Joseph Stiglitz — Rebel With A Cause

Joseph Stiglitz 2001 Nobel Prize winner in Economics is not known to mince his words. This trait eventually cost him the coveted job as the World Bank’s chief economist. Yet, he is a renowned economist — and still as outspoken as ever. Our new Read My Lips examines his views on economics and the process of globalization.

How do you assess the current U.S. economy?

“There is no threat of a depression. The fundamental data are in order. It’s just that people are very frightened.”

(October 2001)

What is your perspective on economics in general?

“Economic policy making should not become a religion.”

(November 1999)

What’s your philosophy in life?

“The cost of continuing mistakes is borne by others, while the cost of admitting mistakes is borne by yourself.”

(April 2000)

How did academic competition shape your life?

“We got this very mixed message at MIT We were taught the perfect-market-competition model, and then we were told that only at the University of Chicago, a center of conservative economics, did they take the model seriously.”

(May 1998)

Where do you see the role of government?

“Limiting the ambitions of the state does not entail a weakening of the state.”

(July 1997)

How do you view the relationship between politics and economics?

“Economic policy is today perhaps the most important part of U.S. interaction with the rest of the world. And yet, the culture of international economic policy in the world’s most powerful democracy is not democratic.”

(November 1999)

What about the relationship between borrowers and lenders?

“For every borrower, there is a lender. And if you have a bad borrower, you may have a bad lender, too.”

(October 1998)

What do you think about Europe’s approach to the market economy?

“Europe has a longer tradition of deeper concern for equity — and a different view of the role of the state. We need to replace ideological textbook economics and their simplistic explanations of what makes markets work.”

(June 1999)

How do you judge the record of the international financial institutions?

“There were terrible results in Asia. The IMF is only now changing its view.”

(October 2001)

What did the World Bank get in return for the money it lent to developing countries?

“Was imposing conditionality an effective way of changing policies? There is increasing evidence that it was not. Good policies cannot be bought.”

(November 1999)

In which way does the attitude of the U.S. government regarding the IMF differ from other countries?

“Most countries unfortunately don’t have the facility that we in the United States have when we receive the Article IV report, of picking it up, saying ‘thank you very much’ — and dropping it straight into the garbage can.”

(October 2001)

What is your take on anti-globalization protesters?

“The streets are not the best place to discuss these highly complex issues. Some of the protesters are no more interested in open debate than the officials at the IMF are.”

(April 2000)