诺贝尔奖获得者约瑟夫·斯蒂格利茨 | 新的全球秩序：后新自由主义全球化
https://www.youtube.com/watch?v=aF1QzSLOy4M&t=1474s
2023年9月28日
与约瑟夫·斯蒂格利茨一起探索一种不同于当前新自由主义框架的新多边主义，为全球合作提供另一种基础。
近年来，以新自由主义为基础的国际经济秩序在过去半个世纪中盛行，遭受了致命打击。经济上，增长速度比以前更慢，不平等程度更高。2008 年金融危机暴露了系统的不稳定性，疫情和疫苗隔离表明边界确实很重要，疫情后的通货膨胀表明市场缺乏弹性。
有证据表明垄断和买方垄断力量正在增强。由于美国拒绝任命世界贸易组织的上诉法官，其新的产业政策粗暴地践踏公平竞争的原则，基于规则的国际贸易体系陷入混乱，新的地缘政治将世界分成集团，各国降低贸易和金融体系的风险。
然而，气候变化和流行病需要全球合作。本次演讲探讨了一种新的多边主义，一种基于新自由主义的多边主义的替代方案，它可能为这种合作提供基础，这种合作在关键方面与当前的全球制度截然不同。
科学组织者：
Giancarlo Corsetti 教授（欧洲大学研究所）
Glenda Sluga（欧洲大学研究所）
发言人：
Joseph Stiglitz 教授（哥伦比亚大学）
谢谢，欢迎大家参加今天的讲座，Stieglitz 教授讲的是后新自由主义全球化，非常高兴 Joe Stiglitz 能来这里，不仅因为他的声誉，也因为他多年来从我们身上学到了很多东西，我认为，特别是因为我们处在一个事物变化很快的环境中，很多方面，好的想法都落后了，所以在某种程度上，Joe Stiglitz 是一个好的想法如何受到政策新兴问题的启发，并提出解决方案，批评新观点，这些新观点具有政策含义，并塑造了可以实现目标的制度治理，所以我立即停下来，不占用讲座的时间，我把发言权交给 Glenda，嗯，我的名字是 Glenda Slugger，我是舒曼大学的国际历史和资本主义教授中心和欧洲大学联盟历史系，我谨代表欧洲大学联盟以及舒曼高级研究中心欢迎大家，该中心成立 30 周年，这只是我们很高兴斯蒂克利茨教授在欧洲的时间允许他来到这里与我们交谈的原因之一。我认为我不需要花太多时间在他的简历上，如果要我花所有时间可能只是浏览一下，但你知道，我认为没有人不知道斯蒂克利茨教授是诺贝尔经济学奖获得者，他目前在哥伦比亚大学担任教授，他是前世界银行首席经济学家，美国总统经济事务委员会主席，担任高级碳价委员会联合主席，国际公司税收改革独立委员会联合主席，1995 年 IPCC 气候评估的主要作者，等等，因为他无所不知，事实上，我知道在座的很多人都认识他，或者在一些场合见过他。他担任过许多职务，而且他的职业生涯丰富多彩，今天我通过诺贝尔网站上的他的自传对他有了更多的了解，我会推荐他，在那里我发现了乔·斯蒂格利茨，他很看重自己早期接受的历史教育的影响，以及他在印第安纳州加里市长大所受的早期教育，他把加里市描述为一个与工业经济的兴衰同步的城市，所以斯蒂格利茨教授是一位经济学家，他重视从另一个角度看待世界的现状，我认为，无论我们想从另一个角度来解释，正如他所描述的那样，这种观点从未像现在这样重要，因为我们在考虑 20 世纪全球化的另一面，我们可能努力实现什么样的国际经济秩序，你知道有谁比我认为的国际公共知识分子更能应对后新自由主义全球化的未来，他在许多不同的背景下将自己描述为公务员，你知道，最终他是一位全球思想家，所以非常感谢你和我们在一起，非常感谢Glenda，很高兴再次来到这里。大约 45 年前，我曾在 EUI 工作过，当时它规模小得多，但那时我很喜欢它，所以我想我应该回来拜访你们，但那时你们大多数人都不在，嗯，这个话题很容易激发人们的兴趣。过去几年全球化发生了巨大变化，我们经历了冷战后的一段时期，弗朗西斯·福山说，那是历史的终结，我们都将成为民主国家，自由民主国家和自由贸易经济体，这意味着我们都应该走向一个没有边界的世界，一切都可以自由地跨越边界，事情并没有像那个范式的倡导者那样顺利，福山显然是多元主义者，我们现在显然处于一场新的冷战中，许多旧秩序的租户已被撕毁，例如，世界银行、国际货币基金组织和美国政府 40 年来告诉各国的一件事就是，你不应该有产业政策，我的一位前任经济顾问委员会主席迈克·博斯金曾说过，哦，他否认了这一点，他曾说过，一个国家生产薯片还是电脑芯片并不重要，如果是这样的话，我们就不会通过《科学和船舶与科学法案》中，我们花费了数百亿美元试图让芯片生产重回美国，因此美国违反了世贸组织规则，而自然安全顾问杰克·沙利文在四月份的布鲁金斯学会演讲中表示，他基本上说，我们写了他没有说这部分，我们制定了国际规则，只要它们对我们方便，我们就会遵守，但现在它们对我们不方便，我们不会遵守，除非我们为了自己的利益重新制定规则，你可以想象，如果你的规则只适用于方便的时候，你就没有规则，所以这是本文的动机之一，全球化的旧秩序已经消亡，问题是新秩序会是什么样子，所以我想把谈话分成三个部分，它基于部分是我的书《人民权力与利润》，部分是我与同事马丁·古兹曼（Martin Guzman）合作完成的，他曾是阿根廷经济部长和前博士后，部分是基于我参与的一些活动，我会在讲解过程中谈到这一点，所以第一部分我将给出广泛的理论，第二部分我将讨论一个具体问题，第三部分将讨论当前正在讨论的一些政策问题，我想我应该对这里的时间有个概念，多少分钟，好吧，我们过去 40 年的新自由主义秩序名义上是建立在运作良好的新古典主义经济前提之上的，我之所以说名义上是因为如果你深入研究，它更多的是基于权力关系，但我们告诉学生的都是关于新古典主义模型的，这可以追溯到亚当史密斯谈到了利用规模经济，大头针工厂，市场越宽广，这些优势就越多，大卫·李嘉图谈到了利用比较优势，让要素自由流动，要素流向生产力最高的地方，这意味着 GDP 增加，所有这些都如我所说，导致更高的产出，这可以让每个人都过得更好，但这种分析存在多个缺陷，我过去 50 年的大部分工作都是试图找出这些缺陷，并强调它们，它假设市场不完善的方式，其中一些是固有的，如不完善和信息和不完善的风险市场，你知道，你可以说一些
不完善是制度性的，你可能会摆脱它们，但你无法解决问题，它们总是会存在信息不完善，它忽略了外部性，气候变化大流行公共卫生问题，外部性确实是四个，它忽略了技术变革，这真的很了不起，这是一种不一致的修辞，用于自由市场经济学家在很大程度上依赖于 Arrow 和 Debru 的工作，第一福利定理表明竞争经济是相当理想的，但 Arrow 和 Debru 的一个关键假设是技术是固定的，Arrow 至少从不喜欢这个假设，但他知道如果他放弃这个假设，这个定理就不正确，他从未充分发展他在 1962 年的一篇论文中所做的，我会回来的，Bruce Grimo 和我进一步发展并更广泛地展示了一旦??你引入技术变化，市场通常不是柏拉图效率，这真的很重要，因为很多右翼人士不参考福利经济学的第一定理我从来没有听过 Barry Goldwater 谈论第一福利定理，因为他们谈论市场的动态特性，但一旦你这样做，实际上竞争分析经济学说它是错误的嗯，下一个观点是一个非常重要的，许多人忽略了它政策忽视了所谓的次优经济学，在多重市场失灵的情况下，消除或减少一个市场失灵实际上可能会降低福利，我稍后会举一个例子，最后，虽然分析表明通过最大化 GDP，每个人都可以过得更好，但这并不意味着你有一个更大的蛋糕，如果你正确地切分它，每个人都可以得到更大的一块，事实上，任何看过政治分析的人都会发现，有些人最终只得到了
较小的一块，他们的情况更糟，这意味着它实际上不是很有效率，所以有一整套定理来解释为什么新自由主义全球化可能行不通，嗯，你知道我不这么自指，我为如此自我指涉感到尴尬，但这是真的，嗯，首先，竞争均衡或一般来说甚至不受约束的帕累托效率约束意味着考虑到市场不完善，我们不完善信息的成本，获取信息的成本，创建市场的成本等等，在不完全风险市场的情况下，不完善和不对称信息，正如我所说，市场效率不高，因此第一福利定理仅限于一个不存在的世界，所以我有时是这样说的，你知道亚当·斯密的“看不见的手”，即追求自身利益就像一只看不见的手，导致社会中每个人的福祉，看不见的手经常看起来是看不见的，这似乎不起作用，因为它不存在，而且市场没有斯密所假设的那种属性，然后大卫·纽伯里和我在一篇论文中表明，在风险市场不完善的情况下，贸易自由化可能会使每个国家的每个人境况恶化，所以这不仅存在分配效应，还可能使每个人的境况恶化，然后我表明，在风险市场不完善的情况下，事实上我确信在风险市场完善的情况下，资本市场自由化可能会降低福利，这真的很重要，因为我一生中的一场战斗就是与国际货币基金组织进行的1997 年，国际货币基金组织试图将其章程改为协议条款，以允许其推动各国实现资本市场自由化。国际货币基金组织成立于 1944 年，当时的国王们并不相信资本市场自由化，他坚决反对资本市场自由化，因此，他帮助创建的机构发生了变化，就像你经常创建的机构一样，20 年后，管理这些机构的人在背后捅你一刀，然后走向了相反的方向，这就是国际货币基金组织发生的事情，在我成为世界银行首席经济学家之后，他们在香港举行了一次会议，批准这一变化，以允许他们推动资本市场自由化，但事情发展并不顺利，因为泰国危机，东亚危机刚刚开始，始于泰国，9 月，我会见了所有财政部长，试图让他们实施更严格的资本管制。控制破坏了世界，他们是国际货币基金组织，但在我们组织起来做这件事之前，印尼危机和朝鲜危机爆发了，所以我们经历了一场全面危机，所以我反对它，部分原因是我认为它没有分析基础，它不是福利增加，我终于在 2008 年的论文中证明了这一点。最后，你知道，创新是现代经济的核心，通过边做边学，营销均衡本质上永远不会有效，所以这些是一些定理，它们帮助我们理解为什么你不应该期望新自由主义全球化会起作用，但实际上在实践中情况更糟，更糟是因为这些是定理，然后你谈论数字是多少，效率团伙比预测的要小，分配效应在我们社会的大群体中更大，情况变得更糟，政治后果非常严重，这与其他一些我没有知道的其他假设有关嗯，新自由主义经济新古典经济学的假设之一是
无成本的流动性，跨部门的流动性，跨地区流动性，萨莫古和麻省理工学院小组等人的研究表明，在那些发生重大贸易冲击的地方，工资下降，失业率上升，房产价值下降，这实际上表明存在局部影响，人们无法自由流动，我们与布鲁斯·格林威尔合作，从理论上分析了当时会发生什么，从宏观经济的角度来看，你可能会再次得到非常糟糕的结果
此外，作为新自由主义议程一部分的贸易协定被称为欧洲自由贸易协定，你经常称它们为伙伴关系协议，但这两个词汇都没有描述 but neither vocabulary describes what
Nobel Prize laureate Joseph Stiglitz | A new global order: on post-neoliberal globalisation
https://www.youtube.com/watch?v=aF1QzSLOy4M&t=1474s
2023年9月28日
Join Joseph Stiglitz as he explores a new multilateralism that differs from the current neoliberal framework, offering an alternative basis for global cooperation.
Recent years have dealt a fatal blow to the international economic order based on neoliberalism that has prevailed for the last half century. Economically, growth has been slower and inequality higher than earlier. The 2008 financial crisis exposed the instability of the system, the pandemic, with vaccine apartheid, showed that borders do matter, and the post-pandemic inflation demonstrated the market’s lack of resilience. There is evidence of increasing monopoly and monopsony power.
With the United States refusing to allow the appointment of appellate judges at the World Trade Organization and with its new industrial policies running roughshod over principles of a level playing field, the rules-based international trading system is in shambles, with a new geopolitics dividing the world into blocs, and countries de-risking their trade and financial systems.
Yet, climate change and pandemics require global cooperation. This talk explores a new multilateralism, an alternative to that based on neoliberalism, which might provide the basis of that cooperation, one that in key ways looks markedly different from the current global regime.
Scientific Organiser(s):
