Reading
Globalization and Its Discontents
A partially wrongheaded book but an interesting one.
I say “partially” because Stiglitz intermixes sophisticated and nuanced understanding of market function and evolution with – at times, intellectually comical – bromide level asides for the anticapitalist yahoos who never took Econ 101 but want to lean on the intellectual authority of his Nobel Prize as they argue across the kitchen table. The second aspect that I find intriguing with Stiglitz so far, is that his (admittedly one-sided) description of the IMF is of an insular, stovepiped, hierarchical, rigidly dysfunctional institution that ignores empirical results of it’s policies and actions. That part I can well believe.
Stiglitz, who has an overriding leftish political agenda, blames IMF institutional culture on “market fundamentalism” of the Chicago school of economics, but he’s describing an organizational-informational behavioral pattern common to most second wave, industrial era bureaucracies. One shared by the US military, the IC, academia and (formerly) by IBM and most institutions of the decidely non-free market Soviet Union. The IMF simply isn’t the home for P2P networks and it acts like the lumbering dinosaur it is – large, brutish, powerful but slow on the uptake and oblivious to much of what goes on around it.
In a sense, though I’m sure Stiglitz never thought of it this way, he’s calling for economic COIN for developing nations rather than the 2GW version of market liberalization practiced in post-Soviet Russia. That’s a meritorious point but I inclined to think that the heavy left politicking Stiglitz sprinkes in his writing will prevent that message from reaching ears that might otherwise be receptive.
The choir he’s preaching to is in no hurry to open up markets anywhere.
July 22nd, 2008 at 1:36 pm
I see the merits of your point and appreciate the economic COIN aspect.
One other aspect of the IMF/World Bank fiasco of the 80’s with structural adjustment programs was their eerie similarity to the old Soviet and Chinese 5 year plans that were often one size fits all and so destructive in the process. Many faux and a few authentic seam states were taken down a peg into the Gap by their implementation, with consequences (especially in urban areas of seam state & Gap countries) that live on today. The Marxist Mike Davis wrote about this in detail in "Planet of Slums" (social and econ rants aside, "Planet of Slums" is an informative read).
July 22nd, 2008 at 2:12 pm
"anticapitalist yahoos who never took Econ 101 but want to lean on the intellectual authority of his Nobel Prize as they argue across the kitchen table. "
haha, why not just tell us what you really think. What a classic line…
July 22nd, 2008 at 4:12 pm
Thanks guys! You have it right Eddie. Ironically, Stiglitz is echoing many of the criticisms of the IMF posited in the 1990’s by the late Jude Wanniski, Ronald Reagan’s guru on rabidly free market, supply-side economics and former WSJ editor.
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Stiglitz is clearly a wicked smart economist but he’s decided that the only way to influence the general public toward what might charitably be called technocratic macroeconomic policies is to throw red meat to the art student proletariat who run around in black turtlenecks breaking windows at Starbucks
July 22nd, 2008 at 5:30 pm
"to throw read meat to the art student proletariat who run around in black turtlenecks breaking windows at Starbuck"
You’re just full of those one quotes, aren’t you, Zen.
July 22nd, 2008 at 6:28 pm
Great line Zen. I attend class with some of those types!
Would you recommend reading Wanniski’s "The Way The World Works"?
July 22nd, 2008 at 9:56 pm
Yes, my former, more partisan, self tends to emerge when discussing econ as I did a heavy load of econ history back in grad school. Too many arguments w/ ppl who did not understand or care to learn the fundamentals. Strangely, I did not have any problem with my profs who were Marxists by and large.
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I would recommend The Way the World Works. Wanniski gets a bad rap for being a) a successful popularizer who was not an academic economist, and b) a ferocious critic of both Demand-side Keynesianism and classical "green eye shade" austerity policies – positions that basically alienated 90% + of the economics profession. I note however that not too many "stars" of the profession -including those with prestigious NYT columns – were in any hurry to debate Wanniski F2F in a public forum.
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I had a few online exchanges with Wanniski when he was running Polyconomics and he was kind enough to give me a comment on something I had written when I’m sure he had better things to do with his limited time. He was a bright and insightful guy and his book is worth reading for his argument regarding Hawley-Smoot alone. Wanniski could also be quirkily and at times bizarrely contrarian in his willingnesss to entertain the improbable and that juxtaposition was simply part of the package.
July 22nd, 2008 at 11:10 pm
Thank you for sharing your insight about him, he will be next in line on my great thinkers pile after I finish Moynihan’s "Family & Nation".
People like Wanniski help make a double minor with econ and anthro looks better and better, but I need to survey both bodies of water more thoroughly before I dive in.
The new GI Bill starting in August 09 removes the financial burden for taking more classes in a semester and leaves time and willpower alone as the determining factors.
July 23rd, 2008 at 5:29 pm
Several good points about Stiglitz. Odd, isn’t it, that he spends spends much more time condemning the IMF (where he didn’t work) than the World Bank (where he did)? There was also, as I recall, a gap between diagnosis and prescription. If the international monetary institutions have been captured by people who are more interested in serving their interests than the interests of the poor, why should calling for them to better serve the poor have any practical effect?
July 24th, 2008 at 3:48 am
Hi Eddie,
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Anthro and Econ are a powerful combination for understanding people – throw in some kind of tdaxp-like sociobiological psychology and some philosophy and you will be the uber-interpreter of human behavior.
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Hi Dan,
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Yes, I agree there’s a lot of airing of bureaucratic rivalries in this book. It gets moreso that way as I read further. Most normal ppl don’t care about "imperious" memos the IMF sent to WB officials. And yes again, there’s a logical disconnect but Stiglitz is writing for the agitated English major dude with the goatee, sipping diet cokes in the student union when he’s supposed to be at his Chem 210 lecture.
July 24th, 2008 at 3:55 am
I have read things by Stiglitz that make a very coherent case against a certain brand of neoliberal/Washington Consensus economic policies without expressing any support for the anarchistic (smashing windows at wherever) branch of the anti-corporate-globalization movement. I think window-smashing is not his style.
July 24th, 2008 at 4:10 am
Hi LFC,
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I agree, Stiglitz would never smash a window and he is, in the final analysis, an exponent of letting the market do those activities the market does well. A technocrat, not a socialist.
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That said he punctuates his writing periodically with "big social problem X" and briefly attributes causation to market fundamentalism when it isn’t or involves multiple causation or occurs under a variety of political economies. He’s smarter than that. It’s thrown in as a polemical wedge and an audience cultivator. That’s all. I still recommend that ppl read his book.
July 24th, 2008 at 4:24 pm
Always interesting to read people’s opinions of Stiglitz! Couple of things occur to me. Comparing Washington Consensus policies to Stalin-esque 5 year plans is a bit off. In reality, the Washington Consensus is bread and butter stuff. It’s "imperialism" when it involves the developing world, but show me a liberal who doesn’t want the US to balance its budget. If you read Thoma or DeLong’s blogs, you will find endless comment threads criticising "faith based" supply side policies, yet when it comes to the IMF and the WB, for some reason it’s all truedn upside down. Really, the Washington Consensus is supposed to be the consensus on what makes good economic policies, period. The unfortunate fact is that policy making in the developing world is not the same as policy making in the developed world and one can’t simply transport best practice from to here to there without problems.
I do agree that there has been a kind of blinkered "one-size-fits-all" approach, where a set of "free-market" policy prescriptions are supposed to cure all ills, yet the general thrust of free market economics is to shy away from hierarchical solutions and to push decision making further down the chain. Ironically, certain factors can negate this approach, turning what should be the epitome of open-mindedness into dead-eyed destructiveness. IMO, Dani Rodrik (far, far, far from a Friedmanite) is probably the best bet for the future of experimental development economic policies, not in the substance, but in the approach.
And it’s becoming mainstream: the recent WB report was "Rodrikian" to the core. Stiglitz might be pleased. Guess not, though. Where would his angle be then?