Globalization and Its Discontents

Session 8

Joseph Stiglitz, Globalization and its Discontents, 2002

Chapters 1 and 2

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Chapter 1: The Promise of Global Institutions

International Organizations – powerful institutions today

A. International Bureaucrats – the “faceless symbols of the world economic order” are under attack B. Protests of Int’l Org Meetings – continual flashpoints/conflict 1. WTO – Seattle, 1999 protest 2. Annual IMF/World Bank protests 3. Protests not new in developing world, ARE new in developed world 4. Now, with communications advances, even 16-year olds have an opinion on NAFTA 5. As result, even conservative politicians must pay heed to negative effects of globalization (Chirac cited as example)

I. Globalization A. Brought much good through int’l trade (Nike facftory example) B. Social benefits as well: Greater connection throughout world has allowed things like the International Campaign to Ban Landmines and anti-globalization movement to develop C. Economic integration helped stop Asian Financial Crisis from growing in ‘97 D. Sometimes results mixed: integration/market reforms in Russia so far bad E. Western-driven with disproportionate share of benefits: Terms of Trade for poorest declining (7) F. Other related issues: speculation, property rights infringement, conditionality of aid as a force that can undermine national sovereignty, environmental probs

II. The Major Institutions of Globalization – IMF, World Bank, WTO A. International Monetary Fund (IMF) – goal: to ensure global economic stability 1. Originally designed to provide loans to countries facing economic downturn to stimulate aggregate demand (Keynesian approach) 2. Now, because of free market ideological influence, countries receive funds only if countries raise taxes or interest rates, or slash deficits 3. Public

Links: between activists in different parts of the world , particularly those links forged through internet communication, brought about the pressure that resulted in the international landmines treaty-despite the opposition of many powerful governments. Similar, well-orchestrated public pressure forced the international community to forgive the debts of some of the poorest countries. Certain benefit to globalization .Opening up the Jamaican Milk market to U.S imports in 1992 may have hurt local dariy farmers but it also meant poor children could get milk more cheaply. Foreign aid, an aspect of the Globalized world, for all its faults still has brought benefits to millions, often in ways that have almost gone unnoticed: Gueriallas in the Philippines were provided jobs by a world bank-financed project as they laid down their arms. In developing world, Globalization has not brought the promised economic benefits. A growing divide between the haves and have-nots has left increasing numbers in the third world in dire poverty, living on less than a dollar a day. Despite repeated promises of poverty reduction made over the last decade of twentieth century.