Politics

Lessons from the Anti-Globalists

May 1, 2017 Joseph E. Stiglitz

The likely victory of Emmanuel Macron in the French presidential election has elicited a global sigh of relief. But it would be a mistake to conclude that discontent with the global economy has crested.

NEW YORK – The likely victory of Emmanuel Macron in the French presidential election has elicited a global sigh of relief. At least Europe is not going down the protectionist path that President Donald Trump is forcing the United States to take.

But advocates of globalization should keep the champagne on ice: protectionists and advocates of “illiberal democracy” are on the rise in many other countries. And the fact that an open bigot and habitual liar could get as many votes as Trump did in the US, and that the far-right Marine Le Pen will be in the run-off vote with Macron on May 7, should be deeply worrying.

Some assume that Trump’s poor management and obvious incompetence should be enough to dent enthusiasm for populist nostrums elsewhere. Likewise, the US Rust Belt voters who supported Trump will almost certainly be worse off in four years, and rational voters surely will understand this.

To continue reading, register now.

Subscribe now for unlimited access to everything PS has to offer.

As a registered user, you can enjoy more PS content every month – for free.

Already have an account? Log in

Secure your copy of PS Quarterly: The Year Ahead 2023

Our annual fourth-quarter magazine is here, and available only to Digital Plus and Premium subscribers. Subscribe to Digital Plus today, and save $15.

Subscribe Now

Joseph E. Stiglitz

Writing for PS since 2001
318 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), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is a member of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.

The Making of Macron
Philippe Wojazer/AFP/Getty Images

Politics 11

The Making of Macron

Dominique Moisi celebrates the candidate's likely accession to the French presidency, and assesses what comes next.
Trump’s Quixotic Energy Policy
Chesnot/Getty Images

Sustainability Now 8

Trump’s Quixotic Energy Policy

Javier Solana thinks Trump's efforts to save a dying industry will end up undermining US energy independence.

new comment has been posted. new comments have been posted.

0 Comments on this paragraph, 101 Comments on this article

Barry McHugh Jul 19, 2017

Isn't it weird that nobody ever ever ever talks about globalising finance. If China, India and South Africa combined their financial centres and ?currency-pegging? into one giant deep and liquid financial centre with its own clearing architecture, there would be no capital flight concern, ample capital and super low interest rates over the long term. FIRE sector / come financialisation / come rent seeking external capital centres would 'stop the bleed(Africa)' and CI SA would have the resources to smack underinvoicing problems hard. DREAM a little Joe.
A new reply to this comment has been posted.
Mauricio Duran-Loriga May 27, 2017

Look, however we all want to eat veal at every luncheon, nobody volunteers to perform the role of the cow, so something's got to give.

The US, Europe, LatAm, Russia, China, Japan, the Gulf drillers, are all packed on the same supply side of the global boat !

All these drunken sailors need colossal trade balance surpluses together with colossal gross national savings growth on a permanent (!) basis to finance (cancer-like) growing mandatory welfare state policies. Not gonna happen folks.

The vicinity of the barn will endure unwelcome developments.
A new reply to this comment has been posted.
Robert Coleman May 23, 2017

Britain's problem is not globalisation. It's problems arise from failure to listen to its electorate and political mismanagement. Over the years the professions have been undermined and devalued. Every opportunity has been taken to lessen the achievements of professional people and to pay them less and reduce their market share by ever greater competition from corporate organisations established to muscle in on the market. Working people's unions have been emasculated allowing pay to fall continuously in real terms and when cheap labour became available, many people simply opted to stay on benefits rather than to work for such low wages. The wages are still attractive to some Eastern Europeans, hence a rise in immigration. Despite the attempts to blame all this on Europe, the British political class is solely responsible. Professor Stiglitz is right; ignore your people at your peril. They may force destructive change like Brexit if they cannot make it in the world their leaders create for them.
A new reply to this comment has been posted.
Subhash Garg May 19, 2017

Peaceful democracy and rule-based globalism are the exception in human history, not the rule. They haven't existed for even a century. The odds would seem to be in favor of a regression to the colonial era with mammoth imbalances between countries and a nexus of military power and commerce. In other words, anti-globalism may be nature's rule.
A new reply to this comment has been posted.
Craig Nelsen May 16, 2017

AN economist, an accountant, and a mathematician are applying for the same position. The interviewer asks the mathematician "How much is two plus two?"

The mathematician looks surprised, "well , four of course."

Next the interviewer asks the accountant the same question. The accountant says "The answer may fluctuate depending on other factors, but it will always average out to four."

Then the interviewer asks the economist "How much is two plus two?"

The economist looks around, then leans in close to to the interviewer and whispers "How much would you like it to equal?"
A new reply to this comment has been posted.
Craig Nelsen May 16, 2017

"The idea that voters will turn against protectionism and populism of their own accord may be no more than cosmopolitan wishful thinking."

...especially in the face of such obnoxious let-them-eat-cake sentiments from our betters.
A new reply to this comment has been posted.
SALVADOR RIOS May 15, 2017

Trump’s style and philosophy are disruptive, as were disruptive many facts that predicted the fall of the Roman Empire, or as disruptive have been the rise and fall of many civilizations. It is not that he wants to put some things to work in a more efficient way, to improve business as usual.
He has given start to a process of substitution of an over matured and semi decomposed system called the present global economy, and the political pacts, friendships and chains that support it.
Being a blow given from one side, from western civilization, to this over matured fruit which represents us all, humanity, one could ask if it is consistent with some other blows of the moment, and curiously enough, it could then be said that Islamic terrorism classifies as having the same purpose. It could be then that Trump, Brexit and Isis are different views of a snake (or a cockroach) trying to change its skin (or exoskeleton), that is, of an integral process.
Minutes before any civilization fell, there were institutions, philosophers and wealthy people giving praise of its wonders and criticizing change. Could it be now the case of WTO, WB, IMF and EU bureaucracy, and some PJ specialists?
If more and more persons ask to open a window of an overcrowded room, even in midwinter, at some moment any exalted group will knock down the door and everybody will ran out. You cannot know what will happen then.
Nevertheless, we can praise the wise oriental salute: may you live in interesting times.
A new reply to this comment has been posted.
igor vidmar May 14, 2017

