Joseph Eugene Stiglitz (/ˈstɪɡlɪts/; born February 9, 1943) is an American economist, public policy analyst, and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979).[2][3] He is a former senior vice president and chief economist of the World Bank and is a former member and chairman of the (US president’s) Council of Economic Advisers.[4][5]
some ways I one has to recognize that
42:32
China may have been lucky they began the
42:37
development strategy just at the moment
42:39
when the West was very open to importing
42:43
manufacturing goods it was a moment
42:49
where because there were a large profit
42:54
opportunities in the West that sustained
42:58
the opening with wrong without regard to
43:01
the effects and workers over the over
43:04
the effects and the overall economy so
43:09
in a way China’s success is testimony to
43:13
the failures of democratic politics in
43:16
the United States in Western Europe
43:19
because the rules the game were designed
43:26
worked to advantage American
43:29
corporations Western European
43:31
corporations with no attention paid to
43:37
the consequences to the workers as the
43:41
United States d industrialized now some
43:43
countries in Europe did pay attention
43:45
and they did have active labor market
43:49
policies that shifted workers from the
43:53
old sectors that were dying into the new
43:55
sectors and Scandinavia has been very
43:58
good in these active labor market
44:00
policies which I think are really
44:02
important in the United States we didn’t
44:06
do that even though economic theory said
44:11
opening up of trade between an
44:14
banks country like the United States and
44:16
China West events would result in lower
44:21
real incomes for unskilled workers
44:24
there’s a missing Stover theorem and it
44:28
was unambiguously clear even though we
44:31
were getting cheaper goods real incomes
44:34
of unskilled workers would go down and
44:36
it’s only if you had a mystical belief
44:39
in trickle-down economics would you
44:41
think otherwise but our politicians did
44:44
have a mystical belief in trickle-down
44:46
economics and they asserted this over
44:51
and over again and so even when you know
44:54
in the Democratic Party we tried to get
44:57
Trade Adjustment Assistance we try to
44:59
have some active labor market policies
45:01
when we couldn’t because of concerns
45:04
about austerity and not enough budget
45:07
concerns they wouldn’t work we went
45:11
ahead anyway there is a growing sense
45:15
the United States though that actually
45:16
the agenda on the right was to increase
45:23
unemployment and suffering you say why
45:26
would they anybody you know why do
45:29
people want suffering well it was part
45:32
of a concerted agenda if you look at to
45:35
weaken the bargaining power of workers
45:38
and drive down the wages which increases
45:41
profits so if you look at this from a
45:45
conservative point of view the reforms
45:47
and our labor laws and reforms in the
45:51
way antitrust policy was enforced that
45:55
reform is a not the right word but
45:58
changes in those laws changes in
46:02
corporate governance and implicit
46:04
understandings the legal frameworks and
46:08
in the investment agreements in the
46:10
trade agreements the investment
46:12
agreements they gave more secure
46:14
property rights if American firms
46:16
invested abroad than if they vested at
46:18
home which meant that they were
46:21
encouraged to invest abroad which also
46:24
meant that if the firm if workers came
46:27
to affirming
46:28
we want higher wages and the firms know
46:31
if you we give you if you continue to
46:35
demand higher wages we’re going to leave
46:37
that was more credible so I think it was
46:43
a deliberate strategy to drive down the
46:45
wages of workers and it worked in terms
46:50
of the economics that I described before
46:52
it did drive down the wages but it has
46:55
now led to these this political backlash
46:58
with which we are dealing so there is a
47:04
relationship between China’s success and
47:07
some of the problems that we’re facing
47:09
it wasn’t inevitable we could have
47:11
managed it better we should have managed
47:14
it better but we didn’t but just as a
47:16
footnote the point I’m making is that
47:20
that was a particularly
47:23
Africa won’t be able to follow the
47:25
manufacturing export-led growth model
47:28
that led to the success of East Asian
47:32
countries including China in fact now
47:36
globally manufacturing employment is in
47:40
decline in any country that believes
47:44
that manufacturing should be at the
47:46
center of their economic policy is
47:48
misguided it can be part of it it can’t
47:52
be at the center well let me just
47:57
conclude by SEP some let me just
48:02
conclude by a set of remarks about that
48:07
in a way that pertain to all countries
