Joseph Stiglitz — Rebel With A Cause
Joe Stiglitz assesses the global economy.
October 18, 2001
Joseph Stiglitz 2001 Nobel Prize winner in Economics is not known to mince his words. This trait eventually cost him the coveted job as the World Bank’s chief economist. Yet, he is a renowned economist — and still as outspoken as ever. Our new Read My Lips examines his views on economics and the process of globalization.
How do you assess the current U.S. economy?
“There is no threat of a depression. The fundamental data are in order. It’s just that people are very frightened.”
What is your perspective on economics in general?
“Economic policy making should not become a religion.”
What’s your philosophy in life?
“The cost of continuing mistakes is borne by others, while the cost of admitting mistakes is borne by yourself.”
How did academic competition shape your life?
“We got this very mixed message at MIT We were taught the perfect-market-competition model, and then we were told that only at the University of Chicago, a center of conservative economics, did they take the model seriously.”
Where do you see the role of government?
“Limiting the ambitions of the state does not entail a weakening of the state.”
How do you view the relationship between politics and economics?
“Economic policy is today perhaps the most important part of U.S. interaction with the rest of the world. And yet, the culture of international economic policy in the world’s most powerful democracy is not democratic.”
What about the relationship between borrowers and lenders?
“For every borrower, there is a lender. And if you have a bad borrower, you may have a bad lender, too.”
What do you think about Europe’s approach to the market economy?
“Europe has a longer tradition of deeper concern for equity — and a different view of the role of the state. We need to replace ideological textbook economics and their simplistic explanations of what makes markets work.”
How do you judge the record of the international financial institutions?
“There were terrible results in Asia. The IMF is only now changing its view.”
What did the World Bank get in return for the money it lent to developing countries?
“Was imposing conditionality an effective way of changing policies? There is increasing evidence that it was not. Good policies cannot be bought.”
In which way does the attitude of the U.S. government regarding the IMF differ from other countries?
“Most countries unfortunately don’t have the facility that we in the United States have when we receive the Article IV report, of picking it up, saying ‘thank you very much’ — and dropping it straight into the garbage can.”
What is your take on anti-globalization protesters?
“The streets are not the best place to discuss these highly complex issues. Some of the protesters are no more interested in open debate than the officials at the IMF are.”