Globalisation & its discontents; Joseph E Stiglitz, Norton, New York 2002

Review
Joseph Stiglitz’s Globalisation and its discontents will not be remembered for its prose, which though readable is journalistic in style, and rather hurried. Nor will it be remembered for what it says, because plenty of other people have been saying much the same things for years. It will be remembered, and it should be read, because of who Joe Stiglitz is: a leading economist when economics above all else has driven the globalization agenda, and a one-time insider to the institutions of globalization. It’s one thing for anarchists and amateur intellectuals to lambast the IMF and economic theory: it’s quite another for an insider and an academic giant to blow the whistle.
I have to admire Stiglitz, not only for his personal courage in “coming out” in this book, but also for the sense of humanity which pervades it. There is palpable compassion for Moroccan villagers whose fledgling chicken industry was derailed by the IMF’s insistence on privatization; clear moral outrage at the complicity of IMF bureaucrats in the criminalisation of commerce in Russia. These and many other examples give well-informed ammunition for those who believe that financial deregulation is dangerous, that privatization is bad, or that too rapid trade liberalisation is dangerous. On the latter for example, Stiglitz comments that
‘Trade liberalization is supposed to enhance a country’s income by as economists would say, utilizing comparative advantage. But moving resources from low-productivity uses to zero productivity uses does not enrich a country, and this is what happened all too often under IMF programs. It is easy to destroy jobs, and this is often the immediate impact of trade liberalization, as inefficient industries close down under pressure from international competition”
None of this would be remarkable, except that the person who is saying it is a Nobel Prize winner in economics.
And here lies the rub in Stiglitz’s book. While he criticises the application of simplistic economic theories, he is not aware of the extent to which economic theory itself—simplistic or not—is to blame. His lament throughout is that the Washington Consensus does not reflect the most sophisticated economic theories: if only the IMF understood economics as well as Joseph Stiglitz, then it would never have forced Kenya to open its finance sector to competition, or forced high interest rates on Indonesia, or pushed Russia to introduce free market prices overnight.
But how many bureaucrats can understand economic theory as well as a Nobel Prize winner? Stiglitz says as much in his conclusion, when he observes that
In economics, no prescription is followed precisely, and policies (and advice) must be predicated on the fact that fallible individuals working in complex political processes will implement them. If the IMF failed to recognize this, that itself is a serious indictment.’
Of course! But this is an inherent problem with mainstream economic theory. The simple stuff—the propositions you can find in any undergraduate textbooks, including that written by Stiglitz himself—preach that markets are always and everywhere the best way to do everything. But more sophisticated theories can lead to diametrically opposite conclusions. For example, simple supply and demand theory asserts that the world would be a better place if both monopolies and trade unions were abolished. But what is known as the “theory of the second best” establishes that if you have monopolies, you should also have trade unions—abolishing one without abolishing the other will make things worse, not better.
Stiglitz gives plenty of examples of this dilemma, and the irony is that most of the time the policies that he argues worked best followed the simple rule of “ask an economist what to do, and then do the opposite”. So Malaysia survived the Asian Crisis better than any other victim by increasing the regulation of its finance sector and temporarily ending the convertibility of its currency. China has prospered by slowly introducing market systems, and only slowly unwinding public ownership of land.
What to do? With “high” and “low” economics pointing in contradictory directions, either you have to have the wisdom of Solomon (or Stiglitz) to decide what to do, or you follow the stuff you have the capacity to understand. Stiglitz wants IMF bureaucrats and proponents of corporate globalization to live up to the former standard, but in general they only have the capacity for the latter.
Stiglitz’s narrative thus has something in common with Mary Shelley’s Frankenstein, except that at least Shelley’s Frankenstein realised that he had created a monster. Stiglitz seems to believe that the monsters in his tale—the IMF, the “Washington Consensus” and what he calls “market fundamentalism”—exist simply because of an inadequate education in economics. But he doesn’t consider where that both economics and economic education might be to blame.
