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Brexit, et après?

Jul 6, 2016 Joseph E. Stiglitz

NEW YORK – Il faudra beaucoup de temps à la Grande-Bretagne, à l’Europe et au monde entier pour digérer les implications du référendum sur le « Brexit » mené par le Royaume-Uni. Les conséquences les plus profondes dépendront, bien sûr, de la réponse de l'Union européenne quant au retrait du Royaume-Uni. La plupart des gens ont d'abord cru que l'UE ne « scierait pas la branche sur laquelle elle était assise » : après tout, un divorce à l'amiable semble être dans l'intérêt de tous. Mais le divorce – comme c’est souvent le cas – pourrait devenir compliqué.

Les avantages de l’intégration commerciale et économique entre le Royaume-Uni et l’UE sont réciproques, et si l'UE prenait au sérieux sa conviction que davantage d’intégration économique est souhaitable, ses dirigeants chercheraient à assurer que les liens demeurent les plus étroits possible étant données les circonstances. Or, Jean-Claude Juncker, l'architecte des stratagèmes d'évitement fiscal massifs au profit des entreprises au Luxembourg et maintenant président de la Commission européenne, semble adopter une ligne dure : « Dehors veut dire dehors », a-t-il déclaré.

Cette réaction instinctive est peut-être compréhensible, étant donné que Juncker pourrait être retenu comme celui qui a présidé la première étape de dissolution de l'UE. Il fait valoir que, afin de dissuader d'autres pays de quitter, l'UE ne doit accepter aucun compromis, offrant au Royaume-Uni à peine plus que ce que lui garantissent les accords de l'Organisation mondiale du commerce.

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Joseph E. Stiglitz

Writing for PS since 2001
290 Commentaries

Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000) and chair of the US President’s Council of Economic Advisers, was lead author of the 1995 IPCC Climate Assessment, and co-chaired the international High-Level Commission on Carbon Prices.

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0 Comments on this paragraph, 72 Comments on this article

Spanish Pablo Jul 17, 2016

And about what the EU means :
Italy Spain and Greece, yep Greece ... are among the countries whose GDP per capita grew more in the world in last 50 years. Plus the 3 of them have longest life expectancy at birth that the United States ... a much richer country .... If anyone would have seen Spain 40 years ago and now would understand what the EU means and what most people even in appalled Greece would not even want to hear about the idea of leaving the EU
Brexit is a rich country with a missing the old empire we rule problem in part of its population. To be out to save pennies on solidarity or cutting emigration has to and will be noticebly different from to be in.... they'll ask back in the 30's to a closer Union paying a higher price... they had a bargain in fact thanks to Tatcher rebate.
#1Europe
- Christine Constable Dec 12, 2016
  
  It is a pity that the contribution to Spain's development in buying so much of her produce and contributing so many billions to her infrastructure is not properly acknowledged - Spain's development did not happen by accident, Britain had a massive part to play in it - including propping up Spain's housing sector and holiday trade. It is amazing that after so much support from the British the Spanish would turn their back on her former friend, simply because the cash tap is to be turned off. With friends like these who needs enemies? You have MUCH to thank Britain for, more humility and acceptance that Spain did not create her own successful future - Britain held her hand very very tightly!
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Spanish Pablo Jul 17, 2016

For starters President Juncker didn't said
"Out is Out" after the vote... but ahead so people that didn't really know what they were voting could have an idea in advance.
They gov didn't know what to do after the vote... nor even now...
One of the most stupid self harming (and might end being self-mutilating) events of modern history ...
But democratic it is..
It also would be democratic if PMs or Presidents call a ref midterm to ask the population if they should continue... that its easier and straighforward.... but nobody calls that referendums
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Michael Ellison Jul 12, 2016

"No, Europe is to be held together by threats, intimidation, and fear."
IMO this is a rather facile conclusion of an appeaser. The EU is a noble vision by far-sighted visionaries that is not appreciated by short-sighted reactionaries. One of the ideological reasons for its creation is to create peace and harmony by cooperation to avoid revisiting the 20C killing fields in Europe. To do that the EU project must not be allowed to fail and wavering members must be stopped in their tracks. If this can be accomplished by appeasement then all to the good. If it can't then a hard line must be taken. It is no use indulging in wishful thinking. The visionary EU leaders will have to deal with the world the way it is, not the way they might wish it to be and the reactionary appeasers must be left to cry themselves to sleep.
- Christine Constable Dec 12, 2016
  
  A political Europe is not a necessary prerequisite to peace in Europe - inter dependent trade and mutual co-operation without force is more likely to succeed than threats and diktats. Look to history, we have to learn those lessons.
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Margaret Bowker Jul 12, 2016

Read this article with interest, but don't think the 'divorce' will become 'messy' as Professor Stiglitz suggests. It is in everyone's interests to cooperate, as he says. It is much more effective to achieve a mutually beneficial deal. The EC President's role lies in proposal and guidance. The EU Council makes the ultimate decisions; the heads of state have the last word. If it takes several weeks for Article 50 to be invoked, say about the time it would have been if the leadership campaign had run its course, then informal talks could take place in the meantime. Better to have the basic parameters laid out. Get the issue of EU nationals agreed for example. UK's global discussions are underway already; the EU should be equally as pro-active.
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john Fahy Jul 12, 2016

