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	Globalization and its New Discontents by Joseph Stiglitz Project Syndicate, agencies   Fifteen years ago, I wrote a little book, entitled Globalization and its Discontents, describing growing opposition in the developing world to globalizing reforms. It seemed a mystery: people in developing countries had been told that globalization would increase overall wellbeing. So why had so many people become so hostile to it?   Now, globalization’s opponents in the emerging markets and developing countries have been joined by tens of millions in the advanced countries. Opinion polls, including a careful study by Stanley Greenberg and his associates for the Roosevelt Institute, show that trade is among the major sources of discontent for a large share of Americans. Similar views are apparent in Europe.   How can something that our political leaders – and many an economist – said would make everyone better off be so reviled?   One answer occasionally heard from the neoliberal economists who advocated for these policies is that people are better off. They just don’t know it. Their discontent is a matter for psychiatrists, not economists.   But income data suggest that it is the neoliberals who may benefit from therapy. Large segments of the population in advanced countries have not been doing well: in the US, the bottom 90% has endured income stagnation for a third of a century. Median income for full-time male workers is actually lower in real (inflation-adjusted) terms than it was 42 years ago. At the bottom, real wages are comparable to their level 60 years ago.   The effects of the economic pain and dislocation that many Americans are experiencing are even showing up in health statistics. For example, the economists Anne Case and Angus Deaton, this year’s Nobel laureate, have shown that life expectancy among segments of white Americans is declining.   Things are a little better in Europe – but only a little better.   Branko Milanovic’s new book Global Inequality: A New Approach for the Age of Globalization provides some vital insights, looking at the big winners and losers in terms of income over the two decades from 1988 to 2008. Among the big winners were the global 1%, the world’s plutocrats, but also the middle class in newly emerging economies. Among the big losers – those who gained little or nothing – were those at the bottom and the middle and working classes in the advanced countries. Globalization is not the only reason, but it is one of the reasons.   Under the assumption of perfect markets (which underlies most neoliberal economic analyses) free trade equalizes the wages of unskilled workers around the world. Trade in goods is a substitute for the movement of people. Importing goods from China – goods that require a lot of unskilled workers to produce – reduces the demand for unskilled workers in Europe and the US.   This force is so strong that if there were no transportation costs, and if the US and Europe had no other source of competitive advantage, such as in technology, eventually it would be as if Chinese workers continued to migrate to the US and Europe until wage differences had been eliminated entirely. Not surprisingly, the neoliberals never advertised this consequence of trade liberalization, as they claimed – one could say lied – that all would benefit.   The failure of globalization to deliver on the promises of mainstream politicians has surely undermined trust and confidence in the “establishment.” And governments’ offers of generous bailouts for the banks that had brought on the 2008 financial crisis, while leaving ordinary citizens largely to fend for themselves, reinforced the view that this failure was not merely a matter of economic misjudgments.   In the US, Congressional Republicans even opposed assistance to those who were directly hurt by globalization. More generally, neoliberals, apparently worried about adverse incentive effects, have opposed welfare measures that would have protected the losers.   But they can’t have it both ways: if globalization is to benefit most members of society, strong social-protection measures must be in place. The Scandinavians figured this out long ago; it was part of the social contract that maintained an open society – open to globalization and changes in technology. Neoliberals elsewhere have not – and now, in elections in the US and Europe, they are having their comeuppance.   Globalization is, of course, only one part of what is going on; technological innovation is another part. But all of this openness and disruption were supposed to make us richer, and the advanced countries could have introduced policies to ensure that the gains were widely shared.   Instead, they pushed for policies that restructured markets in ways that increased inequality and undermined overall economic performance; growth actually slowed as the rules of the game were rewritten to advance the interests of banks and corporations – the rich and powerful – at the expense of everyone else. Workers’ bargaining power was weakened; in the US, at least, competition laws didn’t keep up with the times; and existing laws were inadequately enforced. Financialization continued apace and corporate governance worsened.   Now, as I point out in my recent book Rewriting the Rules of the American Economy, the rules of the game need to be changed again – and this must include measures to tame globalization. The two new large agreements that President Barack Obama has been pushing – the Trans-Pacific Partnership between the US and 11 Pacific Rim countries, and the Transatlantic Trade and Investment Partnership between the EU and the US – are moves in the wrong direction.   The main message of Globalization and its Discontents was that the problem was not globalization, but how the process was being managed. Unfortunately, the management didn’t change. Fifteen years later, the new discontents have brought that message home to the advanced economies. Visit the related web page