Imagine what would happen if an undergraduate degree in engineering produced engineers whose bridges collapsed, whereas those designed by PhD students remained standing. No one would be allowed to work as an engineer without completing a PhD. But equally, we might ask whether there’s something wrong with basic engineering theory if an understanding of it makes you a bad engineer.
This is the question Stiglitz never asks, though occasionally he skirts around it. When criticising the “shock therapy” approach to Russia’s transition to a market economy, he notes that
“Economic theory, which focuses on equilibrium and idealized models, has less to say about dynamics, the order, timing and pacing of reforms than one would like—though IMF economists often tried to convince client countries otherwise.”
Rather than having serious things to say about timing, Stiglitz says that economists belonging to both the “make haste” camp that he rightly criticises, and “do it gradually” school to which Stiglitz himself belonged, were reduced to arguing against each other using crude analogies:
‘The rapid reformers said “You can’t cross a chasm in two leaps”, while the gradualists argued that it took nine months to make a baby, and talked about crossing the river by feeling the stones.’
This might sound bizarre, but it’s quite true. My favourite such homily was delivered by Jeffrey Sachs, who is these days trying to distance himself from complicity with the disasters in Russia and elsewhere. Putting the case for a rapid transition in an academic paper in 1992, Sach gave the analogy that
“if the British were to shift from left-hand-side drive to right-hand-side drive, should they do it gradually … say, by just shifting the trucks over to the other side of the road in the first round?”
Those seeking wisdom from economists should rightly expect better than childish parables from so-called scientists.
This is the real problem, not just with the simplistic economics that Stiglitz criticises the IMF for believing, but also with the so-called advanced theory to which Stiglitz has contributed. The theories assume that markets operate in equilibrium, whereas real markets are always out of equilibrium. Even at the simplest, undergraduate level, economic theories should be based upon the actual conditions in which markets operate—dynamic conditions where economic variables will always be above or below any hypothesised ideal level. If that were the understanding that an undergraduate education in economics conveyed, then the problems that inspired Stiglitz to write Globalization and its discontents might not exist. But for that education to be a possibility, economic theory itself has to change, and not just at the undergraduate level.
Will Stiglitz come to appreciate this himself? It’s hard to say; though his realism was sufficient for him to oppose the simplistic policies that exacerbated the Asian Crisis, the Russian crisis and so on, he still has a degree of naivety that marks him as essentially a believer in the market fundamentalist gospel—he just isn’t a fanatic. When he refers to the “new economy”, he uses capital letters rather than inverted commas—in a book completed in early 2002 when the Nasdaq, the “new economy” index, had already fallen 60 per cent from its peak. Despite being a critic of globalization as practised, he believes that globalization “is here to stay”. Despite giving an anecdote which shows the power of bureaucrats over the governors of the IMF, his remedies for globalization’s ills all focus on governance, rather than the training and selection of staff.
Globalization and its discontents is thus a flawed book, but in the end that is part of its appeal and part of its importance. His book points out that the wholesale rewriting of economic rules that the current corporate approach to globalization entails can only be entrusted to Nobel Laureates and Saints; he establishes that the responsible bodies certainly aren’t staffed by Nobel Laureates; and with the one conspiracy theory he is willing to entertain, that they see themselves as servants of Wall Street, they certainly aren’t staffed by Saints either—and yet he still believes in corporate globalization.
If someone as bright as Stiglitz can see only some of the problems with globalization, then there is little hope that it will ever have the outcomes that Stiglitz in the end still hopes for. Rather than being a means to improve the human condition, in the hands of inadequate and sometimes venal real people, it is likely to be what a prominent physicist turned economist recently warned:
“an enormous, tradition-blind, uncontrolled experiment where no one knows the outcome.”