A minor detail the full impact has yet to be felt?
So far the EU is in "Fire Fighting," mode and is engaged in containment.
Several other countries are looking at the UK and thinking maybe it is time for us to bail out.
It is possible that the vote will return to the original concept and nine countries and a common market.
Not a political group keen on "Bear Baiting."
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Mr Econotarian Jul 11, 2016

Mr. Shannon, yes Norway with a population about the size of metropolitan Atlanta (5 million people) has about 7 billion barrels of proven oil reserves. I'm glad at least they can make socialism work there!
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Winthrop Thies Jul 11, 2016

Stieglitz clings to his old error of attributing widespread unemployment to globalization (free trade). In fact, close economic analysis shows that while NAFTA occasioned some modest job dislocation (for which their are remedies under Trade Adjustment Assistance), the great bulk of unemployment arises from younger people being poorly trained and older ones unable to retrain for the new economy of automation, robotics and AI. The proposed Transatlantic Agr't is projected to be a giant plus in employment and GDP growth for all involved. W D Thies
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Dr.SHIBU SRIDHAR SREEDHARAN Jul 11, 2016

Brexit is a failure of making globalization work as argued by Prof. Stiglitz.
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Tom W Jul 11, 2016

Stiglitz mentions "America’s Republican Party primary" while failing to mention the showing of Bernie Sanders for the Democratic Party. Bernie & TRUMP are two sides of the same coin.
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Jaap Bosma Jul 10, 2016

Well said mr Stiglitz!!!
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Robert Merrifield Jul 10, 2016

Time to go Jean-Claude, you've helped enough!
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Christine Constable Jul 10, 2016

Clearly the nonesense of unrestricted immigration which has created unbearable social and economic costs has to be addressed. The idea that a small island like the UK cannot have any regulation of inward migration is the politics of the madhouse and (frankly) the madhouse is what the UK rejected. Why should the UK population suffer under austerity, deal with our deficits, improve our economy only to allow hundreds of other workers from across the EU to benefit from our sacrifices? None of it makes sense and the British are rightly fed up and angry.

These days even getting our own children to university is an obstacle course of high costs and EU competition, now our children have to compete with the whole of the EU for a home; a job abd an University place in the UK - tell the British young what the benefits are of the EU - I can tell you that the Poles ; Hungarians; and Lithuanians are having a great time, but middle class children of indigenous Brits are very worried about their future and the fierce competition required to stay in the UK and get a decent career and pay.

Threats; intimidations; Prohets of doom; fear mongering that seems to be the way the EU gets its way. As far as I am concerned Brexit was a massive day for the average hardworking (and worried) Brit, seeing their country; democracy and way of life slipping away from them. Without even the decency of a vote on giving away our sovereignty the wretched UK Governments and the grasping Statist Eurocrats were all primed to force us into a post democratic world of State servitude - thank God we had the guts to say no. To Say No to the failure of the EU to grow European economies; Manage the Euro; deal with Immigration...we said no to stripping away Democracy and to being bullied by an unrepresentative incompetent faceless monolith based in Brussels.

The EEC has expanded way beyond its competence. We need regulation in markets, perhaps the biggest regulation should have been with China a long time ago - not the third world countries wanting their time in the sun. There is a massive task to keep the Europeans on side with the EU. That will ONLY happen if the EU accept that the British have a valid point; that our concerns were real and shared; that the EU shows humility and rows back from trying to manage 28 countries and for Europe to see Subsidiarity come back to many the disasterous "one size fits all" model of Europe - it doesn't and it must change.

Junker and Shultz need to go; a concilliatory intelligent team of EU negotiators need to meet with the British and the EU need to salvage a deal with the UK that does not punish but seeks to address the reasons why we voted to leave. Brexit could be an epiphany for Europe, if it starts to get nasty then (frankly) Europe will come off worse. The UK will go to the rest of the World and the Commonwealth - with 80% of our economy services and an EU that won't let us have services EU why are we wasting our time with the EU anyway?

The UK has masses to bargain with - but if the EU has any intelligence, it will give us a seamless deal and allowing us to manage overpopulation (use a sustainability rule for the whole of Europe) Any State with more than 400 people per square KM can manage migration - England will then qualify along with the Netherlands - the two countries with the most problems on over population . If the EU want us to keep buying their cars; wine and fruit and flowers they will all make concessions to us. In return we will provide NATO security; provide payments to support the EU and allow the EU to get IMF loans the UK underwrites. Any suggestion that the EU wants to play hardball will result in a massive and unrelenting trade blockade with the Brits refusing to buy anything European in a show of disgust - only an idiot would want that to happen.

I hope with Theresa May and Merkel and good sense and pragmatism we can get through this little local difficulty - afterall the EU had the chance to give us what we needed to stay - their rubbish negotiators blew it - now they have a last chance - to make an enemy out of Britain would be afoolish self harming act of supreme stupidity - I am expecting sense will prevail - we will do the deals that are need to stabilise Europe and we move on.
- Midhat Dzemic Jul 11, 2016
  
  restricted or unrestricted immigration is mainly, directly or indirectly, product of neoliberal policies - this is quite good explained by Mr Stiglitz here. It is not faire to insist on free flow of trade, services and capital, which destroy local production and cause raise of unemployment and poverty, and on the other side look for specific rules for free movement of labor force which is just one production factor among others listed before.
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- Christine Constable Jul 11, 2016
  