	A Preventable Crisis - El Niño and La Niña events need earlier responses, focus on prevention by Oxfam, Reliefweb, WFP, FAO, agencies   July 2016   The World Food Program has activated its own internal emergency response mechanism, elevating the food crisis caused by El Nino in southern Africa to a “level 3” emergency.   That’s the highest level, putting it on par South Sudan, Yemen, Iraq and Syria. Speaking from Malawi, World Food Program executive director Ertharin Cousin says the WFP is planning to reach 11.8 million people in the region with food assistance between now and March 2017. But to do so, they need some $549 million and raising this money has been difficult because the crisis in Southern Africa is a slow burning and off the headlines. “We have not received much attention from the world community as this situation escalates,” she said. Of this $549 million, Cousin says $204 million is needed “urgently” to preposition food ahead of a coming rainy season that is expected to be particularly intense as El Nino’s sister weather phenomenon, La Nina, sets in.   * For more background on the crisis in Southern Africa:   http://reliefweb.int/report/world/el-ni-o-overview-impact-projected-humanitarian-needs-and-response-16-august-2016 http://www.unocha.org/el-nino/high-level-event http://www.wfp.org/stories/southern-africa-food-security-crisis-0 http://www.wfp.org/news/news-release/un-seeks-boost-response-el-ninos-dire-impact-africa-and-asiapacific-urges-la-nin-p http://www.unicef.org/appeals/el-nino-crisis.html http://uni.cf/29CYGS9 http://www.unocha.org/el-nino   http://reliefweb.int/topics/el-ni-o-2015-16 http://www.fao.org/emergencies/crisis/el-nino/en/ http://www.fao.org/news/story/en/item/417108/icode/ http://www.fao.org/news/story/en/item/423058/icode/ http://bit.ly/28W5CGe http://reliefweb.int/report/world/food-assistance-outlook-brief-july-2016 http://reliefweb.int/report/world/world-2016-2017-enso-overview-13-july-2016 http://reliefweb.int/report/zimbabwe/over-414-million-people-are-food-insecure-21-million-people-requiring-immediate http://reliefweb.int/report/world/el-ni-o-overview-impact-projected-humanitarian-needs-and-response-02-june-2016 http://reliefweb.int/report/malawi/wfp-begins-unprecedented-emergency-food-relief-operation-drought-hit-malawi http://www.nrc.no/perspectives/2016/this-is-a-climate-crisis/ http://www.ipsnews.net/2016/07/monster-el-nino-subsides-la-nina-hitting-soon/   July 2016 (Oxfam, agencies)   The devastating impacts of the 2015–16 El Niño will be felt well into 2017. This crisis was predicted, yet overall, the response has been too little too late. The looming La Niña event may further hit communities that are already deeply vulnerable.   To end this cycle of failure, there is an urgent need for humanitarian action where the situation is already dire, to prepare for La Niña later this year, to commit to comprehensive new measures to build communities’ resilience, and to mobilize global action to address climate change which is creating a ‘new normal’ of higher temperatures, drought and unpredictable growing seasons.   The 2015–16 El Niño has now dissipated, but its devastating impacts will be felt well into 2017. As a result of droughts caused or exacerbated by El Niño, 60 million people across four continents, particularly those dependent on rain-fed agriculture, require immediate assistance. Oxfam assessments show people becoming more and more desperate:   In Ethiopia, the loss of livestock means the loss of livelihoods; men are suffering negative psychological effects and women’s trading businesses are folding.   In Malawi, people will run out of food by August 2016, with no staple harvest until April 2017.   In the Philippines, farmers have consumed their seed stocks intended for the next planting season and fish catches have shrunk by half.   In Haiti, some people are walking 5–10km to find water and there are very few day labouring jobs to provide income.   With prolonged lean seasons starting soon in the Horn and southern Africa, as well as some parts of the Pacific, humanitarian needs will grow over the coming months as people continue to face food insecurity, poverty and disease. The shock is likely to worsen in length and severity if a significant La Niña event also occurs.   This was a well forecast event. Both governments and international stakeholders have responded, but not at the scale and speed to preserve livelihoods, hope and dignity. The funding gap is currently $2.5bn.   This El Niño was a broadly preventable crisis, and as such, is a modern day tragedy. The severity of this El Niño’s impacts is a reflection of the world’s failure to provide comprehensive and long-term strategies to anticipate, prepare and adapt.   Many of its impacts—hunger, loss of livelihoods and displacement—could have been prevented or mitigated by well-planned investments in sustainable agriculture, basic social and physical infrastructure, and essential health and social programmes, among others.   For slow onset crises, particularly drought, the collective response is almost always too little too late. Early warning systems and forecasting have steadily improved and continue to do so, but turning an early warning into early action is hampered by a lack of strong crossdisciplinary leadership, willing to act on the basis of forecasts; agreed triggers for early action; and funding.   This crisis, while particularly severe, is not a one-off. Climate change has supercharged this El Niño and will bring more extreme weather events, and make strong El Niño and La Niña events more likely. Clearly more finance is required for adaptation. Oxfam estimates that international grant and grant-equivalent public finance for adaptation is a mere $4–6bn annually, while adaptation costs for developing countries could reach around $240bn per year by 2030.   * Oxfam reports: http://bit.ly/29PS7Iv http://bit.ly/2adadVY http://www.oxfam.org/en/pressroom/pressreleases/2016-03-16/oxfam-save-children-and-care-call-donor-intervention-southern http://www.elninooxfam.org/   * ActionAid - Hotter Planet: Humanitarian Crisis: El Nino impacted 400 million: http://bit.ly/2gNaaAA Visit the related web page
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