Professor Giancarlo Corsetti (European University Institute)
Glenda Sluga (EUI)
Speaker(s):
Prof Joseph Stiglitz (Columbia University)
thank you， welcome everybody to today's lecture by professor stieglitz uh post neoliberal globalization it is a great pleasure to have Joe stiglitz here not only for his reputation the how much we learn from him over time but I think especially for a reason that we are in a situation where things are changing pretty quickly many dimensions and good thinking is lagging behind so in a way Joe stiglitz is a is an example of how good thinking can be fed by policy emerging issues and come back with Solutions with criticize with new new views which have policy implication
and shape the institutional governance that can make things happen
so I stopped immediately not to take away time from from the lecture and I give the floor to Glenda so um my name is Glenda Slugger I'm professor of international history and capitalism here at the Schumann Center and the history department at the eui and I want to welcome you all on behalf of the eui but also the Schumann center for advanced studies which is having its 30th anniversary and that's only one of the reasons why we're very happy that
Professor sticklitz's time in Europe allowed him to come here and to talk to us I don't think I need to spend much time on his CV and if I was to I would spend the whole time probably just going through it but you know I don't think anyone doesn't know that Professor stiglitz is a Nobel Laureate in economics he's currently at the University of Columbia as Professor he's a former Chief Economist of the World Bank chair of the U.S president's Council of economic Affairs advise as co-chair of the high level Commission on carbon prices co-chair of the independent commission
for the reform of international corporate taxation lead author of the 1995 ipcc climate assessment and it goes on and because of his omniscience in fact I know that many of you here know him or have have met him in some of his many positions and uh in his rich and diverse career I got to know him a little bit better today through his autobiography at the Nobel site which I would recommend and there I discovered a Joe stiglitz who valued the influence of his Early Education in history thank you and as well as his earlier education by way of growing up in Gary Indiana which he describes as a city whose rise and fall paralleled the rise and fall of the industrial economy so Professor stiglitz is an economist who values seeing the world as it is and from the other side and I think um whichever way we want to interpret from the other side as he describes it that perspective has never been more important as we consider what sits on the other side of the long 20th century
version of globalization what version of an international economic order we might work towards and you know who better to address the post-neoliberal globalization future than the man who I think and we know as an international public intellectual who describes himself as a public servant in many different contexts and who is you know ultimately a global thinker so thank you very much for being with us thank you very much Glenda it's a real pleasure to be here again I I was at the uh eui about 45 years ago when it was much smaller but I enjoyed it then so I thought I ought to come back uh and visit you but most of you were not around then
um the uh subject is uh one that's uh easily motivated uh there's been tremendous changes in globalization uh in the last few years um we went through a period after the Cold War where uh Francis fukuyama said it was the end of History uh we would all be democr liberal democracies and free trade economies and the implication of that was we ought to all be moving towards a borderless world where everything moved uh very freely across uh borders um things didn't work out quite as well as The Advocates of of that Paradigm fukuyama was obviously polyarnish and we're clearly now in a new Cold War um a lot of the tenants of the old order have been ripped up so for instance one of the things that the World Bank and
the IMF and the U.S government told countries for 40 years is you shouldn't have industrial policies uh one of my predecessors as chairman of the Council of economic advisors Mike boskin famously said oh he denied it famously said that it doesn't matter whether a country produces potato chips or computer chips um and if that were the case we would not have passed the science and ships
and science act where we're spending uh tens of billions of dollars to try to get chips production back in the United States uh so in doing that the United States uh violated the WTO rules
and Jake Sullivan the um natural security advisor gave a a speech which I urge all of you to read Brookings in April where he basically said uh well we wrote he didn't say this part we wrote the international rules and as long as they were convenient for
us we obeyed them but now that they're inconvenient for us
we're not going to obey them until we rewrite the rules again for our own interests well you can imagine if you have rules that only apply when they uh are convenient you don't have rules
so uh that was one of the motivations uh for this paper uh that old order uh of globalization is dead and the question is what will the new order look like so uh what I wanted to do the divide the talk into uh three parts um and it's based on uh partly my book people power and profits partly uh a joint work that I've been doing with my colleague Martin Guzman who was the minister of economy of Argentina and a former postdoc and uh partly with uh based on some of the activism that I've been involved in I'll I'll talk about that as I go along um the uh so the first part I'm going to give the broad Theory second one I'm going to talk about one particular issue and the third one talk about some of the current policy issues that are on the table and I should uh I guess have a sense of uh time here uh what how many minutes uh okay so um uh the neoliberal order that we had for the past 40 years nominally was based on premises of a well-functioning uh neoclassical neoclassical economy I say nominally because if you look underneath the surface it was more based on power
