Having finished Neil Gaiman’s wonderful collection of twisting tales called “Fragile things” I picked up Stiglitz’s book that was lying on my coffee table. Joseph Stiglitz is an economist, amongst other things a Nobel Prize winner, former World Bank Chief Economist and ex-Chairman of Clinton’s Council of Economic advisors. His 2002 book is called Globalisation and its discontents, I think I’ve reviewed it earlier in these pages. As I flipped through the book again, Jeremy Paxman was chatting with Paul Mason, their economics editor on BBC’s Newsnight. (P.S. And as I later visit the Newsnight website I see that, coincidence of coincidences, Mr. Stiglitz is on the show tonight).
I decided to list some thoughts on aspects of global economics.
Beggar thy neighbour – Globalisation vs Nationalisation is something I have already mentioned in another arena (Sarkozy preventing Sovereign Wealth Funds of other nations from buying up French companies). Stiglitz brings this home very clearly in his examination of protectionist tendencies of so-called “free markets”. Countries that have failed to unite to introduce economic measures together will now do so with national interests put first, as is happening with the UK auto industry as we speak.
Borrowing – All economics is essentially housekeeping. Global economics is housekeeping on a larger scale. This means the same rules apply to both, such as “You can’t have outgo without income”.
Quis custodiet ipsos cutodiare? – Who watches the watchmen, or in this case who regulates the regulators?
Cui bono? – Who benefits? One of the two prime considerations in any good murder mystery is motive. The other is opportunity. Stiglitz says:
…Wall Street regards inflation as the worst thing in the world: it erodes the real value of what is owed to creditors, which leads to increases in interest rates, which in turn lead to declines in bond prices. To financiers, unemployment is far less of a concern.
The next bubble – The Essentials for any bubble are scarcity and demand. Both of these can be artificial. Look for precious resources like water being squeezed next. There’s also money to be made in “Going Green”.
Juggling – In any news feature or documentary, why does the word ‘Globalisation’ have to be accompanied by a clip of a hippie juggling? Watch out for it the next time.
I’ll end by paraphrasing a famous quote.
“Making a speech on economics is a lot like pissing down your leg. It seems hot to you, but it never does to anyone else.â€
The Nazmanian Devil 
