commentator: So, so we obviously don't have
enough books, we don't have enough chairs,
we don't have enough resources; perfect metaphor
for talking about globalization.
[laughter]
From, from the, the Google.org and Google
Foundation site, I'm particularly happy to,
to welcome Joe Stiglitz here today because
he's been writing about globalization and
trying to carve a Goldilocks, middle of the
road approach between sweat shops that are
enslaving and sweat shops that are liberating,
which is, I think, a lot of what he's gonna
be talking about today.
For those of you who don't his background,
it, it's like a litany of the top accomplishments
in the field of economics. And I'm just gonna
read them to you so that, you, after hearing
them are terrified to ask him a question.
[laughter]
We'll start off with a small one when he won
the Nobel Prize for economics in 2001 with
Michael Spence and George Akerlof for contributions
to understanding how asymmetries in information
change the behavior of individuals.
He is currently a university professor at
Columbia University, but previously he was
Chair of President Clinton's Council on Economic
Advisors. And while many people in Google
sometimes think that this is actually President
Clinton's cabinet in exile here at Google,
he has found many of his friends here in the
last couple of days - a bit of an old, old
home day for him.
He was also a Senior Vice President and the
Chief Economist of the World Bank. So he got
all the major food groups: he got the World
Bank, he got Clinton, and the Nobel Prize.
More recently he has written, I think, sensitively,
extensively, and soberly about the problems
of economic globalization. His book, Globalization
and Its Discontents, even the title which
I understand Hal Varian gave him captures,
I think, the poignancy of the struggle to
liberate hundreds of millions of people from
the shackles of poverty and bring them up
a notch without causing economic convulsion
around the world.
That book examined how major institutions
of globalization operate, and it took a look,
and I think a tough minded and a fair-minded
look, at the consequences of how they operate.
He's on a book tour. His latest book is Making
Globalization Work, which for us in Google.org
and the Google Foundation, are really part
and parcel of what we're trying to understand
as we struggle with methodologies of helping
to mitigate the increasing gap between the
rich and the poor and bring people out of
poverty, especially in Africa, in India and
parts of Latin America.
In this book he extends his investigation
and proposers, policies, and structures which
will allow countries to enjoy the benefits
of globalization while mitigating and ameliorating
their disadvantages.
I can see from all the people who are here,
you join me in welcoming Professor Stiglitz
to Google.
[applause]
Professor Stiglitz: Well it's a real pleasure
to be here and, and to see so many, so many
of you. And as Larry mentioned it was, it's
also [bad audio] when you see so many old
friends that I hadn't really realized have
been here.
Hal Varian was in the first class I taught
at MIT in 1966, and then there were, have
been a lot of other people that I worked with
in Washington.
The, the subject of my talk is, is my book
Making Globalization Work. And, and the title
conveys a lot of what the book is about. First,
Making Globalization Work suggests that it's
not working. And much of the book is about
the ways in which it's not working and the
reasons it's not working.
But Making Globalization Work also conveys
my sense of optimism that we could make it
work, or at least work a lot better than it
has been.
And much of the book is based on the basis
of the diagnosis of the problems that I mentioned
before: their causes; what can be done; what
are some of the reforms in the way we, we
run globalization to make it work at least
better than it's been for more people than
it's been working before.
[pause]
Let me begin by trying to describe fairly
briefly some of the ways in which I think
globalization has not been working and, given
the limit of time, limited amount of time,
I'll have to be fairly, very brief about this.
At the beginning of, of discussions of globalization,
modern discussions, the hope was that everybody
would, would be made better off. The expression
was sometimes, "A rising tide lifts all boats."
But a more apt description of what often happens
is that a riptide destroys a lot of smaller
boats, and particularly if there aren't life
vests.
[pause]
What has happened in recent decades is that
while economic theory predicted that, oh and
I'm supposed to turn on this.
[sound of button being pushed]
Okay. Well economic, I don't know if it'll
make any difference.
Well, economic theory had predicted that the
disparities between the richest and the poorest
would be narrowed. In fact, those disparities
have increased. And not only between the richest
and poorest countries, but also within most
countries around the world, the level of inequality
has been increasing. And globalization has
at least something to do with that.
