Product Description

In this hugely controversial book, the most recent winner of the Nobel Prize for Economics argues that though globalization should be a powerful force for good, it has been badly mishandled by the West (especially its lead institutions, the World Bank and the IMF), and that the anti-globalizing protestors have much to say that we should listen to. Coming from a figure of Stiglitz's background and authority, this is an explosive message which will change the way we regard modern global politics.

Product Details

• Amazon Sales Rank: #7008 in Books
• Published on: 2003-04-03
• Original language: English
• Binding: Paperback
• 320 pages

Amazon.co.uk Review
Readers of Globalization and Its Discontents will already be familiar with the controversy and organised resistance that globalisation has generated around the world due to massive media coverage, yet explaining what globalisation 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 globalisation--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 globalisation 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 globalisation, 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

Review
In our society, it's worryingly easy for those voicing criticisms of globalization to be dismissed as naive and ignorant. But this is not a charge than can be levelled at Joseph E Stiglitz, the World Bank's ex-Chief Economist and a Nobel laureate. Stiglitz recounts his experiences in Ethiopia, Thailand and Russia during the frenzied years before and after the Asian meltdown in 1997. He resigned when his protestations about the fundamental wrongness of policies that force already vulnerable economies into capital liberalisation were met with disdain by his political masters. In this book, he presents careful yet passionate arguments against unfettered capitalism. He generously characterizes the West's insistence on it as a short-sighted use of one-size-fits-all economic policies rather than self-serving opportunism seeking to profit from the misery of developing nations, wondering how anyone could believe that liquid capital that enters and then leaves a country overnight can count as investment that will promote long-term growth in domestic industry. In a less diplomatic section he points out that 'development aid' often requires the aided governments to hold US Treasury bills, effectively meaning that countries are borrowing from the US at 20% to lend back to the US at 4%. Right-wing publications are quick to pooh-pooh Stiglitz's thesis as the grumbling of a disgruntled ex-insider. Everybody else should be grateful for this accessible and learned contribution to the debate. Stiglitz denies that he is against globalization per se, arguing that merely he has reservations about defective goods being sold under the brand. Nevertheless, the clear sound of a whistle being blown echoes on nearly every page. (Kirkus UK)

The Observer
instead of placing him in a neat box labelled 'important contribution to the debate' we should listen to him urgently

Customer Reviews

The World's Most Important Book On Globalization
It's not often you can say ,of an Economics book, that it is "as gripping as a Thriller" but Joseph Stiglitz's book is a "jaw dropping" read.
The theme of this book is the terrible consequences of economic policy , exerted from the "Ivory Towers" , of the IMF.
We read about how the IMF and the US Treasury brought Asia to its knees, in the late 90's, by insisting that these regions adopt their orthodox approach to economics. What we find in this book is a detailed account of how IMF theory of the Free Market is at variance with economic experience. If you want to learn about the
inner workings of global economic policy and how it can go badly wrong, then you must read this incredible book.

Good insight to economic policies, no use of data
Until I read this book, I did not exactly understand what was wrong with IMF policies and its breath taking record of failures at many emerging markets. Dr. Stiglitz can help you understand. This book goes over the last 20 years of IMF failures in Russia, Eastern Europe and South East Asia and points out a number of wrongdoings:

1. IMF was usually uninterested in working through the democratic processes of the countries to reach the economic policy decisions. IMF used the power of its loans to push down their throats, the policies that IMF thinks best.

2. When a country is going under a recession, IMF usually forces them to tighten the belts. This policy is almost never implemented in developed economies but IMF forces it on developing countries. It usually ends up deepening the recession.

3. IMF helps the international lenders get their money back (not fully of course) in case a developing country falls into bankrupcy. This is against the risk-reward relationship defined in the theory of finance. The reward they get through high interest rates carries less risk due to the possibility of IMF intervention. This creates irrespossible lenders at times.

4. The unfair trade laws are hurting many poor countries around the world and are creating a discontent about globalization, which actually helped many other poor countries to get their people out of poverty. IMF forces market and trade liberalisation on developing countries without a consideration of how they will be impacted by the existing, unfair trade laws in developed countries. Sometimes, IMF creates a one-way working system in favour of developed countries, .e.g. developed countries still protect their markets for agricultural products, where developing countries may have an advantage.

5. And lastly, there was not a consideration of a gradual plan of reforms suggested by IMF to the countries. It was mostly a step function change being forced on them, which usually collapsed the existing system.

My overall take from this book is that every country should reach its own economic policies by using the democractic process and IMF, as an international institution, should encourage not hurt this.

One dissappointing thing about this book is that there is almost no use of economic data. He almost only talks about policies and economic history. He ignored the use of numbers to justify the wrong/ right policies. It is hard to argue with a Nobel Prize winner about his methods but it is my humble opinion that the book would have been more colorful and convincing had he used numbers.

After this book was written, there has been some success stories of IMF interventions, e.g. Turkey. However, reading the book, I got the impression that IMF's success in Turkey was not contradictory to Dr. Stiglitz's claims. Turkey was already at a stage where market forces were semi-working, the country was trading with the world, especially with EU for a long time and the missing part was the building of strong and independent economic and political institutions. Due to corrupt governments, the institutions were not built. Market liberalisation was not forced on Turkey because it was already there for some time. IMF, by using the attractiveness of cheap loans, forced Turkey to come up with a reform plan of building institutions. EU negotiation process was also complimentary to the IMF economic support. It worked well!

Authoritative critique of market fundamentalism
Author Joseph Stiglitz was a member of President Clinton's Economic Advisory Board, Chief Economist for the World Bank for four years and Nobel Laureate for Economics in 2001 and therefore can speak with some authority on the subject of what is misleading called 'globalisation' - perhaps more accurately labelled, 'globalised American-style capitalism' (not as catchy, I'll give you that).

Stiglitz criticises most heavily the International Monetary Fund (IMF), an organisation that was created to enhance global economic stability but has been all too often used as a tool to promote elite U.S. business and finance interests. The problem, as Stiglitz articulates it, is this: "Market fundamentalists dominate the IMF; they believe that markets by and large work well and that governments by and large work badly. We have an obvious problem. A public institution created to address certain failures in the market but currently run by economists who have both a high level of confidence in markets and little confidence in public institutions."

Stiglitz suggests that the IMF's behaviour does not have intellectual coherency when analysed within the framework of its original charter but that its behaviour does make sense if approached from the perspective that the IMF represents elite financial and banking interests within the dominant economies, most obviously, the United States, which has an effective veto over IMF policy. Therefore, when a country such as Indonesia or Russia is in financial turmoil, the IMF arranges that Western creditors (ie banks) get their money back first; in contemporary dogma this is referred to as 'bailing out' a country. The Fund arranges that Western banks get their billions of dollars back but that the poor people of the targeted country, those that have been worst affected by the Fund's policies of capital market liberalisation and structural adjustment, have their food subsidies reduced or removed, their health and unemployment safety nets cut. The population of the target country then also has to shoulder the burden of repayment. Understandably, this behaviour breeds resentment and discontent.

Stiglitz convincingly argues his case from a position of credibility. He is no anti-establishment radical and his book provides solutions as well as plentiful criticisms. For a non-economist like myself, the book was a stimulating read that never got bogged down in pages of statistics; Stiglitz keeps it readable and he never lets you forget that despite the billions of pounds sloshing around in the system, the policies advocated have a real impact on people's lives. For an insider's account of the global machinations of organisations like the International Monetary Fund and the World Bank, Joseph Stiglitz has written an invaluable guide, one that should be read by protestors and economists alike.