What is the role of the U.S. in the disposition of the world's economic and environmental resources? How are financial markets best defended from economic shock? Does liberalization ensure prosperity?
Journalist Naomi Klein speaks with economists Joseph Stiglitz and Hernando de Soto in a conversation moderated by David Harvey, Distinguished Professor of Anthropology at the Graduate Center- City University of New York (CUNY)
Hernando de Soto
Hernando de Soto is President of the Institute for Liberty and Democracy, headquartered in Lima, Peru and considered by The Economist to be one of the two most important think tanks in the world.
Time and Forbes have chosen him as one of the leading innovators in the world, and more than 20,000 readers of Prospect and Foreign Policy ranked him as one of the world's top 13 public intellectuals.
He has served as President of the Executive Committee of the Copper Exporting Countries Organization, as CEO of Universal Engineering Corporation (one of Europe's largest consulting engineering firms), as a principal of the Swiss Bank Corporation Consultant Group, and as a governor of Peru's Central Reserve Bank. He is the author of several books and papers on economic policy, including the seminal work The Mystery of Capital.
David Harvey is the Distinguished Professor of Anthropology at the Graduate Center of the City University of New York (CUNY).
A leading social theorist of international standing, he received his PhD in Geography from the University of Cambridge in 1961. Widely influential, he is among the top 20 most cited authors in the humanities.
Naomi Klein is an award-winning journalist, author, and filmmaker. Her first book, the international bestseller No Logo: Taking Aim at the Brand Bullies, was translated into twenty-eight languages and called "a movement bible" by The New York Times.
She writes an internationally syndicated column for The Nation and The Guardian and reported from Iraq for Harper's Magazine. In 2004, she released The Take, a feature documentary about Argentina's occupied factories, co-produced with director Avi Lewis.
She is a former Miliband Fellow at the London School of Economics and holds an honorary Doctor of Civil Laws degree from the University of King's College, Nova Scotia.
Joseph E. Stiglitz
Joseph E. Stiglitz was born in Gary, Indiana in 1943. A graduate of Amherst College, he received his PHD from MIT in 1967, became a full professor at Yale in 1970, and in 1979 was awarded the John Bates Clark Award, given biennially by the American Economic Association to the economist under 40 who has made the most significant contribution to the field. He has taught at Princeton, Stanford, MIT and was the Drummond Professor and a fellow of All Souls College, Oxford. He is now University Professor at Columbia University in New York and Chair of Columbia University's Committee on Global Thought. He is also the co-founder and Executive Director of the Initiative for Policy Dialogue at Columbia. In 2001, he was awarded the Nobel Prize in economics for his analyses of markets with asymmetric information, and he was a lead author of the 1995 Report of the Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize.
Stiglitz was a member of the Council of Economic Advisers from 1993-95, during the Clinton administration, and served as CEA chairman from 1995-97. He then became Chief Economist and Senior Vice-President of the World Bank from 1997-2000. In 2008 he was asked by the French President Nicolas Sarkozy to chair the Commission on the Measurement of Economic Performance and Social Progress, which released its final report in September 2009. In 2009 he was appointed by the President of the United Nations General Assembly as chair of the Commission of Experts on Reform of the International Financial and Monetary System, which also released its report in September 2009.
Stiglitz holds a part-time appointment at the University of Manchester as Chair of the Management Board and Director of Graduate Summer Programs at the Brooks World Poverty Institute. He serves on numerous other boards, including Amherst College's Board of Trustees and Resources for the Future.
Stiglitz helped create a new branch of economics, "The Economics of Information," exploring the consequences of information asymmetries and pioneering such pivotal concepts as adverse selection and moral hazard, which have now become standard tools not only of theorists, but of policy analysts. He has made major contributions to macro-economics and monetary theory, to development economics and trade theory, to public and corporate finance, to the theories of industrial organization and rural organization, and to the theories of welfare economics and of income and wealth distribution. In the 1980s, he helped revive interest in the economics of R&D.
