In this way..
After noting these five issues with globalization, Stiglitz goes on to discuss the underlying forces and the institutions behind these issues, and each time following the discourse with a section titled “Making Globalization work”. This section contains Stiglitz’ suggestions on reforming the particular globalization problem in discussion, and the first problem tackled by Stiglitz is the effect, or lack thereof, of globalization on poverty. A positive effect on poverty is seen in China where millions of people have been lifted out of poverty. Stiglitz attributes the booming country’s progress, to its semi-conservative, slow movement to open up its markets to imports, and to what the book refers to as “hot speculative money”- that which seeks high returns in the short run, rushing into a country during a short wave of optimism and rushing back out at the first hint of trouble (pg 10).This view differs from Friedman’s, which points to China’s rapid adaptation of technologies such as wireless connectivity and cell-phone use per capita, even suggesting that the U.S. is lagging behind in these exact areas.
Stiglitz pays special attention throughout his book, to the existing and necessary international institutions that are and should govern he various aspects of a successfully globalizing world. Friedman gives statistical data on present and future job losses and recommends that that nations and their work forces find methods of catching up to avoid being ‘creamed’ by the flatteners. Stiglitz on the other hand does a spectacular job of offering theoretical proposals intended to change the way that we think about the issue first, and then practical measures which can be implemented on a new way of thinking. For example, in reforming the effect of globalization on poverty, Stiglitz first asks that we consider the pervasiveness of poverty. We are asked to recognize that simply opening up markets in developing countries will not eradicate the issue of poverty. In this case, reasonably conditional foreign assistance and debt relief from truly committed global leaders is necessary to provide developing countries a clean slate to base their new policies on. Furthermore, given all the aid available, these countries will not flourish unless they literally clan, which is why Stiglitz stresses correcting the problem in trade liberalization by making international trade agreements fair.
Stiglitz accurately insists that poverty is so globally pervasive, that it heightens the need to help millions of poverty-stricken citizens immediately. For the foreign aid to work and international agreements to become fair, fundamental principles must also be reviewed, one of which Is the recognition of the limitations of trade liberalization. The main limitation of liberalization is the fact that it will not work for every country and every economy. When the U.S and Europe saw success with trade liberalization, they were convinced that this model would lead progressive economies to success as well. The result of this assumption came to be the Washington Consensus, a broader policy framework whose key components were trade and market liberalization and which was forged on consensus of the IMF, the World Banks and the U.S Treasury. The consensus was supposed to represent a set of policies that would best promote development; however, it remained a failure for Argentina and other hopeful Latin American countries.
Early on, in Making Globalization Work , Stiglitz starts to weigh the importance of easily overlooked tenets such as governance in a collaborative process. He states, “There is a consensus, at least outside the U.S. on the dangers of unilateralism and on the 'democratic deficit' in the international economic institutions. WWI made clear our growing global interdependence”(18). Stiglitz goes on to assess the progression of various developing countries under the advice of the Washington Consensus and free-market capitalism, and fearlessly charges the IMF with failure in its goal of stabilizing the world economy. Countries that have followed the advice of the IMF and the World Bank have not prospered as expected. More Friedman TBC...