Closer to home, the disparity between Mexico
and the United States is larger today than
it was. I was in the Clinton White House when
we talked about NAFTA. One of the arguments
for NAFTA was that it would do something about
the six-fold dis, in, differences in income
across that border. Disparity in income which
gives rise to enormous immigration pressures
which have consistently been a problem.
But, as I say, a decade after the beginning
of NAFTA, those disparities had actually increased,
and in some ways, if I have time for questions
we can talk about NAFTA contributed to that.
The, Tho, Thomas Friedman has written a very
influential book called The World is Flat.
And a simple point I wanna make clear is,
the world is not flat. And in many ways the
world is getting less flat.
The good news is that 2.4 billion people living
China and India have been growing very rapidly.
For a quarter century incomes in India have
been growing at five, six percent. This year
it will, it's expected to grow at seven to
eight percent.
In the case of China, growth has been just
under 10 percent for 30 years, and they've
managed globalization reasonably well so that
several hundred million people have moved
out of poverty.
But elsewhere in the world, globalization
has not been managed as well and there are
these problems of increasing disparity.
The, in, in some ways, the forces that Friedman
talks about as having made the world flat
have actually contributed to making it less
flat. And he emphasizes in his book the importance
of technology, of which Google is at the center.
And, and what is so clear is that if you don't
have access to that technology, and if you
don't have the education to make use of that
technology, you will fall farther and farther
behind.
And one of the problems is that coun, countries
like Africa, continents like Africa, they
do not have access to those resources, to
that knowledge, that education, and that is
one of the reasons that the gap has been increasing.
But there are other reasons. The international
community makes rules, rules of trade and
those rules are made mostly by the advanced
industrial countries, and particularly by
special interest in those countries, for their
own interest.
And the result of this is that the last trade
agreement, that Uruguay Round in 1994, actually
made the poorest countries worse off. It wasn't
just that the United States and the EU got
the lion's share of the gain, the poorest
countries were, were actually poorer than
they had been before that agreement.
There are other funny things, funny, other
ways in which globalization has not worked
out in the same way that many people had hoped.
The wor, the growth was supposed to be faster.
In fact growth on average has been slower
in Latin America and Africa. It was supposed
to be more stable. There've been a hundred
crises in the last 30 years. Money is supposed
to flow from rich countries to poor countries.
In recent years money has been flowing from
poor countries to rich countries.
On the other hand, talk about financial markets
being able to slice and dice risk, move risk
from those less able to those more able to
bear risk, and yet a disproportionate risk
still is borne by those in the developing
countries. When they borrow money, they borrow
money in short term loans, in hard currencies,
which means that they have to bear the brunt
of interest rate and exchange rate fluctuations.
And this can have enormous consequences.
I was in, a few years ago I was in Moldova,
one of the former Soviet Union Republics.
You have to remember that at the time we had
said that communism was an inefficient system.
Market economy was efficient. Moving from
Communism to market was supposed to increase
their incomes. In the case of Moldova, it
had led to a 70 percent decrease in their
income and poverty was soaring.
But when we went there, 75 percent of the
budget of the government was being spent on
servicing the foreign debt. And the reason
was very simple: they had borrowed in har,
hard currency when they, their own currency
was linked to the ruble, when the Russian
ruble, when Russia had the crisis, the ruble
fell six-fold and the value in terms of their
own currency of, of their debt increased six-fold.
For an economist it was interesting. We could
see the process of de-development. You could
see people going back to using horses and
buggies. It was just, you know, a totally
depressing scene. The whole country ran out
of oxygen in the hospitals and, and people
on oxygen died the night while we were there.
And what we take as a, as a necessity, as
a, that we take for granted, they take as
an unaffordable luxury.
If there were only one country having a crisis,
only one country not being able to pay back
its debt, you could claim the problem was
a profligate government. You could talk about
corruption. We all know how a country can
go from a situation where you have a two percent
of GDP surplus to three percent deficit in
a span of just a few years, with not so good
economic management.