"It's a lesson US and Europe must now learn". ?
Please excuse me, but W h y exactly "must" they learn this lesson- and who are "they"? If, as is implied- they -"the advocates of globalization" etc., are the US and Europe elites/ruling classes( sorry for the Marxist expression) , this is much less than obvious:
they are doing very fine by Trump, and Macron has a similarly business/elites/neo-lib globalizsation-benefiting- albeit nominally more "social" program ,as befits teh country of "egualite...". The irony that dr.Stiglitz - the lucid analyst of EU/euro malaise -strangely doesn't seem to appreciate is that the
"elite"etc. in EU means primarily German elites/Germany as the strongest economy.
So- as others have said- Macron's attempts to reform France's economy as Mr.Schroeder has done 15 years ago can very well result in LePen winning in 5 years time , both because they will be belated, and of course because French working and unemployed "non-elites" take a very dim view of the "social pact" that had enabled the "German miracle 2.0". With all due respect- It does seem to me that dr.Stiglitz somewhat omits the "political" from his "political economy" of the France/EU... predicament....
A new reply to this comment has been posted.
george sos May 14, 2017

If the economists and those who exploit the system stop for 1 moment and think...beyond their own backsides.
I m not asking for self sacrifice here.But it is one thing to be a vulture and steal common wealth,from all the rest of human kind,and it is a far worst thing to instead of just stealing and shuting your mouth,you add insult to injury,pretending economi9sts still know anything about the future!!!!..
If i was god for a day,i d eliminate fromthis planet the 1% and their lackies..Then we can start a new system,based on the loessons learned (capitalism sucks,cpommunism the same,so we need new ideas.Not temporary thieves.Not investors who only want profits at all costs and no risks...
If honesty and fairness does not find its way back in our society i see dead people.
A new reply to this comment has been posted.
Manu Oquendo May 11, 2017

The current paradigm in power uses rhetoric for lack of real arguments. As such it labels as "populism" whoever is out of the paradigm. In the meantime we are fed, through the most oligopolistic mass media in history, orthodox lies and obsolete recipes.
Globalization cannot work because of fundamental reasons and in any event it would need "the end of democracy" to be able to hide its many structural shortcomings. The left goes along with globalization because it suits its totalitarian agenda. In favor of Globalization we have the Empire on one hand, and Totalitarian Power Ideologies on the other.
Guess where does Mr. Stiglitz stand.
Regards
A new reply to this comment has been posted.
Ben Leet May 9, 2017

Maquiladora factories pay $8 a day, located walking distance to the U.S. border. Mexico has the highest inequality in the OECD, next to Turkey. The lesson here is about "shared prosperity", but at $8 a day and not moving anywhere but down, we will never have a shared prosperity. The left has to at least mention the low wage, poverty inducing system in the world, and then prescribe remedies. Borders do matter -- how many millions of Chinese would pour into the U.S. for the price of a freighter transportation across the Pacific, if not for border restrictions? We need labor and environmental rues that raise standards and wages -- they must be harshly enforceable. Stiglitz makes good points about the right wing paranoia, but fails to mention, at least the mention would help, the solutions. National household net worth is now about $740,000 per, but only about 15% are average or above, and half of households own only 1% of total net worth. Can we put things into focus? Inequality is strangling our social accord, nationally and internationally. I write the blog Economics Without Greed, http://benL8blogspot.com.
A new reply to this comment has been posted.
François Dupont May 9, 2017

Just half of the job has been done in France, because if French choised a lucid and competent President, the second an as important election taking place now, the Legislative one, carries many dangers. One year ago appeared a new political force in the french lanscape, En Marche. With 260.000 members, it succeeded to install Macron at the Presidence of a Vth Republic, which in hands of guys like Mélenchon or Le Pen, could have provided the destabilization of France and Europe. This danger is out, but now still exists the danger to wreck quickly the Macron's project to refundate french and european democratic lifes, as all ancient government parties ans extremists ones have the objective to make of the french parliament an oponent to the french executive. If the case, in a few months France will renew with the sad face of a blocked and destabilized nation-State, once again.
So all democrats all over the world must consider that Macron's election is just a half victory to provide tomorrow another face to Brussels power, what is a necessity for French, for all Europeans, for the rest of the world.
Actually, stabilizing the global finance and monetary order of the world necessitates a deep reform of UNO, and precisely replacing wobbly EU by strong and democratic USE provides the occasion of such a reform of UNO statutes. The Stiglitz report of 2009 can just be more than a clear roadmap to securize the world's economy, when applied at this scale. We can also only jump out the competition of REPC and Tafta-Ceta agreements with the same refundation of missions and functioning of UNO.
What happens if the EZ becomes tomorrow the USE ? All the UNO has to be reorganized, and even China won't be against, we can guess. It's the irresponsible vision of 28 of the richest States of the world of their own sovereignties that forbids to achieve a sane and robust construction of political Europe, a major actor needed to turn UNO into a real governance actor for all what human beings have in common.
So the french election isn't finished to let intergovernmental UE let place to a federal State of Right project being discussed. If french executive and legislative powers work hand in hand, the motricity explained very clearly inside the Macron's program offers to the refundation of Brussels power a large part for 5 years and not for 5 months.
2017 offers also to german voters to choice between a tired and timid pro-Europe chancellery for the past decade and a very dynamic one if, eg, Martin Schulz could be chosen.
Nothing is won, but nothing is lost to restart the project to turn the page of neoliberal Europe and open the page of a political responsibility of Europe both at home and on the world scene. So, it's clear that USE cannot promote either tomorrow protectionism or wild free exchange, but a regulated evolution of world capitalism.
A new reply to this comment has been posted.
Nizar Hassan May 8, 2017

Albert Nasr's comment on this is very central - journalists should read it before writing more pieces using the term "globalisation" so casually.
A new reply to this comment has been posted.
Stan Sorscher May 7, 2017

Only economists say "winners can compensate losers." No one else does. Certainly winners don't. The purpose of winning is to win, not compensate losers.

