Book
Review:Making
Globalization Work
By Jim Miles
10 September, 2007
Countercurrents.org
Book Review: Making Globalization
Work. Joseph Stiglitz. W. W. Norton & Company, New York, 2007.
Having
read Stiglitz' first work, "Globalization and its Discontents",
having thought at the time that it was a strong work, then having read
his second book "Fair Trade For All", which is not even mentioned
in this current work - indicating perhaps that he is not that proud
of it, as he should not be, it was terrible - and now having read his
latest book "Making Globalization Work", I am now thoroughly
disenchanted with his ideas and thought development.
"Making Globalization
Work" is much like his first book in that it is a reasonably clear
read, and while there is by necessity the use of the economic and political
lexicon (that's jargon for 'jargon'), it is not so obtuse (that's jargon
for difficult) that it is not unreadable. It is simply not well argued,
and retains the major faults that were obvious in the middle
work, "Fair Trade For All". [1]
From that previous work,
I criticized his development - or lack thereof - on such issues as social
development, the environment, democracy, and the military. These remain
his weaknesses in the current book, weaknesses that are built into his
pattern of thinking, and even though there are chapters or sections
of chapters on these, they are simply longer dissertations in the same
manner of thinking. Longer does not mean better.
There remains a complete
lack of discussion on several important aspects of 'globalization' that
are ignored almost entirely. The military, other than for a few passing
comments that lead nowhere, receives no recognition at all, although
"trade in arms" is mentioned a few times then passed by. The
United Nations receives equally short shrift, and is not really brought
into the discussion until the final chapter on democratizing globalization
(in Stiglitz' arguments this becomes pretty much an oxymoron) and even
then only receives passing recognition for very small sections of its
overall
functioning.
If I can read Stiglitz as
a person, I would say that his heart is very humanistic, but his mind
is still very much in the capitalist/corporate mode of the World Bank/IMF/WTO
line of thought. Yes, at heart, Stiglitz is a socialist, an international
socialist, yet that word never sees the pages of his work, but he comes
close in the closing pages arguing for a "global social compact".
In thought he remains captive to all his years of World Bank and IMF
structured economic thinking and cannot break away from it to make some
truly courageous statements about how to reorder globalization.
No one can argue that globalization
is not taking place. It has been for centuries, although again recognized
here as being a more recent phenomenon. Certainly it is a different
phenomenon today, but 'globalization' per se has existed ever since
empires have stretched their boundaries and flexed their military muscles
in order to capture more than their 'fair' share of the wealth of the
globe. I will not reiterate the failures of his arguments here as they
are not much different than in my previous review, they would only be
longer as they contradict his longer exposition (see Note 1 again).
For all and any of his arguments,
they are completely subsumed by his lack of success in arguing for changing
the democratic deficit, his pro corporate arguments, and his non-recognition
of the neo-colonial military mode of economic operation that the U.S.
currently uses.
To be sure, the chapter "Democratizing Globalization" does
attempt to reconcile the idea that economic globalization in terms of
'free trade' has little to do with democracy (my words, but gleaned
from his lack of attention to democracy as a force for economic prosperity).
The democratization he presents here concerns mostly that within the
IMF/WTO as he argues that "one of the successes of the last three
decades has been the creation of strong democracies in many parts of
the developing world," yet still the IMF and WTO have prevailed
over these democracies. Stiglitz' democratizing arguments are
not so much for democracy in the pure people power sense but as its
lack in the way globalization "has been managed."
For more democracy then,
the world needs a change in the voting structures of the IMF and World
Bank. Also there needs to be a change in representation so that when
an environmental issue is raised, then the concerned environment ministers
are involved. If Canada is an example of environmental ministry, we
would be no better off, possibly worse off, as the unctuous sheen of
responsibility would reflect attention off the underlying corporate
machinations.
The true irony of his arguments
is that the IMF//World Bank should do as they have been telling everyone
else to do for the past few decades: more "transparency",
a nice word, been around for a long time and is well used; conflict
of interest rules and regulations, again nice phrase, Dick Cheney should
be made aware of it; openness, another well used and somewhat meaningless
word; accountability, another well used, familiar phrase that has been
shown to be meaningless except as IMF/World
Bank/corporate/political rhetoric and jingoism. Using these 'same old
- same
old' arguments I would not expect any greater success within these organizations
than they ever cared for previously. Within themselves, as embodiments
of global corporate structures, these organizations are the least democratic
of any organizations in the world (except perhaps the Bilderberg and
and Carlyle Groups and the ‘Bohemian Grove’ and others of
their kind) and their chances for rehabilitation into democratic institutions
I would rate as nil.
