Joseph Stiglitz, Nobel-prize winning economist accused the White House leader of conducting U.S. trade affairs with the rest of the world under the terms of the “Rule of the jungle”.
“Trump wants to return to the rule of the jungle: when there is a trade dispute between two countries, they ‘duke it out’ and the stronger country wins,” denounces Stiglitz, who thinks that this policy can generate an “international trade regime that is a maidservant to U.S. interests”
In his opinion, the president “misses two critical points”: on one hand, countries would not join a system that takes advantage of them, but would focus on partners that treat them well; and, on the other hand, they can get together against those who have power, in reference to China and Europe vis-à-vi the United States.
“Trump is wrong to blame globalization, whether unfair trade rules or unwanted immigrants, for the country woes, but globalization advocates are also wrong” when they argue that globalization has not played a role in the drama of the population and blame only technological progress.
The Nobel laureate in Economics wrote a new book where he reviews the “mismanagement” that the US has made of globalization. He holds that trade agreements were not unfair to this country and describes President Trump as a quarrelsome person.
CNBC published a Stiglitz excerpt from “People, Power and Profits: Progressive Capitalism for an Age of Discontent,” in which the economist goes deeper into the problems of globalization.
Stiglitz points out that current criticism of globalization, and which is supported by Trump, blame the middle class dwindling incomes on negotiations of “unfair” trade agreements for the U.S., while opponents of protectionism blame them on technological progress.
“For more than 20 years, I´ve been criticizing the way that globalization has been managed, but from a completely different angle,” says the former chief economist of at the World Bank, who realized that the rules of the global game were biased in favor of the strongest.
The trade agreements, generally negotiated at the end of the 20th century, were “unfair: to the benefit of the United States and Europe, and to the detriment of developing countries,” said the Nobel laureate , who sums them up as promoting “corporate interests at the expense of workers in both developed and developing countries”.
“We, as a country, didn´t do what we should have to help workers whom globalization was hurting. We could have ensured that globalization benefited all, but corporate greed was just too great”, acknowledges the economist and professor at Columbia University.
However, he rules out the possibility that his ideas on globalization will bring him closer to President Donald Trump and he distances himself from him by defending the “importance of the rule of law, of a rules-based system for governing international trade” against the “rule of the jungle” that, he says, the president is betting on.
Stiglitz also puts the responsability on citizens for having “mismanaged the consequences both of globalization and of technological progress”, and concludes that “we need better, fairer international rules” but, above all, “America needs better management of the changes” brought about by both phenomena.
Translated by: José Espinoza