz has the knowledge to write that book, but for the most part, he hasn't done so. I would advise him to take a little more time for his next work, and if he should happen to discreetly hire a ghostwriter, I wouldn't take it amiss....more info

  • How and why the IMF has destroyed tens of billions of $
    The former Chief Economist of the World Bank, a Nobel Prize Laureate and Clinton's former Chief Economic Adviser reviews the reasons why the IMF has severely failed its mission to help solve economic crisises and instead has repeatedly made them worse. Prof. Stiglitz deals with the IMF's recent history in Russia, East Asia, Latin America and Africa and why it's remedies have been counter productive.

    Stiglitz blasts idealogues' blind faith in globalization and the market. An important criticism of the IMF and the role of globalization in today's world....more info

  • Not Worth the Time
    Seems to be just another ideologically based treatise and not serious economics. Although everyone that thinks has some degree of plotical bias, this piece appears to be more written to provide talking points for the far Left. Disappointing. ...more info
  • Inside the World of International Finance
    Of all people Joseph Stiglitz is eminently qualified to write this book. His experience and background make him a clear authority on the issues at hand, those of course being the extreme ineptitude of the World Bank and IMF in handling international development. A little research reveals that these two organizations have not always chosen the best path but Stiglitz shows these economic actions with the background information that highlights a frightening level of incompetence.

    Interestingly, this book points out that these two world powers ultimately only represent the interests of the bankers that control them and have consistently failed to help the poor that they were created to serve. In many cases they have even made bad situations worse using extremely questionable economic prescriptions. Stiglitz gives well referenced examples of spectacular ineptitude that make me surprised these organizations can even exist.

    However, as the book wears on it becomes clear that Joseph Stiglitz has had a distinguished career as an economist for a very good reason. He knows what's going on and skillfully gives readers access to the seemingly insane inner workings of the World Bank and IMF. The first three chapters are introductory and bring the reader up to speed. This is where the book doesn't do so well. These chapters are boring and essentially repeat the same thing over and over again for three chapters. While I can see the necessity I don't think they work for their intended purpose. I may not have finished the book if it wasn't the only material available at the time.

    While it misses in the beginning this book really picks up towards the end, the chapters on Russia and the East Asia Crisis are particularly good. Most importantly Stiglitz offers rational, straightforward ways to solve the problems that he outlines here. This book is a must read for anyone interested in the way international finance works. You may want to skip the first two or three chapters though......more info

  • Too bad there isn't a Nobel Prize for mudslinging!
    Joseph Stiglitz, the author of "Globalization and Its Discontents", is a renowned professor of economics. From 1993 to 1996 he served on President Bill Clinton's Council of Economic Advisors, and from 1997 to 1999 he was Chief Economist and Senior Vice President at the World Bank. Then in 2001 he won the Nobel Prize for Economics.

    So Mr. Stiglitz' credentials are certainly in order.

    Unfortunately, Mr. Stiglitz' book does not do a very good job of conveying his opinions to the general public, which is presumably why he wrote the book.

    "Globalization and Its Discontents" tries to be accessible to the average person but it fails in several ways. It is too academic to be easily readable, and at the same time not sufficiently documented, leaving the skeptical reader feeling unconvinced. And on top of it all the book is very boring and there is way too much repetition.

    In other words, I'm not disagreeing with Joseph Stiglitz' message (it sounds reasonable to me, although I don't feel qualified to judge complex economic questions), but I find the message very poorly presented. Which is a shame, as the message is a very important one that deserves the attention of all of us, and our attention should hopefully influence the policies of international finance.

    Too academic? The book is not a research article, but it still includes an index, footnotes and notes at the back. Which is OK for me, but my guess is that this will make the book intimidating for much of the intended audience.

    Too poorly documented? A large portion of this book consists of descriptions of various economic problems in various places in the world during the 1990's, and how poorly these situations were handled by the IMF (International Monetary Fund). But it is all presented in very general terms, and there are no hard facts or precise details or tables of comparative numbers. So you feel that you have to take Mr. Stiglitz' descriptions on trust to a larger extent than should be necessary.

    Too boring? This is perhaps the worst failing of "Globalization and Its Discontents". My estimate is that the ratio of people who start reading this book vs. the number who actually read it to the end is probably at least 4 to 1. Which is unfortunate, as the last chapter, in which Mr. Stiglitz presents his recommendations for how the conditions for international economy should be changed, is the most important part of the book.

    What Mr. Stiglitz should have done was to tell a certain number of very specific stories that illustrate the message that he is trying to get across. Stories about real people and real companies, with exact dates and details and numbers. This would provide the excitement and interest to make people keep reading, while increasing the credibility of the message.

    For example, tell the story of the Russians who took over the natural gas production and how they became billionaires. Tell the story of a certain Indonesian family whose small business was destroyed by the IMF's policies and the consequences for them. Tell the story of a real-estate magnate in Thailand and how he went from rags to riches and back to rags again. People want to read about people, not vague talk about how the GDP in Indonesia went down by 10%.

    As mentioned above, Joseph Stiglitz is very critical of the IMF. In fact, he is very, very, very critical of the IMF, with page after page placing the blame for serious economic problems on the IMF's policies.

    The copy of this book that I read included an "Afterword to the Penguin Edition". In it Mr. Stiglitz describes the launch of the hardcover edition of the book at the World Bank on June 28, 2002: "... representatives of the [IMF] decided to engage in an ad hominem attack, to the embarrassment not only of the economists at the World Bank who had come to see real engagement, but also to the IMF staffers who attended. The IMF attack gave those who were there a chance to see firsthand the IMF's arrogance and disdain for people who disagree with its perspectives."

    Too bad there isn't a Nobel Prize for mudslinging. If there was then Joseph Stiglitz and the IMF could probably share it at the next presentation ceremony.

    Rennie Petersen...more info
  • outstanding
    Although I have for long been familiar with Stiglitz' work on informaiton asymmetries, I figured this book was just sour grapes or an attempt by the author to justify him prostituting himself to the Bretton Woods powers. Not so. The author lays into the IMF in particular from the get go and does not let up until the very end. He paints the IMF as a bunch of ideologues who impose their US inspired dogma on all under developed countries needing international financial assistance. Anybody can do that but what the author brings to the party is a number of key "common sense" clearly written economic insights that obviously elude the IMF and other one dimensional players. The IMF follow an ideological script and read it from their US HQ. They ignore local input and absolve themselves from the human mass sufferings they have induced in countries as diffuse as Indonesia and the former USSR. Obviously information asymmetries were not on their Economics 101 reading lists.
    Finance theory has long told us the obvious truism that trying to maintain a target such as inflation or a fixed rate of exchange obviates the good of that target. Common sense: if a banana republic decides to defend its rate of echange "to the death" then it will die as speculators will gang up in the asymmetric bet that it will eventually have to devalue. The auhtor sees that but the IMF, despite all the damning evidence of its interference in defending indefensible exchange rates, obviously does not. Simililarly with how inflation works in kleptocracies such as the Philippines and Latin America. Stiglitz explains how IMF intervention in those scenarios, by pouring money in and then withdrawing it, help the Third World (and Wall Street) rich and impoverish the poor.
    Sebastian Mallaby in The World's Banker has a shot at Stiglitz for "finding one sore and picking at it". He found not a sore but a huge institution that turned its back on its original mission and contributed to many of the problems the world has endured over the last 20 years. Mallaby, interestingly, formerly wrote for The Economist, which promotes so called Free Trade, the other bane of the Third World.
    If you are interested in getting a proper handle on the IMF in particular, read Globalization and its Discontents. There is much food for thought in it, if any of our leaders can ever be brought to this tiny trough of self enlightenment. ...more info
  • Wasn't as bad as I initially thought but nevertheless it is very one-sided
    The book is not as opposed to globalization as I thought it would have been when I first picked it up. What this book is about (at least for the entire first half) is a rant against the IMF which Stiglitz tries to tear apart in pieces, sometimes successfully, sometimes not quite so. He gives evidence of how the IMF's interventions have contributed to or worsened the macroeconomic crises in East Asia, Russia and much of Latin America. (India and China, wherever they are mentioned, receive some praise from the author because they are seen as having taken a more gradualist approach to reform.) Along side he also vigorously criticizes the role that has been played by the U.S. Treasury in many of these crises and occasionally also criticizes the World Bank, an institution which he was affiliated with as Chief Economist. His main criticism of these institutions is based on the fact that much of their debate happens behind closed doors and involves precious little participation from the host countries outside of their finance ministries and central banks. While the policies made by these institutions affect billions of people in the developing countries, they have little voice in the whole process. Another point which he labors about in the book is about capital market liberalization, and how he argues that it contributes to volatility of capital flows into and out of a country. In general, he finds fault with the way liberalization and privatization has progressed in several of the emerging and transitional economies as they have not had the right institutions that are an integral part of more well-developed market economies such as the US and Japan in place. He also talks at length about involving people in the discussions of macro-economic policies and calls for a more humane face to globalization illustrated by his comment: "Finance and trade ministers view globalization as largely an economic phenomenon; but to many in the developing world, it is far more than that."
    While I do not disagree with many of the points that Stiglitz makes in the book, there is nothing to prove that globalization does not work and free markets do not work. Indeed as any free market economist would argue there need to be institutions in place which can enable the functioning of a free market economy. Some very obvious examples are a legal system which can enforce contracts, administrative agencies which can regulate the buying and selling of securities and those that regulate enterprises from becoming monopolies. However once these institutions are in place and admittedly that takes time, then it is a free market laissez-faire capitalism which works best as demonstrated by the persistent success of an economy such as the US.
    Overall remark-The book lacks balance because it criticizes markets far too often while failing to direct criticism at bureaucrats and the government inspite of what we have seen in the Soviet Union and elsewhere. He is on target though when he calls for the right sequencing of moves which will help bring about a more gradual transformation of society without threatening to tear apart the social fabric which binds a nation together. ...more info
  • Good but lacks Argentina's case
    This book is a good way to get into the inside of an organization that over the past years has failed to provide economic stability and a higher standard of living to various countries by implementing their economic policies. Although there's a lot of information about different cases such as Southeast Asia and Russia, it lacks the one and most important, Argentina. The policies carried by the IMF in Argentina made the country fall into their worst economic depression in its history, first supporting a Convertibility system with no fiscal discipline, then supporting a devaluation that made most of the people in the country fall into poverty. If you're interested in the Argentinian case, you should read "Argentina and the IMF" by Michael Mussa.
    In general terms, the book written by Stiglitz focus on very important economic issues over the las 15 years and gets you inside the World Bank and IMF....more info
  • a balanced picture of globalization
    This book was a reality check. A balanced, thoughtful, and intelligence picture of globalization. ...more info
  • Well argued & informed; but a little technical
    Between his White House years and time spent at the World Bank, Stiglitz is well-positioned to write this book and his Nobel Prize winning academic pedigree only serves to further underpin his argumentation, clarity, & incision.

    Stiglitz breaks through the "fuzzy" anti-globalization arguments and offers a well-reasoned, cogent analysis in which many of those previously fuzzy notions take firm shape (or in other cases are discarded).

    My only caution would be to the reader who is neither familiar with economic language nor keen to learn it: whilst Stiglitz self-consciously endeavours to make this a "popular" piece (rather than academic), he still decends into long economic chains of reaction to make his point. I suspect the non-economically inclined reader might get lost at times.

    Nevertheless, a masterful (though scathing) look @ Globalization....more info

  • Secrecy undermines democracy
    As Joseph Stiglitz explains in this remarkably candid analysis, globalization (the removal of barriers of free trade and the closer integration of national economics) has, in theory, the potential to enrich everyone in the world. But, the way it has been managed, including the international trade agreements and the policies imposed on developing countries, was not less than disastrous.
    The main culprits for the disaster were international economic institutions: the IMF, the World Bank and the WTO.

    Joseph Stiglitz attacks in this book relentlessly the IMF, accusing it even of cooking the books (data and economic forecasts) in order to make its programs seem to work!
    It failed in its original mission of promoting global economic stability and served instead the interest of global finance.
    The author calls it completely incompetent (!) and its policies `a blend of ideology and bad economics'. With its `colonial mentality and social insensitivity' it forced its catastrophic fundamentalist `free market dogma' on its client states. It stressed fiscal austerity, excessively rapid privatization and market liberalization, even before social safety nets were in place as well as adequate competition and a regulatory framework. Its policies were probably the single most important cause of recessions in many countries!
    Politically speaking, the IMF is not democratic. Its actions affect the lives of billions throughout the developing world, but those voices are not heard. On the contrary, bankers who insist on getting repaid are very well represented through the finance ministers and central bank governors.
    Joseph Stiglitz calls for a change in IMF governance via a change in voting rights.
    In the short run, he asks complete transparency and, for every intervention, a report on the expected poverty and unemployment impact of its programs in order to force it to be more responsive to the poor, to the environment, to broader political and social concerns.

    Stiglitz stresses rightly that development is about transforming societies, improving the lives of the poor and enabling everyone to have a chance at success and access to health care and education.
    But for the World Bank, commercial and financial interests supersede concern for the environment, democracy, human rights and social justice: billions of dollars were available to bail out banks, but not the paltry sums needed to provide food subsidies for those thrown out of work!

    Western hypocrisy is totally blatant in the different WTO rounds. Western countries pushed poor countries to eliminate trade barriers, but kept their own barriers, preventing developing countries from exporting their agricultural products. More, they ensured that they garner a disproportionate share of the benefits of trade liberalization with the ultimate result that some of the poorest countries in the world were actually made worse off (!), e.g., the agreements on intellectual property rights had as a consequence that drugs were not available any more in poor countries at affordable prices: thousands were effectively condemned to death.

    For Stiglitz, systems of global governance are essential and he proposes that the existing institutions return to their initial responsibilities: the UN for global political security, the IMF for global economic stability and the World Bank for `human' economic development.

    This is a book of a superb free mind and a must read for all those interested in world politics.

    I also recommend in the same vein, the book of Robert Heilbroner `Behind the veil of economics' and the works of Robert Kuttner. For a voice from the South, see Walden Bello's incisive `Dilemmas of Domination'.
    ...more info
  • What happens when ideology overrides common sense
    I wonder whether Joseph Stieglitz regrets that his book with the slightly misleading title "Globalization and its Discontents" made him the poster-boy of the opponents of globalization. It is a big misunderstanding. The book does not denounce globalization as such, but only the way the IMF mismanaged the economic crises that erupted during the process of globalization. Stieglitz is quite clear about this: "I believe that globalization - the removal of barriers to free trade and the closer integration of national economies - can be a force for good and that it has the POTENTIAL [in italics in the original text] to enrich everyone in the world, particularly the poor." (ix)

    Stieglitz criticizes in his book the dogmatic, ignorant and impatient approach of the IMF to managing crises and system changes. The Asian Financial Crisis of 1997 and the reforms in Russia in the 1990s provide him with his case studies. What emerges from these case studies is that the IMF
    (1) tried to apply a "one-size-fits-all" model to all countries (essentially blindly applying the lessons learned in Latin America in the 1980s, which was that crises are caused by loose monetary policies and imprudent fiscal policies);
    (2) privatized at all cost, even when there was no regulatory structure in place;
    (3) deepened the crisis of the real economy by enforcing a monetary contraction (which reminds me of the practice of applying leeches to cure a patient suffering from a high fever - state-of-the-art medicine in the 18th century but absolutely counterproductive);
    (4) was partially responsible for the onset of the Asian financial crisis through the enforcement of excessively rapid financial and capital market liberalization;
    (5) ignored matters of sequencing by blithely assuming that once property rights were established all else would follow naturally "including the institutions and the kinds of legal structures that make market economies work" (73).

    Eventually the IMF's mismanagement of economic crises is a result of the dominating role of market fundamentalists in the IMF who believe that markets by and large work well and that governments by and large work badly. Which is very ironic because the IMF was conceived to deal with situations where markets failed and global concerted action was called for (the prime example being the Great Depression of the 1930s).

    Stieglitz's book is important because it stresses that local conditions and market imperfections have to be addressed before liberalization and privatization can take place; he argues for controlling the pace and the sequencing of opening an economy to the forces of international market economics, not for protectionism; and he does not share the hostility against multinational companies felt by most opponents of globalization. But these fine points are lost on most readers, even the Newsweek journalists who recently alleged that "Joseph Stieglitz, a Nobel Prize-winning economist, argues that developing countries should have looked to protectionist Asia countries, such as Japan and Korea, as their models for development and not thrown open their economies prematurely to ravages of multinationals."

    Bottom-line: an eye-opener about the ideology ruling the IMF, not an in-depth study of globalization, but well worth reading....more info

  • Imperative reading!
    This is important reading, especially if you haven't really (or ever) thought about the implications of globalization. If you do think about our possible future as a culture, planet and its population this incisive book imparts finer-tuned insight and inspires personal participation in what we will leave our children. great book....more info
  • Eye Opener
    I admit ignorance to the causes of anti-globalization protests in Seattle and elsewhere. Previously I believed that the protesters were just anti-capitalists. Still, I wondered why such venom was directed at organizations (like the IMF, the WTO, or the World Bank) that most Americans probably think about very little.

    Professor Stiglitz first points out the difference in the missions and contemporary practice of the IMF and World Bank (he worked for the World Bank after leaving the Council of Economic Advisors under President Clinton). Then he carefully reports IMF policies and how the IMF has acted dogmatically and with a "one size fits all" approach of "macrostabilizing" developing countries. In this way the IMF has done quite a bit of harm and economic destruction (he talks at length about the Asian crisis of the late 90s). He also points how policies that encourage a rapid transformation toward a market economy and liberalizing capital markets (eg, Russia) have backfired and how the slow approach (China) has been more successful.

    Prof. Stilitz believes globalization can be beneficial if the right programs and policies (we know what works and what doesn't at this point) are instituted. This a very good book for anyone interested in the globalization of the market economy....more info
  • Globalization contradictsthe theory of comparative advantage
    Stiglitz(S)does an excellent job of showing that the role and mission that the IMF and World Bank was to have played in the area of international development and trade has gone badly off course since the late 1970's.However,he needed to add a small chapter or an appendix at the end of his book so that a reader would be able to see that the current emphasis on the international privatization,Liberalization,and Globalization of resources by the economists currently making policy decisions at the IMF and the World Bank does not in any way follow from the standard free trade position based on the theory of comparative advantage as developed by Adam Smith and David Ricardo.In fact,practically every assumption upon which the free trade or comparative advantage conclusion is based,which is that trade will be beneficial to all countries involved,is violated by the advocates of globalization(as well as by those economists who likewise claim that job outsourcing follows from a free trade argument based on the theory of comparative advantage).I will cover only two of the assumptions necessary to obtain the free trade result.First,there can be no immigration or emigration of labor or capital(physical or financial)between countries.If this condition is not met,then one is dealing with absolute advantage,not comparative advantage.Under absolute advantage,both countries do not benefit from free trade.One country will win and the other country will lose.It is not surprising to see all the opposition being raised to the pseudoeconomic trade arguments,given the large number of countries that are losing in international trade relations,presented by IMF and World Bank economistswho should know better.Second,there can be no gains to free trade unless both trading countries are on the boundaries of their static and dynamic production possibilities curves.This condition is not satisfied by nearly eighty percent of the world's countries.Finally,the pro globalization argument has nothing to do with the standard conservative position repesented by Adam Smith.It is ,in fact, a purely Libertarian argument without any foundation in economic theory....more info
  • Ideology and practical economics don't mix
    In this truly impassioned critique of one of the most influential supranational organisations of the past half century, Nobel Prize winning economist Joseph Stiglitz exposes and blows the whistle on the horrific incompetence of the IMF in dealing with the globalization-induced problems of third world countries in the last 20 years. As they say, the road to hell is paved with good intentions and while Stiglitz stops just short of accusing the men in dark suit who run the IMF of intellectual dishonesty in their blind adherence to the practice of reaching out for standard ideologically-based prescriptive cures for the problems of the developing world, his book alerts us to the dangers of an unconscious reliance on conventional wisdoms and the dulling effect existing thought paradigm can have on the intellectual rigour and thinking of policy makers. There is something almost medieval if not downright superstitious about the way the IMF goes about its work and the result is often disastrous for the countries concerned.

    Stiglitz hammers home his point relentlessly but while making minimal use of data and statistics to back up his assertions, also wisely avoids polemics, choosing instead to substantiate his allegations using evidence from recent case studies, viz the 1997 Asian financial crisis and the Russian experience. These case studies are illuminating and solidly argued. The book could be more concise in places but it is overall an important piece of work that should be read by all. It is also highly accessible as Stiglitz studiously avoids techno-babble. The IMF can choose to remain in a perpetual state of denial but that only guarantees its anachronism as an international institution. The tragedy is that the world will be the worse for it....more info
  • The IMF stands accused
    The IMF meets its match

    Globalization and its discontents, By Joseph E. Stiglitz

    A review by John Tataw Manga

    This book is an indictment of the international financial institutions--most notably, the IMF--for their role in the globalization process. It is clear from the author's analyses--supported by concrete examples--that these institutions are intent on implementing policies that protect the vested interests of certain rich countries, to the detriment of many of the poor ones. According to the author, IMF-designed policies don't seem to vary from country to country, even when the problems of each country differ from those of other countries.