bad december

no joke kid

i haven't slept a wink

put a rose at the door

of the dakota for me

i am the walrus crab

i dont care what these people think,

i'm just sitting here makin' myself

nauseous with this ugly food that stinks

i've given up on mango. spent one tenth of my pay at baylene's today. a vest and a top. a reversible vest. and a top that can be worn a million ways. ouch. the clothes are beautiful. but sincerely want to detach myself from the material. ah!!! ben will scoff at me. me material girl. must meditate. avoid shopping centres and bookstores. stay far far away. dont bring credit cards out. bind my wrists. bind my eyes.

baylene please stop making beautiful clothes.

flipping thru globalisation and its discontents - i didnt realise that every tax-paying citizen in the world contributes to the imf! and yet the imf is only accountable to a few governments - powerful during ww2 but some have since lost much of their economic viability AND only the usa has veto powers. no wonder the imf is not effective at all and not even democratic! setting traditional structural policies, forcing developing nations to free their markets to developed nations goods and yet applying protectionist policies to their local markets. not everybody benefits from globalisation. :(

2 days to pulau sibu!

i've got a terrible habit. once i've set my mind on buying something, i cant get it out of my head. watching lord of the dance tomorrow and i thought that it'd be cool if i had a funky jacket to go with my jeans tomorrow night. and immediately i wanted a baylene jacket. oh damn!!! and i cant stop thinking about it. on monday, i decided i wanted a new bikini and i went to buy one! ah!!! help! horrible kid i am. money doesnt come easy. but i dont know the value of money. it has no value to me. i feel so guilty about that. a spoilt brat! blat.

colin called me from sf yesterday to remind me to write him an email! haha. i havent written in a damn long time... so he was like... i thought you died or something. that made my day. he's such a sweet puppy dog. i dont bother to call him... and yet i get these emails/calls once in a while. it's a really nice warm feeling. haha.

