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What's wrong with globalization?

By anansi in MLP
Thu Jul 26, 2001 at 09:28:10 AM EST
Tags: Politics (all tags)

Joseph Stiglitz is not your typical rabble rouser. As chief economist for the world bank from 1996 to 2000, he has a unique perspective on the mechanics of globalization, American style. And when he began to question the impact of these policies, he was fired.

Here is an article about him, and this is one he wrote for the new republic.


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What's wrong with globalization? | 30 comments (24 topical, 6 editorial, 0 hidden)
Article VI.4 of GATS (4.66 / 6) (#2)
by maynard on Wed Jul 25, 2001 at 03:11:50 PM EST

See this report, previously published in the London Observer regarding Article VI.4 of GATS (General Agreement on Trade in Services). This is exactly why protestors are on the streets. Our elected legislative bodies are being thwarted by "world leaders" in an unelected WTO council setting policy which only benefits world business and not it's citizenry.

Here is another interesting link from Salon which further reports on the outrage. This is nothing short of dictatorship, IMO.


Read The Proxies, a short crime thriller.

Article V1.4 of GATS is what get me mad about this (5.00 / 1) (#6)
by 0xA on Wed Jul 25, 2001 at 04:42:45 PM EST

The report you linked to on gregpalast.com will give people unaware of this issue some good background.

I am astonished and appalled that the leaders of any country would ratify this treaty. They are essentially granting final authority in disputes with trade implications to an un-elected unacountable body.

Also check out this article which provides a few more examples of this process in action as well as some details on the dispicible actions taken by Gerber in Guatemala.

The actions of various anarchists and other jackasses taken at recent conferences (WTO in Seattle, G8 in Italy) unfortunately detract from the message of the mostly (95% +) peaceful protesters. I don't know many people who truly understand why these treaties are flawed, there is almost no media coverage concerning the reason 200,000 people show up to protest, just the small violent minority.

[ Parent ]

Interesting Stuff (4.00 / 2) (#5)
by sien on Wed Jul 25, 2001 at 04:36:10 PM EST

Very interesting read. Another interesting guy in this arena is Hernando De Soto, his book, The Mystery of Capital is really good. The first chapter is available at the NYT ( login required ) here . Amartya Sen and his book Development as Freedom ( first chapter at NYT here ) is another one.
Looking at what economics says and what works in the third world is interesting. It tends to indicate that micro economic infrastructure, i.e. micro-credit and the establishing of credit facilities would do a lot more for the third world than any large scale initiatives.
Indeed, it is interesting to speculate if the best thing might be to leave third world economies alone and simply help in adding this type of infrastructure.

The patient didn't have enough leeches... (none / 0) (#27)
by anansi on Fri Jul 27, 2001 at 06:39:26 PM EST

...which is why he looks so pale!

Check out this article. One memorable quote:

Debt is the direct result of the banking structure which has enriched the G8 nations. Our leaders are the last people on earth who should be charged with tackling it.

Don't call it Fascism. Use Musollini's term: "Corporatism"
[ Parent ]

Ah, yes (4.00 / 2) (#8)
by weirdling on Wed Jul 25, 2001 at 05:38:31 PM EST

This is, of course, why I am so stridently against interference in other nations. Sure, if your country can't meet its debts, you can approach a lender who may or may not approve you, but there's no reason for my government to bail you out, as you're just going to complain when I attatch strings, and I will. Since I, personally, wouldn't want my government getting that invasive, I won't support the same for those in other countries.

I'm not doing this again; last time no one believed it.
"Made In Taiwan" (1.00 / 2) (#10)
by SEWilco on Wed Jul 25, 2001 at 06:49:47 PM EST

Have we been hearing many complaints from the people whose favorite electronics are marked "Made In Taiwan"? Do you think your computer monitor was made in your own country?

The issue is not trade but justice (2.33 / 3) (#12)
by maynard on Wed Jul 25, 2001 at 07:15:50 PM EST

I don't have any problem whatsoever with trade, per se. This is not a debate about protectionism in order to artificially prop up national economies, but an issue of justice for citizens and the maintanence of democratic institutions. Make no bones about it, these guys are working out plans to subvert the authority of our constitutionally elected representative government in order to further plans for absolute authoritarian plutocracy.