    This one-size-fits-all approach reminds me of this medic we had in our hometown whom we come to nickname "Dr. Quinee", because he invariably prescribed the medicine called`Quinine' to all who consulted him.

    The author suggests that financial interests are in league with the international institutions to maintain the status quo. And these institutions appear to the attentive (or responsive) to the concerns of these interests.
    The insistence on privatizing and liberalizing the Third World economies at all cost has not gone down well many developing countries; and for good reason. For instance, the author argues: "When global financial institutions enter a country, they can squelch the domestic competition. And as they attract depositors away from the local banks in a country like Ethiopia, they may be far more attentive and generous when it comes to the making of loans to large multinational corporations than they will to providing credit to small businesses and farmers."

    The author also accuses the IMF and other international institutions of mishandling the transition to Capitalism in some former Soviet Block countries. Transition which was undertaken without having provided any proper legal framework to guide it; which led to the profiteering by the few.
    He deplores the change in the IMF's mandate and objectives: "From serving global economic interests to serving the interests of global finance."
    A change which has not been without adverse consequences for developing countries.

    ...more info
  • Insider's view
    It is not often that one can read an insiders view of the institutions that most of the protestors want to tear down. His review of IMF policy and approach to the Asian and Russian financial change is illuminating. He doesn't gloss over China's human rights abuses (but he doesn't highlight them very much either.) He provides an analysis of what went wrong, and suggestions for making the world a better place.

    His style is easy to read, and one doesn't get bogged down in massive footnotes or techincal economic jargon. But that said, he doesn't turn an inward eye at The World Bank. Or review any projects like the Grameen Bank in Bangladesh or other similar projects....more info

  • Great Examples, Poor Analysis
    The author of this book makes several specific claims. First, free market ideology at the IMF resulted in privatization and deregulation in Asia and Eastern Europe. Second, free market ideology assumes perfect information and perfect competition. Third, markets lack perfection and fail. Fourth, critics of government claim that government policy favors special interests, but this it does not. On page 13 Stiglitz derides the notion that "special interests use tariffs and other protectionist measures to increase their incomes at the expense of others". He claims that those who criticize government for inherent bias towards special interests are ideologues. The rest of his book consists almost entirely of examples of special interests benefiting at the expense of others, thus vindicating these supposed ideologues.

    Stiglitz describes how bailouts benefited well-connected financial interests in the US, Asia, and Russia. He describes, in some detail, how special interests made off with fortunes, while ordinary people shouldered the burden of these subsidies. This supports the case for government failure, though the author fails to realize this.

    Stiglitz also criticizes the IMF for assuming that it could outguess the market with its' interventions and demands for restructuring. He points to examples of in Russia of private firms being squeezed while cronies of Yeltsin made off with millions. On page 118 Stiglitz complains that the IMF interfered with "nuts-and-bolts decisions: what the firm should produce, how it should produce its' output, and how it should be organized". On page 128 he complains that the IMF forced bank restructuring on Indonesia. These examples of intervention invalidate his claim that the IMF forced privatization and instead show that it pursued interventionist policies.

    The evidence in this book refutes its' arguments. Rather than being driven by `free market fervor' the IMF intervened in markets routinely. Rather than serving the general public with this intervention, the IMF catered to special interests- a tendency that Stiglitz explicitly ridiculed. Rather than believing in Darwinian competition, the IMF delivered huge bailouts to special interests. The IMF promoted free markets every bit as much as the Pope promoted Atheism.

    On page 74 Stiglitz claims that markets require perfect competition and perfect information to work. Short of these ideal conditions, markets fail (to achieve perfection) and government can, in principle, improve resource allocation. A perfect government can improve upon imperfect markets. But the evidence of this book shows that the worst failures come from huge governmental agencies, like the IMF and US Treasury- the primary culprits in this book. Stiglitz is fond of making false comparisons between imperfect markets and ideal notions of government, but this approach is fallacious.

    Stiglitz explicitly denies that rapid privatization can work, but ignores instances like Hong Kong and West Germany, where rapid and extreme privatization yielded `economic miracles'. He speaks fondly of a larger and more open global governing body. But, Stiglitz shows that current global governing agencies cater to special interests and gives the reader no reason to expect anything different from a larger agency of this kind. If anything, a larger and more powerful gobal regulatory agency would be even more corrupt than the IMF.

    The proper lesson to learn from this book is that big government caters to narrow special interests, at the expense of the general population. Stiglitz advocates stronger world organizations based on misinterpretation of the facts he presents, and his politically na?ve belief that bigger government means better government. We should instead take the politically savvy view that we must choose between large centralized agencies that cater to special interests and dismantling large centralized agencies so that they lose the ability to cater to such interests. Based on its' analysis, this book deserves one star. It misinterprets data and misconstrues theory so badly that one must wonder how Stiglitz got so for in the economics profession. The empirics of this book raise it to two stars, as it provides so many good examples of government failure. Read this book for great examples of how global government operates, but read something by Mancur Olson first so you can approach it with proper theoretical constructs....more info

  • The facts are there, but the interpretation defies credulity
    This book is remarkable. That's an understatement. It is infuriating. Stiglitz pulls no punches with the facts, and they are extremely incriminating. But one of the most infuriating aspects of the book is the bland way in which Stiglitz describes effects of the actions of the IMF and the US Treasury. He treats them as if they are naive participants making a series of innocent mistakes over and over again, never learning anything. This notion--that these players don't realize what they are doing--is simply not credible. Not once does Stiglitz try to follow the money. He acknowledges right off the bat that the culprits (my term) come from and return to cushy corporate offices and financial institutions. Yet nowhere does he acknowledge that the disasters he describes have huge winners as well as "unfortunate" losers.

    Yet, for all that, a person who knows the score will see no attempt to disguise the basic facts of each heist that is described.

    This book exposes the lies that Bush and his predecessors have told about globalization. The criminality of it all is obvious, and the treason of the culprits within the US government is laid bare. They have weakened and endangered us all. Yet, Stiglitz still says this in the Afterword: "The events of the past year [2002-2003] have brought home more forcefully than ever that we are interdependent--globalization is a fact of life."

    What a load of globaloney! What we have is a plundering of the world's peoples by the very wealthy. If you want to call that globalization, be my guest, but it's plunder, pure and simple.

    I highly recommend the book to anyone who wants to learn the facts about globalization, but don't forget to use your common sense to follow the money....more info
  • Interesting and Insightful
    As noted in other reviews, this is not really a treatise on globalization as much as it is a highly articulate and obviously angry rant about the organizations primarily responsible for overseeing the globalization process-- the IMF and the World Bank.