48:10
but we’re we’re china realized this in a
48:16
way more forcefully than many others
48:18
have and that is that reform is a
48:20
never-ending process that societies are
48:28
always changing technology’s changing
48:30
and therefore the policies that are
48:36
going to make a society successful have
48:38
to change in a corresponding way
48:41
for China China’s entering a new stage
48:43
of development it’s facing critical
48:46
problems of inequality health
48:47
environment livable cities markets won’t
48:51
solve those problems in fact many of
48:53
those problems have been created by the
48:56
fact that they had markets that were too
49:00
unfettered to under-regulated
49:02
they’re going to have to regulate them
49:04
better there are further questions posed
49:09
by changing globalization the
49:12
recognition of the risks of excessive
49:14
financialization the West
49:18
I believe hasn’t succeeded in adequately
49:20
taming financial markets as you know
49:23
this is this week is the 10th
49:25
anniversary Lehman Brothers and and a
49:27
lot of people are talking about have we
49:29
done enough I think it’s absolutely
49:32
clear no and what’s particularly
49:39
disturbing is the Trump administration
49:41
is trying to undo the inadequate things
49:44
that we’ve already done again I was at a
49:48
dinner right before the inauguration of
49:51
Trump where one of his chief economic
49:54
advisors was there
49:56
I don’t normally associate with his
49:57
people might make it clearer but it was
50:02
an embassy dinner so I and I didn’t know
50:06
he was going to be there anyway
50:10
and he was talking about how he was
50:16
going to deregulate the financial sector
50:19
within weeks after taking office and the
50:26
first thing that struck me is he clearly
50:28
had no idea of our democratic processes
50:31
yeah he really thought you know Trump is
50:34
the dictator he gets to write rewrite
50:36
all the rules no no none of these
50:38
processes that we put in place as
50:40
democratic checks against authoritarian
50:43
leaders no knowledge of that was just so
50:46
clear but the second point I was going
50:50
to ask what somebody who asked it before
50:51
I did quizzically
50:55
didn’t we have a crisis in 2008 and the
51:02
implicit answer was that was ancient
51:04
history and we have to move on but it’s
51:09
not ancient history and I think the
51:12
risks are very much with us one of the
51:17
concerns that I increasingly seeing in
51:20
China is that as China grows the
51:26
influence of vested interest will grow
51:28
and you can feel it already
51:32
another just a little anecdote every
51:36
year when I go to China I often talked
51:42
to the finance minister and I’ve been
51:43
pushing them to move away from their
51:46
debt finance growth model to more tax
51:50
financed in particular I’m telling them
51:53
they need a carbon tax and it would
51:56
raise a lot of revenue it would help
51:59
clean up their air pollution exceed me
52:02
an obvious idea and the finance minister
52:05
every year says great idea and he says
52:10
we have some political problems which he
52:14
means the auto industry the coal
52:16
industry this you know steel industry
52:18
and so forth we’re gonna work on it next
52:22
year we go through the same conversation
52:27
as China has grown and it has taken on
52:31
many of the features of a modern vested
52:37
interest economy we’re getting change is
52:41
becoming more difficult and that of
52:43
course is is very worrisome but the
52:49
principles that guided China in the
52:53
first 40 years are likely to continue to
52:55
be relevant and that by that I mean the
52:57
pragmatism crossing the river by feeling
53:00
this still stone they’re going to be new
53:02
problems not fully foreseen would that
53:04
appear it will have to address these
53:08
problems
53:09
using insights from theory and past
53:11
experience and the second critical point
53:14
is openness there is much to be learned
53:18
from experiences of others and from the
53:20
ink sykes of non-ideological economic
53:23
analysis and again we’re in a particular
53:29
moment where I hate to keep coming back
53:34
to the United States but we’re a little
53:35
bit obsessed with with our problems one
53:41
can’t help but reflect on the closed
53:45
mindedness of our current administration
53:48
of not looking around you know if you
53:52
think you’re number one and you think
53:54
that you’re the there’s nothing to learn
53:57
from anybody else that is part of the
54:02
beginning of the end so we hope that
54:05
this is just a temporary interlude but
54:09
as we reflect on what makes I know
54:14
successful in the ways it is I think
54:18
there are a lot of lessons for all of us
54:19
to think about how we can make our own
54:21
economy successful for all of us thank
54:24
you
54:30