"Making Globalization Work": Nobel winner's fresh views on globalization

"Making Globalization Work"
by Joseph E. Stiglitz
Norton, 358 pp., $26.95

If a compromise may be found between the business supporters of trade and the anti-traders who staked out downtown Seattle on Nov. 30, 1999, Joseph E. Stiglitz is trying to define it. In "Making Globalization Work," he offers a center-left version of a globalized world.

Stiglitz has the right credentials. He was a winner of the Nobel Prize in economics, for information theory. He was the top economist for President Clinton and after that, for the World Bank. In the latter position he met often with poor-country governments, and in his new book — a follow-up to "Globalization and Its Discontents" — he argues their case against the wealthier lands of East Asia and the West.

The poor countries have too much debt, he says, and it is largely the fault of the lenders. The debts should be forgiven, and followed by large increases in foreign aid. The poor countries have gotten back too little from trade deals, he says. They should be given free access to rich-country markets, and the fat countries should quit featherbedding their farmers.

In trade talks, Stiglitz writes, "The job of Western trade negotiators is to get a better trade deal for their countries' industries." The U.S. trade negotiator pushes for intellectual-property rights so that Americans can get paid for what they invent. At the same time, Congress blocks poor-country products with one-sided anti-dumping laws, an outrageous sugar quota and a ridiculous subsidy to cotton growers.

It is good to hear the arguments of Third World nations about this inequitable state of affairs. Americans should hear them more often.

But Stiglitz is hardly evenhanded; he is making a case. He brushes aside rich-country bellyaches, such as the U.S. trade deficit with China. He caricatures the views of his opponents, saying they believe that their undiluted version of free trade will make everyone better off, when what they actually believe is that by lowering prices it will make most people better off. Stiglitz highlights the flaws of markets, but he is not equally tough on the deficiencies of government economic policies or the failures of foreign aid.

His book is flavored with a deep distaste for inequality. "Those who are concerned about inequality see much of it arising out of luck — the luck of being born with good genes or rich parents or the luck of buying a piece of real estate at the right time," he writes. "Those who are less concerned feel that wealth is a reward for hard work."

It is, of course, a combination of the two. Free-traders would give freer rein to luck in order to maximize overall economic gain. Stiglitz would not.

Stiglitz was an official in the last Democratic administration, and this book might be a source of ideas in the next one if it leans far enough left. He criticizes the Kyoto accords on greenhouse gases, not because they let China and India off the hook, but because they grandfather in the effluents of the rich. "By what right are the developed countries entitled to pollute more?" he asks.

He proposes a set of green tariffs to offset damage to the Earth. He has tried out the idea on officials, and he says they liked it but tended to see it as "the equivalent, in the trade arena, of declaring nuclear war." He also proposes a global anti-monopoly authority.

Some of these may seem like impossibly radical ideas now, but you never know. Books like "Making Globalization Work" — and it is an intelligent, feisty, partisan volume — are where such ideas get their first popular airing.