    I am not enough of an economist to really be able to judge many of Stiglitz' arguments, and as this is not an academic book, the assumptions and foundations of his arguments were not visible. For me this created the sense that while I instinctively agreed with him I wasn't sure if I had all the information or if I fully understood what he was saying.

    The idea that sequencing is at least as important in ideology in leading change has a clear resonance for me (coming from my own experience in corporate organizational change). And certainly, I found his arguments about how the IMF role has mutated from its original intentions believable and compelling. Still, the IMF had so many aspersions cast against it in this book that I felt compelled to go online afterwards to try to find their response to Stiglitz's criticisms. I don't know if it's interesting or not that I didn't find any such response.

    It gets four stars rather than five because I would have preferred more supportive material to help me understand his arguments. It also has the unfortunate tendency to repeat itself (seemingly) unnecessarily-- I suppose a result of what is clearly the writer's deep passion about the subject....more info

  • The IMF and its discontents
    This is primarily a book about the IMF executing the US treasury and Wallstreet agenda (the Washington consensus) (with Camdesus, a frenchman, in US service ?). Stiglitz critique has a ring of credibility, he seems to have the facts right but I have no independent sources to check it against. The processes described seem to go on unabated, that makes the book despite its 4 years current enough to warrant reading. ...more info
  • the book is about IMF errors
    as it has been already said in different reviews, the book deals with the errors of the IMF in developping countries, and in my opinion the critics are well written and based on true facts. so the book title should be rather IMF errors than globalization and its discontents. with this title the book seems to be against globalization and that's not true. perhaps useful in order to increase sales, but stiglitz writes clearly that well managed, globalization is the best thing for poor countries. yes it's possible to write an entire book about the discontents of globalization with good arguments, but it is not the book to make an opinion about globalization. ...more info
  • Challenging Elaboration!
    This is an empirical IMF theory which was published after the author Stiglitz had shaped his career as a members of Council for Economic Advisors(1993-1997), the chief economist of World Bank(1997-2000), and the Nobel Economist(2001).

    His point is very clear. Seeing the reason for world wide discontent voices against Globalization since 1999 WTO Seattle conference, he found its reason for inconsistency of international economic organizations like IMF, WB, and WTO. Especially because of the rigidity of IMF ideological attitude which strongly pushes advancing nations to tight budget, privatization, and liberalization in its shock therapy.
    Citing various cases from East Asian(Japan, Korea, Thai, Indonesia, Malaysia, Singapore, and Philippines) which faced crisis in 1998, Russia and China which end up to different consequences, Africa(Ethiopia, Botswana, Kenya, Morocco, and Coted'Ivoire), Europe(UK, French, Germany, Poland, Hungary, Ukraine, Czech, Sweden, and Rumania), and South America(Brazil, Argentine, and Bolivia) for persuading reader to see IMF error, he guess IMF rigidity could come from the protection of speculators by U.S. Treasury Department which favors Wall Street.
    What he offers from these empirical cases is a progressive globalization which accomplishes equality and economic growth simultaneously.

    As he wrote in acknowledgement, because his main activity has been on academic papers and general speech and he was forced to reduce this original manuscript, we can not see thorough notes and enough arguments. However, as he done in the introduction, the aim of this book was to set up a trigger of discussion. I think he filled the role of his responsibility....more info
  • Thought provoking book, more an IMF critism
    While this book is certainly about globalization, it is more a critique of the IMF, and to a lesser extent, the US Treasury department. The World Bank, where the author was employed as Chief Economist, is treated rather neutral here.

    What I appreciated was analysis of complex issues by a well meaning and Nobel Prize winning economist. Too often, we hear from strident anti-globalists on the far left, or free-market ideologues on the right who generate plenty of heat, but seldom much light on the issues. Stiglitz sees globalism as an unstoppable economic force that can act toward the benefit of everyone with the best policies in place. The policies of the IMF are sharply criticized here and Stiglitz argues made various economic problems worse.

    The East Asia financial crisis, the creating of free markets in Russia, recent events in Argentina, and other international economic events are covered here. Stiglitz deconstructs the IMF policies in each case, and proposes what he feels is a better way to proceed. Too generalize the arguments put forth; the IMF is too focused on the concerns of the investment community and economic indicators, such as inflation, that do not necessarily indicate national prosperity. Stiglitz argues for a better understanding of the local economies in policy decisions, and more concerns about reducing poverty and general welfare.

    I have to agree with some of the other reviewers that writing is not the author's strong suit. However, the author's commitment, knowledge, experience, and generally clear explanations over come this. Such reasonable and knowledgeable commentary is too rare in this debate, which makes this contribution very welcome....more info

  • fascinating content, poor execution
    This is an important book in that it looks at how the economists at the IMF go about their jobs. According to Stiglitz, they blindly apply their economic ideology with virtually no regard to nurturing the institutions that would be vital to overseeing and managing the free markets that they wish to promote. While I cannot say from experience in DC whether he is correct, if he is it is a truly shocking indictment of the way that free-market policies are imposed on the developing world - their way of doing it all, Stiglitz claims, is unbelievably crude and naive, often in their ignorence they do far more damage to complex societies than helping them to make a difficult transition.

    Put simply, Stiglitz argues that the IMF purebreed economists need to think more like the political economists at the World Bank, where - surprise! - he fought the IMF for many years. Rather than blindly pursue their mathematically rigorous visions, he argues, they should nurture a wider array of institutions with greater patience ove rlonger periods of time than the shock treaments popular today. I admit that I do tend to side with Stiglitz's ideas and it what he says is true, it is truly pathetic.

    Unfortunatly, Stiglitz writes in a monotonous style that repeats many of his arguments verbatim in successive chapters. In spite of that, his perspective is so important that it deserves careful scrutiny for anyone interested in the economies of the developing countries.

    Recommended strongly....more info
  • Highly Recommended!
    Author Joseph E. Stiglitz, a Nobel laureate in Economics, leaves the nebulous subject of globalization pretty quickly, and moves on to his real purpose: a sustained critique of the policies and practices of certain international institutions, especially the International Monetary Fund (IMF). Many of the author's insights will be old news to those experienced in international economic affairs, though not to the general reader, who will appreciate his straightforward, plain language. The author's status - as a Nobelist and as chairman of the Council of Economic Advisors during the Clinton administration - makes his book distinctive and controversial. His prominence is a bully pulpit that he uses to inveigh against the IMF's power, secrecy and authoritarianism. We recommend his case for the prosecution, which is stirring and thought provoking, albeit marred by jabs against his old political and bureaucratic rivals and many variations on the theme "I told you so."...more info
  • Extraordinary
    Many Americans are unhappy with the UN, but not many know how much harm is done by the incompetence of the IMF and the World Bank (which happen to be the cousins of the UN itself). Stiglitz indicts both, writing with the authority not only of a great economist but from an insider perspective. He is not so much anti-globalization as fed up with the way these two institutions mismanage globalization.