  @Midhat Dzemic. I am not sure exactly what you are getting at. No one said that the flexibility of services and people was a necessary element to market liberation, but what is at issue is "unrestricted immigration" as part of the EU the UK has to accept NO LIMIT on the numbers of people who may wish to come and live in the UK. Irrespective of whether we have enough space; ability to house people; or can provide public services. This state of affairs is simply not acceptable, because the quality of life for those people who are indigenous to the UK is now under threat, which means our own children are unable to house themselves; find jobs or access public services. The EU has completely failed to address the theoretical principles in a real world. Clearly when so many EU economies are failing thepressure is then on those economies that are succeeding who suck in the unemployed from across the continent. Brexit was an expression of the deep unhappiness of the people of the UK to be the economic sponge that soaks up the poor and failing from Europe at the expense of their own homeland and the futures of their own children. A most reasonable and understandable concern which is being IGNORED by the EU.
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- Midhat Dzemic Jul 10, 2016
  
  I will not go further through your text, just want to try to understand the rationale behind such statement - unrestricted immigration is nonsense, but free trade and free flow of capital and services are quite faire? In my language there is one wording, it is not for public space, but I am sure in other languages we can find similar ones
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eusebio manuel Jul 10, 2016

Despite all the frustrations European conced should be proberly clarified that the discussions did not know any concept slips and so that can address this more accurately
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Allen Mackenzie Jul 10, 2016

'Brexit was a vote against socialism and a hegemonic bloc, a continuation of the Great Unwinding that began with the collapse of empires after the First World War.''

''The EU is a new socialist order, more benign than empires of old, but akin to them in creating a massive hegemon of centralized political power that attempts to stamp out national interests and free trade''
http://business.financialpost.com/fp-comment/lawrence-solomon-brexit-was-the-u-k-s-vote-against-a-new-socialist-empire
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Robert Merrifield Jul 10, 2016

At last a sensible comment that recognises the fallacy in the argument that immigration is an unqualified benefit to all...

Can we have more economists telling their governments and the press that it is not GDP but per capita GDP that matters to the electorate.
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JAMES BECKMAN Jul 10, 2016

Perhaps the assassination is equivalent to the mismanagement of the Brexit campaign by the PM, although not with apparently bloody conseqences. Now as then, there is an opportunity to undo the likely consequences.
- Christine Constable Jul 10, 2016
  
  There was no mismanagment. The British people have never been asked if they want to be in the EU . Everything about the EU, its failures; wealth transfer; open door immigration policy; incompetence; corruption; waste and failure said all we needed to know about whether we should stay or leave - the British took the only choice we could in the face of a deaf and blind EU - ONE SIZE does not fit all - we asked for help to deal with the problems, we were refused - we voted to leave. Nothing more to say - if the EU cannot accommodate one of its biggest paying nations then it is no good to us or Europe. Brexits negotiations were blown up by the EU not the PM - he did what he had to do to bring calm to a very agitated UK. Shultz and Junkers allowed their very large egos to destroy the UK's commitment to the EU - we saw it for what it was an enslaving and democracy killing project that we had to pay for. We decided we had had enough. If the EU wants to grow up, have humility and come back with a better plan and offer we will consider it, if not then we are committed to leaving whatever the consequence, because to become a hostage to the EU while it plunders our wallet is NOT GOING TO HAPPEN.
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Per Kurowski Jul 10, 2016

Since 1988 we live in a world in which regulators, when setting their capital requirements for banks, have assigned a risk weight of 0% to sovereigns (government) and 100% to citizens, like SMEs and entrepreneurs.

That signifies giving government preferential access to bank credit, which de facto means that bank regulators believe government bureaucrats can use bank credit more efficiently than the private sector.

With this as background, I must say it amazes me that a Nobel Prize winner can write about “the current neoliberal arrangements”

http://subprimeregulations.blogspot.com/2014/05/holy-moly-i-always-suspected-bank.html
- JAMES BECKMAN Jul 10, 2016
  
  A bit late, but I would suggest that the higher rating for government borrowing is merely because they are more likely to repay their borrowing.
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Cary Fraser Jul 10, 2016

It might be useful if the current generation of European leaders were required to read Rousseau's Social Contract prior to embarking upon the reform of the EU.
Just over a century ago, the assassination of the Austrian Archduke by Bosnian Serb nationalists, triggered the First Great War which opened the path for the progressive diminution of European power on the global stage.
Perhaps, the current generation of European leaders also need to reflect upon Burke's admonition: "People will not look forward to posterity, who never look backward to their ancestors. "
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John W. Anthony Jul 10, 2016

A few "close shaves with the National Razor", as Dickens put it, should do the trick.
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Gisela Unbesorgt Jul 9, 2016

"Europe is to be held together by threats, intimidation, and fear. "
I don't agree. If threads towards the UK are uttered, then this is not primarly to force the rest of the EU to stay together, but to prevent other states to become free-riders.
Why should some states pay for the EU and for upholding this fragile construct, when others think they can use it for free and without any obligations.
Either the UK pays or it stays outside.
- Christine Constable Jul 10, 2016
  