[laughter]
But the problem is, in the developing world,
it’s country after country. And as a social
scientist when you see a pattern like that,
when you see country after country, you have
to say, "It's a systemic problem. And therefore
you have to look for systemic cures."
It was very good news the, that at Gleneagles
in la, a year ago summer, the G8 leaders decided
to give, for the third time, debt forgiveness
to the poorest countries.
But they didn't even discuss the problem of
why are so many countries having debt beyond
their ability to repay. And if they don't
discuss that, if they don't solve that problem,
debt forgiveness is just a temporary pro,
i-i-issue, and there'll be a debt problem
another five years along the way.
Well, these are some of the, very quick picture
of the ways in which, in which globalization
has not worked out in the way that it's hoped.
What are the reasons?
Well, in the book I, I look at globalization,
not only from the broad view, but look at
it in all its manifestations. In my earlier
book I focused mostly on the World Bank, the
IMF, the global financial institutions. But
globalization touches every aspect of society:
trade, intellectual property, environment,
natural resources, multi-national corporations,
finan, as well as financial markets. And I,
I try to look at each of these, the, the nature
of the problems in each of the areas and what
can be done.
But there are a couple of overarching aspects
that I just wanna mention very quickly.
The first of these, the underlying problem
is that economic globalization has outpaced
political globalization. Economic globalization,
globalization means that we've become economically
more integrated, more interdependent. And
that means what happens in one part of our
global economic system has affects on other
parts of the system. That means there's more
need for collective action to doing things
together. But, unfortunately, we don't have
either the political institutions or the mindsets
to do this effectively, democratically.
[pause]
And you can see that in, in a whole variety
of, of, of, of ways. One of them is that when
we're talking about economic policies inside
the United States we, we, we always talk about
what is efficient, but also what is fair.
What is the effect on various groups?
But it comes to internationally, we don't
tell our trade representative, the USTR, when
he goes to Geneva to negotiate agreement.
We don't say, "Come back with a fair agreement."
If he did that, he would be fired. We say,
"Come back with the best agreement for the
United States," but we really mean, "come
back for the best agreement for our campaign
contributors." And that's what they do. And
you can see that in, in some specific context.
For instance, at the beginning of the Clinton
administration a big issue was access to health.
And one of the problems was the high drug
prices and there was a, a, a lot of acrimony
about, you know, ta-ta, between the Clinton
administration and the drug companies about
drug prices.
But internationally we were, to a large extent,
in bed with the drug companies. The provision
of the Uruguay Round TRIPS, which is called
Trade Related Intellectual Property, had nothing
to do with trade. It was only said trade related
so they could put it inside an international
agreement. There was already the World Intellectual
Property Organization, and they had to have
some justification of why this was being dealt
with in the, in the, in, in the context of
trade.
The whole purpose, one of the main purposes
of TRIPS was to make access to life saving
medicines, to generic drugs, less available.
And the reason this is important is that brand
name medicines often sell for 10, 20 times
the price of generic medicines.
In the case of say AIDS medicines a years'
treatment generic medicines can be under $300,
brand name cost in the United States is $10,000.
And if your income is $300 or even $3,000,
you're not gonna be able to afford a $10,000
treatment. So that was, that was the intent,
and that was the effect.
It meant when the trade ministers were signing
the agreement in Marrakech, they were in effect
signing the death warrants on thousands of
people in Sub-Saharan Africa, India and other
developing countries.
Interestingly, both the Council of Economic
Advisors, and at least many people in the
Office of Science and Technology Policy, thought
that this was bad not only for the developing
countries, but was bad for American, the American
economy and for, for, global, for American
science and global science. It was not a good
structure to intellectual property, and I'll
come back and talk about that a little bit
later.
The, the second reason exacerbating these
problems is the end of the Cold War. In most
ways the end of the Cold War was a great thing.
But during the Cold War we had to fight to
win the hearts and minds of those in the developing
world, in the Third World. And that meant
that we w-would give aid, assistance to people
like Mobutu in Congo knowing that that money
was going to up in a, go into a Swiss bank
account, not help the development, but it
did what it was intended to. Mobutu stayed
on our side at least didn't go over to Russia's
side.