I prefer to keep my voting rights, thank you.


Read The Proxies, a short crime thriller.
[ Parent ]

the development of Taiwan (4.00 / 1) (#16)
by streetlawyer on Thu Jul 26, 2001 at 07:37:20 AM EST

The electronics industry of Taiwan was developed in its infancy by a strong state which excluded foreign competitors and subsidised local producers, which would have been illegal under current WTO rules.

Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]
As in Korea.. (none / 0) (#18)
by ajduk on Thu Jul 26, 2001 at 08:13:42 AM EST

I beleive that the government of Korea called in the largest cooporations at one time and told them to take less profits and invest more, or go to prison..

South Korea was one of the poorest countries in the world after the Korean war. Now it's a first world country.

South Korea

[ Parent ]
Why is globalization bad? Here's why: (4.33 / 9) (#13)
by Inoshiro on Wed Jul 25, 2001 at 07:30:39 PM EST

What is the FTAA?
The FTAA (Free Trade Area of the Americas) is a proposed expansion of the North American Free Trade Agreement (NAFTA) to include all of the countries in N. America, S. America, and the Caribbean (except Cuba).

Who does it affect?
It directly affects the lives of each and every Canadian, as well of all of the people in the 33 other countries.

Why are so many people protesting against the FTAA?
It is not accurate to say that the FTAA is only about trade. It would be more accurate to say that the FTAA is a corporate bill of rights. Free trade deals such as NAFTA, the WTO, and now the FTAA value profits above all else, so environmental and human rights laws can be seen as barriers to trade. These deals give corporations the power to overturn such laws, as they have done numerous times. The FTAA will increase the rights of corporations at the expense of people's right to make democratic decisions.

Who is developing the FTAA?
The FTAA is being developed with alaming secrecy, our elected members of parliament in Ottawa are not even allowed to see it. The FTAA is being worked on by a select few politicians from each country involved, along with the input of the 500 largest American corporations.

Does free trade make a country richer?
Free trade makes the rich people richer and the poor people poorer. The growing gap between the rich and poor is a direct result of the free trade deals being created by the rich and powerful elite for their own benefit. Between 1992 and 1996, the income of the bottom-half of the Canadian popultaion decreased by 5.8%, while the income for the top-half increade by 4.4%. This trend will continue unless free trade is replaced by fair trade.

How does free trade affect workers' rights?
Routine threats to move production are used to force workers to accept lower wages and benefit packages, destabilizing trade unions. Canadian workers have lost more than 137,000 highly paid industrial jobs since NAFTA began. Most new jobs in Canada are non-unionized and temporary or part time -- 45% of the workforce is now engaged in "flexible" labour.

How does free trade affect the environment?
The FTAA will inhibit the rights of governments to create environmental laws. This has already been seen through NAFTA many times. Any strict environmental laws that may be created by countries involved in the FTAA can beseen as barriers to trade, and corporations will have the right to sue governments and overturn these laws. This has been referred to as the race to the bottom. Not only the present governments, but also the future governments wull have their hands tied, and will be unable o make any serious efforts to protect our environment.

How is publicly funded education and health care affected?
The FTAA will push to privatize publicly run services. The president of the world's for-profit hospital corporation has said, "Health care is a business no different than the airline or ball-bearing industry." He has also vowed to "destroy" every public hospital in North America. It is these types of corporations that are directly involved in developing the FTAA.

Some of the previous problems with free trade

  1. Local residents in the state of San Luis Potosi, Mexico, forced the state to block the opening of a hazardous waste incinerator by the US company Metalclad. A geological audit had shown that the project would have poisoned the local drinking water. Under NAFTA, Metalclad successfully sued the Mexican government for US $19 million.
  2. In 1997, the Chretien government banned the toxic gasoline additive MMT. The US corporation Ethyl Corp. threatened to sue Canada for loss of profits, so Canada paid US $13 million to the company and repealed the ban on the dangerous toxin that has been proven to attack the human nervous system. (MMT is banned in almost all US states.)
  3. UPS is currently suing Canada Post for $230 million for unfair competition. The federal government subsidizes the Canada Post service so that people in rural, as well as urban areas, can have affordable postal services. If UPS is successful (as they are likely to be), postal rates are not likely to remain subsidized.
  4. The US made an effort to protect dolphins from hazardous tuno fishing methods. The country banned the imports of tuna from countries that did not make the efforts to protect dolphins, so Mexico complained to the WTO. In 1991, the US was forced to accept foreign tuna -- no matter how it was caught. Rulings like this have effectively killed any hopes of protecting wildlife.