  You really have a damn cheek and have very little understanding of what the UK pays for anyway. I would point out that for 40 years the UK has been paying into the wasteful incompetent EU despite the fact we could barely afford its ever escalating costs. Our money built fantastic roads and infrastructure around Europe already - I don't see anyone in Europe thanking us for their investment. The UK provides the lion's share of the NATO assets for the defence of Europe. As far as I am aware we do not charge Europe for this expense, although Germany has saved Billions not having to pay for nay of it. The UK is the largest Aid donor in Europe. While many Europeans don't even give the commitments to foreign aid they agree to give at summit after summit. The UK gave up its fishing rights and ownership of the North Sea, that alone was worth billions to Europe. The UK supports funding for the IMF - the very IMF that has been bailing Greece out, we also have used our good Credit rating to give secondary loans to countries like Ireland, when they fall on hard times. Your mean minded frankly outrageous criticism of the UK is factually incorrect. The UK (one way or another) will end up paying for Europe, because there are far too many impoverished countries all desperate for a handout - as the EU has been so useless at growing the economies of these countries richer countries naturally have to bail them out. The EU is in no position to try any funny business with the UK - we demand fair treatment, we demand that we are not over populated and over exploited, we demand the rights of our people to choose. If the EU cannot provide that then we will be pleased out is out - and believe me the EU economy will nose dive when we turn our backs on people such as you.
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Procyon Mukherjee Jul 8, 2016

Brexit must move on to the next Act, which is re-alignment in Europe and across the Atlantic. When the Sterling reaches a depreciation of 35% plus, we will have serious consequences.

The Professor is right in many ways; the way to come out of the mess is not to make the future even more messy with threats and counter-threats. U.K. cannot gain at EU's loss and EU cannot gain at U.K.'s loss. It is zero-sum.
- Christine Constable Jul 10, 2016
  
  Quite right. ALl we asked for (largely) was to manage our over population problem and security issues but that was too much for the inflexible EU - what is now needed is a massive rowing back to an EEC type of structure as the EU has proved it is incompetent to manage the many and varied economies of 28 countries. Subsidiarity and general shared rules with help to countries who are under stress - it is not rocket science, but is tough for those driven by dogma rather than sense
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lakshma reddy Jul 8, 2016

"Letting bygones as bygones is a basic principle in economics" where do we find this principle and which textbook author?

"End should not be confused with means".well it is so. Free trade is a powerful means to economic prosperity where barriers from freedom of contract and movement and expression is guaranteed in a positive way.but in reality that freedom and free trade in global market is substantially non existent and huge national and local as well regional barriers are restricting the freedoms.

The EU as such though free within its borders for certain purposes is itself a huge barrier for global free trade.this type of regional arrangements though viewed from narrow or practical purposes as either beneficial in some ways to some nations or organisations and burden some for others has its own effects on populations effected and global free trade as a just mean to equal justice and equity to global population.

Therefore I cannot subscribe to an abstract tyrannical national state controlled non transperant fair trade as a means to end when prices are being determined by global market places and so also wages and profits including interest rates and currency values and players in instances where supply demands are choked by cartels.

We need a global economic perspective on the basis of established first principles in economics and vigorously remove all pernicious national or regional political barriers except to protect the life liberty and property of citizens by national governments and then only the haze now howering over several national political battles settle to equilibrium and to global peaceful prosperity.
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Mr Econotarian Jul 8, 2016

Germany, previously "the sick man of Europe" in the 1990's, implemented the Hartz labor reforms in the early 2000's, now has some of the lowest unemployment rates of the EU and it has higher wages than France, Spain, or Italy.

You have the causation backwards. A country with a freer labor market can more easily absorb immigrants because the ease of brining the immigrants into the labor force can allow comparative advantage to raise the pay of immigrants and of the natives. This is basic stuff from Ricardo. Did you go to economics school?

There was an anecdote of a group of Syrian refugees in Germany who were asked to get on a bus to France. They all scattered. No sane immigrant would prefer France with a 10%+ unemployment rate (and much higher for non-whites) to Germany.
- Mr Econotarian Jul 11, 2016
  
  Alex, thanks for your thoughts on those who have Hartz "mini-jobs". I concur that simply having all jobs hire/fire at will as we have in the US would be preferable, and would avoid the mini-job stigma. However you have not convinced me that Germans would be happier if they went back to 10%+ unemployment rates like their neighbors in France have.
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- Alex Lab Jul 10, 2016
  
  Your knowledge of Germany is very low, Mr Econotarian. Along with the Harz4 reforms a low wage job sector was created. May we have a high employment rate, it does not mean people can live on their earnings. Many are simply subsidised by the state. In fact, companies are subsidised this way. A average family with 2 kids can not save up much if at all when living in one of the bigger cities with high rents. Guess who is voting the german populist party AfD? It is not the entrerpreneur even though thats the AfD wishful thinking. It is simply those who have angst to fall into Hartz4, who are either close to or see / fantasize themselves coming close to. Who believe a refugee is treated better than them and gets eternally money for nothing.
  
  To me the Harz4 reforms layed ground to the rise of the populist party. Event the dumbest German by now knows once you are in Harz4 you won´t get out. You might be well educated , have worked most of your life, you are sooner in than out. That´s what econ statistics don´t reflect, fears. And german politicians have not done much to pick up those fears. That´s why so many do mistrust them (politicians) by now.
  
  In short: a low employment rate has simply nothing to do with people´s reality.
  