We had a view that the enemy of our enemy
was a friend, our friend so Pinochet we could
cuzzle up to.
With the end of the Cold War, we had the opportunity
to try to reshape globalization or international
economic, international economic order to
reflect our principles and our values, or
we had the opportunity to try to reshape it
to reflect our own economic interests or the
interests of our multinationals.
And to a very large extend we chose the second
course. And that was why just shortly after
the end of the Cold War, we had the Uruguay
Round Agreement that I mentioned before that
left the poorest countries worse off.
And the final reason that globalization has
not done as well as it should have is that
we've had a little bit of a Pollyannish attitude.
The view was that everybody would be be-better
off - the view that I rep, mentioned before.
But in fact, what the economic theory had
always said was that countries would be better
off, there would be winners, and the winners
could compensate the losers. But it never
said that they would compensate the losers.
In fact it predicted that there would be some
very big losers.
And the way to see this is to envisage for
a moment what a world of complete globalization
with perfectly working markets would look
like. Now we don't have anything near that,
so you don't have to worry. But just imagine
what the world that those who advocate full
globalization would like to see.
Well it would mean that unskilled wages everywhere
in the world would be the same. Unskilled
workers in the United States would get the
same wages as unskilled workers in India and
China. And that means there's an enormous
downward pressure on their wages.
Now globalization is not the only force that
is exerting downward pressure at the bottom.
But it is one of the forces. And it's one
of the forces that a lot of people think that
they can do something about.
The magnitude of these effects are, are really
quite striking. And they're not just short
run. Real wages at the bottom in the United
States today are about 30 percent below what
they were 30 years ago. And in the last six
years, even the middle has seen the income,
real incomes decline.
Basic point I wa-wanna stress and really the
point that Larry was making is that unless
we can make globalization more equitable,
unless the, the fruits of globalization are
more widely shared, unless there are more
winners and fewer losers, there can be a backlash
against globalization.
Now some people think of globalization as
something like medicine: cod liver oil that
you just have to swallow and accept, and it's
inevitable. But that's not true.
Globalization, as measured for instance by
the ratio of trade to GDP or capital flows
to GDP, was stronger before World War I than
it was at the end of war period. So there
can be a backlash and we have seen already
inklings of some of that kind of backlash.
And that's why this issue is extraordinarily
important, important for those who are advocating
globalization. And that the interest in making
globalization work is really, I think, in
everybody's, in everybody's interest.
Well, as I said, much of the book is trying
to, to describe in, in more particular ways
how we can make globalization work in each
of the areas that I, I mentioned.
And given the limited amount time, and I wanna
save most of the time for, for questions,
let me make, just talk about two areas that
I, I think probably are of interest to people
here.
One is intellectual property. And obviously
in Silicon Valley people think intellectual
property is very important. And it is. And
as an academic I also feel it's very important.
I'll tell you a little story that, that oh
shows a little bit of the ambivalence that
most academics have towards intellectual property.
I was, about 20 years ago I got a letter from
a Chinese publisher wanting me to write a
preface for a pirated edition of one of my
textbooks.
[laughter]
And I was actually quite enthusiastic 'cause
I figured if one hundredth of one percent
of the people in China read my book, it's
a bigger audience than I'll get anywhere else
in the world [laughs]. So you know, and you
write these books mainly you do your work,
mainly not motivated by pecuniary returns.
The main motivation is ideas affecting the
world, trying to solve some economic problems.
That is the motivating factor. It's not money.
So disseminating ideas was, was to me unambiguous
and positive. But I thought before I wrote
this preface I oughta check with my publisher
 --
[laughter]
and, and he went ballistic. [laughs]
[laughter]
Well, intellectual property is different from
other kinds of property in that it creates
an inefficiency. Ordinary property we think
of as important be, property rights are important.
Everybody talks about property rights as a
necessary part of, of the efficient market
economy.
But intellectual property rights creates an
inefficiency. Why? Well because knowledge
is, as economists call it, is a public good.
The, to use a technical way of saying the
marginal cost of using knowledge, of somebody
else knowing the knowledge is zero.
