Stiglitz not opposed to Globalization

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

I take it back.  Stiglitz is nowhere near McNamara.
zzzzzzzz.......

Henry C.K. Liu


The Preacher: Joseph StiglitzBy Christopher Swann
Published: May 30 2003 15:03 | Last Updated: May 30 2003 15:03

Few prophets have ever looked so different from their disciples.
Standing at a lectern beneath the great dome of St Paul's cathedral, the
portly frame of Joseph Stiglitz, the contentious American Nobel
laureate, is bursting out of his smart grey suit.

He is surrounded by the expectant stares of dreadlocked activists,
earnest pensioners and thrusting economics students. We're all here on
this gloomy London evening to hear a globally famed anti-globalist talk
about globalisation.

Most economists become famous if they take up public office. Stiglitz
became famous for leaving his. In 2000, he quit as chief economist of
the World Bank, after repeatedly panning it for imposing harsh free
market policies on the developing world.

That was just the start of it. The International Monetary Fund was
staffed by "third-rate brains from first-rate universities". He also
wondered if the IMF's former deputy managing director, Stan Fischer, had
been "richly rewarded" with a job as president of Citigroup, "for having
faithfully executed" Wall Street's desired policies.

Stiglitz's former colleagues might have wanted to write him off as an
embittered heretic. But in 2001, he won the Nobel Prize for economics
for his contribution to the theory that market economics can fail if one
party to a transaction knows more than the other. All of which makes him
a hard man to dismiss - and a wise choice of speaker for St Paul's
recent series of lectures on ethics.

As one church official ruefully tells me, religious ceremonies rarely
come close to attracting a crowd the size of tonight's. "Bit
embarrassing really," he shrugs.

But when Stiglitz finally starts to speak, he surprises. Though many
regard him as a blatant self-publicist, he seems a reluctant prophet. He
smiles nervously and speaks haltingly when departing from his notes -
not quite the picture of the fearless iconoclast one might have expected.

It gets worse. Firmly clasping the lectern with both hands, he says he
wants to dispel any suggestion that he is opposed to globalisation.

In south-east Asia, for example, globalisation has led to a huge rise in
per capita income, a dramatic increase in literacy and a sharp reduction
of poverty.

This provokes nervous glances among the more activist members of the
audience. Could they have wandered into the wrong meeting? But their
fears are quickly assuaged. "South-east Asia succeeded because they
managed globalisation on their own terms," he says. But Latin America,
countries obeyed the edicts of Washington by focusing on low inflation
and balanced budgets, and ended up with economic disaster.

Political globalisation, moreover, has lagged behind economic
globalisation, meaning that decisions with a profound effect on the
developed world have been taken without its participation.

"A European cow receives more than $2 a day from the taxpayer in
subsidies," he says. "This is more than millions of people in the
developing world live on."

Developing countries who fail to meet debt repayments are thrown into a
sort of debtors' prison. Former freedom fighters are forced to honour
the debts of the military governments that persecuted them.

Stiglitz says all this without the oppressive jargon of economists, but
occasionally the veil of the populist slips. At one point, he utters the
word "externalities". Then, looking as if he has just blasphemed in the
house of the Lord, he explains what he meant.

As the ideas become increasingly complex, Stiglitz enlists the help of
urgent hand movements to coax out his thoughts.

It is then time for questions. It turns out that these had to be
submitted in writing in advance. They are read out by a black-robed
churchman. People ask about "hot money flows" and "capital market
liberalisation" and then this: "Why are economics textbooks so boring?"
"Mine isn't," says Stiglitz, offering a rare gleam of humour.

As Stiglitz finishes speaking, and the applause dies down, I notice that
one of the pensioners behind me has quietly nodded off. "Would you like
to go home for a nap now dear?" asks his wife. The disciples of Joseph
Stiglitz may be grateful for what he has to say. But apparently not all
of them have the stamina required to hear him say it.

Christopher Swann is the FT's economics correspondent