relationships but what we tell our students it's all about the neoclassical model and that goes back to Adam Smith talking about taking advantage of economies of scale the pin Factory The
Wider the market the more those advantages David Ricardo's talked about taking advantage of comparative Advantix um having free flow of factors factors go to where they are most productive and
that means GDP increases uh all this as I say leads to higher outputs and that could make everyone better off but there were multiple flaws in this analysis um and much of my work over the last 50 years has been to try to identify those flaws and just highlight them it assumed the way market imperfections uh some of
which are inherent like imperfections and information and imperfect risk markets you know you you can say some
imperfections are institutional you might get rid of them but you just can't solve the problem that they're always going to be imperfections of information it ignored externalities
and with climate change pandemic public health issues externalities really are at the four it ignore technological change and that's really remarkable it was sort of uh a a an inconsistency in um the rhetoric uh that was used for free markets uh economists relied a lot on Arrow and debru's work the first welfare theorem that said competitive economies are pretty optimal
but a key Assumption of Arrow and debru was that technology was fixed and uh uh Arrow at least never liked that assumption but he knew that if he dropped that assumption the theorem was not true he never fully developed that he did in one of his papers in 1962 and and I'll come back that uh uh Bruce grimo and I further developed and showed uh more broadly once you introduce technological changed markets are not in general Plato efficient that's really important because a lot of people on the right don't refer to the first theorem of welfare economics I never heard Barry Goldwater talk about the first welfare theorem as they talked about the dynamic properties of markets but once you do
that actually competitive analytic economic says it's wrong
um the next point is a really important one that many people ignore it much of policy ignored what it's called second best economics with multiple market failures eliminating or reducing one market failure may actually lower welfare and I'll give an example in a minute and then finally while the analysis said
by maximizing GDP everyone could be made better off that doesn't say you had a bigger pie and if you sliced it correctly everybody could get a bigger piece in fact anybody who looked at any
political analysis would actually happen was that some people wound up with a
smaller slice and they were worse off so that meant it was not in fact uh
pretty efficient so there are a whole set of theorems explaining why neoliberal globalization
might not work and um you know I don't I'm embarrassed
about being so self-referential but I it it's true
[Laughter] uh the first is that the competitive equilibrium or not in general even
constrained Pareto efficient constrained means take into account the market imperfections the cost of our imperfect
information the cost of getting information the cost of creating markets and so forth in the presence of
incomplete risk markets and imperfect and asymmetric information uh as I say markets are just not
efficient and so the first welfare theorem is limited to a world that doesn't exist
so the way I sometimes put it is you know Adam Smith's invisible hand that
the pursuit of self-interest leads as if by an invisible hand to the well-being of everybody in society the reason that
the Invisible Hand often seems invisible that is ill it doesn't seem to be working is because it's not there
and and that uh the markets don't have that kind of uh uh property that Smith
assumed and then David Newbury and I um showed uh in a paper that with
imperfect risk markets trade liberalization could make everyone in
every country worse off so it wasn't only that there were distribution effects it was it could
make everybody worse off um and then I showed that with imperfect uh
risk markets uh actually I'm sure to be within perfect risk markets Capital Market
liberalization maybe welfare decreasing and that was really important because
one of my battles uh in life was with the IMF in 1997 where
[Music] um the IMF tried to change its Charter
uh to articles of agreement to um
allow it to push countries to have Capital Market liberalization when the IMF was founded
uh 1944 with Kings Kings did not believe in Capital Market liberalization he he
was adamantly opposed to it and uh so an institution that he helped
create turned as often you create institutions and then
you know 20 years later the people running them uh stab you in the back and uh go in the
opposite direction and and so that that's what happened uh at the IMF and
at the point I be right after I I became Chief Economist of World Bank uh that
was on their agenda there was a Hong Kong meeting uh where they were going to
ratify this change to allow them to push Capital Market liberalization well uh
the events turned out not well because
um the Thai the East Asia crisis was just beginning
it began in Thailand and in September and uh I met with all the finance
ministers and try to get them to put on tougher Capital controls uh undermining
the world they the IMF um but before we could get all organized
to do it um the Indonesian crisis and then the Korean crisis and so we had a full-blown
uh crisis so the point is I opposed it in part because I thought there was no analytic
foundations for it that was not welfare increasing and uh
I finally you know gave a proof of it in the paper in 2008.