The cult of Ernesto Che Guevara is an episode in the moral callousness of our time. Che was a totalitarian. He achieved nothing but disaster. Many of the early leaders of the Cuban Revolution favored a democratic or democratic-socialist direction for the new Cuba. But Che was a mainstay of the hardline pro-Soviet faction, and his faction won. Che presided over the Cuban Revolution's first firing squads. He founded Cuba's "labor camp" system—the system that was eventually employed to incarcerate gays, dissidents, and AIDS victims. To get himself killed, and to get a lot of other people killed, was central to Che's imagination. In the famous essay in which he issued his ringing call for "two, three, many Vietnams," he also spoke about martyrdom and managed to compose a number of chilling phrases: "Hatred as an element of struggle; unbending hatred for the enemy, which pushes a human being beyond his natural limitations, making him into an effective, violent, selective, and cold-blooded killing machine. This is what our soldiers must become …"— and so on. He was killed in Bolivia in 1967, leading a guerrilla movement that had failed to enlist a single Bolivian peasant. And yet he succeeded in inspiring tens of thousands of middle class Latin-Americans to exit the universities and organize guerrilla insurgencies of their own. And these insurgencies likewise accomplished nothing, except to bring about the death of hundreds of thousands, and to set back the cause of Latin-American democracy—a tragedy on the hugest scale.
The present-day cult of Che—the T-shirts, the bars, the posters—has succeeded in obscuring this dreadful reality. And Walter Salles' movie The Motorcycle Diaries will now take its place at the heart of this cult. It has already received a standing ovation at Robert Redford's Sundance film festival (Redford is the executive producer of The Motorcycle Diaries) and glowing admiration in the press. Che was an enemy of freedom, and yet he has been erected into a symbol of freedom. He helped establish an unjust social system in Cuba and has been erected into a symbol of social justice. He stood for the ancient rigidities of Latin-American thought, in a Marxist-Leninist version, and he has been celebrated as a free-thinker and a rebel. And thus it is in Salles' Motorcycle Diaries.
The film follows the young Che and his friend Alberto Granado on a vagabond tour of South America in 1951-52—which Che described in a book published under the title Motorcycle Diaries, and Granado in a book of his own. Che was a medical student in those days, and Granado a biochemist, and in real life, as in the movie, the two men spent a few weeks toiling as volunteers in a Peruvian leper colony. These weeks at the leper colony constitute the dramatic core of the movie. The colony is tyrannized by nuns, who maintain a cruel social hierarchy between the staff and the patients. The nuns refuse to feed people who fail to attend mass. Young Che, in his insistent honesty, rebels against these strictures, and his rebellion is bracing to witness. You think you are observing a noble protest against the oppressive customs and authoritarian habits of an obscurantist Catholic Church at its most reactionary.
Yet the entire movie, in its concept and tone, exudes a Christological cult of martyrdom, a cult of adoration for the spiritually superior person who is veering toward death—precisely the kind of adoration that Latin America's Catholic Church promoted for several centuries, with miserable consequences. The rebellion against reactionary Catholicism in this movie is itself an expression of reactionary Catholicism. The traditional churches of Latin America are full of statues of gruesome bleeding saints. And the masochistic allure of those statues is precisely what you see in the movie's many depictions of young Che coughing out his lungs from asthma and testing himself by swimming in cold water—all of which is rendered beautiful and alluring by a sensual backdrop of grays and browns and greens, and the lovely gaunt cheeks of one actor after another, and the violent Andean landscapes.
The movie in its story line sticks fairly close to Che's diaries, with a few additions from other sources. The diaries tend to be haphazard and nonideological except for a very few passages. Che had not yet become an ideologue when he went on this trip. He reflected on the layered history of Latin America, and he expressed attitudes that managed to be pro-Indian and, at the same time, pro-conquistador. But the film is considerably more ideological, keen on expressing an "indigenist" attitude (to use the Latin-American Marxist term) of sympathy for the Indians and hostility to the conquistadors. Some Peruvian Marxist texts duly appear on the screen. I can imagine that Salles and his screenwriter, José Rivera, have been influenced more by Subcomandante Marcos and his "indigenist" rebellion in Chiapas, Mexico, than by Che.
And yet, for all the ostensible indigenism in this movie, the pathos here has very little to do with the Indian past, or even with the New World. The pathos is Spanish, in the most archaic fashion—a pathos that combines the Catholic martyrdom of the Christlike scenes with the on-the-road spirit not of Jack Kerouac (as some people may imagine) but of Don Quixote and Sancho Panza, a tried-and-true formula in Spanish culture. (See Benito Pérez Galdós' classic 19th-century novel Nazarín.) If you were to compare Salles' The Motorcycle Diaries, with its pious tone, to the irrevent, humorous, ironic, libertarian films of Pedro Almodóvar, you could easily imagine that Salles' film comes from the long-ago past, perhaps from the dark reactionary times of Franco—and Almodóvar's movies come from the modern age that has rebelled against Franco.
The modern-day cult of Che blinds us not just to the past but also to the present. Right now a tremendous social struggle is taking place in Cuba. Dissident liberals have demanded fundamental human rights, and the dictatorship has rounded up all but one or two of the dissident leaders and sentenced them to many years in prison. Among those imprisoned leaders is an important Cuban poet and journalist, Raúl Rivero, who is serving a 20-year sentence. In the last couple of years the dissident movement has sprung up in yet another form in Cuba, as a campaign to establish independent libraries, free of state control; and state repression has fallen on this campaign, too.
These Cuban events have attracted the attention of a number of intellectuals and liberals around the world. Václav Havel has organized a campaign of solidarity with the Cuban dissidents and, together with Elena Bonner and other heroic liberals from the old Soviet bloc, has rushed to support the Cuban librarians. A group of American librarians has extended its solidarity to its Cuban colleagues, but, in order to do so, the American librarians have had to put up a fight within their own librarians' organization, where the Castro dictatorship still has a number of sympathizers. And yet none of this has aroused much attention in the United States, apart from a newspaper column or two by Nat Hentoff and perhaps a few other journalists, and an occasional letter to the editor. The statements and manifestos that Havel has signed have been published in Le Monde in Paris, and in Letras Libres magazine in Mexico, but have remained practically invisible in the United States. The days when American intellectuals rallied in any significant way to the cause of liberal dissidents in other countries, the days when Havel's statements were regarded by Americans as important calls for intellectual responsibility—those days appear to be over.
I wonder if people who stand up to cheer a hagiography of Che Guevara, as the Sundance audience did, will ever give a damn about the oppressed people of Cuba—will ever lift a finger on behalf of the Cuban liberals and dissidents. It's easy in the world of film to make a movie about Che, but who among that cheering audience is going to make a movie about Raúl Rivero?
As a protest against the ovation at Sundance, I would like to append one of Rivero's poems to my comment here. The police confiscated Rivero's books and papers at the time of his arrest, but the poet's wife, Blanca Reyes, was able to rescue the manuscript of a poem describing an earlier police raid on his home. Letras Libres published the poem in Mexico. I hope that Rivero will forgive me for my translation. I like this poem because it shows that the modern, Almodóvar-like qualities of impudence, wit, irreverence, irony, playfulness, and freedom, so badly missing from Salles' pious work of cinematic genuflection, are fully alive in Latin America, and can be found right now in a Cuban prison.