  Apart of that, your question if Mr. Stiglitz did attend econ school, is a disgrace. You disqualified yourself - not the author - in my opinion.
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- Steve Hurst Jul 9, 2016
  
  @Mr E
  
  Germany benefited from the ECB lowering interest rates in order to help it accomodate reunification
  
  Germany - near half its activity is focused on exports aided by the fact the euro is surpressed by the PIGS, giving it advantage against a Germany currrency outside the EZ
  
  Anecdotes about Syria refugees are not data. Apart from anything else refugees should not expect the right to pick locations they want to reside in
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Mr Econotarian Jul 8, 2016

Where are declining real wages? Go to FRED and you will see US median real wages at all time highs and average real hourly compensation (a better measure because of rise of tax-advataged non-wage compensation) is also at all-time highs.
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Mr Econotarian Jul 8, 2016

In 1961, only 8.1% of US households made $100,000 per year or more (in 2014 dollars). In 2014, 24.7% of US households made $100,000 or more.

Similarly, in 1961, 38.7% of US households made under $35,000. In 2014, only 33.7% of US households made under $35,000 (despite millions of under-educated immigrants arriving during that time).

All quintiles of income in the US are doing better now. It is not just the 1%. Median wages are up, average hourly compensation is up, and unemployment today is no worse than in 1970 despite women having largely joined the labor force since then.

Brexit is about fear of immigrants "taking away" socialist provided schools and education, plus good old racism.
- Mr Econotarian Jul 11, 2016
  
  All of my analysis was in real, not nominal dollars, specifically 2014 dollars.
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- Christine Constable Jul 10, 2016
  
  Inflation? Lack of buying power daft analysis???
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- Steve Hurst Jul 9, 2016
  
  @Mr E
  
  Comparing data in nominal terms over more than 50 years is meaningless
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Barry McHugh Jul 8, 2016

My Incentivise Planet
• FREEZE council rates and charges while, giving % reduction in corp. tax rate for % increase in a corporations employees (eliminate the vast array of piecemeal concession, and if these are stealth-model tax convention circumvention disband OECD and send staff to IMF)
• Break open the pastoral lease problem by promoting corn cropping for cattle feed as in US. Do it NOW by having UN ram it down our throats before it is a geopolitical issue when regional poor see the waste. With waste of land supported on the flimsy premise that we ‘love them hills’ or ‘they’re prestigious properties for the workers on them’ (Go figure the incoming inflation after production cut backs / aged-lazy-lubricated farmers constrain supply). (Would liberals win if they dumped their allegiance / alliance with country party members?)
• Smack banking sector entities who can have 98% of them making losses (US 2000 recession) in place of pursuing the opportunity cost of wheat at 50c a bushel, which is ‘proximate’ with (1) perfect storm of CNY depreciation and USD appreciation and Ergot and PRC can’t ease as softs futures go mad (2) little else out there as with S&P 500 futures and 25 year notes in lockstep there is zombification of the cap markets outside of commodities, etc.
• Dads-mums stop stumping up deposits for kids’ properties and in place do this or have Gov’t incentivise you to do it: - Pay a percentage of the income tax of your children so as to incentivise them to try harder, or try at all. We have medium incomes just $3k to $5k of the sum of big city average rent plus the dole (social security)
• Nobody is reading this far so briefly: Grow global markets by growing low-aged demographic country markets by keeping children alive in those, by incentivising hedge funds to invest in these countries by giving them the numbers, viz: Work a regression of the growth in those poor countries from (1) aid + (2) inwards capital flows and show how that has grown their markets down the track. Contain the hurdles by managing down the tariff escalation and local council gouging that may otherwise constrain the growth in those countries (i.e. Government Sov. Wealth funds could invest in those countries on the back iof managing these hurdles).
Sorry I bored you to death.
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G. A. Pakela Jul 7, 2016

I don't understand the criticism of neo-liberalism, a policy designed to combine the dynamism of free markets with a social welfare safety net. What is the alternative, socialism? Let's take the panoply of 1970s policies such as wage and price controls, administrative pricing setting and regulation of major business sectors including transportation, telecommunications and energy, and monetary policy forced to accommodate the inflation/supply constricting results of those policies. All of these led to increasing inflation, frequent recessions and stagflation. Professor Stiglitz indulges in a crypto-Marxist critique, which is to say all criticism of free markets and no specific, realistic solutions that would lead to a better outcome.
- John Brian Shannon Jul 8, 2016
  
  Hi Mr Econotarian,
  
  And the last time I was in Norway (a true socialist country) they had a $1 trillion dollar pension fund surplus (it's now $1.3 trillion) 2.5% unemployment, 29% debt-to-GDP, ranked very highly on productivity (18th in the world) a very low crime, homelessness, bankruptcy rates, etc. and all residents there receive a free university education (which explains the very low crime rate) and Norway is ranked #1 on the Social Progress Index and #4 on the UN Happiness Index -- and that's just the short list.
  
  (Yes, a lot of countries have mid-sized petroleum reserves, but they aren't performing anywhere near Norway! And as for the countries with larger-sized petroleum reserves, they aren't doing any better. So it's about having the best 'vision' and 'stewardship' and the best 'management' in place -- it's not about the resources. It's about stewardship)
  
  I could make a similar case for other socialist nations, like Denmark (check those stats!) and Sweden, and other socialist nations -- meanwhile France barely qualifies as socialist.
  