and then finally you know bringing on uh Innovation which is Central to Modern
economies with learning by doing marketing equilibrium is essentially never efficient
so those were some of the theorems that help us understand why
um you should not have expected neoliberal globalization to have worked
but actually in practice things were worse and they were worse because these were
theorems and then you talk about uh what are the numbers and the efficiency gangs
were smaller than predicted and the distributive effects were larger in
large groups in our society became worse off with very strong political
consequences and this has to do with something else I didn't uh you know some of the other
assumptions um one of the assumptions of neoliberal uh economic new classical economics is
uh Costless uh Mobility uh intersectoral uh in across places
and some of the work of people like samogu and the MIT group show that in
those places where there were big trade shocks wages went down unemployment increased
property values went down showing in fact that there were local
effects people did not move freely and uh and work with Bruce Greenwell we
had theoretically analyze what happens then and you can get again very bad
outcomes from a macroeconomic point of view
moreover the trade agreements that were part of
the neoliberal agenda called free trade agreements Europe you often call them partnership agreements
but neither vocabulary describes what they were a Free Trade Agreement would
be you know very short free trade means I don't have any tariffs you don't have any tariffs I don't have any uh
subsidies you don't have any subsidies and that's it I would say you know a Free Trade Agreement would be three pages
free trade agreements are thousands of a thousand sometimes thousands of pages long why there are managed trade
agreements with all kinds of special Provisions no Free Trade Agreement really included agriculture
and special interest and that was the only area where you could have subsidies
um and uh if you looked at it it was managed to trade managed for the
benefits of large corporations and powerful countries and the international institutions
reflected the same power dynamics for instance the intellectual property
provision which played a big role in the pandemic uh reflected uh the interest of
big Pharma and I saw that very clearly because the trips provision reflected the U.S View
and the US view I saw firsthand was
driven by big Pharma and the entertainment industry so copyright we
talk about it being uh really well it was uh the Mickey Mouse bill because it
was attended to extend the property rights of Mickey Mouse
and the IMF reflected the interest of the larger creditor countries I often
refer to it as a the credit collecting agency of the rich countries
well there are a series of events that began uh uh in the early part of this Century
to undermine neoliberal globalization uh
actually there were some events earlier but I'm just beginning to talk about these uh the 2008 financial crisis
showed that Financial globalization integration meant that mismanaged financial markets in one country could
lead to a global crisis so it undermined the faith in free Capital flows the 2017 we found
Trump showed that powerful countries could rip up the rules at will he just
said well I'm going to you know I don't care about the WTO and it was even worse than that he
refused to allow the appointment of the judges at the uh WTO so it
basically shut down the Appellate body at the WTO
um and then uh the uh 2000 uh uh
2012 Biden passed the IRA the most massive subsidy ever
um when it was passed be Europeans are beginning are beginning to complain
about it but I'll explain people in the developing countries and Emerging Markets are really complaining about it even more even though it had a good
purpose its purpose was to advance investment in
uh green but the it led to an unlevel playing
field the magnitude was originally it was supposed to be a 270 billion dollar
subsidy but it was a tax credit so it was uncapped
and Brookings uh estimated a little while ago that it was over 1 trillion
but uh when I was recently in Brazil they were complaining that their estimates are one and a half trillion so
that's a lot of money on a country like Brazil obviously can't uh compete
um so um these are some of the events uh
probably more dramatic was what happened in the pandemic because in the pandemic the global IPR
rules made it impossible for
[Music] countries in the South to get access to vaccines and Therapeutics and tests
there there was supply shortages uh and uh uh there were there was a
capacity not great but more some capacity in the developing countries for
producing it and there would have been more if there have been a tech transfer and
um South Africa and India at the very beginning of the pandemic asked for a
vaccine waiver it wasn't a change in the legal framework because when the WTO was
created the uh uh there was a provision for compulsory
licenses particularly relevant in pandemics epidemics let alone a pandemic
and even the U.S had used that or had talked about using it in the uh uh in
one in one instance um the
um uh problem was the compulsory licenses the drug companies had figured
out how to drag their feet and in the case of the pandemic it was very important to act quickly you didn't
want to wait five years of litigation to get your license so that was the reason for the waiver it
wasn't you still pay a royalty so the drug companies got compensated
but at a fair market rate not a monopoly rate
but the drug companies wanted to be compensated at a monopoly rate and the disappointing thing was that the
drug companies owned several of the European countries
uh Germany I couldn't even get the SPD to change their policy we got the greens
to change but not the SPD of course you didn't expect uh
the FD to change but but uh we we did
get Biden to support the vaccine waiver um but without the support of Germany UK
Switzerland the vaccine waiver didn't occur people died people were
hospitalized thousands and thousands unnecessarily because of this and this
has led a legacy of anger in the developing countries and Emerging Markets
there was another aspect of where globalization didn't work the way it should have There are rules about uh
not exporting hoarding putting export restraints right now Europe is complaining about
some export restraints that Indonesia is imposed on the export of nickel because
Indonesia is trying to increase move up the value chain and not just be a
primary producer he wants the end of neocolonial relationship and Europe says
no you have to maintain your neocolonial relationship and Export raw nickel so
that's a current uh debate but in the pandemic the United States
refused the export of um key ingredients for the vaccines
so uh there was and there was a lot of vaccine hoarding so that led to what was called vaccine apartheid
uh so uh um
there were other aspects of the imbalances that became very evident in
terms of the support for the economies um and uh neolib one of the big things
is showing the government mattered but also uh the market economies showed
remarkable lack of resilience um the supply chains were very fragile
and uh I thought that all that was predictable
it was related to the short-termism of market economies and the way that market
economies don't appropriately value risk we can talk about it more formally what
what the market failure is but it was a predictable market failure
finally uh I think almost finally um uh
there is that the new geopolitics in June economics there's a new Cold War
and uh highlighted by uh Russia's invasion of
Ukraine uh you know just the blatant violation of international law
uh but even more important from the American point of view is the growing split with China
and uh it's the only things that Dev thing that Democrat and Republicans
agree on is that China's bad and uh people may uh differ about what
the what thing about China they dislike but that the view that this we ought to
be tough on China is almost Universal and uh so Universal that I think people
are afraid who don't really believe it even to speak up um so there's a kind of Conformity going
on and uh it's each side Democrats and Republicans
are pushing uh the other to take stronger uh view uh Stronger action
uh it's not clear what the reason for this is um in the sense that uh
at this point china hasn't done uh anything it hasn't done a lot uh to
deserve uh this kind of treatment um Graham Allison uh has written a book
uh about what's called the facilities trap the idea that the uh number one
country doesn't like to become number two and uh there's a lot you know I a lot of
evidence of that being relevant uh partly it has to do with China's support for uh Russia in the context of the
Russian invasion of Ukraine uh there's explicit Chinese aggression in the South
China Sea and uh probably most relevant is
China's a threat to take over Taiwan you know the uh uh one of the senior uh
uh Chinese leaders met with me uh and
um said you know our Accord with Nixon was the peaceful reunification
and you and the West always talk about peaceful and we always talk about reunification and uh very clear hint
that there would be reunification whether peaceful or not
um the old vocabulary is uh friend Shoring you almost gave that in one of her
speeches but uh she never defined friend one of the uh Latin American large
American countries came up to me and said uh I I said he went to uh yelling
said are we a friend or not and uh she was a little evidently a
little surprised at the question uh hadn't what really defined who was
afraid and not and therefore who gets that benefit of frame Shoring
um Europe has a much better vocabulary and I think a a very relevant one they
talk about de-risking so um what I should have pointed out on the
previous slide I I highlighted the hoarding of covid-19 products show that
borders did matter at a very critical time but now uh
uh with the potential breakup of the global system
uh borders again matter and if China were to invade and you have
to give some probability to that we're to invade Taiwan
um that would entail major changes in
patterns of trade so if you know that's a serious risk what action do you take
today again emphasizing the borders matter well a couple of other uh factors
undermining neoliberal globalization I'll talk about very quickly um the massive externality associated
with the climate change um
but the problem is that this is a major social cost which is not incorporated
into market prices so every country is engaged in subsidizing
and so anybody who says market prices reflect real cost
have forgotten about a major first order subsidy that every government around the
world is and we don't have a good way of measuring the mat relative magnitude of the subsidy so the whole basis that
market economics is supposed to be a balance of you know who is selling you know of of having
free markets reflect real cost we now know with this mass of externality they
don't so uh that really undermines
the basis of pre-trade but the action that Europe are now
trying to take against the Emerging Markets like saying we won't import
palm oil from deforested land are greatly resented and asymmetric
