Renowned U.S. Economists Denounce Corporate-Led Globalization

Nobel Prize winner Joseph Stiglitz and internationally acclaimed economist Paul Krugman decry undemocratic, unsound, and unethical corporate agenda

by James L. Phelan

It seems critics of corporate-led globalization have some new allies.

Recent Nobel Prize winner Joseph Stiglitz, along with well-known economist Paul Krugman, have of late made a flurry of public statements critical of the policies and processes of the World Trade Organization (WTO), the World Bank / IMF, and the proposed Free Trade Area of the Americas (FTAA) -while leaving plenty of harsh words for the blatantly pro-corporate actions of the Bush Administration. Both economists point to the disruptive and distorting influence of large corporate entities through their dominance over both domestic and international institutions.

Stiglitz and Krugman have begun to voice their indignation more frequently in the press, raising many of the same concerns that social justice and environmental advocates have long made about the disproportionate influence of big business and the hypocrisy of "free market" dogma.

Taking Care of Business

In a recent column appearing in the New York Times, Krugman stated: "Cynics tell us that money has completely corrupted our politics, that in the last election big corporations basically bought themselves a government that will serve their interests. Several related events last week suggest that the cynics have a point." As evidence of heavy-handed corporate opportunism, Krugman takes issue with the recent claims by security interests that federalizing airport security would represent a "taking" - a bald move by private interests to maintain a questionable security status quo free from public calls for more systematic scrutiny.

Krugman then assails the House "Stimulus Bill", stating that the "remarkable thing we learned from that bill was that conservative politicians - who used to claim that they were improving incentives by reducing marginal tax rates, and that it was just an incidental side effect that big corporations and wealthy individuals were so richly rewarded -no longer feel the need to disguise their payoffs." As he states, the principal goal of the bill is to repeal retroactively the corporate alternative minimum tax, "which means that selected companies would immediately receive huge lump sum payments from the government, totaling around $25 billion, with no incentive effect at all." What's worse is that "there are no strings attached to those gifts: if the companies want to, say, pay huge bonuses to top executives, they can. Republicans have always depended on the kindness of corporations, but this bill takes that faith to extremes."

Very little here, says Krugman, is representative of sound economic policies aimed at economic recovery, not to mention the need for shared sacrifice in times of belt-tightening. Corporate interests, as Krugman rightly points out, have friends in convenient political circles. In a blunt conclusion, Krugman sums it up saying that "the truth must be spoken. Lately our government has not exactly inspired confidence; its response to terrorism is starting to look a bit scatterbrained. But on some subjects our leaders are quite clearheaded: whatever else may be going on, they make sure that they are taking care of business."

Corporate-Led Globalization

When it comes to decrying the disruptive influence of the corporate agenda internationally - whether in the WTO or the FTAA - most critics have focused their energies on denouncing the anti-democratic nature of international trade and investment regimes and their narrow focus on liberalizing markets at all costs.

A recent interview with Joseph Stiglitz, however - the ultimate World Bank/IMF insider - sheds new light on what many have long suspected: documents and testimony on secret industry-governmental meetings, the behind the scenes agenda-setting of transnational corporate interests, and the apparent hidden agenda of the WB/IMF.

This conspiratorial assessment of hidden agendas could easily be shrugged off as baseless - except that this account comes to us from a fired-up and increasingly political Stiglitz. Fired from the World Bank in 1999 for his criticism of the WB/IMF's policies, Stiglitz has refused to keep quiet as these institutions - largely serving under the dictates of the U.S. Treasury Department - impose policies internationally that he claims have "condemned people to death."

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