Many Americans are counting down the hours until George W. Bush leaves the Oval Office. Joseph Stiglitz, though, has gone further than most. He keeps a special clock at home just so he can see precisely how long there is to go.
The Nobel Prize winner has never been afraid of controversy, but he’s not exactly alone when he says in his view things can only get better the second the countdown reaches zero and Bush moves out of the White House.
With his lack of pretensions and easy-going style Stiglitz seems more like a favourite uncle than a world-renowned economist, academic, and former presidential advisor as he chats over a cup of coffee.
His ability to put complicated concepts into easy-to-digest nuggets has endeared him greatly to the media, but also explains why his books on globalisation and economics have a far greater reach than most economists could dream of.
As he whisks around the globe, stopping in Korea and London, before heading back to Columbia University, Stiglitz has plenty to say about what the US needs to do to improve its relationship with the rest of the world and where it has taken wrong turnings. “At the end Americans will look back at a failed presidency that turned its back on the international community.”
But Stiglitz is interested in more than critiquing the Bush presidency; he is campaigning for a new type of globalisation, one that puts a more equal and fair global society at its heart, and for less pressure from the US-influenced global development institutions to impose a one-size-fits-all free market, pro-privatisation model.
“The US has pushed a particular model on the rest of the world. It might work for America, but is totally not acceptable in many other parts of the world where a sense of social solidarity is important or need to be important for those societies to function.”
Where developing powers India and China have resisted US-led pressure to move towards instant privatisation of state functions, and refused to swing open their doors to multi-nationals without qualification, they have created much stronger societies, Stiglitz argues.
“These countries managed globalisation: it was their ability to take advantage of globalisation, without being taken advantage of by globalisation, that accounts for much of their success.”
More transparency, easier to access information, and stronger civil societies are wearing away some of the power in the relationship between the developing and developed countries, he argues.
“Using the internet … they can see what is going on in a way that we might not like,” he says relating a story about the recent US-Korea bi-lateral talks where, after the US negotiators had finished a deal they told the Koreans was good and fair, the write-up on the US government website told a different story. “Basically it said: ‘we managed to screw the Koreans’.” Korean access to that information is likely to have a powerful influence on future negotiations.
With the US presidential primaries in full swing, the timing may be right for this man with global stature, and the ear of influential Democrats, to be heard by policy makers back home.
Knowledge of foreign policy and the continuing role of the US in Iraq have both emerged as part of the cut and thrust of debates between Barack Obama and Hillary Clinton as they tussle for votes. And Stiglitz has a lot of knowledge and experience to offer. He acknowledges that he has regular conversations with the three Democratic front runners, and you can imagine he is likely to be snapped up as an advisor by the Democratic candidate next year.
A long-time critic of the IMF, even in his World Bank days, Stiglitz can help build a wide base of support. He can find common ground with anti-globalisation lobbyists who cluster around Naomi Klein when he speaks of the damage Bush and his acolytes have done to the UN and other multilateral institutions, but the Nobel Laureate has far more than journalistic railing and emotion in his armoury.
Klein would no doubt agree with Stiglitz that: “The damage that has been done by Bush has been huge… the damage to the World Bank is huge, the damage to the UN is huge.”
But Stiglitz is not an anti-globalisation campaigner; just someone who believes it can be done better and to the benefit of the many, not the few. He is busy spreading his message that globalisation is not yet benefiting the world’s poorest and then setting out his prescription for how to make it work.
Narrowing the gap between the richest and poorest with a strong state at the core is the only way for globalisation to work in his view. The poorest suffer the most insecurity in a global economy, but if it is to work they too must benefit from opening trade doors and jobs to international competition. In the past, he says, “when people have talked about globalisation they have talked about the impact it has had on GDP but they don’t talk about the impact it has on disparities. The way globalisation has been managed has meant increasing disparities in many parts of the world, both in developed and developing countries.”
Not only does he argue for safety nets of various kinds – medical and educational among them – as essential in creating a more secure and stable society in developing countries, but he applies these principles to the US as well.
These principles – including a centralised national health care system – have always been considered surprisingly radical in the US, but he is not alone when he says the pendulum is swinging towards significant reform.
“All the candidates have been forced to address the questions of what are they going to do about the health care crisis in the US?”
Stiglitz believes that high levels of inequality in the US have started to change people’s views about the role of the state. Inequality has grown under Bush and has even started to undermine that greatest of national myths – the American dream.
He argues plausibly for greater emphasis on equality in development theory and practise. This, he believes, will help create greater stability and security internationally.
“The argument has always been that [if] the country is a whole lot better off…those that have gained could compensate the losers, but the problem is under Bush that hasn’t happened. Rather than trickledown it has been trickle up.”
Inequality, he argues, produces social unrest. “I believe that it is important for countries to focus on equity, on ensuring that the fruits of growth are widely shared,” he says.
“The people at the bottom keep paying the price. We could compensate them, we could help them share more the fruits…by improving education, and having more progressive taxation. Under Bush we have done just the opposite and I think that is part of the social tension in America.”
And who can find fault with his campaign to bring the same kind of democracy and transparency to international development organisations such as the World Bank and IMF? It seems only fair that these international organisations should have a clearer voting structure, and the public should know how they come to decisions, as they would with their own governments.
He argues idealistically for a fairer world built not on the single pillar of the market, but on three more — government, individuals and community. As someone who has worked in the highest levels of both academia and politics, he offers more than just analysis; he provides a set of potential policy solutions – and that is his advantage over other critics of US foreign policy and development theory.
It may be stating the obvious to say that free trade will not bring equal benefits while everyone has different levels of skills, but sometimes the obvious needs to be stated and re-stated, until the time is right to hear it. And Stiglitz isn’t giving up.
A version of this article was first published in the Fabian Review. Check out the society’s website for details of the Fabian Society Change the World conference on 19 January in association with the New Statesman
Rachael Jolley talks to Bill Clinton’s ex-economic adviser about the positive power of globalisation and other issues ahead of the Fabian foreign affairs conference on 19 January in association with the New Statesman