With Globalisation and its Discontents, economist and writer Joseph Stiglitz wrote a devastating critique of globalisation approach and its results. His work caused much discontent among those he attacked, as much for his argument as for his apparent self-righteousness. We seek to answer two questions: Firstly, does Stiglitz' work help us to identify the causes of contemporary conflicts and secondly, could it be that Stiglitz overlooks deeper interrelations between globalisation and contemp
Index
Abbreviations
Introduction
1st part – About an idea
2nd part – On root causes and catalysts
3rd part – On Indonesia, China and Bolivia
Conclusion
Bibliography and References
Abbreviations
Abbildung in dieser Leseprobe nicht enthalten
Introduction
With Globalisation and its Discontents, economist and writer Joseph Stiglitz wrote a devastating critique of globalisation approach and its results. His work caused much discontent among those he attacked, as much for his argument as for his apparent self-righteousness.
But while Stiglitz might be correct in noting the apparent rise in social and political conflict in the developing world, does he also help us understand the causes of these conflicts? Is his argumentative thrust correct in accusing the IMF of being responsible for the growing levels of conflict, or falls he instead short of the mark?
In this paper, we seek to answer two questions:
Firstly, does Stiglitz’ work help us to identify the causes of contemporary conflicts and secondly, could it be that Stiglitz, while explaining superficial causes, overlooks deeper interrelations between globalisation and contemporary conflicts, how innovative is Stiglitz actually in describing Globalisation’s discontents?
1st part – About an idea
In Globalisation and it Discontents, Joseph E. Stiglitz[1] offers us his critique of globalisation’s wrongs. But what does he mean by ‘globalisation’?
The term has existed for almost half a century, yet it still largely evades a universal definition. Furthering ambiguity, ‘globalisation’ has become an ideologically charged concept as it became increasingly influential and, as some argue, misleading: its proponents advance numerous concepts, describing globalisation as a “process” a “stage”, “phase” or “an ideology”[2].
Stiglitz argues globalisation as economic globalisation[3], or what he calls the ‘Washington Consensus’. According to Stiglitz, the IMF advances globalisation as an ideological, rather than economical, consent associated with crude market fundamentalism based on the assumption that ‘shock therapies’ of fiscal austerity, trade and industry privatisation together with financial and economic liberalisation will inevitably lead to development and prosperity.
Fundamentally, ‘globalisation’ denotes an ever-increasing growth in global trade, foreign direct investment (FDI) and capital flows, as well as increasing global production and consumption: as the world becomes, through increasingly complex relations, a single marketplace of global competition, national sovereignty over markets declines in importance and even becomes a hindrance.
Despite many suggestions, globalisation as economic interdependency is by no means a new phenomenon; nor is it irreversible. The Atlantic economy prior to 1914 knew economic interconnectedness, trade, migration, and international capital flows long before contemporary globalisation debates[4]. Technological advances fuel present-day globalisation, as capital and information move across an increasingly borderless world, economic deregulation, financial liberalisation, flexibility and the elimination of trade obstacles helps, in theory, stimulate growth - it becomes hence desirable for states to pursue liberal economic policies to attract FDI.
Markedly, the use of ideas surrounding the debate recalls the classical modernisation-theory and Raymond Aron’s vision of linear development[5] in which developing countries benefit from the acculturation of modern Western policies and values. Like ‘globalisation’, ‘modernisation’ considers development as linear, ongoing and inevitable, through which all countries have to equally go on the stages of their development from traditional societies to developed ones[6].
Although Globalisation and Modernisation differ in aspects, both are equally universalistic, as they understand there to be a single desirable future, which can be achieved solely by means set by them. Both take for granted that development towards this desirable end is most advanced in the West and others therefore have to continue along lines laid down by Western countries - both can consequently be said to be ‘variations of the same theme’. In this duality, ‘globalisation’ becomes both an objective and a subjective phenomenon. While global trade unquestionably exist, theorists trying to conceptualise it create ideological ‘Globalisation’ in the first place - creating its perceived inevitability as a process undergone as progress is embraced. This conceptualisation simultaneously helps to largely discount contentious methodical questions and maintain Globalisation as a fact, as the universally accepted economic policy.
Globalisation nevertheless is increasingly questioned: Globalisation and its Discontent s cannot be ignored in this context, pointing to its negative impact on developing societies, causing conflict and insecurity, perpetrating poverty and existing wars.
2nd part – On root causes and catalysts
Stiglitz argues that the IMF forces economic policies that, while conforming to textbook economics, make little sense to the countries they are recommended to. The pushing of such policies as “ends in themselves” on a “one-fits-all”[7] basis had disastrous results, undermining countries and leading to the increase of global poverty and conflict[8]. He maintains however that globalisation, if phased correctly, can be “a source of good”[9]. Stiglitz’ analysis of individual case studies, notably of the Asian Crisis and Russia’s economic transition, are forceful, arguing that the IMF forces countries to embrace globalisation “too fast, too far”, and exposing them prematurely to global economic instability. By doing so, he says, the IMF simply ignores the costs of social and political stability, as such premature exposure can act as additional destabilising element causing political and social conflict.
However, while we can accept Stiglitz’ criticism of IMF policies, this explanation appears too shallow. Rather than genuinely discussing globalisation, Stiglitz seems to be attacking a “curious blend of ideology and bad economics”. Rather than simply accepting that “policies were right and simply not implemented well”[10], we should ask ourselves if globalisation itself does not inherently create fundamental vulnerabilities leading to increased exposure to conflict?
Stiglitz’ insistence on the IMF weakens his argumentative depth as he largely ignores the impact of other factors such as government failure or ‘bad government’. To find the sources of contemporary armed conflict, such factors have to be taken into account for each individual case, as they create the social superstructure with which globalisation interacts.
While we shall not claim any “simple and direct connection[11] " between globalisation and conflict, we shall point to it often resulting in widening inequalities, which in relationship with social prerequisites can create ‘breeding grounds’ for conflicts. Even if globalisation increases overall growth and prosperity, such improvements are likely to be unfairly shared and to amplify relative deprivation, increasing horizontal and vertical inequalities, rising uncertainties about economic prospects and resulting intra-social frictions. This relative deprivation is often accompanied with an intensification of distributional conflict due to declining government revenues and expenditures, compromising the state’s fiscal autonomy and a weakened capacity to rectify socio-economic grievances[12]. This weakening of the state’s ‘provisionary powers’ primarily leads to a decline of lower classes’ living standards and can lead to the erosion of it’s general legitimacy, as it is seen as progressively reclining from the social contract[13].
[...]
[1] Joseph Stiglitz has been Chairman of President Clinton’s Council of Economic advisers, chief economist at the World Bank between 1997-2000 and received the Nobel Prize for Economics in 2001
[2] Kumar, 2003; O'Rourke, 1999
[3] Even though globalization has equally important cultural and political meanings correlated to cultural cosmopolitanism.
[4] O'Rourke, 1999
[5] Aron, 1958
[6] Preston, 1996
[7] Stiglitz, 2002
[8] Ibid.
[9] Ibid. p. 248
[10] Ibid. p. 194
[11] Fitzgerald, 2001
[12] Fitzgerald, 2001
[13] Further, from a security point of view, conflicts are linked to a breakdown of state constraints. Even with strong motives for conflict, an effective repressive state can prevent, eliminate, or reduce conflict, whereas a weak authority may not be able to constrain violence by violent means, nor address underlying socio-economic grievances by peaceful means and might even succumb to it. See China. (Mostert, 2003)
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