Joseph Stiglitz made this point quite clearly, years ago, when he characterized the book "Winner Take All Politics" as the other bookend to his own writing on globalization.

Let's have Hacker and Pierson talk about solutions.
A new reply to this comment has been posted.
harry wilkinson May 7, 2017

Stiglitz as usual strike the nail on the head . The problems that exist with globalisation revolve around the fact that the benefits have accrued to the few rather than being much more widely distributed as they should be . Until this changes , as Stiglitz points out there will be a continual movement towards any political movement which promises change . If allowed to continue , we can look for an economic apocalypse once again .
A new reply to this comment has been posted.
Joop Klinkhamer May 7, 2017

So funny, that only the Scandinavian countries are mentioned in this context. What about the Netherlands, Belgium, France and Germany?
A new reply to this comment has been posted.
Alexandros Aslanidis May 7, 2017

My question is this:

If the government of a country that runs chronic trade-deficits doesn't impose tariffs, but instead applies an austere fiscal policy in order to restrain demand and force up the savings rate (much along the lines of what Germany and China are doing), are the globalists okay with this?

Because if they are, this will depress global trade as much as tariffs are.
- M M May 7, 2017
  
  Alexandros, your question should be a statement and is fact, the problem is that they chose not to see it or to even acknowledge its existence!
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Louis Stouch May 7, 2017

In a few years, when we've brought back thousands of jobs vfrom overseas, it will be wonderful to hear Stiglitz eating his words. Until then Joseph, I feel your pain. And I relish it.
- M A J Jeyaseelan May 7, 2017
  
  Beggar thy neighbour strategies have never worked in the past nor will it work in future. It is myopic to believe that a high cost economy can be sustained solely with the help of domestic demand. The real solutions to the US economic ills is in boosting its global competitiveness. There may be short run gains from deglobalization but these would be wiped out thereafter plunging the US economy into deeper problems
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
M A J Jeyaseelan May 7, 2017

There are always two primal forces of 'individualism' and 'collectivism' at work all the time and drive all socio political thinking. This applies not just to individuals but also to countries.

Brexit as well as 'Make America Great Again' are pointers to the rise of individualism among nations. What people do not anticipate well is that the clamour for individualism would not end with the breaking up of regional groupings. It might lead to breaking up of countries too as it had happened in Eastern Europe.

While events in France might not go the American or British way, there is hardly any room for complacency because the problems that triggered the events in the US and UK are real. Globalisation cannot thrive at the cost of local jobs and welfare in the member countries. Every regional and global grouping must work to ensure that the collective arrangements do create wealth and welfare in member countries to a greater degree than what each memer could achieve on its own.

Unfortunately, most regional and global groupings are still being manipulated through the same old beggar thy neighbour strategies that characterised previous trade regimes. I do not think that it is fair make the benefits that a member derives from regional or global groupings depend upon their respective negotiating skills. Fairness must prevail irrespective of the negotiation capacities and skills. Until this happens, globalisation will always be under grave threats

It is also very important to plug the deficiencies and loopholes in the regional integration and globalisation mechanisms. Most regional groupings lack the capacity to identify and address the emerging local problems in member countries.

Most of these regional organisations lack the knowledge infrastructure required for taking simultaneous view of the macro and micro perspectives. This is the reason why countries that are left to fend for themselves in the area of micro problems find macro conditionalities of the regional arrangements very stifling.

Globalisation can succeed, as it should, only if they put in place the necessary knowledge infrastructure for ensuring that their macro decisions do not go against interests of the local microcosms.
A new reply to this comment has been posted.
TS Low May 7, 2017

In one paragraph you deride the "us versus them" agenda of populist politicians and their followers. Yes your policy prescriptions are about redistribution and compensation for the disrupted "losers".

This is the heart of the matter, that liberal and progressive policies require massive redistribution and therefore MUST adopt an "us versus them" mandate forthrightly and unequivocally. To say otherwise is deceptive. An elite with too much title needs to have that privilege stripped without compensation, to effect the changes advocated. The current structure IS binary, so by definition, it already is "us versus them". Stiglitz's solutions dodge the necessary remedy.
A new reply to this comment has been posted.
Thaomas H May 7, 2017

Nicely said, but the "compensation" of those left behind by technological change and globalization needs to take the form of faster growth and tax-financed redistribution, not only re-training and a stronger safety net.
A new reply to this comment has been posted.
A Historian May 5, 2017