How about this alternative
- simply get rid of the IMF - completely - throw it
out like any other proven useless concept, but remember its useful lessons
on
how it failed - and the WTO - completely, as per John Bolton, would
anyone
really notice if the top ten stories of the WTO headquarters in Geneva
disappeared (other than for the big hole in the ground) - and the World
Bank, but have an effective World Bank fully restructured under a more
democratically organized United Nations. “Simplistic" the
economists will utter; "Naïve" the politicians will sneer;
"Madness," the CEO laughs.
Yes, more power to the people - more democracy - can be dangerous for
the corporate organizations of the world.
For a moment let me return
to these corporations before discussing the UN and the neo-colonial
military. Stiglitz' chapter on "The Multinational Corporation"
is where he truly displays his resistance to significant and democratic
change by lauding the virtues of the corporate world.
Stiglitz briefly presents
a half dozen unsupported ideas as to why corporations are good, and
for someone so intent on using and abusing statistics as economists
are, the lack of supporting stats is interesting. According to Stiglitz
the advantages of corporations are: enabling "the goods of developing
countries to reach the markets of advanced industrial
countries"; they have the ability to let producers know "almost
instantly what international customers want"; they help bridge
"the knowledge gap"; they
narrow "the resource gap"; they have brought jobs and economic
growth to the developing nations and inexpensive goods of increasingly
high quality to the developed ones"; and finally they have lowered
"the cost of living": leading to "an era of low inflation
and low interest rates."
So what's wrong with all
these feeling good items? Certainly "goods" from developing
countries reach the advanced industrial markets, but those goods are
mainly in the form of resources extracted for a pittance or 'industrial
agricultural' crops such as coffee, bananas, sugar cane, and cocoa that
deprive the locals of subsistence farming, increase the costs of the
land base as corporations own and control the land, and force many indigenous
peoples into towns where they become sources of cheap labour.
Stiglitz' most laughable
argument is his contention that consumers "want" everything
while barely noting that without advertising, without the constant propaganda
pressure of buying more and more unnecessary goods for the pure sake
of keeping the consumptive economy going, these 'wants' would disappear
quite rapidly. The world is constantly bombarded with this consumptive
mentality through all media; it is almost impossible to avoid and because
it is so predominant, it seems so normal. The real beneficiary to consumers
'wants' remains the corporations, not the consumer.
The knowledge gap can hardly
be claimed to be bridged by corporations without supporting evidence.
The greatest increase in global literacy (one significant measure of
the ‘knowledge gap’) as measured by the UN shows it occurred
across the globe in the decades of the 1960s, '70s and '80s, in both
developed and undeveloped countries. Knowledge has always travelled
quite freely; if nothing else, corporations try to restrict that transfer
with patents and lawsuits against products and natural resources
(DNA, plant medicines) that they claim as their own. As for the transfer
of technology aspect of the argument, most of that transfer remains
under control of the companies within the country they operate in; and
more to the point, technology will transfer without corporations as
it historically always has in the past.
As for the 'resource gap',
a phrase that sounds meaningfully academic, I cannot say that I know
what that is without some more information from Stiglitz, for certainly
the developed countries are mainly interested in the resources of the
undeveloped: the minerals, the oil (not even discussed in this book
in spite of its predominance in global resource wars), the agricultural
products, the cheap non-mobile labour. Nice term, not terribly meaningful,
except perhaps to other economists.
After all his arguments about
how 'economic growth' as measured by the GDP per capita or gross national
total is a poor measure of wealth measurement (something he finally
gets right in this work compared to the previous two) - because a GDP
increase statistically can mask a large increase in disparity and increasing
and deepening poverty among the poor - he then contradicts it all by
saying corporations provide growth. Are not these the same people that
run the IMF, that people the WTO, that rule the World Bank, that concurrently
try to rule the world and measure it all with GDP growth statistics?
Finally, the era of low inflation
and low interest rates has little to do with corporate 'good' but is
much more centred on the U.S. Treasury controlling the economy in its
ridiculously high state of indebtedness by artificially manipulating
interest rates to increase consumptive borrowing for more of those unneeded
'wants'. Certainly housing is needed and lower interest rates help,
but they are contrived more and used more to promote corporate wealth
within the real estate economy (and keep the war going, financed via
Chinese purchases of Treasury bonds) and finance other purchases within
the consumptive lifestyle promulgated by the corporations.
Without a much better developed
argument Stiglitz cannot just with great ease and facility throw out
his reasons why corporations are good as sound bites that he expects
the reader to accept without further evidence.