What you can do:

  1. Read more about the FTAA and free trade.
  2. Talk to people about free trade.
  3. Join in peaceful protests against the WTO.

If you have any questions about the FTAA, WTO, ar NAFTA, please email fightfreetrade at yahoo.com. Or check out:

[ イノシロ ]
hey, (3.00 / 1) (#14)
by chale on Wed Jul 25, 2001 at 10:46:29 PM EST

Inoshiro. why not submit this to the queue? it's better than most of the stories i've seen on the issue so far.

When one tugs at a single thing in nature, he finds it attached to the rest of the world. -John Muir
[ Parent ]

I second that! (none / 0) (#23)
by wiredog on Thu Jul 26, 2001 at 03:00:47 PM EST

If there's a choice between performance and ease of use, Linux will go for performance every time. -- Jerry Pournelle
[ Parent ]
Actually... (none / 0) (#24)
by physicsgod on Thu Jul 26, 2001 at 05:37:55 PM EST

All I see is assertion. It would be nice to see some of the proposed terms and then an analysis of what that might cause.

--- "Those not wearing body armor are hereby advised to keep their arguments on-topic" Schlock Mercenary
[ Parent ]
Rich vs. Poor (none / 0) (#25)
by KWillets on Thu Jul 26, 2001 at 07:16:20 PM EST

Free trade makes the rich people richer and the poor people poorer.
The figures you quote are for Canada only. I suspect many low-wage jobs would indeed migrate from rich to poor countries, yielding lower incomes for poor people in rich countries, but I don't know what the net effect would be.

[ Parent ]
The Rich Get Richer, The Poor Get Poorer? (none / 0) (#30)
by cdellow on Sun Jul 29, 2001 at 11:09:51 PM EST

*sneeze* When in history has this not been true? The rich are rich because they have money smarts. The poor are poor because they lack money smarts.

The poor can change their status through hard work. The rich can change their status through illegal schemes, being sloppy with their money, being sued for abusing workers, etc, etc, etc.

[ Parent ]
What I wonder is, why didn't they turn down IMF ? (3.00 / 2) (#15)
by Highlander on Thu Jul 26, 2001 at 06:02:14 AM EST

Reading Stiglitz, I wonder, if the medicine administered by the IMF was so bad, and the country really had so bright local economists, then why didn't they turn down IMF ?

Moderation in moderation is a good thing.
because they were in desperate need of bailing out (5.00 / 1) (#17)
by dash2 on Thu Jul 26, 2001 at 07:44:21 AM EST

... by IMF loans.
If I speak with the tongues of men and of angels, but have not love, I am become sounding brass, or a clanging cymbal.
[ Parent ]
because.. (none / 0) (#19)
by ajduk on Thu Jul 26, 2001 at 08:19:08 AM EST

... by IMF loans...AFTER following IMF guidelines on easing short term capital flows...which caused the acute problems in the first place.

[ Parent ]
Inconsistancies (none / 0) (#20)
by gauntlet on Thu Jul 26, 2001 at 10:00:09 AM EST

The article is surprisingly inconsistant for such a well-educated author. First he goes on describing why the policies were bad. Then he describes the erroneous reasoning behind these policy decisions. Then he describes the circumstances that allowed these mistakes to go unchecked.

Then, he insinuates that they were intentionally making self-serving mistakes based on the lack of evidence of the effectiveness of the policies.

So he gives two possible explanations for the same mistakes. I would tend to apply Hanlon's Razor here ("Never attribute to malice that which can be adequately explained by stupidity.").

Let's tell the IMF and the WTO that they are not elected by us, and that we don't want them dictating to our governments. Let's not accuse them of profiting from the downfall of less industrialized economies. That just makes us look stupid.

Into Canadian Politics?