you know an actual question is well a lot of your growing if agriculture is on
Deep Forest to land you just deforested it a long time ago so why should you
prioritize old deforestation with new deforestation
it's just another way of of the West trying to under uh take advantage of the
others well there's still other drives drivers have changed the globalization the
changing structure of the economy to our services and there are many distinct aspects of
services I want to move on quickly to the second important part of the talk where
I addressed the question of global trade with learning by doing and climate
change and uh the experiences that we have raise the
question of whether there can really be an international rule of law in the presence of powerful countries an
example I gave earlier illustrates but a rule of law is still really
important for the less powerful countries so you have the irony right
now is that many of The Advocates of the rule of law are is not the United States because
it's breaking it but smaller countries who want to be protected against big
countries beating them up or other smaller countries uh trying to engage so
uh that's really the context so in the next few minutes I want to discuss a
special case of trade systems in the presence of learning by doing and the big point I want to make is that
the equilibrium outcomes are likely to differ markedly from output or welfare maximizing outcome
and uh the hopeful note is that cooperation
among medium-sized countries and competition from large Powers which we are seeing today
for support of the other countries men able the creation of a more balanced
system that would otherwise be the case so the basic idea is
um uh if you have learning by doing where
the learning occurs based on your own production
and I'll take the extreme case you can't transmit the knowledge across borders
but you can transmit dollars across borders what does it look
like well uh the obvious solution is you have the
Innovation occur in the places where Innovation is
easiest you to look for the comparative advantage in innovation
and then you transfer the dollars but of course uh
um we don't have a system of uh easy transfers across borders so that leads
to the question of what would the equilibrium really look like
before getting in there I want to talk about uh uh a pie in the sky idea if you
want to talk about just or Fair trading system in this context what how would
you think about it how would you begin to think about it and I I like to think
about it uh in terms of uh raw's theory of Justice
and you ask behind a veil of ignorance where you don't know which country you were going to be born in but you had to
adopt a set of international rules that would you would have to obey no matter where you were born
what set of rules would you want to have
and um we know we can describe that precisely
and it would be again where you will have efficient
uh distribution of innovation but
widespread redistributions of the income that's generated by that
optimal research and learning experience
so those are all you might call pie in the sky
and I want to look at two other cases one is the decentralized solution with
constrained power and the constrained power all I mean by that is where uh
the countries that signed the agreement obey them not like the United States
but where you are but where if you say sign on to
the WTO you actually obey the rules and the equilibrium of course will be
the powerful countries will set International rules that maximize their
expected welfare uh investment in The Innovation will not be optimally allocated there'll be rules
IPR rules that benefit the advanced countries at the expense of the less
developed countries uh and in fact inequalities will be
perpetuated and magnified but that's not as bad as the next two
cases one is where um
we have where um instead of having uh the powerful
countries obey the rules you have the powerful countries not to pay the rules
and that's really uh uh the situation we have and the equilibrium entails abusive
power and powerful countries set the international Rose exante the maximize
their expected welfare knowing that if the rules prove too inconvenient they
will break them the powerless countries obey the rules powerful countries may
not enforce the rules expose if they are no longer in their own interest and again the rules even increase
inequities even more so all of this is to try to say how
difficult it is to get a just or even a fishing system
of rules um in the current environment where we don't have a global government
so in a way um policy is really going to be constrained
to recognize that we are in this second or third best world and what do we do
how do we improve things and that's where you know most of the
political activity is today so uh what the third part of the talk I
want to talk about moving to a multipolar world with diffuse power
and particularly marked by strong polarization and uh with this new Cold War
I should probably say uh the divisions are markedly different than in the
occurred war or at least our perceptions are uh it's not so much centering around
ideology uh though even then that was partially a
facade we always talked about the West being favored democracy
but we overthrew democracies that we didn't like in the case of Chile and
Pinochet so we were never committed to democracy there was an embarrassing uh uh
Summit of uh democracies that Biden convened uh where
uh there were some countries that were obviously not democracy
um you know what do you do when uh Biden uh cozies up to Modi
who is engaged in uh destroying a free press uh uh
attacking a very large minority within his country uh a country that was set up as a multi
multi-ethnic country trying to destroy that uh most ethnicity and actually uh
really attacking free universities like jnu so for you know for Biden and and
now Canada is saying that he actually killed a Canadian citizen on Canadian
ordered the killing of a Canadian citizen on Canadian territory so you
know the the Visage of biting siding up and say these are the democracies that
are on our side it's clearly not you know they're more democracy there are no
democracies on their side and most of those on our side are democracies but it
isn't clear it's clearly not uh abide about democracy and
um it's a little bit important Europe has made a very big deal of emphasizing we shouldn't uh talk about the
fight against Russian invasion of Ukraine in terms of democracy because if Ukraine had not been a democracy we
would also have defended Ukraine maybe not so strongly but we would have
defended it because it was a violation of international law and uh I I think
that is important uh point to keep in mind but there is this new uh Cold War
and it's opening up the potential for Arts changes in the global economic architecture
uh but in the presence of this uh real
polarization we're at a moment where we need real cooperation
because if we don't address climate change together uh we're all doomed
so um and there wasn't that sense
during the Cold War the old Cold War so we're in this very peculiar situation
where there's uh we we are very interlinked in the way we were not
before economically uh uh the uh we are interdependent because
we share the same planet and we have to solve that problem but clearly uh
there is this growing antipathy um the U.S is proposed the notion of
wall Gardens I don't know if you know it that that there would be some areas where we would not allow free trade but
there'd be other areas where we would and executor and not persuasively uh
persuasive idea so um let me uh talk a little bit about uh
some of the reforms uh that are uh
currently being discussed that highlight
uh the dysfunction I I think dysfunctionality of the occurring system
and maybe into where we might go
uh corporations operate
across the world and there's a problem where does their income
get generated and therefore where can their income be taxed
and uh many of you may know that our uh
most powerful in our most Innovative corporations are also
most skilled at tax evasion avoidance uh and uh example is is uh
Apple where it claimed that all the profits
that it earned in Europe were due to the economic activities of
some 300 plus workers in Ireland who are working very hard to make
billions of billions of dollars you can imagine the productivity of each of those uh workers that they generated uh
uh so many billions of dollars uh each one uh we wish we were also
productive uh and then a quirk and it's not a quirk but it was
of the Irish tax law has it that if you are a company that is effectively
controlled outside your border you don't pay taxes so the subsidiary of Apple that control
that was generating all these profits was not taxed in Ireland so the total
tax that they paid on their European profits was 0.2 percent
and over the small period of time uh Europe calculated that they owe 13
billion the European commission owed 13 billion dollars that's an example of of tax avoidance
and so uh there has been a a specially after 2008 and concerned
about tax revenues there was a a global agenda to
um uh stop this I've been involved in this
issue since when I was in the Council of economic advisors because I felt the
curing system which is called a transfer price system where you make up prices to
determine the value of what is produced in each country so you have a shirt
without sleeves and you say well putting on the sleeves added this much value
so this system of code arms Lane transfer price the the best example of
in clothing when you ship apparel to Panama and they sew in that
made in Panama label all the value of the shirt is due to
that made in Panama label because everybody wants a made in Panama shirt and the value of all the rest was nil
so and just so happens that Panama doesn't tax has a very low tax rate so
that's an example of how the old system the transfer price system works and uh I
had tried to change it without lock it was one of my many failures uh when I was on the chairman of the Council of
economic advisors uh treasury reflect U.S treasury reflecting interest of Corporations
did not want to change and um so uh
after uh the 2008 crisis and and a lot of agitation the oecd stepped up set up
a a process which was called beps base erosion and profit shifting and I think
I've given you a flavor about how you do profit shifting so that you shift the
profits to places that don't tax them and it's a major industry
um and they have come up with a set of proposals that is now being discussed
around the world it has two pillars the second pillar is a really important one
is a global minimum tax and the U.S has adopted not the form
that they wanted but a 15 minimum tax that's too well but the oecd initiative
is 15 then but with a lot of carb out so it's effectively like 12 13 percent
that's even lower so like half the rate of the corporate income tax in Latin
America so it's just it is an attempt to stop the race to the
bottom but it's clearly not a solution the other part of it is uh uh what they
call pillar one and the question is it allocates taxing rights
to different countries according to a formula a particular approach
