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October 17, 2006

Why globalization has failed

Posted by Kristi Heim at 4:08 PM

Update: If you want to read the whole discussion, stay tuned for reporter Al Scott's Q&A with Stiglitz this Sunday.

Nobel Prize-winning economist Joseph Stiglitz stopped by here for a brief interview this morning to talk about the state of the global economy. I had a chance to meet Stiglitz a few years ago at Columbia University, where he teaches, and he was every bit as dynamic today.


Joseph Stiglitz

In town to promote his book "Making Globalization Work," reviewed here, Stiglitz said he was interviewed this morning by a radio host at KEXP who was one of the protesters at the "Battle of Seattle," marching in the streets against the World Trade Organization in 1999. The foes of free trade might think they've found a new messiah, but actually Stiglitz supports globalization in principle. He just opposes its mismanagement, which has exacerbated the fundamental inequalities between rich and poor countries.

Countries like China and India have succeeded in spite of those obstacles, he said, because they have resisted pressure to float their currencies by the World Bank, IMF and the rest of the so-called Washington concensus. Brazil developed its own alcohol fuel industry, one initially discouraged by the World Bank, and now has achieved energy independence, he noted.

Lack of a level playing field in behind-the-scenes WTO negotiations has traditionally hurt the developing world. But in some ways it could come back to bite the U.S., too. Without multilateral trade agreements that include environmental protection, for example, a country that pollutes without restriction has a cost advantage over one that doesn't.

While globalization isn't pretty, it does seem permanent. At least Stiglitz is proposing some solutions for making it better.

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Tricia Duryee
Tricia Duryee
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Angel Gonzalez
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Kristi Heim
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