Tag: Joe Stiglitz

Q&A: What Can We Economists Do Right Now to Be Useful?: INET Edinburgh

Posted on by Brad DeLong

What can we economists do right now to be useful, as far as policy is concerned?

I believe that we economists can do very little, right now, to materially affect policy. Joe Stiglitz is an economist. Joe Stiglitz was in fact the chief economist in the late 1990s. Joe Stiglitz then argued that TRIPS was a bad idea. It enriched not America but rather the holders of pharmaceutical patents. It did so at the cost of charging poor countries like Vietnam and Congo through the nose for intellectual property that was non-rival in some very basic sense, and for which the appropriate market price was zero. Joe Stiglitz lost that argument. USTR does not regard its mission as primarily that of promoting the health of the world or even the U.S. economy.

One thing we should be doing is laying the groundwork for some future day in which we can affect policy. We should be pushing very hard right now developing arguments for an expanded public sector—a public sector that will produce real marginal cost pricing for things that are non-rival, or perhaps liable only because of increasingly sophisticated and onerous layers of legal “protectionism”, but that somehow is not called “protectionism” because it is not concerned with movements of goods. Why it does not count as “protectionism” is a mystery to me.

At this point I want to incorporate-by-reference the entire works of Dean Baker, and then stop.

Must-read: NPC Newsmakers: “Feb. 11 Newsmaker Panel Asserts that the Proposed Trans-Pacific Partnership’s ISDS Provision Will Undermine U.S. Courts and Legislative Bodies”

Posted on by Brad DeLong

Must-Read: As I understand it, all precedent suggests that ISDS provisions are not a problem for the United States. ISDS panels make their determinations, and as a result other countries gain or fail to gain the right to impose countervailing duties on U.S. exports–and then the negotiations begin, with the first move being the U.S. negotiators say: “Do you really think this company of yours now waving around an ISDS panel ruling has a strong enough case that you want to seriously risk pissing us off?” It is much easier all around for everyone if the ISDS panel rules for the United States–and the pattern of rulings in the ten years we have watched this instrumentality at work strongly suggest that that is how it works.

Of course: things could change. And ISDS panels do rule against other countries’ governments–that is, after all, why the U.S. has put ISDS into this agreement: to give its companies protection.

But the disturbing thing is that I do not understand these institutions very well–neither how they are formally supposed to work, how they work in practice, and why they work the way that they appear to do:

NPC Newsmaker: Feb. 11 Newsmaker Panel Asserts that the Proposed Trans-Pacific Partnership’s ISDS Provision Will Undermine U.S. Courts and Legislative Bodies: “What are the ramifications of the Trans-Pacific Partnership…

…and in particular will the Investor-State Dispute Settlement (ISDS) provision of TPP take the enforcement of U.S. laws out of the hands of the nation’s courts and legislatures in favor of corporate-controlled tribunals? On Feb. 11, at 10 a.m., in the National Press Club’s Bloomberg Room, three experts on trade and investment law will address a National Press Club Newsmaker news conference…. Joseph Stiglitz… Lise Johnson… Ralph E. Gomory

Audio

Must-read: Joe Stiglitz: “Why the Great Malaise of the World Economy Continues in 2016”

Posted on by Brad DeLong

Must-Read: Joe Stiglitz: Why the Great Malaise of the World Economy Continues in 2016: “In early 2010, I warned… that… the world risked sliding into what I called a ‘Great Malaise’…

…Unfortunately, I was right: We didn’t do what was needed, and we have ended up precisely where I feared we would… a deficiency of aggregate demand, brought on by a combination of growing inequality and a mindless wave of fiscal austerity. Those at the top spend far less than those at the bottom, so that as money moves up, demand goes down. And countries like Germany that consistently maintain external surpluses are contributing significantly to the key problem of insufficient global demand…. The U.S. suffers from a milder form of the fiscal austerity prevailing in Europe… some 500,000 fewer people are employed by the public sector in the U.S. than before the crisis. With normal expansion in government employment since 2008, there would have been two million more.

The only cure for the world’s malaise is an increase in aggregate demand. Far-reaching redistribution of income would help, as would deep reform of our financial system–not just to prevent it from imposing harm on the rest of us, but also to get banks and other financial institutions to do what they are supposed to do: match long-term savings to long-term investment needs…. The obstacles the global economy faces are not rooted in economics, but in politics and ideology. The private sector created the inequality and environmental degradation with which we must now reckon. Markets won’t be able to solve these and other critical problems that they have created, or restore prosperity, on their own. Active government policies are needed. That means overcoming deficit fetishism. It makes sense for countries like the U.S. and Germany that can borrow at negative real long-term interest rates to borrow to make the investments that are needed…