  Here's a longer list for Norway:
  
  The highest accumulated budget revenue surplus in the world, worth $1.3 Trillion (held in a sovereign pension fund)
  Strong and steady GDP growth
  Very low Debt-to-GDP
  A #1 to #4 ranking on the UN Happiness Index (varies by year)
  A #1 ranking on the Social Progress Index
  Typically a #1 or #2 ranking on the highest per capita income in the world
  In the Top 5 worker productivity rankings in Europe (and by extension, the world)
  One of the lowest crime rates in the world
  One of the ‘least corrupt’ nations. Ranked #5 on the Corruption Perception Index
  An average 2.5% unemployment rate (except during the global financial crisis where it shot up to 5.5%. Not to worry, it’s already fallen to 3.0%)
  Free university tuition for all citizens and residents
  Free universal healthcare ranked 7th in the world (It would rank higher, but maintaining full-service Hospitals in remote regions with tiny populations is uneconomical)
  Virtually 100% of the country is powered by renewable energy except for some remote settlements where a microgrid (natural gas power) is the only choice
  Unparalleled diplomatic credentials. Everyone knows Norwegians are among the best ‘honest brokers’ in the diplomatic world making Norway the ‘go-to’ arbitrators for nations in crisis
  A favorite country of the Olympics committee having hosted successful games twice in recent years
  
  https://johnbrianshannon.com/2015/12/15/secret-of-norways-success/
  
  Economic theory and opinion are great. Actual results are everything.
  
  Best regards, JBS
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- Mr Econotarian Jul 8, 2016
  
  Last time I was in France, their more highly socialist system seemed to be breaking at the seams with huge protests, strikes, and high unemployment rates.
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jagjeet sinha Jul 7, 2016

Trump and Brexit - both caused by similar circumstances - represent momentous miscalculations.
It seems history is condemned to repetition - no lessons learnt from 1914 or 1814 or 1714 or 1614 or 1514 or 1414.
The Majority overplayed and Meltdowns alone seem to be the solution.
Despite all the wisdom that Nobel minds have consistently produced.
Submit and surrender the preferred method, never mind history lessons.
Greece unable to do what Great Britain always ready to do - and Germany eventually delivers.
The future moves on the chessboard seem evident.
Not looking good...
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Hendrik S. Jul 7, 2016

Stiglitz and Juncker are both from the same generation. Both want to chance the world and be remembered as outstanding doo-gooders. They are so much the same that would probably act like two married people when put in the same room. These guys are actually dangerous people who will be proved wrong in so many ways.
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M M Jul 6, 2016

When central bankers decide to stop bailing out banks and when government ministers and officials decide to grow up and to acknowledge that their main duty is to serve the public (being the citizen) and not the failed state of affairs (being the too big to fail that are “continuously failing”) and to focus their efforts on generating real growth, then and only then can all other long pending issues be dealt with. But with no responsible leadership (the ones that abandon ship at the first opportunity), leadership with differing mind sets, different agendas, total lack of transparency all over the place, there is no hope whatsoever to get anything constructive done and “Anger Voting” shall continue to be the order of the day. A sound trade or the lack of it is only one tiny factor in this whole saga.
- M M Jul 7, 2016
  
  Cheers, JCB.
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- John Brian Shannon Jul 7, 2016
  
  Hi M M,
  
  "...with no responsible leadership, leadership with differing mindsets, different agendas, total lack of transparency all over the place, there is no hope whatsoever to get anything constructive done and “Anger Voting” shall continue to be the order of the day..." -- M M
  
  Although I've paraphrased an excerpt of your comment, I fully agree with your conclusion.
  
  "Anger Voting" will increasingly become "a thing" and wherever votes are held, I expect to see that reflected in the results.
  
  Some nations are immune to "Angry Voting" -- probably because their politicians *are responsible* and *aren't beholden to the 1% and their acolytes* and there is plenty of transparency in their governance architecture.
  
  Norway comes to mind, as do the rest of the Scandinavian nations and Switzerland.
  
  https://johnbrianshannon.com/category/norway/
  
  https://johnbrianshannon.com/category/sweden/
  
  https://johnbrianshannon.com/category/switzerland/
  
  I enjoy reading your comments here at ProSyn.
  
  Best regards, JBS
  A new reply to this comment has been posted.
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Vanishing Leprechaun Jul 6, 2016

Thank you, Mr. Stiglitz, for your reasonable discourse, amid such an awful lot of silliness mixed to lies we have found everywhere.
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stephan Edwards Jul 6, 2016

Don't vote in anger the man says. While this piece is very thoughtful, I will point out some truths that will be very unpopular but perhaps will inspire some thought.

1) Many is of only vote in anger, as a rule of thumb our votes and interests are irrelevant compared to the big donors and corporations not that there is any difference between the 2 groups these days.
2) Democracy is joke and voting is a farce. It doesn't matter which way those in the bottom 40-60 % vote you are getting policies that benefit the rich and powerful anyway. Witness the truly blatant and likely to succeed attempts to circumvent the UK exit vote. It was only advisory they cry we don't have to those who voted out are all ignorant racist peons and should not count. If you want to prove to people watching that Democracy is a farce and voting a joke this should do it.
3) It's amazing how many "experts" will testify straight faced that what is in their rich patrons interests is in the public interest. NAFTA and how it will leave only good paying jobs for americans to move up to ring any bells. Or perhaps the economy is infinite pie not zero sum game ? Of course they then said that due to less tax revenues they were going to cut hospital beds by 20% and staff by 50% but despite the fact that immigration had increased the population needing services by 30% nothing would change. And you wonder why we view "Experts" has being full of bovine fecal matter?
4) Last and perhaps most "Amusing" ! I here all this talk about moral obligations to help Syrians, Poles, Afghans, and so forth. But not a single word about "moral" obligations to the people abandoned in Hull, Sunderland, the US rust belt. Apparently the transnationals have a moral obligation only to foreigners not their own people. You are abandoning us It only seems fair we abandon you and everything you stand for. It doesn't do us a damn bit of good.
- Steve Hurst Jul 6, 2016
  