If it's unlike, it, it's unlike ordinary goods
like a chair. If one person's sitting in the
chair, another person can't sit in the chair
without high discomfort.
[laughter]
But in the case of knowledge after I've told
you what I know, you now know it but I still
know it, right? I haven't lost it. Well, Thomas
Jefferson put it actually much more poetically.
If you go to the Jefferson Memorial, you can
see this where it says, "Knowledge is like
a candle. When a candle lights another candle
it doesn't diminish from the light of the
first candle."
Well, intellectual property not only restricts
the use of knowledge, it actually gives a
monopoly power. And we know that monopoly
is very inefficient.
So the question is, why do we do this thing
and create this intellectual property that
has such inefficiencies? Well the answer is
to motivate innovation. And that is, it-it
plays a very important role in motivating,
incentivizing innovation. It's not the only
incentive, as I say, a lot of the basic research
is done not with that as a part of, part of
the incentive, it's, it's there are other
incentives that are just as important.
But if you don't get intellectual property
rights correct, you can have all the disadvantages
without the advantages. And what do I mean
by correct?
Well, intellectual property has a lot of dimensions
to it. It's the length of the, the patent
or the copyright, the breadth, the conditions
under which you can get it, a whole set of
terms which affect, which, which, which relate
to, that describe the intellectual property
regime. And if you don't get the balance right,
you get the disadvantages without the advantages.
And historically we've, we've known about
that for a long time. It's not been talked
a lot about, but it's, it's, it's, in the
20th century the two most important inventions
innovations arguably were the automobile and
the car, and both of those were almost stymied
by intellectual property.
In one case, the Wright Brothers got a patent
on the airplane after Kitty Hawk. But so did
somebody else called Curtiss. And there wha,
developed what is called a patent thicket.
Anybody wanting to develop an airline, an
airplane had to pay both of them and no one
could pay both of them. And so nothing happened
until World War I came along and the US Government
said, "It's too important to have an airplane
to allow the patent lawyers to stymie the
development." And the result of this was they,
they seized the patents and decided who was
gonna get what and how, who was gonna pay
how much. And we got the airplane.
More recently the story all of you probably
know, the story of BlackBerry, where it had
to pay 600 million dollars ransom to continue
to operate to a patent lawyer who had bought
a patent from somebody else for a patent that
had already been declared invalid in two other
countries. And probably will not be sustained
in the United States. And yet the way our
intellectual property regime works says, "That
if you have that patent nobody can trespass
it."
Well that's, these are examples of, of the
ways in which if it's not correctly designed,
it can have very adverse affects.
In the area of health, you can see it even
more dramatically 'cause what's at issue is
not just a question of money, it's a question
of life.
There was a, a race, there, a very major important
project, the Human Genome Project to decode
the human genome. It was an orderly process
in which a clear, clearly on target. But a
few private companies decided that if they
could go a little bit faster, pick out a few,
hopefully valuable genes, they could get a
patent on the gene. What is the social value?
Well, they decoded it maybe a day, or week,
a month earlier than the Human Genome Project.
But the social value of that was almost nil.
The social cost is enormous.
One of them, for instance, got the patent
on the gene that's related to breast cancer.
[pause]
Another company wanted to provide a free test
for breast cancer. But this company that has
the gene said, "No. No way. We, you, we, you,
we have to get several thousand dollars to,
you have to pay us if you wanna find out whether
you are susceptible to breast cancer." And
the result of that is lar-large numbers of
people will die unnecessarily.
In the case of Canada, they've decided not
to recognize this patent. So there is an element
of discretion in here, but the way the American
system has been going has been to restrict
the usage.
Well, in the context of developing countries
I mentioned before the whole intent was to
reduce access to generic medicines, the whole
intent of the TRIPS Agreement, and it's done
that.
The, what have they gotten out of it? Well,
the pharmaceutical companies have not used
that money to, to spend that money on research
for the diseases of the developing countries.
They spend more money on marketing and advertising
than they do on research. More money on research
on lifestyle drugs like hair, than they do
on life saving drugs. And almost all of the
money on life saving drugs is spent for those
diseases for the advanced industrial countries.
