Tuesday, December 8, 2009

Joseph Stiglitz's How Globalization Works - Chapter 3

Stiglitz writes that the Washington Consensus was idealistic economics that didn’t produce real-life success. He believes that most economists have gotten past the question of whether markets are inherently efficient and have moved on to “whether government can improve matters.”
He cites the growth of Asian countries as being the product of governments “choosing which sectors their countries would develop rather than leaving it up to only the market to decide.” The spillover effect supposedly increased returns from this policy since technologies developed in “chosen” industries could be applied to the castaway industries.
Stiglitz goes on to make the audacious claim that “it is important for countries to focus on equity, on ensuring that the fruits of growth are widely shared. There is a compelling moral case for equity…” He then concludes his chapter by saying; “it would be even better if we titled [the playing field] to favor the developing countries.”
This author would surely feel right at home in the former Soviet economy. His mind must be in a fantasy world to consider that equality is something to be obtained through markets or that governments choosing economic winners and redistributing wealth is morally desired.
The only way humans will ever all end up equal from an economic perspective is if no one has any economic assets at all. People are by nature selfish and equality should hardly be pursued. Rather, freedom of the individual to pursue economic wellbeing should be promoted.
Stiglitz clearly believes that national governments are in place to pursue equality of their own citizens as well as the good health of all foreign citizens. I fundamentally disagree with him on the grounds that national governments should simply promote freedom for its own people. They should be founded on the belief that all humans are selfish, not benevolent, as Stiglitz mistakenly believes.

No comments:

Post a Comment