Search Order by Raúl Rivero
What are these gentlemen looking for

in my house?
What is this officer doing

reading the sheet of paper

on which I've written

the words "ambition," "lightness," and "brittle"?
What hint of conspiracy

speaks to him from the photo without a dedication

of my father in a guayabera (black tie)

in the fields of the National Capitol?
How does he interpret my certificates of divorce?
Where will his techniques of harassment lead him

when he reads the ten-line poems

and discovers the war wounds

of my great-grandfather?
Eight policemen

are examining the texts and drawings of my daughters,

and are infiltrating themselves into my emotional networks

and want to know where little Andrea sleeps

and what does her asthma have to do

with my carpets.
They want the code of a message from Zucuin

the upper part

of a cryptic text (here a light triumphal smile

of the comrade):

"Castles with music box. I won't let the boy

hang out with the boogeyman. Jennie."
A specialist in aporia came,

a literary critic with the rank of interim corporal

who examined at the point of a gun

the hills of poetry books.
Eight policemen

in my house

with a search order,

a clean operation,

a full victory

for the vanguard of the proletariat

who confiscated my Consul typewriter,

one hundred forty-two blank pages

and a sad and personal heap of papers—

the most perishable of the perishable

from this summer.

i love watching ben do his balances. he's a natural at balancing. on focusing. going for yoga tonight. gotta train up for kilimanjaro! quite nervous now. been doing some internet research and only 60% of those who attempt the great mountain succeed in reaching the peak... i've set my weekly schedule out nicely - mon:yoga at home, tues:tap, wed:yoga, thurs:doctor, fri:yoga/movie, sat:slack/hang out, sun:run/church. there! my life is complete. haha. seems kinda boring... but well i'm enjoying the routine. i'm enjoying tap tremendously. my ankles still scream esp. for side shuffles... and we did them for soo long... ouch. and sometimes the ankles dont listen... but oh well...

honestly, i dont care about the damn casino issue. being slightly ambivalent about lots of things now ........................... ............................................................... .......................................

“Everyone wondered, But no one could tell when young Oyster Boy came out of his shell”

robot boy, lunch box, toodle loo, hello hi messages, tap cat, eclectica, word riot,........

Suckers that turn on there own,Dolls that cry and moan.Cars that you do not pedal,I am not trying to meddle.Our kids are getting lazy,Some of these toys are just plain crazy.These people only caring about the mind,Not caring if the kids are good or kind.Yes, it is good to play,But why not do it nature's way?Our children need to be strong,Some of the things we are doing is quite wrong.

dejavu. two people asked me the exact same question. one yesterday. one today. "so how are things at sculpture square" one out of concern. the other out of politeness. but somehow felt as if she was asking, are you ok. you dont look too good. mmm... talking to boon ngee just now. he's a drummer at jazz @ southbridge. really good musician. he's go gentle. like this innocent gentle sweet little being. he may turn out otherwise ya know. but just talking to him... he's so well-mannered. so down to earth. so sincere. masato calls him charismatic. anyway, i'm sending images to clara - watch out for masato article on monday in straits times! on dial-up lah!!! so it's taking too long. might as well add an entry. hammie is shopping at bugis. waiting for me. performance at the gallery just ended. wow. nice. we had philip tan on keyboards and percussion. aya sekine on the synthesiser(?) and keyboards, boon ngee on drums/percussion, adam on guitar, dance by daniel k and gilles massot. really nice. and we had a really good turn-out. i'm so glad... for masato and for everyone in general. that more people can share and be in this same experience. *sigh* a good sigh this time. 29% more to go before the images get to clara. come on hurry up now!!!!

hmm... i was so stressed out when i left work this evening that i bought a cookie made from 4 kinds of chocolate in it... yummy. the girl at the counter (bakin' boys at suntec) kept feeding me with so many samples and i needed a chocolate fix soo bad, i couldnt resist. 4 kinds of chocolate!!! oh man yum yum.