Stiglitz is dishonest and worse on migration. It's not true that for "3/4 of a century" our elites openly admitted they were working for a "global economic order, in which goods, services, PEOPLE, and ideas could move more freely across borders." If they had, US voters would have rejected the prospect. In 1945 the US had its most restrictive immigration regime ever, and most Americans were glad about this because they remembered the extreme economic and cultural polarization caused by mass immigration from c. 1870s-1924, especially after the frontier closed (around 1900), agriculture continued to mechanize, and native lower-skilled labor had fewer options outside labor-glutted urban areas. Our elites from 1945-1964 admitted they wanted to open up TRADE but were honest and pragmatic about NOT reopening up the US to mass unskilled immigration because they acknowledged the costs of the latter. Then elites pushed the Immigration Act of 1965, whose long-term effects they were dishonest about, then they started enabling mass illegal immigration in the 1980s, most of it lower-skilled, then they lied about the 1986 Immigration Act: that it would end illegal immigration when in fact it more than tripled illegal immigration, most of it largely lower skilled labor that suppressed real wages by driving up lower-end housing costs. And they continue to be dishonest about the fiscal costs of immigration : that overall American-headed households currently subsidize immigrant-headed households through means-tested welfare and other state, local and federal transfers (see Academy of Science study), due in part to the over-all lower-skilled levels of current immigrants to the US and in part to the free-rider problem (immigrants overall pay less in the system since the 5 year ban on welfare use is inadequate and does not apply at all to "refugees"). More recently they have become dishonest about even higher-end immigration, with the result that Americans have been forced to TRAIN their H1B visa replacements, which under elites' original promises to limit such visas to positions no American can do, would not have happened. Stieglitz does not want to admit that elites use immigration-induced labor surpluses to their economic benefit and try to buy off those harmed with an inefficient, unfair, independence-killing, and humiliating welfare state, and that while this so-called "trade-off" may work well for elites it does NOT work well for those whose lives are disrupted, ruined, and sometimes even terminated (see Remembrance Project) by high levels of lower-skilled and culturally alien or even culturally-hostile migration.

Like so many economists Stiglitz does not want to admit that PEOPLE unlike goods are not interchangeable parts; that cultural values matter. They refuse to acknowledge the enormous costs--especially on women and children--of bringing in large numbers of culturally hostile migrants who publicly assault women and children as they do in their own societies--a problem that criminal justice systems will never adequately address because of the difficulty of effectively prosecuting such acts. They have no real solutions for those whose lives were ruined by gang rape and sexual trafficking of minors on an industrial scale (see Rotherham, Rochdale etc ad nauseum) because in their mind people have no cultural values that matter, being merely interchangeable parts of a machine. They have no solution to the San Bernardino or Orlando or NIce or Bataclan massacres, because they do not want to admit that people would ever harm Western peoples for such non-rational reasons as religious ideology or cultural hostility...
A new reply to this comment has been posted.
Victor Douglas May 5, 2017

As disturbing as Trump and Le Pen are, they stand head and shoulders above the Chavez/Maduro regime in Venezuela, a regime which Stiglitz has praised even as it has plunged that country into hunger, despotism, and one of the world's highest murder rates, in a country that could have been the Norway of South America. (And oil prices are still well higher than when Chavez took power -- poverty there is entirely the result of the deliberate destruction of private industry, with car plants, flour mills, and bakeries shut out of official greed and just plain malice.
A new reply to this comment has been posted.
Albert Nasr May 5, 2017

There are two misleading notions propagated by the globalist literature: The first is the use of the term ‘globalization’ in instances where the term ‘globalism’ – or more appropriately ‘global statism’ – ought to be used (no minor semantic matter), and the second is the charge that opponents of globalism are against the fusion of activities and aspirations that make the oneness of humanity.

On the latter point, no words ring more forebodingly pertinent than those of J.M. Keynes, uttered more than eighty years ago: “Ideas, knowledge, art, hospitality, travel – these are the things which should of their nature be international. But let goods be home-spun whenever it is reasonably and conveniently possible, and above all, let finance be national.”

Globalism is primarily an ideology; globalization is a process. As a process, globalization is neither a historical imperative nor is it necessarily a vector of progress, and its opponents are certainly not retrograde nationalists who embrace völkisch ideas.
A new reply to this comment has been posted.
Yoshimichi Moriyama May 5, 2017

Globalization is to be subdivied into lesser particles like a molecule and an atom. I learned in my high schoold days that a molecule could be subdivided into atoms, and that an atom was devisible into electrons, neutron, protons. The teacher also said electron, proton and neutron were the basic, smallest and undevisible units of matter and therefore of the universe, though crazier guys divided them into smaller particles. I gave up learning about them because it required advanced mathematics and because I did not want to go mad like Heisenberg. But the important thing is that an electron is negatively charged and proton positively charged. Likewise, a lot of desires go into the making of what we call globalization. Capitalist greed is one of them. It often dresses itself up in a cosmopolitan attire as Mr. George Solos did in this blog.
A new reply to this comment has been posted.
Stamatis Kavvadias May 5, 2017

In my opinion, Stiglitz argues that liberal forces (i.e., those supporting "liberal democracy") should react to the rise of extreme right-wing populism. He considers the former "democratic" and the latter not. He considers the rise of the extreme right-wing is the fault of conservative liberal powers (which, arguably they were in the case of Cameron and BrExit), or "status quo policies" as he calls them.

He suggests "the Scandinavian model" and policies for social support, as the counterweight that "liberal democracies" of free markets can raise, against protectionism that "closes the borders" to movement of people, ideas and (lets not forget) cross-border investment. He suggests that, if the status quo evades this need, "liberal democracies" risk to regress, in the hands of extreme right-wing (national and internal) polarization.

Of course, the problem is that Stiglitz says *nothing* of the super-rich that "liberal democracy" creates. He expressly targets only the redistribution of new (supposedly increased) national income.

Stiglitz says nothing of half the world's wealth sitting in the hands of only 62 people: we should distribute the rest, as it grows!

He says nothing for the *public* money given as *free lunch* (I believe many like the term "moral hazard" here --I don't: it's plain unfair!) to stock markets and directly to big companies, through QE programs growing asset bubbles.