His work has helped explain the circumstances in which markets do not work well, and how selective government intervention can improve their performance.
Recognized around the world as a leading economic educator, he has written textbooks that have been translated into more than a dozen languages. He founded one of the leading economics journals, The Journal of Economic Perspectives. His book Globalization and Its Discontents (W.W. Norton June 2001) has been translated into 35 languages, besides at least two pirated editions, and in the non-pirated editions has sold more than one million copies worldwide. Other recent books include The Roaring Nineties (W.W. Norton); Towards a New Paradigm in Monetary Economics (Cambridge University Press) with Bruce Greenwald; Fair Trade for All (Oxford University Press), with Andrew Charlton; Making Globalization Work, (W.W. Norton and Penguin/ Allen Lane, 2006); and The Three Trillion Dollar War: The True Cost of the Iraq Conflict, (W.W. Norton and Penguin/ Allen Lane, 2008), with Linda Bilmes of Harvard University. His newest book, Freefall: America, Free Markets, and the Sinking of the World Economy, was published in January 2010 by WW Norton and Penguin/ Allen Lane.
Joseph Stiglitz discusses the rhetoric and reality of the United States economic model and calls the corporatism of the United States financial system flawed. He says, "neoliberalism is a doctrine, market fundamentalism is dead."
Stiglitz also points out the irony of American financial leaders advising other countries how to run their markets.
Social science that analyzes and describes the consequences of choices made concerning scarce productive resources. Economics is the study of how individuals and societies choose to employ those resources: what goods and services will be produced, how they will be produced, and how they will be distributed among the members of society. Economics is customarily divided into microeconomics and macroeconomics. Of major concern to macroeconomists are the rate of economic growth, the inflation rate, and the rate of unemployment. Specialized areas of economic investigation attempt to answer questions on a variety of economic activity; they include agricultural economics, economic development, economic history, environmental economics, industrial organization, international trade, labour economics, money supply and banking, public finance, urban economics, and welfare economics. Specialists in mathematical economics and econometrics provide tools used by all economists. The areas of investigation in economics overlap with many other disciplines, notably history, mathematics, political science, and sociology.
(born Feb. 9, 1943, Gary, Ind., U.S.) U.S. economist. He received a Ph.D. (1967) from the Massachusetts Institute of Technology and taught at several universities, including Yale, Harvard, Stanford, and Columbia. From 1997 to 2000 he was the World Bank's chief economist but often disagreed with the organization's policies. Stiglitz helped found modern development economics, and he changed how economists think about the way markets work. His studies on asymmetric information in the marketplace showed that the poorly informed can obtain information from the better informed through a screening process, for example, when insurance companies determine the risk factors of their clients. He shared the 2001 Nobel Prize in Economic Sciences with George A. Akerlof and A. Michael Spence.
Freefall is a great book. I didn't think I would like it; but the writing is sharp and the analysis convincing. Markets fail and governments fail too. Why not aim for some kind of balance of power and reponsibility. Now I will read his view on anything economic.
De Soto is kinda confusing. What is "more" or "better property rights"? There's plenty of evidence that for example expanding property rights to intellectual property has bad effects in certain sectors (see pharmaceuticals). South Korea developed having very loose intellectual property and benefited a lot from piracy. China ofcourse has a lot of public ownership, aswell as forms of hybrid ownership like the Township and Village Enterprises.
De Soto seems to imply that there's such a thing as more or better property rights, there's no such thing. There's all kinds of different arrangements appropriate to different societies.
this conversation was some what circular. soto basically saying property rights [i know he tried to unload the word] is the [only?] fundamental basis of empowering the powerless. the others agreed and added to it by saying thats not enough. then he says at least the occidentals have it, its worse everywhere else. and then it started again.
if property rights are fundamentally necessary for the information system of a just legal framework it doesnt mean it cant be the basis of an unjust system either. the examples klein give fit this but those are explained away by essentially having the right to protest against the injustice. that cant be enough, we need something more intrinsic at the basic level to guard against it. simply relying on that to be solved at the policy level by politicians and activists isnt good enough and its not a solution. i wouldve liked to see them discuss this.
also soto used a broad stroke to brush away the london example. fitting an 80's trend into a much broader historic context was too simplistic, harvey should have pressed him on it by talking details.
on the whole good talk, meandering at times but i would still like to have seen more.
