Moving Beyond Stiglitz? Does ‘Globalisation and its
Discontents’ add to our understanding of the
sources of contemporary armed conflict?

by: Florian Heyden

Index

Introduction 4

1st part – About an idea 5

2nd part – On root causes and catalysts 7

3rd part – On Indonesia, China and Bolivia 10

Conclusion 15

Bibliography and References  17

Abbreviations

FDI = Foreign Direct Investment
GDP = Gross Domestic Product
HDI = Human Development Index
IMI = International Monetary Institutions
IMF = International Monetary Fund
NEP = New Economic Policy.
OECD = Organisation for Economic Cooperation and Development in Europe
WTO =World Trade Organisation

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. Stiglitz¹ 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 globalisation³, 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.

[...]

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