Inflation and growth

[Seth Ackerman]

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