Joseph Stiglitz (The Guardian): Development in defiance of Washington

[Jack Rabbit]

From the London Observer (Sunday supplement of The Guardian Unlimited)
Dated Thursday April 13

Development in defiance of the Washington consensus
China has carried off the world's largest reduction in poverty by grasping that market economies cannot be left on autopilot
By Joseph Stiglitz

China is about to adopt its 11th five-year plan, setting the stage for the continuation of probably the most remarkable economic transformation in history, while improving the wellbeing of almost a quarter of the world's population. Never before has the world seen such sustained growth; never before has there been so much poverty reduction.

Part of the key to China's long-run success has been its almost unique combination of pragmatism and vision. While much of the rest of the developing world, following the Washington consensus, has been directed at a quixotic quest for higher GDP, China has again made clear that it seeks sustainable and more equitable increases in real living standards. China realises that it has entered a phase of economic growth that is imposing enormous - and unsustainable - demands on the environment. Unless there is a change in course, living standards will eventually be compromised. That is why the new plan places great emphasis on the environment.

Many of the more backward parts of China have been growing at a pace that would be a marvel, were it not that other parts of the country are growing even more rapidly. While this has reduced poverty, inequality has been increasing, with growing disparities between cities and rural areas, and coastal regions and the interior. This year's World Bank world development report explains why inequality, not just poverty, should be a concern, and China's plan attacks the problem head on. The government has for several years talked about a more harmonious society, and the plan describes programmes for achieving this.

Read more.

I am a little concerned with Stiglitz' piece. While there can be no denying that China has made great strides, to point it out has a bit of a Mussolini got the trains to run on time naivete about it. Like many so-called free market economies, China's has been fueled on low wages. Thus, far from being a workers paradise, China has produced the worst of both worlds: a free market economy where workers are expected to toil for little without complaint and an authoritarian political system which assures that they will have little to say about it.

[acmejack]

1. At what price to the environment?

What price to society?

Regions of China are virtually uninhabitable as a result of uncontrolled industrialism spewing poisons into the ecosphere. The people are rioting daily, pretty far from a worker's paradise...

[malaise]

3. Valuid point but the essence of Stiglitz's

article is that contrary to the view of neoliberal economists, market economies cannot be left on autopilot. Trickle down policies have failed at every level (including the environment) and government intevention is essential if one wants to ensure that benefits are shared widely. He points out that China's development plans take account of that reality.

[lutherj]

2. I'm sure that Stiglitz would recognize your concerns.

He's arguing against market fundamentalism on their own terms. I suspect he would be delighted if the WTO or the Cato Institute raised these objections.

[luckyleftyme2]

4. WHY WE NO LONGER CAN COMPETE!

the reason we are losing all of our businesses over seas is because we cannot compete in a market
that has national health care and and guaranteed retirement systems !
why we have not achieved an even playing field is because of the insurance companies,and the politicians they buy.
how many of you realize the game plan now in use? major companies are now owned or controlled by foreign money.
our last strong market industry is about to fold. the auto industry cannot sustain it's benifits
and compete in the world market.
there has been a systematic of dismantling our industry while stealing the nation's wealth over the past thirty years. many of these " blind movers and shakers" are affiliated with this administration. (the one that will go down in history as the straw that broke america's back".)
these foreign owners are coming in ending company health care plans, cashing in our retirement pensions and taking their profits off shore.
our only national threat is the very survival of our countries wealth. which is basically "non-existent"
we are running on a false economy,sales are not up;loans,prices and profit are. people are getting loans on houses they can't possibly pay.credit card debt ,second mortgages and bankruptcies are!