  @Stephen
  
  Yes I noted the whitemans burden with some puzzlement. A guvnts responsibility is to its citizens not someplace that has asked for and been granted independence. The clue is in the word 'independence'
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david b Jul 6, 2016

I miss your writing at the nytimes. that readership needs your voice of reason on a regular basis. it seems they actively work to avoid discussion of the real issues in order to perpetuate the status quo
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Jose araujo Jul 6, 2016

Professor, very good article again. I would just want to make two points, the first being, are the protestors really against globalization? Do we even care? I think it’s just a populist scheme being used by the two sides of the fence to ignite the speeches, but in reality it’s not a question of principles, nobody, well most of us at least, are really AGAINST GLOBALIZATION on the grounds of superior race or values or whatever. We are AGAINST LOW WAGES, but this seems to be forgotten by all, especially the ones leading the leave side.

The second point is that immigration is after war, the worst thing that can happen to a country. Take Portugal that in this past 5 years lost 5% of its population and 10-15% of the working force.
- Jose araujo Jul 7, 2016
  
  Yes Steven European and Ecumenical, we Portuguese know what’s all that about.. Amazing that actually many of the so called Elites here in Portugal see Immigration has a good thing, go figure.
  I guess it’s our history, when you have nothing more to trade you just traffic human beings, and then come up with shameful explanations like opening the country to new worlds, but in our defense we not only traffic the Africans but also the Portuguese, well I guess that makes you really ecumenical and open….
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- Steve Hurst Jul 6, 2016
  
  @Jose
  But Jose you forget it makes you feel more European and more part of a wide community to be on low wages and have the young, motivated and qualified leave your country creating tax revenue problems downstream
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Michael Public Jul 6, 2016

You come so close and yet cannot cross that line of suggesting a better way.

Mainstream economists have a problem - a conflict of interests - in that their income (salaries, consulting fees, articles etc) comes entirely from the 1% - either directly or indirectly - and so they dare not do anything to go against the grain, regardless of whether it helps or hurts the greater good.

The result of this is that, as a rule, the only ideas forwarded by economists to society at large are those designed to protect the elite.

I think the best thing one could do is to free the economists - in other words - find some way that they can be paid without fear of losing their income. Then they can say what they want to say - and act in the interest of the average joe and not of of the brothers Koch and their ilk.

But who will pay - I hear you all shout at once? Well, that is the question - some suggestions - a 0.1% tax paid into an independent trust, a PBO who feels this is the greater good, a billionaire who genuinely wants to do some good, or some other such thing. No doubt it will not be easy but the reward will be infinitely higher and so we should find a way.
- Jose araujo Jul 6, 2016
  
  @Michael, yes economists are to blame, but economists have allways been on the side of power (namely the neo-classics) but that never prevented the emergence of thinkers like Keynes, Stuart Mill or even Karl Marx.
  
  Most of the mainstream economists (Adam Smith included) like Paretto, have been very vocal about inequalities and the so called class struggle, what happens nowadays is that Media is dominated by the rulling class, the propaganda mechanisms silence all intelligence voices either by design or because they don't have the impact of the tradicional sound bytes...
  
  I'm sure Galileo would be ridiculed by current media, and the panel of experts that would have been set to analyze his claims. And I’m sure Galileo would have been sent to be burnt for the sake of audiences…
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- Steve Hurst Jul 6, 2016
  
  @Micheal
  
  I wouldnt give tuppence for most econmists. In fact tuppence woud be overdoing it
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Gerald Silverberg Jul 6, 2016

“cut off its nose to spite its face”
Nothing new here in EU policy since 2010. It's called austerity.

That said, I doubt that the EU will take a hard line against the UK. It's not in their interest and will not deter populists from agitating for similar referendums in their own countries. The Austrian finance minister even doubts Brexit will happen.
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Steve Hurst Jul 6, 2016

A very fair summary.

Threats will not hold the EU together because the threats have little effect at national ballot box level and will quite likely promote action against the threatening as it is seen as subjugation
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John Brian Shannon Jul 6, 2016

Hi Joseph,

When I read about the EU 'taking a hard line' and 'out means out'... it's all so... 1950's.

I understand. The European 1% and their acolytes in Brussels are hurt that 52% of Britons (2016) and a majority of Swiss (2014) don't want EU membership.

Contrast that meanspirited attitude with German Chancellor Angela Merkel and German Foreign Minister Frank-Walter Steinmeier, who favour a calm, measured, and pragmatic approach to Brexit. Both politicians appear to be the adults in the room (the 'Mother' and 'Father' of Germany, and by extension, of the EU) and it looks good on them.

Regardless of 'hurt feelings' and 'embarrassment' felt by EU mandarins, the global economy must go on.

The EU needs the UK as a trading partner, just as much as the UK needs the European Union as a trading partner.

And sabotaging UK or Swiss egression can only turn out badly for all involved.

I feel sad for (unelected) people who feel the need to punish a majority of voters in two EU nations (so far) in order to intimidate and prevent other voters in other EU nations, from trying the same thing (democracy)

The question is: Is the EU 'The Mob' or is it a democracy? We'll soon see.

