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: #7934 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

Will Hutton, Guardian
‘A massively important political as well as economic document … we should listen to him urgently’

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

Customer Reviews

Balancing Acts
It is always better to hear things from the horse's mouth. Eminent economist (Nobel Prize Winner no less) Joseph Stiglitz has been directly involved with some of the most serious financial crises in recent times. Not limited to academia and economic theory he served in high profile policy positions including as senior VP and chief economist in the World Bank. For me, it's also important that he spent extensive time with people in the affected countries. The description of modern international economic management: "from one's luxury hotel, one can callously impose policies about which one would think twice if one knew the people whose life one was destroying..." (p. 24) does not apply to him. His case studies provide the backdrop for his analysis of globalization as well as concrete evidence for some of his critical contentions. This is not a dry economics book; it is a captivating read that offers a very accessible examination of global economic and financial systems.

To position Stiglitz up-front: he is not against globalization - in his estimation it is quality-neutral as a conception and it is here to stay. The aim of his study is to show what lessons need to be learned and applied to make globalization live up to its potential for the majority of the world's populations. The red thread of the book is the examination of the primarily negative impact that globalization has had on many developing countries and the two billion or so poor who live on less than $2/per day. His reasoning why this has been the case and what is to be done to bring about positive change makes this book an important resource for the critics and the proponents of globalization alike.

Due to its vital role in global economics today, he focuses his criticism on the IMF, fundamentally disagreeing with major policies of the Fund as applied by its senior representatives. But GLOBALIZATION AND ITS DISCONTENTS is much more than a personal rebuke of his former colleagues and associates. Anybody who has worked in and with developing countries, local policy makers and civil societies, will find themselves in tune with many of Stiglitz' salient points. Several times he comments on new strategies being tried out on "powerless" countries like Ecuador and Romania, too weak to resist the IMF and resulting in the experiment's highly negative consequences for the countries. (p. 203) The East Asia crisis (1997 onwards) features prominently in Stiglitz' account. What went wrong and why didn't the prescribed (IMF) medicines bring the ailing economies back to health? Other major examples are the 'economies in transition' - in particular Russia and the former Soviet Bloc countries.

In a summary one cannot do justice to the wealth of information contained in GLOBALIZATION AND ITS DISCONTENTS. Stiglitz' analysis follows several major themes. At the core of his arguments stand the dealings of the powerful "Washington Consensus" - the combined economic and financial force of IMF, World Bank and the US Treasury deciding on the "right" policies for developing countries. (p. 16) One of his fundamental criticisms of the IMF is that it is no longer transparent in the pursuit of its objectives and that it moved away from its original mandate: "The IMF was founded on the belief that there was a need for collective action at the global level for economic stability." However over time, the Fund has taken to "champion market supremacy with ideological fervour" (p. 12). The IMF was designed to complement the World Bank, whose mandate was "reconstruction and development" following World War II, now the major international agency for the eradication of poverty. By the 1980s the Fund and the World Bank had become increasingly intertwined with each broadening their range of influence. As a result, while the IMF "does not claim expertise in development - yet it does not hesitate to weigh in". (p. 34). Within the Fund's primary focus for macro-economics, Stiglitz argues, "market fundamentalism" has been the economic philosophy of choice with the result that financial institutions and international lenders have usually been the primary winners from each of the major financial crises. Yet, he stresses that the IMF policies are "not conspiracy more a reflection of interest & ideology of western financial institutions". (p. 130)

Another criticism voiced throughout the book is that the IMF prescribed economic remedies tend to be identical whatever the economic and financial crisis encountered: one size fits all. There is hardly any choice for a government in crisis. This approach, combined with the admitted lack of knowledge of the broader development context, can in some cases plunge the country into further recession rather than stimulate recovery. High unemployment in countries without an adequate social safety net is habitually a harmful side effect of the austerity measures imposed on the government by the IMF. Another victim of these policies is the environment. The wider social and political context of a country or region is often overlooked, Stiglitz contends, resulting in social unrest and worse: IMF-inspired riots. (p.77) Recession and civil strife further set back the development agenda and Stiglitz refers to numerous World Bank studies that confirm his assertions.

Stiglitz describes alternative approaches, presenting the evidence based on his own vast experience. His proposals can be subsumed under the term "balance". For example, any privatization of industry and markets should be gradual and sequenced, and must be balanced with strong institutional and legal structures. Rather than using "shock therapy" and forcing rapid privatization of capital markets, the "gradualist" approach ensures better results in the short and longer term (Russia vs. Poland). In the same vein he recognizes the need for balance between market forces and governmental interventions. He reminds the reader that the advanced industrialized economies all went through growth periods when government regulated the markets and capital flows. He asks that developing countries be given a real and honest chance to sit in the driver's seat when developing locally adapted international economic models. (review: Friederike Knabe Ottawa Canada)

not what you might expect, but worth reading
If you are looking for a book that rages at the evils of capitalism then you are going to be disappointed. In fact this book is not really about globalisation. It is really about how the IMF called it wrong on some key events (just about) within the broad process known as globalisation. So we are treated to a bit of an examination of how the IMF drifted away from its original mission to end up prescribing some very ideological economic measures to countries.

This takes in both the recent Asian crisis and the Russian journey to a market economy. So in that sense it is almost covering broader ground than what you might typically term globalisation. But then on the flipside it is pretty much a critique of the IMF's role rather than a general take on these issues.

As such this book is very wrongly talked about as if its part of the anti-globalisation even anti-capitalism camp. Far from it. Its very much an endorsement of market economies, but a key theme is how important the management of transition to market economies is carried out. Hence he's not against privatisation, but the process of privatisation. He's not against capital market liberalisation but how it brought about, and wants more focus on the infrastructure required before it can happen.

In this sense it's not really a call to arms, more a call to reason. It's basically a book calling for a sensible approach to dealing with markets and applying them to countries with no history of them. That might sounds much less racy than some anti-capitalist rant, but it is far far more realistic, might actually have some influence and do some good, and is part of what is actually politically achievable.

However, having said all that it has managed to be contraversial. The economic orthodoxy has been upset and that some of Stilgitz's punches must have hit home.

Excellent detail, too repetitive.
Stiglitz is clearly a first rate economist, the arguments he makes in his book are by no means watertight, but I found most of them to be very convincing. In particular his analyses of the Asian financial crisis, and the contrasting methods of communist-to-capitalist transition are excellent, he clearly explains any jargon and highlights some key areas that are often dismissed in other non-academic economics discussions.Also Stiglitz provides lots of helpful references to other works so if you feel like digging deeper in one particular area you can.
On the other hand the book suffers from an alarming amount of repetition, many paragraphs are more or less verbatim clones of previous ones and several of the chapters are clearly redundant. That said I don't know of another book that deals with the same area with such class and as it is so short the repetition isn't too much of a problem. In short it is well worth the read, Globalization is the most important issue facing us today (try saving the environment without solving it first, ain't gonna happen), we all need to have an informed opinion.