Monday, June 11, 2007

Globalization critique by Nobel Laureate

Joseph Stiglitz, who teaches economics at Columbia University in New York, was an economic advisor to President Bill Clinton from 1995 to 1997, and chief economist at the World Bank from 1997 to 1999. His latest book, "Making Globalization Work," was published in September 2006. Together with George Akerlof and Michael Spence, Stiglitz was awarded the Nobel Memorial Prize for Economics in 2001.

You are considered an intellectual icon of the critics of globalization. Is this embarrassing to you, or are you proud of this role?
You're right, I am very critical of globalization. Why should it be embarrassing to me? It isn't easy to find an approach that benefits everyone. But very few people benefit from the way things are going now.

Only a few? The economies in some developing and emerging nations are growing rapidly, and many people finally have the prospect of escaping poverty.
Both in industrialized nations and in countries like India and China, often referred to as the winners of globalization, there are hundreds of millions of people who in fact suffer from globalization. The negative consequences are especially glaring in China and India, where only a few people are becoming phenomenally wealthy, while the poorest of the poor remain poor.

How exactly do you define globalization?
To put it succinctly, globalization is the growing together of the world, brought about by lower transport costs, better and cheaper infrastructure, and the tearing down of manmade barriers.
I do, of course, see the positive side of globalization -- namely, that it has helped many people in developing countries overcome the sense of being excluded. The Internet is a stage for everyone, and pressure can be generated there. But that's the theory. I am critical of what in fact are very different consequences for the development of mankind. In reality, social inequality in the world is growing.

Some leading economists are opposed to the handing out of billions of dollars in aid. What is the ideal form of development aid, in your view?
There are various ways to help developing countries. Classic development aid is one -- and it isn't half bad. It has already helped millions of people in the world to fight disease, for example. There is absolutely no doubt that development aid can contribute to elevating the standard of living. Of course, there are always bad investments and money that winds up disappearing into shady hands. But that's the same everywhere, both in the private sector and in government spending. The many billions of dollars that the U.S. government has spent on the Iraq war were wasted.

What are your hopes for the G8 summit in Heiligendamm, Germany?
So far the United States has refused to join other industrialized nations to find a reasonable solution to protect the climate. There are serious efforts in every industrialized nation to do something about protecting the environment -- just not in the United States. I want to see the heads of state in Heiligendamm confront President Bush and say: "We need an international set of regulations, and you, as the world's most powerful man, have an obligation to be part of it!"
Bush announced his own proposals on climate change recently...
Those attending the summit must make it clear to Bush that his policies are accelerating climate change and that countries are being destroyed as a result. Bush doesn't understand civil language. The problem has to be made clear to him in more drastic terms.

There are concerns in the G8 nations that efforts to avert climate change will be destroyed by rapid growth in China and India.
And that's why the group of G8 nations must be expanded. It doesn't do any good for a small group of people from a handful of rich countries to discuss the problems of the world without the participation of the world's largest nations. That includes China and India, but also many other countries.

Brazil, Mexico and South Africa, the other three major emerging economies? Or Saudi Arabia, as the world's biggest oil producer?
I don't know how the summit could be structured so that all interests are properly represented. One could find arguments for and against any country. One thing is clear, and that is that in its current form, with eight countries, it isn't working.

Would it be better if these eight nations didn't talk?
Talking is always good. But President Bush has proven to be extremely obstinate in the past. His guiding principle has always been that his policy would ultimately prevail, no matter what the issue -- and no matter how his policies affected the rest of the world.