I hope the moderate EU voices win. The world is crying out for responsible politics and responsible economic policies.

Always a pleasure to read your fine essays here at ProSyn.

As always, very best regards, JBS
- John Brian Shannon Jul 7, 2016
  
  Hi Jose,
  
  Thank you and no harm done!
  
  I think we do have a similar worldview, but there's no harm in raising questions -- ever!
  
  I enjoy reading your insightful questions about these ProSyn essays.
  
  Cheers, JBS
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- Jose araujo Jul 6, 2016
  
  @John, sorry I didn't understand you on the first place, but I figure we are on the same side. Please accept my appologies
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- Jose araujo Jul 6, 2016
  
  @Jonh, can't you see that you are perpetuating a lie? Greece, Portugal, Ireland, Spain, etc problems didn’t came from unbalanced public accounts nor debt. Portugal and Spain or example, prior to the crisis had well below average debt. Most of the debt we have contracted came from the financial system because the ECB is an aberration that doesn’t perform its functions of central bank and guarantees the health of the European Financial System.
  
  Portuguese, Irish and Greek sovereign debt crisis didn’t came from the excess debt but from the lack of the lender of last resort and the confirmation of the end of European solidarity. By the way, European tax payers paid nothing for the bailout, the bailout instrument didn’t resort to European Taxpayers money.
  
  The root of the problem is that the EZ is not an optimal currency area, the Euro created a “de facto” fixed exchange rate policy with all the problems to the less competitive economy. By perpetuating the narrative you are perpetuating the “eugenic” argument, the race and moral superiority of the north and the need for the sub humans to be told how to behave.
  
  Sorry for the harsh words, but that’s what we feel when you guys impose your truths….
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- John Brian Shannon Jul 6, 2016
  
  @Steve
  
  Re: my response to Jose
  
  I fully agree with you, Steve.
  
  "The euro requires wealth transfer perpetually to GR to function, since this is denied debt and decline can only accumulate in GR. It is true GR has not helped itself and its resultant public relations are diabolical but the fact remains the euro has inherent imbalances which work in favour of Germany." -- Steve Hurst
  
  FULLY AGREED!
  
  Best regards, JBS
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- Steve Hurst Jul 6, 2016
  
  @John
  
  re your response to Jose
  
  The euro requires wealth transfer perpetually to GR to function, since this is denied debt and decline can only accumulate in GR. It is true GR has not helped itself and its resultant public relations are diabolical but the fact remains the euro has inherent imbalances which work in favour of Germany
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- Steve Hurst Jul 6, 2016
  
  @John
  
  The EZ is the beast within the EU, it is central to federalism. It is the wolf used to threaten the sheeple. Adminstrators of the euro then fleece the sheeple, sovereignty then shorn. The idea is to capture the eastern states to avoid them sleeping with the dreaded Russian Bear, an entirely political act, hence economic bribery and corruption and old EU economic decline because economic measures are secondary to overt politcal policy, an objective which requires the suspension of democracy in member states
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- John Brian Shannon Jul 6, 2016
  
  Hi Jose,
  
  Just to clarify about; "Greece needed to be told"
  
  We are talking about 'some economists' telling 'Greek economists' that you can't run deficit after deficit and expect EU taxpayers to pick up the tab.
  
  Is that so harsh?
  
  Why should hardworking EU taxpayers be forced to pay additional taxes, just so that half of Greece's taxpayers can continue to not pay their income taxes?
  
  It's hardly; "Arbeit macht frei" -- and it's more like; "Zahlen Sie Ihre verdammten Steuern." (Pay your damn taxes. We aren't going to be paying them for you, for much longer)
  
  Seems reasonable to me...
  
  Cheers, JBS
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- Jose araujo Jul 6, 2016
  
  Greece 'needed to be told', ....that's the spirit.... you don't have to say nothing more..
  
  When you hold a country and a people and treat them likek 5 years old, you don't need to say nothing more .. "Arbeit macht frei"
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- John Brian Shannon Jul 6, 2016
  
  @Steve
  
  Two very different situations, IMHO.
  
  Greece 'needed to be told' that they were 'running their economy into the ground' -- while the UK has one of the best economies in Europe.
  
  I would further add, that the EZ is a different animal than the EU -- one being an exclusive monetary union, whilst the other is a broader political union.
  
  Also, the Greek situation has other players involved, such as the European Commission (EC), the International Monetary Fund (IMF), and the European Central Bank (ECB) and it's typical is those situations that there might be some amount of jockeying for position going on. All of which can result in mixed messages being released to the media.
  
  It's my observation that Germany is in the EU for the long haul, and is politically mature-enough to realize that the UK landmass isn't going to drift off towards Antarctica.
  
  Germany needs a clear, collegial, interdependent, and symbiotic relationship with the UK (and vice versa) or both will suffer.
  
  Chancellor Angela Merkel 'gets this' more than most, IMHO.
  
  As always, very best regards, JBS
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- Steve Hurst Jul 6, 2016
  
  @John
  
  'German Chancellor Angela Merkel and German Foreign Minister Frank-Walter Steinmeier, who favour a calm, measured, and pragmatic approach to Brexit'
  
  Come on John, this is the Merkel who hung Greece out to dry and moved private German bank exposure onto EZ taxpayers. Germany will do whatever it can to keep the EZ together that bit longer and if that means hanging the UK out to dry then that will happen. If it means for some reason playing nice then that will happen
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