Stiglitz offers words of wisdom in Trinity

 

IT HAS heard debates on issues as diverse as abortion, apartheid and gay marriage but, last night, economics took centre-stage at the debating chamber of Trinity College's historical society.

For 45 minutes, six speakers debated the motion That this House Believes that Globalisation Hurts the World's Poor.But all eyes were on chairman Prof Stiglitz, who concluded the debate with a 30-minute address.

"Globalisation has helped hundreds of millions of people around the world. The problem is the way globalisation has been managed - it has been worked to the disadvantage of the poor," he told the chamber

The world expert on globalisation outlined the views that have made him one of the most influential economic thinkers. His first target was the "hypocrisy of the free market". "Intentionally or unintentionally, the international institutions have kept down the price of goods exported by developing countries," he said.

Arguing that the World Bank, an institution he joined in 1997 as chief economist, actively encouraged developing countries to focus only on primary education so that they would produce unskilled goods, he criticised the system of tariffs and agricultural subsidies that characterise global trade.

"Take cotton, in the US. Our government gives €3 or €4 billion dollars to cotton farmers. This drives down the price. The result is that more than 100,000 Indian cotton-farmers are [taking their own lives] . . . "

Prof Stiglitz also criticised the "lack of social contribution and high social cost" of the globalised healthcare industry. "Aids treatment costs €10,000 a year; the cost of generic medicine is €150 a year. If you asked the American people, 'Do you want poor people in Africa to have access to Aids medicine,' they would say yes, but it wasn't put to the voters. It was put to negotiators behind a closed door in Geneva with drug companies at the table."

He said Nama is likely to "burden this generation for 25-50 years or more. I am very uncomfortable with a government with such a minority support making such a decision."

He said the view there is no alternative is "just wrong".

"There is an alternative. Play by the rules of capitalism - if you can't pay back your debt, shareholders and bondholders lose. If the Government puts in money, it needs to get control commensurate with the money put in. It also should get a return proportionate to the risk involved - in this case, it's a big risk."