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.
Right, I was thinking something around the same lines. Just as Creationists and Inteligent Designers can always point to some "gap" in the fossil records, and basically say "Aha, you haven't explained how this life form evolved from one phase to the next, therefore 'God' did it", Free Market Fundamentalists always look to something not yet deregulated or privitized to pin the economie's problems on. Of course, neither of these fundies make any sense.
Nicolas Taleb, author of Black Swan, says that the math on the derivatives is junk math. They are 100's of pages of complex math........with risk models that only look back fifteen years. Please, don't call it "so complicated." I've done math. It is junk and belongs in the trash, I don't care how pretty it is. This is where Soto is, again, eloquent, but useless. We don't need legal-surgeons to extract the cancer..we need garbage men and an incinerator. By the way, these derivatives only regain their value if our current home and asset deflation completely reverses towards new highs....yea! Stick that in your pipe of optimism and smoke it. No, Stiglitz is right, just have fun with Naomi and ignore the insecure, rocket-scientist-Soto.
I agree with De Soto's view that there is a lack of information about derivatives markets and quite frankly they're so complicated that I think governments are scared to try and understand them. Stiglitz could of pushed De Soto more.
Naomi seemed well out of depth and lacks any real philosphy, instead we get a stream of ancedotes that don't really address the issues.
Naomi Klein has made an career out of pointing out something very interesting and obvious before anyone else. I can understand how she inspires jealousy in so many who wish they travel the country giving speaches.
Brushes9: It is not a "theory of everything". In the context of the current crisis the problem lies in institutions not knowing what they own. When they find a "AAA" derivative on their books they have NO CLUE as to even what part of the country those loans cover. Much less which particular house or even tranche of that loan until someone spends months trying to find out.
Sactownjudge, you failed to provide a link but I found the article anyway and somehow, I still escaped the conclusion you proposed without feeling anything about TNR or Chait. I also found Klein's response which does clarify some of the points Chait attempts to rebuke.
The lengths that you and he go to defame her work as 'pseudo-intellectual' or 'perfect nonsense' are really quite dramatic... you may not agree with her views but she has certainly put forth a well-founded (or at least well-researched) argument in The Shock Doctrine.
I think we can all agree that free-market policies have gone a bit awry since the advent of corporate personhood, opening a pandora's box of legally protected self-interested goals that intertwine into a fustercluck of less-than-ethical materialist pursuits. Her theory on some of the more recent exploits of corporate capitalism is just as solid as any other you can attach a bunch of facts to.