but the way it does it not surprisingly given that it was done the way it was done who where it was
done and how it was done allocated most of
those taxing rights to the rich countries so what was intended to be an initiative
to increase the tax revenues of the developing countries that emerging markets and all
countries has wound up being fairly ineffective
so that's uh a a an example of uh
something that has not worked and right now uh there is a
um uh big moves to shift it the negotiations from the oecd to the U.N
uh the second thing I'll talk about very briefly is uh
one aspect of the Global Financial system and that is that related to the looming
debt crisis in many developing countries and a few merching markets
when you have zero interest rates for a long time
there is a tendency to borrow because the cost of borrowing isn't very
high and so many companies and many countries
got over indented indebted and then with the interest rates going up very quickly
from near zero to five percent
many countries are not able to service the debt many countries are
wound up even more indebted than they wanted to because of the pandemic which they hadn't planned on and even more so
because the Ukraine war led to an
increase in the price of oil and food so there are a lot of countries
a lot of countries that are highly indebted and um
won't be able to repay now
the fact that debt might not be repaid is something that happens all the time
I hope it doesn't happen to any of you but it it is part of life and capitalism okay you you get over indebted and
within our countries we have ways of dealing with that which is called bankruptcy laws
and bankruptcy laws decide who has first claim and who has second claim and how
to how to take the limited resources and allow a fresh start use the
resources most efficiently and have some
Fair way of dealing with the claimants there is no International architecture
for doing that uh I helped uh
uh push a a a set of principles
for doing that that was hoped to become a framework at the U.N
and the U.N General Assembly adopted uh the set of principles
uh almost unanimously I mean it's really quite striking only six countries voted
against Unfortunately they were um the wrong countries uh the United
States UK uh so and there nothing
happened so here we are eight years later a crisis on our hands and no
framework and meanwhile things have gotten even more complicated because
the credit Market has gotten uh more complex with many creditors
uh banks have been replaced or in addition to banks are are the hedge
funds and in addition to the usual bilateral lenders China
and uh so uh things are quite frankly a mess
and the hope that the IMF had which I thought was never going to work and has
not work is the putting in Provisions in the contracts called things like
Collective action Clauses would resolve the problem and it improves things but it's not enough
uh making things even more uh problematic is the IMF is supposed to be acting
counter cyclically you know it's helping stabilize the global economy
but the rules that it's adopted are de facto Pro cyclical
and so uh just when countries need the money it's jacked up the interest rate
so borrowing from the IMF has become very expensive and insufficient given
the disproportionate growth of private liquidity the interest rate is linked to sdrs has gone up with a fad ECB and a
bank of England rate hikes And Then There are a provision that is not well
known called surcharges are added on if you are really in bad shape they charge
you even more even though there have been almost no defaults if there is a default it will be because
the IMF charged their surcharges so they are creating their own problem
and the result of this is that the total interest rate for some is now eight
percent which is not really a low interest loan
and um just to show you how rapidly the SDR rate has gone up
in in the last couple years the picture looks like this
but the high interest rates are also a problem for countries turning to the uh
multinational multilateral development banks for financing green transition because things uh Investments for the
green transition that are profitable at low interest rates become unprofitable at the uh High interest
rates and it's very clear that there's not enough uh Capital within the
multilateral development Banks so let me just conclude
uh there is a new balance of Economic and political power emerging which is
markedly different from that of 1944 or even 1990
and uh I think the banks countries are are loath to take on board the full
implication um it's partly there's been a really big shift in I I might say ideology the
belief that markets would solve everything it wasn't a full belief as I said before because we never acted on it but it
shaped excape policy even if it was not adhered to
that belief is gone I mean there's still you know we still have the Republican party but they are uh they don't really
even believe it themselves they voted for uh the chips act uh and they they
they uh um uh have supported all kinds of
corporatism uh in the country so
um the the underlying Market ideology isn't there
and uh uh there isn't anything to replace it
so we are in a world basically where where power is is a defining part of
what is going on that has contributed to
uh one only but only one of the factors contributing to the the challenge to our
democracy if we look at it from a global point of view democracy is in retreat
uh uh the fraction of people living in democracies has gone markedly down uh
but I believe that democracy is the only way forward that will lead to Broad inclusive societal well-being
and so uh my view is that the failure of globalization neoliberal globalization
created or at least was an important factor in creating
the what I describe as a fertile field for demagogues and that fertile field for demagogues
has now been tilled and um
uh there are a host of demagogues populists and Authority would-be authoritarians that have stepped in
uh not just the United States but in many countries around the world
um the uh question you know when I look at
globalization in the post-war era
in the it was shaped a lot by the United States
and its commitment to a borderless world even if it was sort of
not a a um self-listen it you know it may have
been and and even if it was partly based on bad economics and even if it was it
was a move towards a a uh
towards a world with fewer borders where borders mattered less
and uh without that will we be able to how will the new
globalization look and uh um
the there are obvious questions uh posed by the fact that not only is the United
States not taking leadership in globalization one of the two parties in the United States
is uh antithetical uh to any Globe is really gone back to
it isolationist roots um and then that race is
the question of which other countries what other countries will are there other countries that can step step into
the breach if the United States can't do it can Europe do it
um I find it very interesting I began my talk saying it's really in the interest of smaller countries
and I by small I don't mean necessarily a small population but in terms of the economy uh they have an interest in
having a rule of law so uh
I describe Brazil in Indonesia is two of the large democracies remaining
I don't I'm not sure India is a democracy it used to describe itself as the largest
democracy in the world but Modi is has demoted it so Brazil and Indonesia that
I describe is the two largest functioning democracies in the Emerging Markets can they step into the breach in
shaping the agenda and norms and institutions in the new global economic order or we will will we continue to see
dysfunctionality what is so clear is given
the the importing so climate change we have to somehow find enough space for
cooperation that we don't wind up totally polarized
but the reality will be that we will be somewhat polarized
and um the U.S view has been basically we
can fight you in one Arena and cooperate in another
it's not clear that that hypothesis is true or if it is true there may be
limits on the way you fight in one Arena that uh you need to impose if you're going to
get cooperation in another that let me stop okay
[Applause]
thank you so much Professor stieglitz for such a wide-ranging and engaging uh
paper I'm sure there will be plenty of questions should say my name is Giorgio Riello and I am from the history
department where I teach early modern global history and I can see we have a
very large audience we have colleagues but we have also a large number of researchers here that I would strongly
encourage to pose questions and start a discussion please do raise your hand and
say when you start your question who you are for the benefit of everyone here we
are trying to go hybrid as well so there will be questions in the room as well as Professor sluga is going to monitor the
questions online so we are going to both physical and and virtual so I open the
floor can I see any hands yes please
very much Professor stiglitz for your uh for your valuable uh and uh and great
presentation my name is Christine arato and I'm a John Monet Professor a Germany fellow here at the uh at the eui and I'm
also from Hungary uh I would like to ask you a question about the very nature of
this emerging new word order because you mentioned two
features at the same time and I would like to ask some clarifications because
in one sentence you said that it is emerging multipolar uh word order at the
same time you also said we are witnessing an emerging new court war that was actually bipolar so I was
wondering about the basically the number of the of the key players you think they
are and related to that I'm really curious about your opinion about the the
role of Europe or the European Union in this new emerging world order thank you very much
thank you
yeah that's a great question um what
uh is very clear is that uh the country's uh in uh you know countries
like Brazil and Indonesia what used to be called the third world uh don't want
to take sides and uh the
um uh it's partly there is some antipathy to the West as a
result of the pandemic and lots of other you know the colonial history
um it's partly that uh they are very dependent on China
and uh yet many of them are democracies that feel more affinity
to uh want to stay aligned with Democratic uh countries
so um they're um being very explicit in a context
where you see that is uh many of them have abstained in the votes of the U.N
on in condemning Russia and a grayish aggression and you sort of wonder why uh
uh this is you know there aren't many cases of black and white and this seems
to be one and small countries have a very big interest you would have thought
in making sure that the international rule of law that one country doesn't invade another because if a big country
invaded them they have no uh ability to resist so it's very clear that they
should be supporting this and the question is why not and one of the reasons is that they are trying to stay
outside of these two now uh you're right
uh you know the conflict is between basically right now U.S and China
and um the size of these Emerging Markets is
very different from what it was in 1944. um
the the bricks which is not um uh uh which includes uh China and
Russia uh but the bricks has a larger uh uh GDP than than he either than the
advanced countries so they're really large in GDP now so they really do represent
an other source of power if they were aggregated and that they worked together and they are now trying to do that in a
variety of ways the brics extinction was an example of that to say we are not
uh going to be dictated to by the advanced countries uh I thought it was a
mistake the way they did it and I could go so um it is multipolar it's a bipolar
conflict it's a cold war but multiple polar sources now Europe is where does
it fit in this well um it's clear that in the current
configuration uh Europe is really aligned with U.S
uh you know basically through NATO but Europe doesn't have its own in
independent Defense Force therefore it knows that it's totally dependent on the
United States where that Russia to become more aggressive and uh so uh I think in my sense is you
know most Europeans would like to be aligned with the United States but United States is a very
unreliable Ally if if we elected Trump we should want to be a partner uh you
know I don't I'm not sure you would so I've been telling Europe that it really
is important for it to um you know I'm I'm against uh military spending but I
think in this world it's what you have to do and so yeah I think there needs to be a European Defense for us and I think
Europe needs to be a more independent voice a separate independent voice and
the reason I yeah as I say the reason I think that uh because I think human
rights and democracy are really important I think for the most part with the
exception of one or two countries including yours uh Europe is committed to uh democracy and uh the
um uh America democracy is fractual
and so anybody believing in Risk diversification says we ought to have a really more independent sources of
support for democracy and human rights thank you so I have a couple of questions
thank you thank you for a wonderful presentation
I'm the other former World Bank Joe in the room uh Joe and I were colleagues
for a number of years when I was with the World Bank Institute um
I am curious you talked about a lot of bad economics being practiced by governments and off
not listening to economists as a former Chief Economist at the bank I'm curious
are you in touch with and talking to people like Nick Stern
and Justin Lin do you talk with them especially Justin
with whom I am in touch are you talking with them about uh about these issues
and and what his users you know he's now in Beijing at the University and his
I'm not sure how influential he is but do you especially with respect to the
future of the multilateral development Banks and the World Bank and an added question what are your views of uh the
prospects for reform at the bank with Ajay Banga yeah we are having another
question first
Tobias for I'm a research fellow here at the Robert Schumann Center and also for me thank you for such a
thought-provoking overview I want to just uh ask a little bit about something
you touched upon but never went into directly and that's the changing role of central banks in this order right so
over the last two decades we've seen central banks that take a much more active role in the management of
financial market and arguably also in the real economy and I just want to ask you know how do you think that changing
role has contributed to sort of the changing Global Order and what do you see going forward and what do you think
the role of central banks should be in a world of climate change and sort of relatedly to that given that the FED is
the most important Central Bank in the world what you see in those discussions about the preeminence of the US dollar
right is there going to be a challenger do you think it's here to stay sort of
just some more thoughts on this thank you okay so um uh yes I am actually in touch I've
written uh several papers recently with Nick uh Stern on on climate and and how
climate and growth can be complementary what's wrong with the uh uh uh
the integrated assessment models uh how could nordhaus uh say it was a good
thing to have three and a half degrees uh you know my there must be something deeply wrong with economic models that
say that uh would they they ignore um and uh how could uh that have gotten
the recognition that it did so uh and I've also been done a lot of zooms with
Justin Lynn in China um the um I think uh Nick and I very strongly
believe in uh the importance of the multilateral development banks that are
market failures and capital markets that those market failures are
particularly strong in developing countries and emerging markets and uh if
you go to a country like Brazil uh the
private financial markets do almost no real investment
uh they're all engaged in speculation and lending to households and you know
other things but not in real investment and if it weren't for the bnds the uh
Brazilian Development Bank uh you wouldn't have the embryo I came down here on an embryo airplane
um you know which was financed by uh the bnds uh so I you know you every every
time I go on a trip in Europe I get reminded of the importance of of development Banks and they are
particularly important in uh the context of Greening the economy
and there's a Resurgence we uh even in the United States which is
moving into becoming a developing country um we now have a Development Bank in New
York State uh um which is focused on and working very well and focused on Greening the New
York State economy me um so um and I'm very optimistic about
the new president I mean he's very committed to to uh uh climate change
poverty growth has a good view about how you balance it Africa is a real Challenge and knows that is
a particular Mandate of the bank as it is focused on poverty and the extreme
poor but how do you do that and preserve the environment and address climate
change so um and people within the bank are very enthusiastic the most enthusiastic
they've been about a president since I think wolfinson you know so it's it's
really been the uh the first time since Jim Wilkinson that there's been a president who is committed to
development and Global public goods and understands that and understands Finance
so um yeah I'd love to spend hours on
answering your question about the role of central banks um but let me just be very very brief um
The Experience both after 2008 and in the pandemic showed that fiscal policy
could be very effective multipliers were large uh fiscal policy operated in the
pandemic very quickly and uh um the ideology which had said that you
ought to you rely on monetary policy for adjusting the economy uh I think has
been discredited it was never based on any good theory it was really I think right-wing ideology that did not want
governments to play an active role in the government in
the econ society and so they said oh you shouldn't you should have an independent
institution be your regulator of counter-cyclical policy so I I always
thought there was a little more of some ideology uh built into the models that
they were uh uh using um the
um I can't help but say I think uh the
Federal Reserve has uh shown
uh the dangers of bad economics
uh in uh managing the post-pandemic inflation
uh you know or some people say you know if you're
a carpenter everything looks like a nail and you use a hammer to hit it okay so
it may be that but uh the fact is uh there was inflation
and uh that one tool they know is
raise the interest rates they didn't ask they did and their
mindset was that inflation is always due to excesses of aggregate demand
it was not true and it was so easy to see that it was not true if they only looked at the data
uh in the beginning of the inflation
the main source a main source about a third of the inflation was due to cars
it wasn't that all of a sudden people with the amount of cars it was a supply-side problem the car companies
forgot to order chips and it takes a couple years to get chips if you don't order them and you know with the old
nursing rhyme but for a chip you could you don't have a you lost a kingdom but you you you they didn't have the cars
and so car prices spiked uh later on there were all kinds of
supply chain interruptions and uh
uh the Ukraine in the Russian invasion of Ukraine who had to oil prices going
to 120. they couldn't continue to rise we knew that and there would be disinflation when the
when the ship's problem was solved when the various supply-side problems were
solved moreover one of the things that was really important was that
the supply side interruptions gave temporary Market power to a lot of
firms because competitors couldn't come in if there were excess
profits they couldn't come in because they didn't have a supply so there was an enormous exercise of
temporary Market power so markups went way up so you had all these supply side factors
I mean one more example um uh housing prices went up
if you looked at it from an aggregate point of view that was surprising why because the major determinant of the
demand for housing is the number of people in the United States we succeeded in killing over 1 million Americans
and that should have decreased the demand for housing and uh
uh nobody want you know migration plummeted from what it had been again demand from housing was lower than it
was anticipated again prices should have come down what was the problem well it was an
asymmetry of uh price adjustment uh people didn't want to you know New
York City is a fantastic place to live but in pandemic and you're cooped up in
your apartment nobody likes it so our apartment building was half empty uh people wanted to live in Southampton
Hudson Valley these nicer places so demand for housing in those places
went up prices soared and prices in New York went down but only a little and the
average price went up but then you start thinking in each of
these cases would raising interest rates solve the problem would interest rates
lead to more oil would interest rates lead to more food would interest rate more eggs which was
a big problem because we had a buyer uh uh a virus on our chickens
um would it lead to more you know a reduction in viruses among
chickens would it lead to um uh more uh
more cars no but what it would do is
make it more difficult if there was a shortage of housing to build a housing where people wanted it so it was
exacerbating the problem and if you move outside of a competitive
model to a uh what is called a customer Market a Phelps winter Greenwald stick
looks kind of model uh you can see that you raised interest rates firms focus
more on the short run and take advantage of raising the price more regardless of
what the cost is going forward in terms of Customer Loyalty so it's actually inflationary
not always but in these particular instances so monetary policy probably has made things
worse and obviously it's contributed to the
global debt crisis so and then uh
to sing the praise a little bit more of our Central Bank
um they had totally done a terrible job in regulating the banks
uh Powell had led an effort to undermine the Dodd-Frank Act that had been the
regulations passed in the aftermath of the 2008 crisis so he wanted to
deregulate and make it even worse
not only did he deregulate he didn't supervise very well and what we discovered you know amazingly is that
when they were doing stress tests on banks they did not take into account the fact
that when you raise interest rates the value of government bonds goes down
I mean it just it was really amazing how bad they were you know that was a part
of the problem that we had in the 90s in in the banks so uh so we had uh the
problem of uh Silicon Valley Bank going bankrupt half of all of our startups
were in Silicon Valley Bank it was a major you know it was a 30 billion
dollar it was a big failure yeah it's a big Bank you know it was a
local bank but it was a big Bank um and so uh
uh um the bottom line is the central banks did not understand
their role or the FED didn't understand its role in
the global economy grow in America's economy and I think it performed
enormously badly uh moreover I mean I could go on
um uh there are certain standards of conflicts
of interest um can you believe that the begs portfolio is managed by BlackRock
um the larger you know the uh the the they say we have iron walls so that the
information you get you know we don't
so anyway that's just the beginning of my tirade
against the Fed I think we have quite a few questions
from the audience so what I I like to do is actually that you pose all your questions and then Professor stieglitz
will decide actually choose probably one uh to answer because we need really to close in in the next five minutes so I
have a lady here and then I have Charles and Salvador and then the gentleman over
there and the Very director at the end of the room while the mice going around just to say
don't answer this question because you like the question online there are lots of them but the one that really sticks
out is is post neoliberal globalization anti-neoliberal or just after neoliberal
so that's it or just one after after oh
thank you so much for your inspirational lecture my name is Selena sudano I'm a
research associate here at the rubber Schumann and the problem of a taxation
that you were mentioning uh one was one of the main concern main concerns of my
PhD research and what I've been of serving as a legal scholar is that tax
and brother regulatory reforms that would Foster a fairer and more
sustainable economic system including of course taxation
um that would of course also enhance democracy completely agree with you are
falsely opposed by big Global multinational during the regulatory procedures
um so and here at least at the U that is where I studied we have a regulatory
system that is evident and based and not Justice based I would say as a lawyer so
it's not looking to the rule of law and to democracy standards so basically as
many corporations are bigger than states in the end and those states don't have
the Machinery to resist the political but also the knowledge and the evidence
creation strategies of these companies what could we do to fight against them
and one of my questions would be shouldn't we
somehow put into question the neoliberal system that includes an
intellectual zone so then we interrogate ourselves about the intellectual art and
their opinions of this market system in the sense that we are pushing for
Eternal economic growth and we need big Market Pleasures for
that to nurture that economic growth so the question is shouldn't we start by
putting into question precisely that principle the need for economic growth and big Market Pleasures for that thank
you thank you so the microphone should go that that end and I ask you to be
telegraphic in your questions I'm Charles Walton a historian from the
University of Warwick um to come back to the fukiyama uh it seems like the Pollyanna shukiyama has
given way to a darker fukiyama about the effects of technology and over the past
six months to a year governments around the world now seem to be very concerned about the AI and biotech and the fusion
of the two and how that's going to change not only the economy but also the
relation even the nation post westphalian nation state um nation states are going to need to
depend on AI companies to help protect their own people so I'm just wondering
how your thoughts on AI
thank you my name is here in the corner my name is I'm a PhD researcher in the
history Department and my question was about the world population shifts we're seeing we
all know that in the oecd countries populations are decreasing and whilst in
Africa the population of these countries are increasing and they will keep doing it for the next decades
so my question what was what effects can these Trends have in the in this post
neoliberal order you were describing it and if uh are there any measures of the
international organizations you mentioned are considering in this in this context thank you can
you move the bike uh yeah hello my name my name is sylvanus
fellow and a professor from University of Guelph Canada yeah my question is
what specific role is is China expecting to play in this new world order and what
is the implication of that for African countries especially because of the the huge influence of China on the
continents I wanted to touch on that what role does China play in this new order and what is the implication of
that for Africa thank you
a one-word answer you I think um did
post neoliberal is anti-neoliberal neoliberalism is really failed the neoclassical model as all these failures
and the consequences of those are so evident that uh a new globalization has
to recognize the limitations of that of that of that model
um the I guess the big question uh
two questions uh uh one Africa obviously uh
uh is uh where the population is growing
globally it will probably taper off
uh it will have to do if the world is going to be you know it's going to be very hard for climate
uh change to be mitigated if we don't have a limits in the population that you
know we the biosphere just can't survive and most of the forecasts do think that
the demographic practition will occur but it's occurring more slowly but uh the
consequences for migration pressure are going to be enormous and
um that's why I know some people in the European commission feel very strongly about the
importance of some kind of Marshall Plan for Africa um that will reduce the disparity in
incomes which are a major driver of my great migratory patterns uh but you know
that won't solve the problem but it will at least uh alleviate it
um they they're also you know in the saho region there's going to be climate
migraines and um if one doesn't do enough to grow the
African economy that's going to be a global problem so I I think there needs to be more
attention to the the demographic issue and the interaction between the
Democratic imbalances and uh the uh
climate change I don't think uh the appropriate answer is what a few
countries including Japan are doing we're just trying to increase their population um you know I
yeah I I think that's not the right right answer uh the right answer is how
to live with the smaller population and lower gross growth of population I think
we can do that and live well and I think there's just been you know
part of the maybe explain one of the disadvantages of Texas and American thing bigger is better I think that's
wrong and one has to change the mindset uh about that
uh the a very big uh you know
a a part of the doctrine of neoliberalism that I criticized was that
there's no power it's a competitive market power doesn't exist and that's so contrary to anything that
anybody who's engaged in globalization sees and you know whether it's in tax
negotiations or the IMF anybody who's been involved in in real and real uh
government uh or International sees blatant
exertion of power over any reason and over National interest
you know it was not in the net you know if you asked do Americans as a whole or
people in Germany as a whole want to see people in uh developing countries die
because they can't get access to vaccines I don't think many people would vote for that
uh even if it meant drug company profits were down um
and we see it even more when it comes to the new Cold War
America is trying to win the hearts of people in the third world and at the same time we are telling them that if we
have another pandemic we're not going to share our vaccine our intellectual property that's not the way to win the
hearts and win the Cold War so you know the inconsistencies in our
policy are so blatant and then you ask what causes them it's not that hard to figure out it's particular companies
doing that now that's why a pillar
of the Biden Administration has been to
uh increase competition um to they've just brought a suit
against Amazon um uh and against uh they've been very
aggressive against the other uh gaffa um you know and and uh uh been very
strong on enforcing antitrust law and changing uh a lot of antitrust Doctrine
uh it's running into a lot of difficulties because uh in law
precedence matters except for our Supreme Court which doesn't believe in
law but that's a uh but in general
precedence matters a lot and uh even if the Precedence is based
on bad economics it changes very slowly and one of the long-standing damage that
Milton Friedman in The Chicago School has done to the world has been to
instill the idea that markets are naturally and presumptively competitive
placing the burden of proof on anybody who suggests that they might not be
and you know there are some cases where you say you know it's so obvious that
it's not competitive um and yet it's very hard
um for those who know our Anti-Trust uh I
uh uh was engaged as an expert witness in uh an Anti-Trust action against uh
saber which is the uh big uh Airline reservation system that has a market
power and engaged an absolutely ruthless behavior and I'm proud it was one of the
few section two uh uh cases these are monopolization it's a very you know not
only to engage the anti-competitive practices you try to monopolize and very
few cases in the last 60 years of monopolization and we we won that case
before a jury which is a really hard uh thing to do but anyway the general
thrust is I think part of the post neoliberal agenda is trying to create uh
a more competitive economy there will be big firms that's not the issue they'll be big enough and for the
question yeah Innovation is important and it needs to be at the center but we
can have Innovation we'll get more Innovation by having competitive competition between firms than we get
from uh Monopoly American dominant firms so to me uh
having more competition not we aren't going to get perfect competition more competition is the way to stimulate
growth of the right kind thank you so much
for such a wide-ranging and uh really extremely stimulating paper and for being so generous also with your time I kind of think of a better person who could take us through this very
complicated topic um we said at the beginning that Professor siglitz is someone who puts
together Theory policy in reality reality can be worse than Theory than the theorem but we should not be scared by it and I think Professor stieglitz has shown in this career that we should actually be critical and challenge actually that reality that is not a given and I think he has given proof today to us exactly at that point thank you so much foreign