    The IMF and the World Bank, charges Stiglitz, gave the wrong medicine to developing countries in crisis, making things even worse than if they had done nothing at all. These include Latin America, Russia, Thailand, South Korea - all of which suffered needlessly from the foolish policies imposed upon them from outside. It is as though applying powerful shock treatment to a patient in psychological distress - the shocks are more painful than the original illness, and the result is long term brain damage, if not suicide.

    As a counter example Stiglitz cites China as successfully navigating through the Asian Financial Crisis by resisting the unsolicited advice from these venerable agencies. "China was the other country that followed an independent course," writes Stiglitz. China managed to achieve high growth with stability all the while the surrounding economies were crashing down (and as Japan remained mired in recession). "China achieved this by following the prescriptions of economic orthodoxy. These were not the Hooverite IMF prescriptions," Stiglitz continues, "but the standard prescriptions that economists have been teaching for more than half a century: When faced with an economic downturn, respond with an expansionary macroeconomic policy."

    You wonder how Stiglitz views the Bush tax cuts as the "fix" of America's jobless recovery! (No doubt he is as disdainful as Warren Buffett.)

    Stiglitz continues: "The standard medicine worked, and China averted a growth slowdown.....I think it is no accident that the only major East Asian country, China, to avert the crisis took a course DIRECTLY OPPOSITE THAT ADVOCATED BY THE IMF [my capitals], and that the country with the shortest downturn, Malaysia, also explicitly rejects an IMF strategy."

    Stiglitz's criticism of the WTO is milder by far (indeed he has much less to say about it); he admits it is a much more democratic organization.

    The IMF and the World Bank are clearly discredited. If they don't change then they are doomed to irrelevance (like what Bush likes to say about the UN). As I read this book I feel the presence of a brilliant, almost genius-level mind who calmly keeps his cool while he takes his side with the young, gas-masked protesters throwing rocks and Molotov-cocktails on the streets of Seattle (or wherever their meetings happen to be this year). The difference is that Stiglitz's arguments hit much harder and make a bigger dent.

    Former Secretary of the Treasury (now Harvard University's President) Lawrence Summers, whose awesome reputation as an economist is equally matched by his abrasive personality (he never hesitated to lecture Senators during hearings), once said, after meeting with China's then Prime Minister Zhu Rongzhi, "This man must have an IQ of 200!" It is no accident that Zhu was in charge of China's economy during the Asian Financial Crisis, and that he rejected IMF's prescriptions completely. One gets the feeling that Joseph Stiglitz's own IQ is in the same league as Premier Zhu's and President Summers's....more info

  • Rakes the IMF over the coals
    There are actually at least four books published in the last eight years with the title "Globalization and its Discontents," and for Joseph Stiglitz's book the title is probably a bit misleading. This is NOT a general indictment of globalization. When it comes to international economics, Stiglitz is the consummate insider: he was recently the chief economist for the World Bank, for crying out loud! You won't find him protesting on the streets at the latest WTO meeting.

    This book contains something better: a tightly argued, detailed critique of the ideologically-driven free-market policies that the International Monetary Fund (IMF) has been pushing down the throats of developing nation after developing nation. Stiglitz makes the following major points:

    * The IMF has a deep faith in the power of free markets to solve all economic woes, and sees the primary historical effect of market intervention as stifling, rather than enabling, the development of truly free markets;

    * This position of the IMF is, however, poorly supported by the bulk of economic evidence from the last three or four decades of globalization, and more nuanced models of free-market development (some of which were developed by Stiglitz himself) show that an active government role is typically crucial in the development of healthy indigineous free markets;

    * The conditions under which the IMF makes loans to developing countries generally harm, rather than aid, the short- and long-term economic health of these countries for the lower- and middle-class populations;

    * IMF-imposed conditions generally ARE good news for foreign investors, whose risk the IMF loans are in effect underwriting;

    * The economic ministries and cabinates of developed countries themselves, such as the U.S., generally adopt policies much more moderate such as those of the IMF, casting doubt on whether the IMF is really the source of much economic wisdom at all.

    All these points in a dense yet well-written book that covers cases of African debt, Russia after the fall of communism, the East Asian crisis, and more. The book takes some intellectual energy to read but it's well worth it. I learned a great deal about the last ten years of international economic development, and I recommend Stiglitz's book highly....more info

  • Exhausting.
    It should have been subtitled: "Or how the IMF screwed everything up, despite Joe's best efforts."

    It's a tiring tirade....more info
  • thoughtful though narrow view of globalisation
    I enjoyed reading this alot, it was well written and easy to digest. Some of the content was a real eye opener and the author was adept at getting his view point across without sounding like he was on a soap-box. But it is only one view of how the IMF operates wihtin the broader context of a globalised society - and I thought the title was a bit misleading.
    At the end of reading it I was left feeling that this book is really about what goes on at the IMF in relation to its global practices and responsibility rather than why globilisation has failed in the eyes of many of the worlds population.
    Some brilliant passing shots at the US treasury and the US administration and its dominant role in forcing international bodies (like world bank, IMF and WTC) to do what the US wants rather than what is right for a sustainable inclusive global society. If you want to know more about the shadowy world of US politics and how they dominate global policies and practices, this book is for you.
    ...more info
  • Simple, repetitive, and makes the point
    The book is: a) a "J'accuse" against the IMF's policies without naming names; b) apologetic of World Bank's policies, especially while the author was chief economist there.
    The main thesis, other than the above: it is hypocrite to impose harsh policies on weak and poor countries when industrialized countries are well aware of their social impact and uncercertain results that they do not dare to implement them at home. ...more info
  • An excellent critique of globalization
    From his experience on Clinton's economic council and at the World Bank, Joseph Stiglitz offers a searing look into what's wrong with economic globalization. His assessment of the International Monetary Fund's "one size fits all" policy makes the case for why that institution, whose aim is to maintain global economic stability, has actually hindered economies throughout the developing world, instead of helping them. Highly reccomended to those with at least a basic understanding of international economics. ...more info
  • instructive analysis of globalization's ills
    The title of this book obviously borrows from Freud's Civilization and its Discontents. I suppose that one could stretch the relationship further and try to illustrate that Freud's sublimation of desire is similar to the IMFs sublimation of common sense, or some other such pithy observation, but what this book does really well is simply to point out many of the inconsistencies of the thinking at the IMF, its lack of accountability despite its being a public institution, and the arrogance displayed by it in the face of criticisms (including, as per the Afterword, this book)....more info
  • The iceberg reading of an iceberg lecture.
    On a very concrete level, the impact of the book is clear. It is directed primarily against the way the IMF handles financial crises in the developing countries.
    The message is also clear on the level of political morality. Our dealings with the underdog nations are selfish. Economic relations are rarely motivated by altruism. But we play a game of winners and losers, instead of allowing a win-win interaction.

    Even so, many of the serious reviewers (a lot of the criticism is obivously unfounded, unfair, petty or beside the point: title, repetitions, style, and certainly the demand for more footnotes and academic rigour) wonder what Stiglitz really is trying to tell us. One reviewer mentions the "uncertain thrust of the book". I find this uncertainty or equivocation not so much on the level of plain argument, but rather lurking behind the discourse. Even conceded that an author has to limit his subject, the reader feels like Stiglitz shows him only the top of the problem-iceberg.

