Reading Globalization and Its Discontents

I am a firm believer that everyone should expose themselves to the ideas/works of opposing viewpoints, no matter how ridiculous one might think such views are. I feel a lot of people read blogs, books, and articles only by people with similar views. This acts as a re-enforcement of opinions rather than an enhancement of knowledge. As such, I like to think that I break out of this mold by reading people like Paul Krugman, Ezra Klein, or even Naomi Klein.

One of the issues that seems most obvious to me is globalization and its net benefits for people around the world. The chief critic of globalization is Joseph Stiglitz, a nobel laureate in “information economics.” I picked up his magnum opus, Globalization and Its Discontents, today and just finished reading the first fifty pages. Interestingly, I find myself agreeing with him much more than I thought I would. First off, he is not nearly as anti-“globalization” as he is in opposition to distinctly non-market institutions like the IMF and the World Bank (where he was chief economist for a few years). The IMF and World Bank, in my admittedly limited knowledge, are organizations that are indeed detrimental to growth in developing countries and more often make things worse than make them better.

From the start, he acknowledges the undeniable benefits to people around the world and even seems to offer some support for sweatshops:

People in the West may regard low-paying Nike jobs at Nike as exploitation, but for many people in the developing world, working in factory is a far better option than staying down on the farm and growing rice.

So far, it seems clear to me that Siglitz isn’t opposed to globalization as much as he is against how it is being carried out. In the back of my mind I also remember that his expertise is in asymmetric information and not international trade (though his time at the World Bank does give him expertise on how it carries out its business).

I have only read a fifth of Stiglitz’s book, so he might go onto issues where his opinions part from mine later. Meanwhile, I look forward to seeing what he has to say against all the good things of globalization I hear so much about.

Advertisement

 

Klein Distances Herself from Shock Doctrine Film

Naomi Klein, one of the anti-globalization movement’s favorite writer’s, has decided she will disaffiliate herself with UK Channel 4’s upcoming film rendition of her best-selling book The Shock Doctrine: The Rise of Disaster Capitalism. The Independent reports:

A source at Channel 4 said the [Klein] was so disappointed with [their] vision of her book – which she reportedly felt did not carefully lay out the thesis or explain the economics but instead made unproven assertions – that she sought to distance herself from the film after seeing the early cuts.

Sadly, for those of us who’d love to hear her voice narrate overdramatic and inaccurate juxtapositions of Milton Friedman quotes with dying children, we’ll have to stick to a short video she made before.

For those who don’t know, Klein’s book argues that liberalizations of markets are remarkably unpopular and come about only in times of crises. Among her many flaws, she uses Milton Friedman quotes horribly out of context and bases her entire book on the idea that free market ideology only succeeds when people are in a state of shock. One terrible inaccuracy, as many critics pointed out, was when she revised history by claiming Tiananmen Square showed students’ unwillingness to accept market reforms – when, in reality, the opposite is true.

I don’t think anyone would disagree that people, in a state of shock, accept some change that they wouldn’t otherwise. That was Friedman’s point. Where Klein goes berserk is by assuming that moves towards free trade or ending of price controls were never popular and came about only through undemocratic means. I have to hand it to her: of all the anti-globalization writers, Naomi Klein manages to be both the least insightful and most popular.

Tyler Cowen bashes the book here. Read Johan Norberg’s excellent rebuttal of Naomi Klein’s book here. Or, for a short teaser on his paper, check out this video: