Making Globalization Work or All Hands Down

Making Globalization Work

Author: Joseph E Stiglitz

"A damning denunciation of things as they are, and a platform for how we can do better."—Andrew Leonard, Salon

Four years after he outlined the challenges our increasingly interdependent world was facing in Globalization and Its Discontents, Joseph E. Stiglitz offered his agenda for reform. Now in paperback, Making Globalization Work offers inventive solutions to a host of problems, including the indebtedness of developing countries, international fiscal instability, and worldwide pollution. Stiglitz also argues for the reform of global financial institutions, trade agreements, and intellectual property laws, to make them better able to respond to the growing disparity between the richest and poorest countries. Now more than ever before, globalization has gathered the peoples of the world into one community, bringing with it a need to think and act globally. This trenchant, intellectually powerful book is an invaluable step in that process. This paperback edition contains a brand-new preface.

The New York Times - Jeffry A. Frieden

Stiglitz has given us a well-written and informative primer on the major global economic problems. He helps his readers understand exactly what is at stake.

Library Journal

Nobel Prize winner Stiglitz (former chairman, Council of Economic Advisors; Globalization and Its Discontents) identifies six existing indications that globalization has yet to live up to its promise: the pervasiveness of poverty, the need for foreign assistance and debt relief, the aspiration to make trade fair, the limitations of liberalization, the need to protect the environment, and the flawed system of global governance. In addition to reiterating this criticism from his previous megaseller, Stiglitz here presents concrete methods to enable political globalization to proceed in accord with economic globalization. For example, the IMF, World Bank, and World Trade Organization and a host of additional, soon-to-be-created international political organizations need to start democratically representing the interests of developing countries and stop serving as platforms for the "Washington Consensus." The author occasionally slips by adopting the same type of rhetoric that, he argues, has mystified the processes of economic globalization, e.g., when he suggests that a balanced intellectual property regime serves the interests of every nation developed and developing alike. Overall, his new work succeeds admirably at presenting a concrete course of action for strengthening the institutions and processes of political globalization. Accessible to nonspecialists, this book is recommended for all academic libraries. Cynthia Cameros, Teaneck, NJ Copyright 2006 Reed Business Information.

Soundview Executive Book Summaries

Fighting The Good Fight
Many economists and world leaders agree that globalization is supposed to create higher living standards, increased access to foreign markets, more foreign investment and open borders. But former World Bank Chief Economist and Nobel Prize winner Joseph Stiglitz argues in his latest book, Making Globalization Work (a self-described sequel to his 2002 book, Globalization and Its Discontents), that globalization is desperately failing the 80 percent of the world's population that lives in developing countries and the 40 percent that lives in poverty.

The Problems
Stiglitz's overall objection is not to globalization itself; it's to how globalization is managed. He argues that the institutions tasked with managing globalization - the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO) - help developed nations more than poor nations and place profit ahead of environmental health and better standards of living.

One reason for this, Stiglitz argues, is the United States' excessive influence on the system. The IMF, for example, assigns votes according to economic size, giving the United States effective veto power. Further, the U.S. president appoints the head of the World Bank. This concentration of power has led to what Stiglitz calls "the Washington Consensus," his term for the lock-step policies shared by the IMF, the World Bank and the U.S. Treasury. The result is that these institutions are only really accountable to wealthy countries rather than the poor countries they are tasked with helping.

What's worse, Stiglitz writes, is that when poor countries seek aid, the Washington Consensus attaches economic policies and lending conditions that are often counterproductive and even undermine the sovereignty of those nations. Its requirements often include massive privatization, spending cuts, lower import tariffs and exposure to volatile foreign capital - four things Stiglitz explains are precisely what developing countries don't need when they're in dire straits. Consequently, Stiglitz argues, countries that have followed the advice of this powerful block have failed almost 100 percent of the time to maintain economic stability.

The Solutions
Stiglitz offers a litany of specific reforms to the globalization management system, but, ultimately, they all rest on the (some might say provocative) idea that the regulatory power of government, rather than unfettered capitalism, makes free markets work. Absent this oversight, he writes, markets dissolve into chaos, dishonesty and secrecy.

One of Stiglitz's biggest proposed reforms is to the global reserve system's dependence on Treasury securities, which he argues is actually a mechanism for funding U.S. overconsumption habits. Stiglitz calls for a new, global reserve currency (called "global greenbacks") system that would stabilize the worldwide yin-yang effect of trade surpluses and deficits.

Stiglitz also proposes global regulation that would restrict activities and political instabilities that harm the environment, and would provide recourse when one nation's environmental actions harm other countries. Stiglitz further argues that poor countries are entitled to compensation for maintaining their biodiversity, especially those with rainforests that spawn drugs and sequester carbon dioxide.

Western banks and multinational corporations are also on Stiglitz's list of institutions needing global oversight. He argues that today's thick corporate veil regrettably tends to relieve employees of moral responsibility. Part of the solution to this, he writes, is more leeway regarding global class-action suits and more enforcement of intellectual property laws so that, for example, AIDS drugs become more accessible rather than more profitable.

Ultimately, Stiglitz concedes, the solution to many of the problems of globalization management lies at the feet of poor countries, which must break the bribery cycle between their governments and international companies, sell their natural resources for a fair price, spend - and save - their money wisely and learn to manage currency fluctuations.

Despite all the protest, Stiglitz is clearly still a cautiously optimistic supporter of globalization. But he is confident that the United States cannot continue to control the world's major economic aid institutions without producing results for the poor countries of the world.

Why We Like This Book
Making Globalization Work explores the problems surrounding the management of globalization. It contributes considerably to the political discourse about the role of governments in the free market through its nuts-and-bolts appraisals of NAFTA, the WTO, the Kyoto Protocol and many other elements of today's globalization debate. But the heart of the book is about finding better ways to make globalization work for the hundreds of millions of people who live in developing countries and in poverty. Copyright © 2007 Soundview Executive Book Summaries

Kirkus Reviews

If the free market is the answer to the world's woes, then why is so much of the world getting poorer? Nobel Prize-winning economist Stiglitz (The Roaring Nineties, 2003) ventures some persuasive answers. There are many ways to make globalization work, writes Stiglitz. Regrettably, the U.S. and institutions such as the International Monetary Fund and the World Bank are not practicing any of them. Indeed, he argues, "the world's sole superpower has simultaneously been pushing for economic globalization and weakening the political foundations necessary to make economic globalization work." The U.S. consistently plays on an unlevel field, demanding that developing nations open their markets on terms dictated by American interests; globalization as it is now practiced demands that sovereign nations become less sovereign, even as it forces upon developing countries a one-size-fits-all economic system that "is inappropriate and often grossly damaging." America's insistence on the primacy of the free market really means a market that is free for the biggest players, though even a theoretically pure free market is not necessarily the best solution in many instances. For example, Stiglitz writes, many of the thriving economies of East Asia, such as China's, are thoroughly managed, while social democracies such as those of Scandinavia channel much of the GDP into long-range, state-controlled financial sectors for the interest of future generations; meanwhile, free-market experiments in the former Soviet Union have proven disastrous except for a few lucky capitalists. Reining in inequalities is one of the foremost tasks for a globalism worthy of the name, Stiglitz suggests; those calling for ThirdWorld debt relief are on the right track. But there is more to it, he adds, including a rethinking of innovation-stifling intellectual property conventions and a restructuring of international institutions to serve their neediest constituents fairly. A thoughtful essay that ought to provoke discussion in certain well-appointed offices, to say nothing of development and aid circles.

Table of Contents:

Ch. 1	Another world is possible	3
Ch. 2	The promise of development	25
Ch. 3	Making trade fair	61
Ch. 4	Patents, profits, and people	103
Ch. 5	Lifting the resource curse	133
Ch. 6	Saving the planet	161
Ch. 7	The multinational corporation	187
Ch. 8	The burden of debt	211
Ch. 9	Reforming the global reserve system	245
Ch. 10	Democratizing globalization	269

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All Hands Down: The True Story of the Soviet Attack on the USS Scorpion

Author: Kenneth Sewell

Forty years ago, in May 1968, the submarine USS Scorpion sank in mysterious circumstances with a loss of ninety-nine lives. The tragedy occurred during the height of the Cold War between the United States and the Soviet Union, and it followed by only weeks the sinking of a Soviet sub near Hawaii. Now in All Hands Down, drawing on hundreds of hours of interviews, many with exclusive sources in the naval and intelligence communities, as well as recently declassified United States and Soviet intelligence files, Kenneth Sewell and Jerome Preisler explain what really happened to Scorpion.

In January 1968, a U.S. intelligence ship, USS Pueblo, was seized by North Korea. Among other items, the North Koreans confiscated a valuable cryptographic unit that was capable of deciphering the Navy's top-secret codes. Unknown to the Navy, a traitor named John Walker had begun supplying the Navy's codes to the KGB. Once the KGB acquired the crypto unit from the North Koreans, the Russians were able to read highly classified naval communications.

In March, a Soviet sub, K-129, mysteriously sank near Hawaii, hundreds of miles from its normal station in the Pacific. Soviet naval leaders mistakenly believed that a U.S. submarine was to blame for the loss, and they planned revenge. A trap was set: several Soviet vessels were gathered in the Atlantic, acting suspiciously. It would be only a matter of time before a U.S. sub was sent to investigate. That sub was Scorpion. Using the top-secret codes and the deciphering machine, the Soviets could intercept and decode communication between the Navy and Scorpion, the final element in carrying out the plannedattack.

All Hands Down shows how the Soviet plan was executed and explains why the truth of the attack has been officially denied for forty years. Sewell and Preisler debunk various official explanations for the tragedy and bring to life the personal stories of some of the men who were lost when Scorpion went to the bottom. This true story, finally told after exhaustive research, is more exciting than any novel.

Publishers Weekly

Controversy has steadily shadowed the 1968 sinking of the U.S. nuclear submarine Scorpion. The navy's official version of accidental sinking on a routine mission was challenged by allegations that the Scorpionwas in fact torpedoed while shadowing a Soviet task force. Further rumors indict the spy John Walker for providing confidential codes to the Soviets, enabling them to track the submarine. Yet another account purports that the Soviets destroyed the Scorpionin retaliation for the sinking of one of their own subs. The two navies eventually called a truce rather than risk further disrupting relations. Sewell, a submarine veteran, and Preisler, a writer of techno-thrillers, add little new evidence in their version of the story; their new data is unfailingly familiar and they never succeed in making a persuasive case for the conspiracy and cover-up they claim occurred. Instead, Sewell and Preisler devote more time to anecdotes about the Scorpion's crew and their families and little vignettes of the routines on board a nuclear sub. What is undeniably useful is the book's demonstration of the high numbers of accidents between ships and aircrafts that were accepted as routine during much of the Cold War. All Hands Downhighlights a truth no less relevant today: international incidents are in good part constructions mutually agreed upon after the event. (Apr.)

Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Edwin B. Burgess - Library Journal

This third recent book on the sinking of a U.S. nuclear attack submarine in 1968 attempts to reconstruct both the tragedy and the events leading up to it. While Stephen Johnson's Silent Steelfailed to identify a cause for the loss of the boat and its 99-man crew, Ed Offley's Scorpion Downbroke through U.S. Navy silence and convincingly postulated that the Scorpionwas sunk deliberately by a Soviet sub in retaliation for the loss of a Soviet sub the month before and that the navy knew this and concealed it to prevent a general naval war from breaking out. Sewell (coauthor with Clint Richmond, Red Star Rogue) and Preisler ("Tom Clancy's Power Plays" series) bring further information: that Robert Ballard of Titanicdeep-sea exploration fame was secretly involved in locating and exploring the Scorpionwreck while working at Woods Hole, using the Titanicas a cover story. They also focus on the John Walker spy case (naval officer Walker was found to have spied for the Soviets from 1968 to the mid-1980s) and the highly damaging intelligence that Walker provided to his Soviet handlers. The authors interweave several detailed narratives of crewmen and their families. The overall sensational tone and the use of reconstructed events and conversations make for a lively narrative, but readers will be better served by Offley's book. Libraries with an interest in naval affairs will no doubt want both books.

Kirkus Reviews

Convincing argument that the 1968 sinking of the nuclear submarine USS Scorpion, long considered an accident, was the result of a Soviet attack. Although not the first to level this accusation, Navy veteran and nuclear engineer Sewell and Tom Clancy stand-in Preisler (Tom Clancy's Power Plays #1, 2004, etc.) make a compelling case, buttressed by research in Soviet archives and interviews with retired officers. Espionage plays a central role in the Scorpion disaster, thanks to traitorous John Walker. The authors recount the oft-told but still mind-boggling story of this junior officer at submarine communications headquarters who sold secrets to the USSR. (He would not be suspected for nearly two decades, until an angry ex-wife informed on him.) Soon after Walker enabled the Soviets to decipher coded American submarine communications, a Soviet missile sub on a still-unknown mission near Hawaii sank with all hands in February 1968. Two weeks later, a spy reported that a damaged U.S. submarine had arrived in Japan. Soviet files reveal and interviews confirm that high Soviet officials believed it had deliberately sunk their vessel, perhaps by ramming. In revenge, they torpedoed the Scorpion on May 27, killing 99 men. Blaming the Soviets would have exacerbated the Cold War, so the Navy's official inquiry quickly dismissed that idea and the Navy spent its time investigating theories involving complex mechanical failures. The authors deliver an engrossing overview of American and Soviet submarine operations, including an unnerving number of encounters that could have ended in shooting. They provide capsule biographies of the Scorpion's captain and many of its crew, their families and theirfriends. Serious readers may skim the fictional recreation of the sinking, but few will be able to resist the juicy details offered about this half-forgotten disaster and its aftermath, including the boasting of old Soviet admirals that they would have won World War III because they knew every move the U.S. Navy made. A satisfying historical whodunit, redolent with Cold War paranoia and tragedy.