Joseph E. Stiglitz, winner of the 2001 Nobel Prize in Economics, was a member of the Council of Economic Advisers during the Clinton administration from 1993 to 1997, serving as chairman from 1995 to 1997. From 1997 to 2000, he was senior vice president and chief economist of the World Bank.
His book Globalization and Its Discontents, published in 2001, was translated into 20 languages and is an international best seller. He subsequently published The Roaring Nineties in 2003, which was also a best seller.
Stiglitz helped create a new branch of economics called "The Economics of Information," and made major contributions to macroeconomics, monetary theory, development economics, trade theory, theories of industrial organization and rural organization, theories of welfare economics, and income and wealth distribution.
His work helped explain the circumstances in which markets do not work well, and how selective government intervention can improve their performance.
He is now professor of economics and finance at Columbia University in New York.
GT: Clearly your expertise is not simply technology, but relates to the broad picture of how governments should view technology deployment. For example, CIOs and technologists in government often operate as change agents, and government strategies for deploying technological solutions frequently involve re-engineering processes. When one is engaged in this kind of endeavor, it is helpful to have a balanced vision for long-term progress and improvement.
Stiglitz: There is another link with technology in my book. One of the criticisms I level is we pushed deficit reduction a little too far. In the excessive pursuit of deficit reduction, there were important investments that were cut back, and you have to balance out the benefits of the deficit reduction with the cost in terms of what you have to sacrifice. If you have to sacrifice high-return technology, then it is having an adverse effect on the economy. In fact, there were a number of instances where I saw this vividly. One example was the excessive focus on deficit made it difficult to put into place an air traffic control system that used new technology and was absolutely essential. Eventually we did do it, but it was shocking to see the state of the technology. We were using Polish vacuum tubes. We had computers that were several generations out of date. That is an important message in my book -- that you have to balance out the benefits and costs of deficit reduction.
GT: I also wanted to touch on your earlier book, Globalization and Its Discontents, because it is where you make the strongest case for an open debate on globalization -- a debate everyone must participate in. By extrapolation, that would include local and state governments, as well as citizens everywhere. In particular, you argue that the way globalization has been managed to date must be radically rethought.
Stiglitz: I think one of the points I described in that book might be of interest to your readers. I was in the high Andes in an indigenous Indian village. The mayor was describing how globalization was being managed was adversely affecting him. But even more interesting, he was saying he was going back to traditional Indian democracy -- a much more participatory democracy. What you had was this joining of this remote village thinking about how colonialism had taken away a lot of their autonomy, and they, in some ways, were chucking some abuses and reasserting their autonomy. They were going back to their roots of local self-government. At the same time, they saw themselves affected by globalization. They were aware of how, at that moment, the Brazilian exchange rate was going down and making it much more difficult for them to export some of their products. So that was a very interesting experience that showed how