No one is calling for Stalinism, only for responsible information systems. If we had the information, the financial crisis would have been foreseeable. I agree that Klein and Stiglitz are somewhat wishy washy, but nonetheless I took notes on this talk and I did notice some interesting insights from all three of them. However, I was interested in the original question, which was power from a geopolitical standpoint, but the outcome of the discussion was quite enlightening anyways, and I too enjoyed the input by deSoto, he is a very skilled thinker.
Naomi Klein wasn't invited to appear in this forum based on her charismatic and trenchant public speaking persona. But then again, it's quite extraordinary for someone to write a 700 page book about economics that becomes a New York Times best seller, gets translated into twenty-eight languages, and earns fulsome praise from people like Seymour Hersch, Howard Zinn, and even John Le Carre.
That includes about 100 pages of footnotes, including some completely original research establishing previously undocumented ties between some more prominent neoliberal economists and fun guys like the former Chilean dictator and mass murderer Augusto Pinochet, and confessions from former top IMF officials concerning their agendas.
She's a writer and researcher, not a public speaker, and as someone who has actually read her book, I can assure you that it is nothing short of paradigm shattering for the average American, raised on a steady diet of neoliberal propaganda and selective news reporting for the last several decades.
If she seems to evince excessive concern about the plight of the countries and lives of the people destroyed by the actors responsible for the neoliberal makeover of the developing world, let me assure you that the only effect that's had on her journalistic skills is to sharpen them. Her book isn't about hand wringing and weeping, it's about facts, patterns of conduct, and the conclusions they imply
There's an amazingly consistent agenda that the financial elites have been carrying out right under our noses for years under the camouflage of 'spreading free markets' and 'democracy' - with the tacit complicity of the American media. It' s been carried out under cover of a massive disinformation campaign executed so expertly that one wonders at how we could have stared so ignorantly at the pieces of the puzzle for so long.
Perhaps it's because only a few of the pieces have been revealed previously from time to time in periodicals. Klein's done the research, seen the connections, and then gone the extra mile to uncover new facts and linkages that establish her case fairly conclusively - and in a style accessible to a lay audience, sacrificing nothing in accuracy for clarity.
We've now arrived at the stage in the agenda where we had better understand what it is and how it's carried out, as it is now being executed upon the United States. Unless reversed soon it won't be too many years until we'll look much like it's other victims - places like Argentina and Russia.
I don't think it's an exaggeration to say that it's probably one of the ten most important books of the decade.
Klein...lacks analytical skills and presumes emotional attachment to the poor is a an adequate substitute. Soto...correct. Stiglitz in this session is too vague and too partisan.
RE: the topic of Economic Power --- to do what, when, under what conditions, for what reward and with what potential penalty? Economic power? What is that, precisely? Since never defined, I remain at a loss about what they are discussing. Obviously, in 2006, BSC and LEH had some measure of 'power.' Was it in their interest(s) to go BK? No. Yet, that is the system which they created/endorsed. So, were there limits to their power? Yes, of course, but the participants didn't dwell on this.
Second, what about markets. Not one of participants considered letting markets work. So what if GS joined LEH and BSC in BK. Markets work......it is just the outcomes are not always popular. Markets and the market system is not perfect, but it certainly beats Stalinist administrative fiat.....even if the modern day Stalinists wear smiling face buttons and tell you to have a nice day.
No the problem began with Progressivism and government price controls/subsidies. Once aid to the farmers is justified ...the logic of aid to Goldman Sachs, etc., could not be denied.
