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Globalization and Its Discontents

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Globalization and Its Discontents

W.W. Norton,

15 min read
10 take-aways
Text available

What's inside?

International monetary organizations (WTO, IMF) are putting a bad face on globalization: how good intentions went wrong.

Editorial Rating

9

Qualities

  • Innovative

Recommendation

Author Joseph E. Stiglitz, a Nobel laureate in Economics, leaves the nebulous subject of globalization pretty quickly, and moves on to his real purpose: a sustained critique of the policies and practices of certain international institutions, especially the International Monetary Fund (IMF). Many of the author’s insights will be old news to those experienced in international economic affairs, though not to the general reader, who will appreciate his straightforward, plain language. The author’s status - as a Nobelist and as chairman of the Council of Economic Advisors during the Clinton administration - makes his book distinctive and controversial. His prominence is a bully pulpit that he uses to inveigh against the IMF’s power, secrecy and authoritarianism. getAbstract.com recommends his case for the prosecution, which is stirring and thought provoking, albeit marred by jabs against his old political and bureaucratic rivals and many variations on the theme "I told you so."

Summary

The Noble Origins

In 1944, shortly before the end of World War II, the Bretton Woods conference in New Hampshire brought economic delegates from the major Allied Powers together with economic delegates from various smaller, less powerful countries. The delegates agreed to establish certain international economic institutions. These included the International Bank for Reconstruction and Development, now popularly called the World Bank, and the International Monetary Fund (IMF).

These institutions were rooted in the economic thought of John Maynard Keynes. They existed to deal with what he considered to be the frequent, often catastrophic failures of the unguided market. Market forces were powerful, blind and irrational. He believed that, like animals, they needed careful, constant supervision to be useful. Keynes felt governments should provide this supervision. Thus, the Bretton Woods system established an international economic government.

The IMF and the World Bank performed very specific functions in this economic government. The role of the IMF was to enforce the rules of an elaborate system of currency and capital controls, and to assist countries in monetary...

About the Author

Joseph E. Stiglitz was chairman of the Council of Economic Advisors during the administration of President Bill Clinton. He served as senior vice president and chief economist of the World Bank, and won the Nobel Prize in Economic Science in 2000.

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