    I'm sure that those examples which Prof. Joseph Stiglitz gives us of lobbyists working behind the scenes are just that small part of his experience which is already publicly known. But to understand his aggravation we must assume that he has seen seen a lot more (successful) pressuring for special interests in his political positions than what he can tell us. This could be called the "first-level-iceberg-dimension" of the book.

    There are at least two other, more fundamental, dimensions that Stiglitz hovers around without bringing them into clear focus. But these "second-level-iceberg-dimensions" are central to his effort of trying to understand the malfunctioning of the IMF as systemic rather than personal.


    First, there is the alternative of funding economic development with financial gifts or credit. Stiglitz does not give a clear picture wether in his opinion borrowing is harmful or can be beneficial for the developing countries. His arguments point in both directions. On the one hand, he advises those countries to make use of their modest means in a way that they don't have to incur debt.
    On the other hand, when he calls for a stronger say of the debtors on the IMF-Board and suggests that a formalized international bancruptcy procedure should be introduced, he seems to enhance the importance of (foreign) credits in economic development. But again in his article "Dealing With Debt. How to Reform the Global Financial System", his call for "transferring risk from poorer countries to rich ones" or his complaint that the world is giving loans to the USA instead of "channeling funds from rich countries to poor ones" as well as his expectation that "global greenbacks could be used to finance global public goods, such as improving the environment, ..." seems to suggest (higher) foreign aid instead of loans.

    Anyway, there still is a "third-level-iceberg-dimension", namely what requirements of our economic system are eventually behind the fairly manifest interest-structures operating in and/or behind the international finance- and trade-organizations. I guess we have an overproduction of finance capital, generated through some malfunction inherent in our system. This surplus production tries to conquer new markets. Not even in our society can this excess capital be turned into productive investments, and much less so under the prevailing socio-economic conditions in the developing world. If that is true, there is little hope for real changes in the workings of international finance, unless we manage to completely revamp our economic (and social) system. Maybe environmental constraints will soon force us on such a new road.

    The ultimate dimension behind "globalization" is the world-wide expansion of the Western Civilization. Globalization is, in essence, the transformation from the history of mankind into world history. Up to now, mankind has developed in subsystems more or less separated from each other. You could say that several civilizations have so far competed to find the best pattern to cope with nature. Certainly there has been fruitful communication: where would we stand today, had we not adopted from the Arabs the decimal system that originally was developed in India? But none of the others has reached a degree of understanding nature that is necessary to develop a technology able to span the globe (and travelling into space). That the Western Civilization has achieved this is nothing you or I can personally be proud of. But we dont' have to be ashamed for it and - as Stiglitz says - there is no alternative to globalization.

    The imposition of conditions by the IMF on the developing countries might have a double face. Of course there are practical reasons to set up limits for state spending etc. At the same time, the conditions are probably part of the expansion of our cultural system. Many of those who criticize the IMF for imposing them would never question the justification of other conditions imposed through other channels. Anti birth-control, anti child labour etc.: in all of these cases, there is probably more behind our mission-like activities than just economic interest.
    In fact, even in the EU the governments hide behind "conditionalities" imposed by rather intransparent mechanisms. The deregulation and the privatizations that have taken place would probably never have come about, had they not been decided upon on a supra-national level. "They" made us do this, we cannot change it. However, there is one fundamental difference: the EU is eventually not "them" but "us". The perception of the IMF in the developing countries, by contrast, is probably one of total alienation. Maybe Stiglitz only wants to remedy this by giving the debtors more say in the IMF. Because basically he knows and says that the problems of the young countries are largely homemade and not resulting from any ill applied medicine or outright malice of western-dominated international institutions.

    At any rate, Prof. Stiglitz definitely is not an emotional iceberg, but highly compassionate with the suffrances of the people in the third world countries....more info
  • Not a fun read... but incredibly insightful nontheless
    I don't doubt that Stiglitz is right. People with a background like that and have won the Nobel Prize usually know what they are talking about. But man this book is frustrating in the first few chapters. I initially categorized it as anti-western propaganda because it is extremely opposed to western policies. However, it is right. The economics of it are sound, the politics also make sense and the details of this are all laid out. You definitely need some economics knowledge to get through it and it makes a VERY good case against market fundamentalism and excessive deregulation. Unfortunately, the same market fundamentalism that drives the IMF is also what drives Wall Street and the Treasury and it's causing a lot of problems nowadays.

    ...more info
  • A must read
    I have read over 50 books on topics related to economics, and the socio-political aspects of globalization, free-markets, and their history. This topic has, for years, fueled passionate debate among Keynesians and liaise faire economists to name a few. And today, with globalization affecting everyone of every walk-of-life, this debate is making its way into the local coffee shops and hair salons.
    Of the 50+ books mentioned, there is not one that I would direct the general population to. Yet it is ever more crucial for the masses to understand how globalization drives the politicians they vote for, who in turn enact the laws that determine how globalization will affect us all.
    Dr. Stiglitz's book requires at least a basic education in economics to follow references to Adam Smith, Keynesian economics, Marginal Utility, and the interplay of state taxes and interest rates, for example.
    For those with a basic knowledge of such things, this book is a must read -- for two important reasons:
    1) It was written by Noble Prize winner Joseph Stiglitz, former economic advisor to the Clinton Administration and Chief Economist at the World Bank. You can no longer argue the topic as a learned individual if you don't read this book (agree with it or not).
    2) Whether you believe Dr. Stiglitz has a bone to pick with the IMF, it is difficult to ignore his passion for doing what he believes is right. The overriding theme is Dr. Stiglitz's insistence that organizations driving developing countries toward globalization, through market liberalization, do so with transparency -- allowing proper and constructive critique and debate to play a democratic role in ensuring that scarce resources and the impoverished of the world aren't taken advantage of.
    And finally, after reading this book, you will learn how the IMF, World Bank, and others work to indoctrinate developing countries into the world economy. In Dr. Stiglitz's view, reforms are prematurely accelerated to ensure that financiers receive their expected return on investment -- often at the expense of a heavily indebted nation.
    Whether you believe this or not, it is plausible, and demonstrable, through history, that the interests of the wealthy have great potential for abusing resources and the less fortunate. With the stage set in this manner, coupled with secretive closed-door meetings at the IMF, it is a conceivable scenario that the IMF has, at times, made matters worse in a weakened economic and heavily indebted country. In researching my master's thesis on globalization, I have corroborated stories and case histories that support Dr. Stiglitz.
    Well, heck, you should see how the creditors came after little-ole me when i lost my house to a flood in the same year that I was laid off from my job due to recessionary conditions! Financiers are not in the mercy business....more info
  • Global Economics have never been explained more clearly!
    This book should be read by anyone interested in the impacts of globalization. Stiglitz's provides the reader with a blistering critique on the current state of globalization, and particularly chides the International Monetary Fund (IMF) for their arrogance and cookie-cutter approach to crisis resolution. The East Asian financial crisis, Russia's rocky road to a market economy, and other recent examples are used to illustrate how the IMF's bailout plans are contingent on a country's agreement to rapidly adopt western ideologies (free market economics). This "conditionality" forces the expedient liberalization of capital accounts, imposes restrictions on the government's fiscal policy, and pushes up interest rates in the name of fighting inflation. The result is high unemployment, stunted growth, and an increase in the federal deficit.

