Mr. Stiglitz rebuffs the image of globalization as the rising tide that lifts all boats at the same time. Globalization can be a riptide that destroys all non-prepared boats. Another classic metaphor he dismisses in his book is Adam Smith’s invisible hand: “… the reason that the invisible hand seems invisible is that it is not there.”
Mr. Stiglitz writes: “I believe that globalization has the potential to bring enormous benefits to those in both the developing and the developed world. But the evidence is overwhelming that it has failed to live up to this potential”. In his presentation he acknowledged success stories such as China and India, but argued that failures are more prevalent: Less growth in Latin America, NAFTA as a failure for the poor, more crises worldwide, money flowing from poor to rich countries and poor countries with more debt that they can manage.
One of the biggest problems, according to Mr. Stiglitz, is that economic globalization has outpaced political globalization, with the economic consequences of globalization having outpaced our ability to understand and shape globalization and to cope with these consequences through political processes. To make globalization work we have to acknowledge that there are losers, and we have to decide how we are going to deal with that.
In his book, much like in an anti-globalization protest where the “abolish the WTO” banner marches together with “save the turtles” and “ban Microsoft”, there is room for many different topics including trade, environment, patents, etc. I haven’t finished reading it, but so far it makes a good read, at the least providing food for thought.
- Advances in Development Economics