Stiglitz’s article is an attempt of explaining why there are inequalities between nations in terms of globalization. According to Stiglitz, it is global organizations like the International Monetary Fund (IMF) and the World Trade Organization who, through corporate greed, create these problems, while countries that do not participate in or resist the influence of these organizations are able to succeed. Countries that “have managed globalization on their own, such as those in East Asia, have, by and large, ensured that they reaped huge benefits and that those benefits were equitably shared,” (206) while those under the thumb of global institutions suffered due to these institutions not having the countries’ interest in mind and “lack[ing] democratic accountability” (210) to ensure proper behavior.
These economic organizations are representatives of what Giddens would call “the world capitalist economy,” one of the four dimensions of globalization he defines. (Giddens, 71) Giddens’ description of the capitalist world economy certainly fits with the consequences Stiglitz describes:
…even in its beginnings, the capitalist world economy was never just a market for the trading of goods and services. It involved, and involves today, the commodifying of labour power in class relations which separate workers from control of their means of production. This process, of course, is fraught with implications for global inequalities. (Giddens, 71-2)
At the end of his article Stiglitz proposes a global alliance to ensure equality, one which, unlike private organizations like the IMF, could be held publicly accountable. Considering that the author previously said those countries who fare best are those who avoid external influence, proposing such a body is a strange remedy. Regardless, how possible is this solution?
The countries who would most want this arrangement, and willing to give up the portion of their sovereignty that an international system of regulation would require, the most would be those with weaker economies. Getting the more powerful countries, with the most to lose and least to gain, to agree to terms would be nearly impossible. As Giddens points out, the United Nations, created with the intention of avoiding wars as much as possible, is “decisively limited by the fact that it is not territorial and does not have significant access to the means of violence.” (Giddens, 73) In the same vein, how could an alliance of countries without significant wealth influence the world economy? It could not be through force—in the modern world, a nation does not need to have a strong military to be a strong economic power, but those that are strong military powers necessarily need powerful economies. With neither economic influence nor military power, how could these nations convince the rest of the world to agree to any possible international laws to encourage equality?
Unfortunately, Stiglitz closing suggestion would be an intrinsically weak coalition with no power to enforce its proposals. Perhaps Stiglitz believes that powerful countries would do so out of humanitarian sympathy, but that has never been the case throughout history. Solutions are hard to reach, but identifying the nature of the problem is part of the process, which Stiglitz does an excellent job of.