He says nothing of taxpayers --and mostly the poorest of them-- bailing out the banking system. And he says nothing of the next crisis expected in less than a decade.

In my opinion, there is clear need for *wealth* (not just income) redistribution. This ought to be the end of "liberal democracy".

As a friend says, we do not need more policies of social support; we need more democracy. Real democracy!

In my opinion, this will lead to polarization, but it will not be national or anti-migrant (that is an artefact of oligarchic politics of ideological TINA and lack of political proposals for fairness). It will be a polarization among those that believe that there should be no limit to economic freedom and those that think that economic freedom of anyone should be strictly limited, if it means the economic enslavement even of one!
A new reply to this comment has been posted.
bob josephs May 4, 2017

Those who have prospered from globalization will not easily give up those gains. They are few in number, but they control the levers of power in DC, finance, media, and culture. In fact I have read in a National Review column how the displaced white blue collar worker of the Mid west deserve their fate. That is not much different what you might hear from a progressive Californian. The losers in Globalism know their fate won't be much different than the mostly minorities they see in public housing using EBT cards in stores. They know , despite the promises, that will be their fate and likely their children as well. The winners in globalism, both progressive and conservative, think they deserve what they have. The truly wealthy will push to have the middle class and merely affluent to pay the bill with income taxes, but leave accumulated capital untouched. The choice is either protectionism or pay up.
- Stamatis Kavvadias May 7, 2017
  
  Quit right, but whether protectionism will be in the direction of national and anti-migrant polarization, or in the direction of fairness for majorities is quit important. And the latter cannot be addressed by extreme right-wing candidates.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Paul Daley May 3, 2017

Stiglitz needs to take more careful aim, if he means to protect a rules-based system of international. He should be targeting the authoritarians at the world's central banks who have used their powers of seigniorage to drive a wedge between asset prices and underlying income flows, and to protect property owners and capital income at the expense of others. It would have been very surprising had there not been a political reaction under those conditions.

The FED now seems at least conscious of its earlier mistakes although it will be the last to issue any mea culpa. The world has paid the price over the past three decades for leaving capital account management in the hands of unconstrained national authorities. That needs to be addressed.
- M M May 7, 2017
  
  Stamatis, if Stiglitz, Varoufakis or even yourself were right, Greece and many countries around the world would have been a real paradise. What people instead got is a current Venezuela...
  A new reply to this comment has been posted.
- Stamatis Kavvadias May 7, 2017
  
  PD, MM, DH,
  
  I feel you embrace a fallacy that central banks would have decided differently in cooperation, or that politicians would have decided differently. It's a fairy-tail. There is no medicine for "unconstrained national authorities," because all national authorities, starting with political/legislative authorities, are corporation and economic optimization proponents and there is strictly secondary care for peoples, plus *no care at all* for any concept of fairness.
  
  The problem is political and Stiglitz puts it correctly. It's just that there is no way that the rules-based international order that is based on """free""" markets, can be organized in terms of fairness. The rules of this international order are clearly wrong for fairness. It is clear that assets as the base of the money system creates super-rich and pushes any losses to taxpayers (or depositors now, in the EU). The money system cannot support fairness and Stiglitz tries to defend it around fairness....
  A new reply to this comment has been posted.
- M M May 3, 2017
  
  Paul, you hit the nail straight on the head. These are the real culprits, from the days of Greespan until today..
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
j. von Hettlingen May 3, 2017

Joseph E. Stiglit believes the UK and the US have something to learn from the Scandinavian countries, whose citizens have coped quite well with globalisation. In the UK and the US, many claim they don't benefit from growth generated by global trade, putting the blame on free movement of capital, goods, services and people for their loss of jobs and dwindling incomes.
Beating the drum of Euroskepticism, anti-globalisation, anti-immigration etc. the rhetoric of France's far-left candidate, Jean-Luc Mélanchon and the far-right firebrand, Marine Le Pen is a reminder of the Brexit referendum and Trump's presidency in 2016. Ahead of the second round run-off on May 7, the centrist candidate, Emmanuel Macron will not have the votes of protectionists and nationalists, that make up some 40% of the electorate. Even if he beats Le Pen, he will have to tackle the grievances of those, who don't vote for him. Youth unemployment rate is staggeringly high - some 23%.
In France, apart from economic malaise, which many blame on globalisation, national identity and culture play an important role in Le Pen's xenophobic slogan - "On est chez nous." She argues the French no longer feel themselves at home, as globalisation destroys their community, erodes their values, and brings lots of foreigners into the country, who have different cultures, languages and religions.
The author suggests a Scandinavian-style welfare model to stave off populists, because the "costs imposed by such politicians are high for all of us, even if they do not fully achieve their protectionist and nativist ambitions." Trump and Brexit leaders showed how populists achieve their goals - "they prey on fear, inflame bigotry, and thrive on a dangerously polarized us-versus-them approach to governance." Trump has already divided America and "diminished respect for the presidency." Le Pen - if elected - would take France out of the Eurozone and the EU, posing a huge threat to the European project. Despite high levels of equality, low unemployment and sophisticated social services, right-wing populism - in form of xenophobia - has been on the rise in many Nordic countries.
Fiscal conservatives in the UK and the US disparage the Scandinavian welfare model, calling it socialism: "progressive policies, including strong social-welfare programs, job retraining, and other forms of assistance for individuals and communities left behind by globalization." If poverty persists, "Trumpian politicians may become a permanent feature of the landscape." However, once right-wing populists assume power, they do little to reduce income ineqality and close the wealth gap. Often their policies - to create jobs and services, while cutting taxes - aren't realistic.
Within the US and Europe, anti-globalisation is widespread, largely because it is seen as a threat to jobs and livelihoods, hollowing-out of the middle class. Not only have blue-collar workers lost their jobs to foreign competition and automation, many white-collar jobs are being outsourced too. At the same time, immigrants are flooding into their countries, partly due to political turmoil and economic meltdown elsewhere, partly heeding the call of big companies.
While Scandinavian countries have an efficient welfare system, they also promote a strong sense of civic engagement. But in the UK and the US, where there have been big changes in family structures, poverty is prevalent among unemployed, divorced and single parents. Yet the state traditionally resists intervening in domestic life, leaving the socially vulnerable to their own devices. Cynical opponents to social welfare can say, the needy have the choice - they can choose between laissez-faire and state paternalism.
A new reply to this comment has been posted.
Jonathan Willinger May 2, 2017