Free Trade Benefits The Poor (2.50 / 2) (#21)
by WombatControl on Thu Jul 26, 2001 at 12:49:53 PM EST

This mantra that free trade is "corporate welfare" that "puts profits first" is hollow. Free trade benefits the countries who want to sell goods and services to the US market.

Current protectionist trade policies unfairly target poorer countries with crippling trade barriers. According to the 1999 World Bank World Development Indicators countries who wish to import textiles to the US face many trade barriers that effectively limit their access to the world's largest economy. They want to trade, they have products that would sell, but trade barriers force them out, locking them into poverty.

Protectionism does not work. According to Charlene Barshefsky, U.S. Trade Representative, in her testimony on US priorities, trade barriers actively hurt governments who institute them. (U.S. Senate, 106th Cong., 1st Sess., June 24, 1999.) The fact is, trade barriers will disappear regardless of treaties like FTAA. Just as information wants to be free (in the sense of speech, not beer, BTW.), so does trade. These countries want connections to the Western world, they want the goods and services that the West provides, and no matter how many protests there are, that fact will not change. Free trade is good for the poor, ane protectionism is a thing of the past.

A better explanation can be found in this report on the benefits of free trade. For information on regional trade benefits, this article provides some insights into the specific economic benefits.

Free trade benefits the hypocritical (none / 0) (#22)
by ajf on Thu Jul 26, 2001 at 01:34:15 PM EST

I agree with most of what you're saying. I firmly believe that free international trade is in everyone's best interests.

Unfortunately, it's not true that free trade benefits everyone who wants to trade with the US. The US government subsidises agriculture, for example, and actively impedes imports. How do smaller countries like Australia and New Zealand (which over the last couple of decades have eliminated almost all protectionist policies) benefit from this?

Much of Japan's past economic success is attributable to their one-way trade - they export widely, but there are significant bureaucratic roadblocks making importing products which are also manufactured in Japan incredibly difficult for foreign companies, to the point where they are reluctant to import rice, to give another agricultural example, even when a poor season means domestic supply will not meet demand.

"I have no idea if it is true or not, but given what you read on the Web, it seems to be a valid concern." -jjayson
[ Parent ]
Hurt in the long run (none / 0) (#26)
by weirdling on Fri Jul 27, 2001 at 03:31:08 PM EST

The UShas run a trade deficit for a long time. Nevermind the particulars, this is good. Nations such as Japan, who are heavily protectionist can do so only as long as there is a bigger economy. The US discovered this in the thirties, when its economy handivacced the entire world, making for overstock of goods. Since the US exists, Japan can be this closed and expect that the US, at least, can afford to buy Japanese. However, as time goes on, threats rumble from Washington about trade embargoes and these other countries really ought to reconsider.

I'm not doing this again; last time no one believed it.
[ Parent ]
how is it that... (4.00 / 1) (#28)
by poltroon on Sat Jul 28, 2001 at 03:55:34 PM EST

critics of corporate-style globalisation are implicitly blindly promoting protectionist policies? I was under the impression they promote standards which consider the interests of people rather than corporations. ie. fair trade.

And just as silly as it would be to be blindly pro-protectionism, how does it make sense to say that protectionism universally doesn't work? Is it totally impossible that it might be in the best interests of certain nations to protect some of their developing industries until they're capable of competing in a global market place? When exactly did protectionism become a thing of the past? Undoubtedly sometime between the 19th century and now, when it worked for the US.

[ Parent ]

Put the Corporations in Place First! (none / 0) (#29)
by ca5e on Sun Jul 29, 2001 at 12:21:08 AM EST

The problem with any free trade agreement that is being designed right now is that they are being designed by and for <u>CORPORATIONS</U>. That's right. Not by the governments of the impoverished countries, not even by Western governments. I agree that free trade is inevitable, but it should not be implemented at this time, when we already have enough trouble keeping corporations in line within the legal boundaries of the United States. Our president has proved time and time again that he is working in the interest of his various corporate constituents. Think what would happen if the oil companies could sue our government for having a natural reserve in Alaska, a terrible, inconcievable "trade barrier"?

What the current trade agreements are offering is boundless, unlimited corporatism.
[ Parent ]
What's wrong with globalization? | 30 comments (24 topical, 6 editorial, 0 hidden)
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