Globalisation has led to more inequality, says economist Joseph Stiglitz

Nobel-winning economist criticises negotiations to agree new EU-US trade deal

The battle to stop the proposed European Union-United States trade agreement is the first step to halt growing inequality in major western countries, says Nobel Prize-winning economist Joseph Stiglitz.

Rejecting the argument that globalisation has reduced poverty, Mr Stiglitz says 500 million people have been moved out of poverty in China because it exploited globalisation to build its industrial base.

"It wasn't globalisation the way the World Bank, the International Monetary Fund, or [former head of the World Trade Organisation] Peter Sutherland would have had it," he said. "These countries managed globalisation on their own terms. China never liberalised its capital account. . . It took it [globalisation] and implemented it to its own advantage," said Mr Stiglitz, speaking in London to promote his book, The Great Divide.

Economic woes

Western countries are suffering high unemployment, low growth and stagnant wages, he said. “Trade did lead to more inequality. Unskilled workers are competing with Chinese unskilled workers, that drives down their wages.” We have to acknowledge globalisation has led to more inequality, he said.

He criticised the negotiations to agree a new EU-US trade deal, the Trans-Atlantic Trade and Investment Partnership. US demands for greater intellectual property protection rights from the EU, equal to what it has demanded from the developing world, show the stand taken by the US trade representative “is a lie”, he argued.

Mark Hennessy

Mark Hennessy

Mark Hennessy is News Editor of the The Irish Times