The evidence on the efficacy of retraining is not very encouraging. And permanent welfare is not a solution - jobs have meaning in people's lives in ways that go beyond the paycheck. A better path for progressives and liberals is to back away from the extreme form of globalization that has developed over the last period. We can determine what forms of globalization are beneficial to society as a whole - and not just beneficial to a small number of elites. Interesting that do many so-called Keynesians view trade as an unalloyed positive; Keynes did not share that illusion and his proposal to limit trade surpluses and deficits through currency controls has proven prescient indeed.
- Stamatis Kavvadias May 5, 2017
  
  @Dik Hed
  
  I want rules on maximum relative wealth and no work ethics. You seem very concerned about the people at the bottom not working and not concerned at all with people not working but living of the rest of us, by extracting rents.
  A new reply to this comment has been posted.
- Steve Hurst May 5, 2017
  
  DH
  
  Unfortunately studies show that there is a most effective point on the graph of hours worked per week for an employer and it is around the conventional concept of full time working. Less hours is less effective on tasks and more hours brings in a performance drop due to tiredness. It points to part time working or job sharing being difficult to implement
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
simon jeanes May 2, 2017

Hi, groups in the lower 6 deciles have already been left less well off. We need to address the price the top 4 decile, should and still need to pay to rebalance some form of fairness , giving tax breaks to the capitalists hardly ever filters down to the majority. People in power tend to want more power. So care generously towards those in need, more than relying on ' supply side economics ' to do anything but increase inequality!!!! Trump and many others are obsessed by tax breaks for the top 4 deciles , dangerous social upheavals can result, as history can testify to!
A new reply to this comment has been posted.
Victor Morris May 2, 2017

Just like "Uber" and "Air Band B" we need innovation in every outdated way we think, work and insure our current methods. The clash of civilizations make it mandatory.
A new reply to this comment has been posted.
jagjeet sinha May 2, 2017

THE NEW HONGKONGS
All Politics is always Local.
Global Capital Flows always change Economic Geography - but Globalization has always remained a blessing.
Until the deleterious effects are felt at home - either manifested as Social Inequalities or Regional Inequalities.
Perhaps the most blatant lessons on Regional Inequalities resulting from Global Capital Flows are to be found in China and India.
Given the Twin Civilizations have thousands of years of history - their Population concentrations are in The Heartlands.
Global Capital Flows is usually centered on The Hongkongs - New Enclaves of Wealth created by Globalization.
The resultant Migration to The Hongkongs from The Heartlands is Unlimited - until similar enclaves of Global Capital Flows are created.
New Hongkongs within The Heartlands have to be financially engineered - The Chongqing Model - to mitigate the Migration pressures.
Without One Language - in the face of Internal Migration of One Billion from Rural China - assimilation would be impossible.
China now has created 15 "New Hongkongs" - larger than the first Hongkong - bringing benefits of Globalization to The Heartlands.

The answers that Macron Mandate must find is indeed Shared Prosperity that Stiglitz suggests.
Regional Inequalities - the cause of Unlimited Migration - need to addressed so the Globalization benefits percolate.
Depopulation of Regions - Portugal Poland Italy Spain Greece - is proof that TRANSFER UNION is needed.
And if Germany does not deliver - perhaps the German electorate is against - then obfuscation is no longer the answer.
The number of Italian Migrants in Britain now nearly the same as Polish Migrants - soon both will be heading for France n Germany.

Brussels is impervious - so long the Brussels Bureaucracy gets its biscuits - as The Migration pressures are diverted to London Berlin Paris.
Brussels is best compared to Delhi - both are Fake Capitals - so long the biscuits come home, the Proletariat can live on cake.
Beijing is Real Capital - that financially engineered The New Hongkongs - that responds to The Proletariat.
A new reply to this comment has been posted.
M M May 2, 2017

It is surprising that the left machine did not support Melenchon during the 1st round and surprise surprise, no project fear this time round from any source, no fear mongering by the media, total silence from the IMF & Co, no campaigning on the side of Macron by the German establishment (Merkel & Co), yesterday Varoufakis endorsed Macron and soon we are to read an article from him on PS on how good Macron was to him, etc...
- simon jeanes May 2, 2017
  
  Sure!!! But is this really surprising, we have known for some time now that Macron, was almost certainly going to be one of the two. Fillon was a wounded candidate the right nationalist sentiment probably always indicated Le Pen, the natural orthodoxy , would be to promote Macron. And yes I think in hindsight if the left had come together,there could be a leftist leaning candidate. But now I know there is only one choice, and it's NOT ,Le Pen !!!!!!
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Filip Stefanovic May 2, 2017

1) As many wrote, "enabling" is very different from "ensuring".
2) Shouldn't we open a honest debate about whether it is more relevant to "increase economic efficiency" or to make sure that no "groups - possibly large groups" are left "worse off"? What is more relevant? Who serves whom? The people the economy, or the other way round? I have my own preferences.
- simon jeanes May 2, 2017
  
