Joseph Stiglitz is no radical. He is a mainstream “free market” economist who won the 2001 Nobel Prize in Economics. He served as chair of the Council of Economic Advisers for President Bill Clinton, starting in 1993. In 1997 he left the Clinton administration to become the chief economist and a senior vice president of the World Bank.

Globalization and Its Discontents is a fascinating insider’s look at the process of capitalist globalization. It offers a unique perspective from one who has increasingly become uncomfortable with rigid, right-wing dogma and economic theory of what Stiglitz calls the “Washington consensus.”

In January 2000, Stiglitz had enough and quit the World Bank after a series of increasingly public disputes. He dared to question things like privatization-at-any-cost (he believes privatization is a good and useful tool), or willy-nilly deregulation of financial and capital markets and other conservative ideological assumptions. His “deviations” made him progressively a more controversial figure in finance capital circles.

Several chapters in the book are stand – alone case studies of the destructive greed of finance capital in the process of globalization. For example, Stiglitz takes you on an absorbing walk through the East Asian economic crisis and shows how International Monetary Fund (IMF) policy nearly led to global meltdown. In an interesting twist, he has high praise for how the People’s Republic China is managing and did manage its economy during the crisis that began in 1997. He writes: Though differences in individual circumstances make the reasons either for the occurrence of a crisis or for quick recovery hard to ascertain, I think it is no accident that the only major East Asian country, China, to avert the crisis took a course directly opposite that advocated by the IMF, and that the country with the shortest downturn, Malaysia, also explicitly rejected an IMF strategy. Stiglitz, likewise, shows how “shock therapy” policies, favored by the US Treasury and the IMF, brought incredible suffering and chaos to the people of Russia and Eastern Europe in the wake of the collapse of socialism. A sizable section of his book is on post-Soviet Russia. In a way, Stiglitz kind of sees as his specialty as from socialism to capitalism. “Seldom has the gap between expectations and reality been greater than in the case of the transition from communism to markets,” he writes. Privatization, deregulation and liberalization were supposed to lead to a short recession and then great economic growth. In fact, only Poland, Hungary, Slovenia and Slovakia, of the former socialist countries, have regained a GDP roughly equal to the final days of socialism. Russia has only about two-thirds of its 1989 GDP; Moldova’s decline is the worst with less than a third of its socialist GDP and the Ukraine is at roughly a third of its 1989 GDP.

Stiglitz makes the case that with the Wall Street, IMF policy direction of the transition, “Russia had quickly been transformed from an industrial giant, a country that had managed with Sputnik to put the first satellite into orbit into a natural resource exporter.”

In 1989, by Stiglitz’s calculations only two percent of Russians lived in poverty. By 1998, 23.8 percent were living on $2 or less a day. More than 40 percent were living on $4 a day or less. More than 50 percent of the children of Russia live in poverty today. Most Political Affairs readers will find the book’s simplistic dismissal of socialism, Marxism and the Soviet experience a bit much. Again, he’s a free market true believer and no radical. Nevertheless, in his own kind of aloof and pragmatic way he does care about the inequalities of a totally unregulated market economy, even if he seems to miss the point of what causes the problems.

Stiglitz also cares about democracy, in that he does see that most of the problems created by the IMF, the World Bank and the World Trade Organization (WTO) are because these bodies are dominated by commercial and financial interests. That’s as far as it goes. He does not see them as instruments of capitalist globalization that, no matter their “development” and humanitarian rhetorical cover, are instruments of global domination and control for transnational capital.

Still, Stiglitz hammers the wrong-headedness, even from a ”free market” point of view, of World Bank, IMF and WTO policies. With very specific examples, he illustrates some of the many reasons for the rising anger and militancy of the anti-globalization movement.

Perhaps the biggest weakness of the book is that it really doesn’t delve into the workings of capitalist globalization in Africa and Latin America. There are some examples, but here the predatory nature of globalization, piled on top of centuries of colonial and neo-colonial exploitation and deliberately forced underdevelopment are even more catastrophic.

One of the main questions debated in the anti-globalization movement is, “Can the IMF, the WTO and the World Bank be reformed?” Stiglitz obviously thinks the answer is yes. His final chapters have a lot of interesting ideas about reform worth thinking about as arenas of struggle. He believes in negotiating labor and environmental standards into trade agreements. He argues for government regulation and the need to control and mediate markets. He believes in transparency and more democratic governance in global financial institutions.

Many of us on the left have concluded that the problem is not just bad policy, but the more fundamental deadly flaws of the capitalist economic system. Still, Stiglitz’s book illustrates the broad possibility of coalition to fight the worst effects of capitalist globalization.

Globalization and Its Discontents has already made an important contribution to the further development of such a coalition. Stiglitz’s insider view gives substance and form to the many suspicions of millions in the anti-globalization movement.

Globalization and Its Discontents By Joseph E. Stiglitz W.W. Norton & Company 2002.