On the brink...

Finally, after a year or so, I had finished reading Joseph Stiglitz's 2 books on globalisation. The first one "Globalisation and its Discontents" talks about why globalisation had so far failed to live up to its promise of delivering growth and improvements in standard of living around the world. In fact, quite the opposite has happened in many parts of the world. The second book " Making Globalisation Work" then talks about some of the main areas of reforms that needs to be made in order to move globalisation on the right track, including a global reserve system, policies to tackle global warming, trade policies and intellectual property frameworks.

I seldom read, that's a fact and it is not something that I am proud of. But I must say that these 2 books had really opened my naive and ignorant brain somewhat. I do not claim to have the intellectual capacity to be able to critique the policies or ideas that the author had, but I think there are some pretty sound and logical principles that were surfaced (according to my understanding).

1. Humans respond to incentives - to get them to do the right thing, the right incentives must be present.

This sounds perfectly logical, but it is not so easy to implement in real life. Till this day, there had been far too many policies that looked good on paper, but actually failed to provide the right incentives for people to respond in the appropriate manner. The worst policies are actually those which provide the incentives to do the OPPOSITE. The usual reason for this would be too myopic a view on a certain issue, or a certain indicator, for example only inflation, or debt repayment, as compared to the health of overall economy.

2. Globalisation can work - the devil's in the details (management).

In theory, globalisation can and should work. However, what had failed so far is not globalisation itself but its management per se. What is happening right now is that political globalisation lacks way behind economic globalisation, resulting in perverted incentives or opportunities for quick individuals/corporations to make a quick profit at the expense of others. Combining point 1 and 2, this means there is an urgent need to relook at various areas from trade to finance to environment and work out details in policies and contracts that would provide the right incentives.

3. A global phenomenon requires global response, global coordination.

This idea is perhaps the most evident throughout the whole of the second book. It is perhaps the most important idea of all and there are signs of such things happening. It is simple enough to understand, if each and everyone (country) think only about themselves, each would pursue policies that would benefit himself and overall, at best it might not benefit everyone. At worst, it may lead to detrimental effects for everyone. This is blatantly not the way to go when the actions of someone sitting in a comfy office in Wall Street can ultimately lead to my bonus being cut :( It's time to stop being myopic and/or xenophobic. It's time to think global, and to take an interest in global affairs, including the way international affairs are being conducted. And the first step towards achieving that is really to learn more about global affairs.

I really do feel that the world has reached a crossroads of sorts in a lot of areas, areas like global warming, terrorism, international trade, etc etc. The decisions that we will make in the next 5 to 10 years would determine the direction the whole world would take for the long term future. Would our future generations look back on this period and lament our inability to learn from our mistakes, or praise our generation for the bold moves that we took?

"All it takes for evil to succeed is for a few good men to do nothing."