As far as I can tell, the problem remains: What's the Beef?
So interesting to watch this now! Of course deSoto was absolutely right about the institutional corruption that has lead away from the rule of law. But what's most interesting is that he tries so earnestly to stay on topic while Klein and Stieglitz zing the Republicans and posture and bloviate. What a powerful reminder of what so much of the left's contribution amounted to during the onset of public knowledge of the financial crisis.
I mean, deSoto is thinking constructively about key fundamental flaws and the others really don't want to get down to brass tacks. It really looks like neither Klein nor Stieglitz knows her or his stuff except from an ideological point of view. Yikes! I guess we in the north will now get what we so richly deserve.
while you fucktards are quoting Marxist bullshit, DeSoto and I and others are using relevant "information" and pushing the use of it forward in IT and Development and legal and property rights frameworks known as the "rule of law" and "alienable property" and the like. Screwups, incompetent regulators and congressmen who have IQ's lower than larvae and narrow self-centered "all the world's a Nail/object of one more useless bill, speech pandering after testing and getting ahead of the wind and crowd's opinion that carries the thoughts of the day for those morons on the hill to babble about (Sen Corker excluded, but he was real b4 coming to congress and has the common sense to show for biz success and actually doing something of value, unlike the rest of the herd of dung beatles in charge of the legislative branch, who incidentally solve no problems, stop no Executive violations of the Constitution, and likes the Executive, simply manage by objection, reacting and running like monkeys in the jungle as brush fires pop up all around. Shame on Bush, Shame on the Republicans, Shame on the Democrats. Fuck you all for destroying the Idea of Liberty that is America and never stopping to solve issues, for spending us into depression, stripping the world's marginal of the food for the day, robbing us blind by economic distortions and incentives and jackass regulations or the lack of smart common sense ones, not bought and sold like the 110000 page Grahm bill which was written by the financial lobby and allowed all the derivatives to be unregulated, an unread bill written with no one reading it b4 it was law, the next axes are Social security, credit cards, student loans, iterative spirals as we can not sell to other nations who are in recession and more losses at home while the industries propped up by economic distortions whine for help like the auto players who never got it, a government to paid 3 dollars to bets and speculators who bet the put downside of the derivative credit default swap market to every legitimate loss on a mortgage, unregulated and not allowed to be called what it is, "insurance", so the finance future to be cornholed in hell with Pinapple with Bush and Gonzalez and Paulson and Pelosi and Waxman and Barney Frank by Hitler in infinitum allowed and paid the financial thieves 3 dollars to 1 legit claim with our children's money and Obama deserves a chance, but the same types are in charge so the Treasury,Fed, Hill, Exec, groupthink will go one. We need to put our taxes in a Spendthrift trust and let Buffet manage the treasury and finances. Government is incompetent and corrupt and at best, just a bunch of dim witted, unimaginative dullards, (Intel and Military excepted), I hope they all not just go to hell, but rot in Stalin's, Hitlers, Pol Pot and Mao's, Yehzov and Beria's and all other enemies of this countries outhouse pits in hell. Worse than our enemies, they threw the constitution, economy, reputation as the pinnacle of liberty and high principles and threw the out like the baby in the proverbial bath water. You all make me sick and you keep the schools 40th in the world so the blathering graduates vote for you or are too clueless to contribute or notice your collective insipid malevolence. Eat shit and die, all congress and politicians, Republicrats or Demofuctard wanna be marxists. Screw you all for wrecking the greatest country in History.
Likewise, agreement with de Soto's thesis and approach. Especially what he said around the 55 minute mark, in context of Katrina/NOLA, aboriginal rights, urban foreclosures: point is that with proper information we can tell just how unjustly political power is being applied.
FWIW my long-time suggestion has been that we must strive to fulfill the bourgeois revolution in order to more clearly see how it is fraught with contradictions. "Progress" is dialectical, nae?