    Stiglitz also points out the hypocrisy of U.S. in regards to free trade. In short, the U.S tell countries to drop their tariffs and subsidies to allow free reign for U.S. exports while they keep tariffs (on steel) and subsidies (for farmers), which restrains a less-developed country's access to their markets. The central theme of the book is that developing countries are adversely affected by the current state of globalization as they incur a disproportionate amount of the costs and long-term risks and well-to-do western bankers and U.S. corporations reap many of the benefits.

    You will come to understand why people rightly despise globalisation in its current form and the way its currently carried out! The greed of the west is unbridled and has virtually no one checking it or restraining it. The IMF are selfish "economic mafia pimps". This book explains it all - how and why and gives you ALL the facts to substantiate your gut feel about the stink that globalization emits....more info

  • 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.
    ...more info
  • The Economics of Failure
    As noted on this book's cover, there are few people in a better position to examine the problems of globalization than Joseph Stiglitz. This book is mostly an indictment of the faulty economics of the globalization process, especially as practiced by the International Monetary Fund (IMF) and the World Bank. Despite that focus on the economics, Stiglitz successfully integrates first-hand economic knowledge with the larger issues of globalization, especially social justice in developing countries.

    His main focus is the poor economics practiced by the IMF in their so-called mission to stabilize world financial markets. Instead, the IMF is guilty of pushing the ideology of free markets, which is not supported by economic data and has little connection to the real world. The free market ideology does not even have credence in the US, as we have social safety nets and economic regulations to protect citizens against market failures. However the IMF, as a condition for monetary aid, forces developing nations to enact simplistic free market systems before they have regulatory structures or institutions in place, leading to all kinds of economic chaos and suffering. Stiglitz provides evidence that such narrow-minded economic bullying by the IMF was a key factor in the Asian financial collapse of the late 90s and the continuing financial anarchy in Russia.

    The most chilling indictment here is that the IMF and World Bank are less concerned with the development of poor nations, than with religiously pushing the vested interests of their main stakeholders: Wall Street fatcats and financial speculators who make quick profits off currency fluctuations and cheap exports. Meanwhile the nations who follow the IMF's rules, like Bolivia and Thailand, suffer long-term consequences. While his writing style gets repetitive as the book progresses, Stiglitz provides solid evidence of why globalization, at least as practiced by American vested interests, is a cause of great worldwide suffering and resentment against the US. [~doomsdayer520~]...more info

  • Infotainment and macroeconomics...a recipe for economic disaster
    For any free market advocate Stiglitz's book is very difficult to read. He may believe globalization is good on balance but he argues that global trade requires global government management. He believes that liberalization and privatization cannot occur too quickly because it will cause too much pain, poverty, and unemployment.


    This book is not a scholarly work and should not be treated as such, for the following reasons:

    1. Does not paint a fair portrait of free market economists; he calls them fundamentalists and ideologues...and then paints his "moderate" side as science. To anyone with a dictionary, ideology is not a bad thing...and to anyone who's taken an economics course: proving the work of free markets is just as much a science as macroeconomics. Tells his audience absurd things like how free market economists assume there is always perfect information and perfect competition...which misrepresents what each of those actually means and baits uninformed readers into viewing free market economists as unrealistic (nothing has to be perfect for a free market to work and work well...btw).
    2. Argues in the book that macroeconomic policies are sustainable in the long run...and have yet to actually do so.
    3. Argues that job growth/creation and pro environment policies go hand in hand (this is obviously not true, but it begs the question: "who was the books target audience?"...if you guest leftist you were right! A perfect example of why this is an infotainment book rather than a scholarly work)
    4. Argues that because the limited liberalism and privatization that has occurred hasn't produced more wealth or less unemployment that it must be the fault of liberalism (a logical failure on his part).
    5. Argues that privatization and liberalism hurts society so much that it shouldn't be undertaken unless planned slowly and carefully. Another logical failure on his part because we wouldn't need to privatize and go through market growing pains if socialists hadn't attempted property theft to begin with! (He never admits the information damage to the market that government over regulation and intervention actually does and that any pain felt when liberalizing and privatizing is actually the result of the market working to move factors to where they are most needed by society and away from their artificial values created by government bureaucrats and government policies.
    6. Argues that shock therapy never works and that managed economies do. Examples Russia as a shock therapy failure and china as a managed economy success. Never mind that Russia's first attempt at liberalism was copying China's managed market model back in the 1980's and they fell flat on their face. You can't assume China's model works for Russia because China was far more agriculturally based than Russia. This was basically a major assumption error on his part. He also misses out on all the shock therapy that did work (even despite incomplete liberalization in the countries where it occurred).
    7. Understands that free markets work best when no one has tariffs in place....and understands that the first world's tariffs, especially on agriculture, hinder the development of the third world. BUT, he then suggests that the third world keep and raise protections on their industries and agriculture to protect their development (citing we did it and it seemed to work for us)...but protectionism never works for anyone but the capital owners in the society...everyone else is stuck with paying higher prices for goods. The developing world will actually make themselves worse off if they raise tariffs and quotas.


    Any free market thinker who reads this will see Stiglitz as just another macroeconomist clawing to protect his employment future in a world that increasingly sees globalization, liberalism, and privatization as the keys to development and prosperity. You will find this book aggravating, logically fallacious, free market economics badly misrepresented, and history horribly confused. This is a textbook on how to ruin an economy and destroy liberalization.

    For any macroeconomist or someone who just loves the idea of government regulation and economic management (in whatever form) this is the book for you. But just remember, he doesn't paint a fair picture of free market economists and they will be far better prepared to debate you than this book lets on....more info
  • Incoherent and generally unenlightening
    Anyone with an interest in global affairs would be aware of the East Asian crises and the Russian attempt at becoming a market economy. These are the two main examples used by Stiglitz to frame his arguments and the policies are well known. They are the same problems the anti-globalization movement protests against outside various international financial meetings so there are no new insights here of any great significance. Some of the less prominent countries like Ethiopia and Malaysia are covered though and these sections are interesting although still using the same themes - co-ercive IMF tactics, capital market liberaliztion or protectionism etc. Stiglitz also contradicts himself at times. In one section he argues for greater transparency and public debate (ie. politicization) of the IMF's policies, then in another criticises the U.S. government for enacting protectionist measures domestically (assuredly for political purposes).
    The problem with these 'insider' accounts is that they are by definition subjective. The only examples of the inner workings of these institutions put forward are self-serving anecdotes of when Stiglitz himself opposed, or tried to oppose, IMF policies. There is also very little talk, and even less criticism, of the World Bank which is where he was the chief economist. Would recommend a book by, say, a respected professional journalist who can be a more objective, more dispassionate, and much more coherent....more info

 

 
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