It is all understandable. It is market economics
where the returns are. But that does not mean
that it is socially efficient or socially
desirable.
And there's an alternative system that I describe
in the book, which is the prize system. Where
you give a medical prize, where you give a
prize for those who discover a vaccine or
cure to an important disease like malaria,
and a small prize to somebody who discovers
another drug for which there already is a-a
cure.
[pause]
That would provide the resources, the incentive
to develop, to do the research that we need.
The American taxpayers are paying for this
anyway through Medicare, Medicaid, through,
through a whole -- the question is are they
paying for it in an efficient way? And the
answer clearly, in the current system, is
no.
What you would do once you have these pat,
the, the-these innovations then is use the
competitive marketplace to distribute, to
distribute these, these drugs, vaccines widely.
So you use competition to drive down the price
and increase the quantity. As opposed to the
current system, which is based on a monopoly
system, which is raising the price and restricting
the quantity.
And obviously, if you have knowledge you want
that knowledge to be used and disseminated
as widely as possible. And as I said in this
particular case the cost of not doing that
is enormous.
So that's an example and, and it, it's an
important example because it illustrates the
general principle; you need resources to,
to do anything. You need resources to innovate.
Incentives matter. But too often, without
thinking about things, we've wound up with
systems where the incentives are not working
in the right direction, and that there are
ways of redesigning the incentive structures
to try to use the resources that we have in
a better way, to direct them to have increase
both economic efficiency and overall equity.
Let me spend a-a moment talking about the
environment. I spent a lot of time, a chapter
in the book called "Saving the Planet." The
reason I talk about the issue of global warming
is twofold. It, it exemplifies the failures
of globalization - the global governing system.
But also even if we solve the problems of
economic globalization, if we don't solve
our environmental problems, it won't do us
any good. So these, these, these are really
first order issues.
I was on the, the IPCC, the Intergovernmental
Panel on Climate Change, that reviewed the
evidence in 1995 and then, then, even then
it was overwhelming. But since then what has
happened has, has made it even stronger.
One of the thing, for instance, we knew that
the Arctic ice cap was melting, but we didn't
anticipate to melt anywhere near as fast as,
as has been occurring.
I should tell just a brief little story. I
was at Davos last year, and in one of the
sessions the, on global warming the oil-oi,
large number of oil companies were there and
one of the, one of the oil executives said,
"You know you guys are just much too pessimistic.
You're only looking on the gloomy side of
things. You, you know there's a bright side
to everything. The melting of the Arctic ice
cap means that we are gonna be able to get
the oil underneath the Arctic Sea at a much
lower cost." [laughs]
[laughter]
He said, "There's only one little problem,
the United States has not signed the Law of
the Sea so there may be a little war about
who gets the, who gets this oil." It is unbelievable,
but, but these are actually things that do
happen.
The, this is a particularly concern for developing
countries 'cause they are among those that
are going to be much, most affected; the most
vulnerable. Bangladesh, you know one of the
poorest countries, a third of that country
will be under water. I had a meeting with,
with a number of the Pacific Island, leaders
of the Pacific Islands, they were in, in New
York for the UN meeting. Most of them see
their days as numbered. They will be under
water; they just won't exist anymore. So for
them this is a matter of life and death. No
war could do what we are doing to them as
a result of global warming.
Now for an economist the problem of global
warming is a very simple one. It's a question
of externalities. We are imposing costs on
others that the greenhouse gases, the emissions
of greenhouse gases lead to the warming of,
of the atmosphere - something that actually
was predicted in a sense. I mean one of the
things that is very interesting as you start
getting into this is, is realize that that's
back, th-th-ere's some physicists that made
a back of the envelope calculations a hundred
years ago. Didn't know that there was going
on, but they asked the question, "What would
happen if concentrations of greenhouse gases
increased?" And their predictions were remarkably
accurate even before the big computers.
The, the, the, the, the
[pause]
as I said the global warming is going to affecting
the, the most vulnerable, the most. But we
aren't doing anything about it. The way economists
think about it is as an externality, and whenever
there's an externality, you make people pay
for the cost that they're imposing and that
means a tax, some kind of a charge, a carbon
tax. And that was one of the things that Clinton
administration proposed in the beginning.