Returning to the UN, where
we should truly be if we are to make 'globalization' work in a democratic
manner, the reader finds another 'deficit' in Stiglitz' approach to
the world economy. As much as the UN is flawed and has serious problems,
it can probably be reformed much more readily than the corporate based
IMF/World Bank/WTO regimes that at their base are fully non-democratic
corporate constructions. To reform the latter
requires some great demolition and excavating; to reform the UN requires
mostly super-structural work.
To start with, eliminate
the Security Council and make it more of a global cabinet, chosen from
the UN's elected representatives, proportionally as per population of
region (and not appointed as in many countries). Subsume the World Bank
completely to the UN and have it operate on principles that encourage
the betterment of the people of the world over and above the false statistics
of the GDP. Its decision making process could be designed to force it
to be 'open', 'transparent' and democratic with regards to the member
states of the UN, the majority of whom are currently totally dissatisfied
with the current IMF/World Bank operations. The UN could also liaison
with the World Courts in Brussels, and while Stiglitz argues for more
institutions to support globalization, we need not more, but better,
more fully supported, and more accessible World Court functions as well
as the same for other UN agencies. Parts of state national courts could
be integrated into the World Court system such that nation states could
prosecute under internationally accepted laws. And as above, completely
disband the IMF and current World Bank. There is probably not much that
can be done about the WTO directly, but limits on its pursuit of corporate
happiness could certainly be obtained under the democratic proceedings
of a revived UN General Assembly.
That revival could include
having the Security Council be the body that implements General Assembly
decisions and motions, rather than being the only true source of power
in the UN. And rather than having the Security Council have any member
carry a veto, the veto power should go to the General Assembly to over-ride
Security Council decisions. Messy and slower, but democracy tends to
be that way when it is true democracy.
My final argument arrives
at Stiglitz largest and most glaring error when he is discussing globalization
- the lack of any reference to the global military economy. He does
argue for arms restrictions between WTO/IMF trading partners via the
trade agreements; he does, in a completely undeveloped throw away phrase
argue that the only "conditionality" to trade agreements "is
probably nuclear proliferation - only countries that commit themselves
fully to a non-nuclear regime would be eligible." Well, there goes
the world's economy to hell right there. Other than that, nothing.
I cannot believe that Stiglitz
is ignorant of the manner in which global corporations, national governments,
and the military institutions are so heavily inter-twined; that he is
ignorant of the U.S. military budget being larger than all the rest
of the world’s military budgets combined; that he is ignorant
that “It represents a massive financial injection into virtually
every local economy in the [U.S.];[2]” that he is ignorant of
the war in Iraq and that its essential purpose is to control the oil
regimes of the world and thus support the U.S. dollar as the reserve
dollar for the world; that he is ignorant of all the recorded modern
history of neo-colonialism through covert and overt military and quasi
military interventions throughout the world, the 'hidden fist' of the
jingoistic Thomas Friedman; that he is ignorant of Dick Cheney's and
Condaleeza Rice's and Bush's relations with big oil and other militarily
oriented companies.
For globalization to work
democratically, the military needs to go home and disassociate itself
from business and be subject to the democratic processes of their home
governments, which includes abiding by the norms of international law
as set out by the Geneva Conventions, the UN Charter, and all other
related human rights laws. Only then can "fair trade” ever
even begin to be fair: fair in its support of a sustainable environment;
fair in its support of working people and working conditions and their
rights to safe conditions and proper organizations (if all conditions
of 'fairness' were in
place, most likely there would be no concerns about labour mobility
or illegal immigration); fair in its support of education and health
services; fair in its equality for all humans and all cultures; and
fair in its accounting for the value of resources of all kinds on the
global market exchange.
While I believe that Stiglitz
has his heart in the right place, his head is still well within the
confines of the World Bank that he departed from physically several
years ago. His recommendations in "Making Globalization Work"
are narrow and shallow and will not address the problems with our current
form of 'globalization'. His last comment about a "global social
compact" reveals his heart. We have the beginnings of that within
the UN
Charter, within the Geneva Conventions, within the totality of international
law. It is from there that we must work in order to obtain a truly globalized
democracy.
[1] see Book Review “Fair
Trade for All” http://www.palestinechronicle.com/story-08250753615.htm
[2] Burman, Stephen. The
State of the American Empire – How the USA Shapes the World. University
of California Press, 2007. p. 68. A wonderfully informative book I am
concurrently reading along with Stiglitz.
Jim Miles is a Canadian educator
and a regular contributor/columnist of opinion pieces and book reviews
to Palestine Chronicles. His interest in this topic stems originally
from an environmental perspective, which encompasses the militarization
and economic subjugation of the global community and its commodification
by corporate governance and by the American government.
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