Globalization: Stiglitz’s Case

Old Blog Import

This article does an increadible job of getting to the heart of Stiglitz’s argument against IMF policy. However, the criticisms he then aims at the book seem to be rather defensive and conservative (i.e. he would do well to read Sen’s book!).

In Globalization and Its Discontents Stiglitz bases his argument for different economic policies squarely on the themes that his decades of theoretical work have emphasized: namely, what happens when people lack the key information that bears on the decisions they have to make, or when markets for important kinds of transactions are inadequate or don’t exist, or when other institutions that standard economic thinking takes for granted are absent or flawed.

The implication of each of these absences or flaws is that free markets, left to their own devices, do not necessarily deliver the positive outcomes claimed for them by textbook economic reasoning that assumes that people have full information, can trade in complete and efficient markets, and can depend on satisfactory legal and other institutions. As Stiglitz nicely puts the point, "Recent advances in economic theory"”

The New York Review of Books