Now Kyoto was a major success in some ways.
The world got together, very disparate groups,
and reached an agreement. But in other ways
it was a big disappointment.
It only covers about a quarter, a third of
all the sources of greenhouse gas emissions.
The United States was not, didn't, didn't
join. The developing countries that within
30 years will be accounting for about 50 percent
of the emissions aren't in. And deforestation,
which accounts for about 20 percent of the
emissions, also is not a part of Kyoto. And
so, as I say, much more was left out than
was brought in.
[pause]
The Kyoto approach has reached an impasse.
The problem is a very simple one. That it's
impossible to get an agreement about target
reductions between the United States on the
one hand and the developing countries on the
other. The developing countries say, "Why
should we have less of an emissions permit,
emissions target per capita than you do?"
But if every country got the same as the United
States, the, the amount of emissions would
be enormous, the world, it, it, it would not
be tolerable. More, put it another way, it
would put no constraints on the developing
countries for another century.
[pause]
So we are at this impasse where, where a target
approach simply is not going to work. And
this alternative approach of a global tax,
carbon tax, I believe is, is an alternative.
The interesting thing is there is beginning
now of, of, of a movement in this direction.
The head of the Conservative Party in the
UK has said, "It makes so much more sense
to tax bad things like pollution than good
things like work and savings. And so why don't
we shift the burden of taxation away from
work and savings towards taxing pollution?
And if you do that, incentives matter, and
people will then pollute less and that we,
we can do something about the, the spaces."
Now the fact that even the conservatives now
in England is moving this way I think is providing
a basis of a-a-a, an alternative potential
approach to, to this.
In the book I talk about how, what we can
do about deforestation. That was a, a really
mi-minor mistake with major consequences.
We said that countries could get credit for
planting forests, but not for, not cutting
down their forests. That means that a country
like Papua New Guinea is better off cutting
down its forest, then replanting it, than
keeping it.
Now you think about this it just sounds pretty,
pretty stupid. And it's amazing how long it
takes to move this idea through the political
process. We, we, we, we've worked with, a
group of us in Columbia have been working
with, with a-a formed a coalition called The
Rainforest Coa-Coalition, which has actually
succeeded now in guiding, getting this issue
on the next agenda of the post-Kyoto agenda
for where we go from here.
Well, let me just conclude with, sharing with,
a-a sense of optimism - a mild sense of optimism.
A lot of people ask me, you know, why, why
do I think you know I've described all the
problems, the roles of special interests,
how they shape globalization. Do I really
think giving a sermon or writing a book is
going to make any difference? Aren't these
forces too strong, won't they just keep going
on the way that they've been?
I think the answer is that globalization is
in a very fluid state. Lots of things are
changing. I talked about global warming. The
evidences of that are much more rapid than
anybody had anticipated. I talk about the
trade agreements when the protests broke out
in Seattle in 1999, the idea, the problems
were not very much in the air. Today everybody
understands them. The WTO created a Rule of
Law was an imperfect one, but still a Rule
of Law. And they've ruled that the United
States cotton subsidies are illegal. So we
continue to subsidize them; 25,000 rich American
farmers share three to four billion dollars
a year, causing incomes of some 10 million
people in Sub-Saharan Africa to go down. But
eventually those will go, go.
These are just a lar, a number of examples
of things of ways in which globalization is
changing.
The real issue, in my mind, is the following:
are we going to try to patch globalization
as it were? Have a crisis, we'll deal with
the problem, find some temporary solution
as we, the expression goes "kick the ball
down the road a little bit" 'till the next
crisis comes along. Or can we make globalization
work better by trying to think thoughtfully
about the problems? Think thoughtfully of
realizing that there are winners and losers;
that we can redesign globalization and make
sure that there are a lot more winners.
And, and this book was written in the note,
w-w-w-with a hope that, and a belief, that
there are lot of these reforms that we can
undertake that will succeed in making globalization
work. Work for a lot more people so that the
potential that the advocates of globalization
talked about 25 years ago will really be realized.
Thank you.
[applause]