i had a really fun tap class today. beginning to get into the groove of tap. alicia said i make nice strong "tap" sounds. so... she hardly give compliments so heh heh. i'm grinning... haha. i think yoga really helped with my tap. all that ankle work and strengthening of ankles and feet... think i've got quite strong feet/ankles now... heh heh. trying not to boast too much... but i'm happy and had a very satisfying tap class so i have to shout it out loud. yo yo yo.

ok and i have to preach [again] about the marvels of yoga. it's the cure for everything. seriously. just do yoga. you'll be a happy person.

masato is leaving soon... we went to jazz @ southbridge and then lau pa sat on sat. yummy. really good music. aya (pianist) is fantastic and she'll be performing this fri at sculpture square... yah... and... yah... and... yah... tap

tap

tap

and shush... shit... fuck... but i did something really mean today. an insurance agent (or financial planners as they call themselves now) called me on my hp:

agent (rattling off...): we have this financial package.... blah blah blah (long story)

me (politely): sorry i'm not interested

agent (more rattling): how can you say you're not interested when you do not know what the product is. do you know what financial freedom is?

me (annoyed): you sound like a textbook (there, i was curt. short and sweet. insult. a knife through her heart)

agent: (laughs lamely) no...

me (very annoyed cause i'm paranoid about talking on mobile phones): there is no such thing as financial freedom. what you gonna give me money for the rest of my life so i dont have to work???

agent: no... financial freedom is... blah blah blah

me: anyway, there is no such thing as freedom. one's freedom is another's unfreedom (sound cool ah, but i stole that quote from somewhere lah. me not that brilliant)

agent: no...

me: sorry. very busy. bye.

agent: (gives up) bye.

so i felt bad that i was really rude to her... tried to accumulate good kamma by being nice to other ppl after that. but thats the prob with my big mouth. it just says the most awful things... i'm sure she was just doing her job. but i just hate insurance agents, so persistent, so annoying, like a fly teasing you to swat/squash it. they get on my nerves... but well, what to do. someone's gotta do the job...

i've starting to write snippets of the play. i use conversation bits from all around me. and a working title from lethem. today is today is today. its raining. and its frustrating talking to mel these days. they're at that stage. where nothing gets into the head. so its best to keep your angry words. calm down and not say anything. anyway, i trust her to make her own life. i wonder how annoying i must have been at that stage. gawd. we all go through that awkward must rebel stage. sack.

diana krall tomorrow. yummy. yummy. spotted yummy ck panties but restrained and didnt buy. saw yummy muji jackets and tees but restrained. i'm so proud of myself. i didnt buy anything. am an impulse buyer. told myself i cant sign anything till next week. i'm damn fucking broke. fuck fuck fuck.

damn fucking. just felt like saying it. fuck fuck fuck. sometimes you have to allow yourself. and not hold back. but sometimes you have to hold back.

these are dark times, says tolkein...

my sis came back with love bites on her neck. i can imagine the rush, the excitement from a make-out session. the bodily heat, the intensity, the passion, the lust... i remember when i had my first love bites. honestly, i didnt enjoy them. i was fascinated at how he formed them. later at home, when i ran my fingers over the tender purple skin, all i felt was like a bruised animal, hurt by someone who left his marks all over me. from then on, love bites never appealed. i hope she doesnt feel that same disappointment. but it's a learning process... everyone gets hurt in sexual experimentation; getting caught up in the heat, you forget, and you let go. that's why i'm forever grateful to be with a guy that thinks with his brain and not his dick. sometimes you lose control, but the guy keeps thinking. i am grateful also that i have not been attacked or forced to perform any sexual acts against my will. i do wish i had restrained myself on certain occasions. the body is precious. and we dont know that until, we've felt a certain abuse, a certain pain or regret.

it is monday, i resolved to come to work refreshed. and yet i am more burdened than ever. like the rock that sisyphus heaves up and rolls down, we are too like that absurd man, simply going on with life. today is a down cycle. at least, when you're at the bottom of the cycle, the only thing you can do is look up. and try not to break your neck.