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The Rebel Within: Joseph Stiglitz and the World Bank (Anthem Studies in Development and Globalization)

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Stiglitz, who is the former Chairman of President Clinton's Council of Economic Advisers and Chief Economist of the World Bank, won the 2001 Nobel Prize in Economics (younger than Milton Friedman had been when he won his Nobel). This moderate pragmatist can hardly be called a soft leftie and yet his stinging attack on the IMF and the World Bank (both organizations intensely disliked by Republican rightwingers) is both surprising......and perfectly justified, in my view. He develops this theme more fully in his other book "Globalization and Its Discontents," while this small book is a good extract of his economic philosophy. In his many public speeches and statements Chairman Joe lends the full weight of his considerable authority to China-boosters and China-lovers everywhere. But his frequently expressed optimism of China's economic prospects is not his main point - he uses China as an example to show why and how you can avoid messing things up if you use the right methods.

I understand this book to be a very clear description of what is missing in the way the international financial organizations address the problems of developing countries. But there is more to say about one of the core problems in our countries and that is the weakness or the lack of institutions and as a result of this ..corruption and worst....impunity. Politicians no matter what party..protect each other. A lot of people's money goes to the pockets of a few ... money that should be spent in education and health. Some of this money comes from the WB , IDB , etc...

Giving it a little more thought..maybe this kind of arrangement is the best situation for these corrupted third world politicians and for the big multinational firms and financial institutions that lend them money...to keep the people in poor countries ignorant and illiterate so that the big firms can keep their advantages with unlimited cheap labor pools. Sure , maybe this situation is viewed as a comparative advantage or just as business strategies by the big firms..but for our own politicians-gangsters ....this is a major crime and should be treated as such...If we just could !!!

Why keep lending money to be used by these thieves?? Well, maybe some goes back to the source...banking accounts in developed nations or comsumption of luxury goods manufactured in the hometown of some of the top brass in some Bank. Who knows?? Believe me.. ,it is not funny to see the son of some new-rich state official driving the last model Lexus SUV with your money!!! Why we the people do not do something about it?? How?? Going to the corrupted legal institutions or to the corrupted police?? Going to the streets and making justice with our own hands and then be accused of terrorists or leftist anti-free market mob and risk an invasion by the US Marine Corps??? Voting??? Give me a break!!! We often see on TV the prez of the USA drinking coffee and chating with some these third world politician-mobsters in his oval office ....Why???

Mr. Stiglitz certainly has clarified and explained the problems we face ...but the solutions are not easy to undertake. There are too many factors involved and the one that could make a difference...to change the mindset of the people...means nothing less than a mental rebirth and a total destruction of all cultural heritage....And this could take centuries....or some sort of dictatorship.... Is there any hope for us???

Joseph Stiglitz was Chief Economist and Senior Vice President at the World Bank from February 1997 to December 1999. He was dismissed a few months before the end of his contract and replaced by Sir Nicholas Stern.

This is a thought-provoking collection of nine of his most important speeches given between January 1998 and January 2000. They all undermine the conventional wisdom of the World Bank, the International Monetary Fund, the US Treasury Department and HM Treasury.

He exposes the failures of the Washington consensus, of shock therapy in the transition economies, of financial liberalisation, and of the IMF's handling of East Asia's financial crisis. He discusses his vision of development as social transformation; the role of knowledge in markets; the importance of openness, workers' participation in firms, the right to know and economic democracy; and the value of trade unions.

He observes that China accounted for two-thirds of all the growth in low-income countries between 1978 and 1995. In the 1990s, China's GDP almost doubled, while Russia's GDP almost halved and its inequality doubled. In the last few decades, East Asia's states have increased their GDPs and life expectancies, extended education and reduced poverty. In the late 1990s, reckless loans by US, European and Japanese banks caused Korea's crisis. Market entities, not the government, misdirected credit; the government's only failure lay in not regulating the banks.

Stiglitz notes, "If one didn't know better, it might seem as if the fundamental propositions of neoclassical economics were designed to undermine the rights and position of labour." Full employment is more important than welfare, since welfare can never provide the dignity that comes from work.

He points out that recent studies suggest that "increased labour market flexibility could actually exacerbate economic fluctuations." Indeed, "greater wage flexibility ... may actually contribute to an enhanced likelihood of a recession."

He urges preventing crises by controlling capital flows. There is a large literature showing "capital and financial market liberalisation ... unambiguously contributing to economic volatility and an increased probability of financial and currency crises and recessions."

the correct title is: "The Rebel Within: Joseph Stiglitz and the World Bank"