Inflation and growth

Seth Ackerman SAckerman at FAIR.org
Fri Jan 28 14:16:56 PST 2000


Patrick Bond wrote:


> > >Stiglitz has vacillated on this question. On some occasions, he has
> > >put the figure at 40%.
>
> If I may draw upon a citation from a Jnl of World Systems Research
> article I did last year...
>
> Precisely the institutional role Stiglitz had to
> continue playing--defending a key Washington
> Consensus institution, the World Bank--led soon
> enough to his South African delegitimisation. In
> January 1999, his World Bank Pretoria-based
> colleagues set up a formal meeting with 50 members of
> the SA NGO Coalition (Sangoco), where Stiglitz went
> on to reverse tack on the larger economic issues
> (including his Helsinki-speech consent to allowing
> inflation rates to rise to 40 per cent--he reduced
> the figure to 8), once some embarrassing questions
> about "moral hazard" were put to him. As recounted by
> Sangoco vice president Mercia Andrews and Campaign
> Against Neoliberalism in South Africa coordinator
> George Dor,
>
> We asked him for his views on the
> contradiction between his speech in Helsinki
> and the World Bank contribution to the
> [homegrown structural adjustment] Gear
> strategy. He told us he didn't know much
> about South Africa ... We put it to him that
> perhaps the Bank should take action against
> its staff members on the Gear team who got
> the employment predictions so horribly wrong
> by suggesting that Gear would generate
> hundreds of thousands of jobs each year when,
> in reality, hundreds of thousands are being
> lost. Everything in his tortuous reply
> suggested that he was not particularly
> concerned whether Bank staff members produce
> work of poor quality and that staff members
> can get away with shoddy work that has a
> profound impact on people's chances of
> finding employment.
> Our engagement with him highlights a
> significant retreat from his Helsinki
> position. There are a number of possible
> reasons. His Helsinki speech may have been a
> deliberate strategy to create the impression
> of change. He may have been reigned in by the
> World Bank after Helsinki. Perhaps he felt
> restrained in Johannesburg by the need to
> talk the language of his entourage. He
> portrays the confidence that he has the ear
> of the institution but insider talk suggests
> that he is a maverick who is not to be taken
> too seriously. Whatever the reason for his
> retreat, his hero's halo has now vanished.
> [International Viewpoint, 310, April 1999;
> for an official Sangoco report on the meeting
> in the same spirit, see also NGO Matters,
> January 1999.]
>

I don't view Stiglitz either as a co-opter or as co-opted. I think the friction between him and the Bank/Treasury complex forced him to choose between conforming or leaving; to his credit, he left.

His real views are almost certainly the ones he expressed in his Helsinki speech. (And in his recent Challenge article about the post-socialist transition; and in his remarkable lecture this month on labor and democracy.)

Seth



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