  Hi, surely we have an economy that can provide both, not having to choose between one or the other? With technology increasingly making jobs and occupations redundant, this is the time to seriously consider basic incme !!!!!¡ x
  A new reply to this comment has been posted.
- simon jeanes May 2, 2017
  
  Hi, groups in the lower Deciles have al
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Chandrashekar Tamirisa May 2, 2017

Has the post-1989 globalization led to development? Only in protectionist China did it but not in other parts of the world. Globalization will not be credible until it leads to broad-based growth and development.
A new reply to this comment has been posted.
Steve Hurst May 1, 2017

Its a like reading an article from the Flat Earth Society
A new reply to this comment has been posted.
Steve Hurst May 1, 2017

'The costs imposed by such politicians are high for all of us' eg Trump etc
Unlike the crazies that nearly pancaked the World's finances then asked the taxpayer t0 cover the tab. How short the memory, still it is better than no memory such as that resident on Wall St
- Curtis Carpenter May 4, 2017
  
  Sadly, the video doesn't talk about the nature of inequality in a just society --- so misses the most important aspect of his approach to distributive justice in my view.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Alex Leo May 1, 2017

Old people, those over 60, just do not get it. No social group in the West is universally worse off now than they were 10 or 15 years ago. But many are significantly worse off than they thought they would be, as the pecking order has changed. The world has changed, industries have changed, personal and professional attributes required to succeed in gainful employment have changed dramatically. Those who have not tried hard to keep up with the times have been tossed aside, some have been crushed. But it is especially hurtful to realize you have been outcompeted by someone who barely speaks your language and whom you have considered inferior your entire life. But this is a narrow problem of dying branches of a civilization whose only chance of survival is openness.
- M M May 2, 2017
  
  Alex, you need to seek some help at your earliest opportunity. Don't delay it.
  A new reply to this comment has been posted.
- Andrew (Andy) Crow May 2, 2017
  
  Alex. Sixty isn't old these days.
  A new reply to this comment has been posted.
- Steve Hurst May 1, 2017
  
  Alex, take a look at youth unemployment before you claim nobody is worse off
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Curtis Carpenter May 1, 2017

Professor Stiglitz has outlined the present crisis beautifully, but I think he's wrong in the hints he offers with respect to its resolution.

Our system is economically overdetermined and built on a collection of false assumptions. Stiglitz closes with the thought that" the only sustainable prosperity is shared prosperity" -- but how is "prosperity" to be defined? What is it's relationship to a life well lived, and well worth living?

We need to rethink our modern, deeply flawed concept of "the meritocracy" and give the notion of "civic virtue" a far greater weight in how we understand it and our "prosperity." Unless that happens, no amount of prosperity as our economists define it will make our collective lives better. We will instead continue to descend into a Hobbesian state of the war of all against all, played out, for the time being anyway, in the mythical no-man's land of "free markets."

It's inflammatory I know, but there is some value in the old communist's slogan of "from each according to his capabilities, to each according to his needs."
- Curtis Carpenter May 1, 2017
  
  Hi Michael!
  
  As with most idealistic maxims, "to each" is open to many objections (eg. who decides what "I" need?) But such slogans are meant as pole stars -- useful for navigation, not as practical destinations.
  
  There are some who argue that if individuals were assured of a basic level of security, creativity, innovation, and perhaps most importantly civic involvement, would _in_crease. I guess it depends on where you come down on the question of man's basic nature. Is he the noble savage of Rousseau, or the predator of Hobbes, red in tooth and claw?
  
  With respect to accumulation of wealth (or any advantage) I admire John Rawls and his theory of distributive justice. From your ideas here, I think you'd enjoy reading him (if you haven't already). Your thinking is not inconsistent with his.
  A new reply to this comment has been posted.
- Michael Public May 1, 2017
  
  The problem with "each according to his needs" is that it often kills innovation and individual effort. I think accumulation of personal wealth should be allowed but passing it on to heirs is not allowed (say above a nominal amount of $1 million). Further, corporations that have enduring brands must pass the ownership of those brands into a common collective ownership after 20 years - whereby they are leased to the highest bidder, in all likelihood the original corporation. Something similar should be done with land.
  
  Proceeds to from these amounts go to subsiding education and funding startups (after all, these two represent the crucible of future value in the economy).
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
lakshma reddy May 1, 2017

Economics of global economy works on a different plain than the national economics under a politically sovereign government in a territorially bounded country.The rules of game for global free markets does not work politically defined nation state though both appear simmiliar in markets term.Therefore a wish for welfare states like Scandinavian model will work only on condition of their productivity is above global average and not always and inflexible manner.they may even face worse position than Greece if they go out of budgets in troubled times.
This rule applicable to nation state is not applicable to global state where welfare state concept with in global free economy is possible and feasible to all global citizens who fall behind market competition without their culpability.
The rest of description of effects of nationalist populism as an irrational behaviour from their personal interest of maximising their future interest though irrational from globalist point of view and the rising tide of tecknology led globalisation is concurrable.
A new reply to this comment has been posted.
Stephen Siamai Kromah May 1, 2017

Thanks for continue talking for the welfare state. You wrote lot about it in your book entitled :"The Great Divide". In November 2016 I was in Geneva for one week at the World Trade Organization (WTO) attending trade in services statistics workshop for Less Developed Countries (LDCs). I bought copy of the book from the WTO Bookstore.

Reading it makes lot sense about my own country, Liberia. "rent seeking in government, inequality because of poor government policies, and entrenched politicians in power promoting inequality, poor education for disadvantaged group, lack of opportunities for people to realize their full potential" are common feature of my society. Thanks Stiglitz
A new reply to this comment has been posted.
John Reuter, Esq. (Ret.) May 1, 2017

Stiglitz lost all credibility when he unwisely supported Hilary. Better he had gone on sabbatical or better a 24 month hiatus. But no. Now he by default joins the elite liberal intelligencia in their myopic march to defame, delegitimize and destroy Trumpism in all its glory. Macron I hope, nay pray, will be tossed into the rubbish heap of political compost heap upon which Hillary provides the most recent political scraps. The enlightened professor should come down from his ivory tower and join the people again, those who have been lied to by both political parties. Let's go another way, the trail being forged by Trump.
- Steve Hurst May 1, 2017
  
  Lemmings also follow trail blazers. If you dont know where you're going any road will take you there
  A new reply to this comment has been posted.
- Michael Public May 1, 2017
  
  Ad hominem ad infinitum ad nauseum.
  A new reply to this comment has been posted.
- Stephen Siamai Kromah May 1, 2017
  
  Even if Stiglitz missed out on Hilary, that does compromise his writing with common sense. See and read the 4th & 6th paragraphs of this commentary.
  A new reply to this comment has been posted.
- Curtis Carpenter May 1, 2017
  
  Many of us have been down parts of the "Trump trail" before in our lifetimes. It wasn't pleasant. Our parents went down very long stretches of it -- and not all of them survived the experience.
  
  I'm nearing the end of the trail myself (and not unhappily, I might add), and if I thought your attitude was representative of the majority, I'd wish you all a nice trip. But some still cling to reason, and they may yet prevail over people like you and your fellows. So I will simply feel sorrow for the young that have to fight this battle against your zero-sum view of the future. A battle it is though, and that's no mistake.
  A new reply to this comment has been posted.
- simon jeanes May 1, 2017
  
  Besides not wishing for a Trump ; le pen ! Putin, alliance across America, Europe and Asia.... !!!
  I do so wonder what the ' Trump trail ' is precisely????
  When you say ' join the people' do you mean the " minority" who voted for him as opposed to the majority who voted for Hillary Clinton?
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
M M May 1, 2017

The heavy guns to the rescue, but where were they during the last decade or so? The left machine had over 8 years of Mr useless in chief (BO) running the show. The current state of affairs in the US, Europe and elsewhere did not generate by itself, someone created it and spread the seeds for it in the last 8 years. Regrettably, the right machine and their so-called experts are equally to blame for people grievances and only when both left and right party machines recognise their mistakes and decide to abandon hypocrisy, self denial, greed to state just a few and to change tact, then and only then there can be some hope. And yes, in the case of France like elsewhere in Europe, one has the EU establishment on the top, adding obstacles and throwing gasoline on already raging fires.
- Steve Hurst May 1, 2017
  
  I love the smell of napalm in the morning
  A new reply to this comment has been posted.
- Michael Public May 1, 2017
  
  Since Reagan both left and right were pushing the same brand of economics often called neo-liberalism. You are right(sic) something had to give... pity it had to all result in spiteful voters voting a spiteful president in.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
simon jeanes May 1, 2017

It seems from a UK perspective that an ideologically driven Conservative, soon,to be elected with a massive majority,Party, will further the ignoble cause of increasing inequality and reducing further shared prosperity and hence causing more social division.I for one wonder how we return to a more equal and fair society,without radical policy change away from neo-liberal economic policies.
- simon jeanes May 1, 2017
  
  Yes, mechanisms in theory fine but they need to be credible to an electorate that is resistance to forces of reaction. They also have to be lead by politicians who are credible with credible policies, which seems extremely lacking at this time. Where have the socialistic parties gone to in this country ( credible) that is!!! A lack of anything not neo liberal is scoffed at.
  And the credible repost to this is deafening !!!!
  I simply don't see a credible truly opposition to defeat what began in the mid 1940's at Bretton Woods
  A new reply to this comment has been posted.
- simon jeanes May 1, 2017
  
  Yes, i
  A new reply to this comment has been posted.
- Michael Public May 1, 2017
  
  Mechanisms are very easy - a 90% death tax would do it. Political will is the problem.
  "What do all men with power want? More power!" - the Matrix Reloaded
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Gerald Silverberg May 1, 2017

France also has a generous welfare state, perhaps more generous than many Scandinavian countries. But by being stuck in the eurozone and underperforming industrially, it is increasingly unable to finance it and is stagnating with high unemployment.
Thus we have a chicken and egg problem: which comes first, high export competitiveness or a generous welfare state and retaining?
- Gerald Silverberg May 5, 2017
  
  @Mr Econotarian
  Precisely my point.
  A new reply to this comment has been posted.
- Mr Econotarian May 5, 2017
  
  France's economic freedom score is 63.3. Compare with Sweden at 74.9 and Denmark at 75.1. France is a far more over-regulated country than most of the Scandinavian countries, which generally have open-market policies to sustain flexibility, competitiveness, and large flows of trade and investment, and the transparent and efficient regulatory and legal environment encourages robust entrepreneurial activity (despite having high taxes and high levels of redistribution).
  A new reply to this comment has been posted.
- Michael Public May 1, 2017
  
  Well, it is certainly easy to afford things if you are richer, something America experienced between WWII and Reagan.
  
  That being said, if you are poor and you forego expenditure used to lift up the man in the street it is only a matter of time before you end up with a country at war with itself, and whose value then trends to zero - Zimbabwe or North Korea being a classic case studies.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.

https://prosyn.org/kgJlts7

Lessons from the Anti-Globalists

Secure your copy of PS Quarterly: The Year Ahead 2023

The Making of Macron

Trump’s Quixotic Energy Policy

New Comment

Contact us

Log in/Register

Lessons from the Anti-Globalists

Secure your copy of PS Quarterly: The Year Ahead 2023

Edit Newsletter Preferences

Set up Notification