19 internautes sur 26 ont trouvé ce commentaire utile
- Publié sur Amazon.com
Stiglitz and Greenwald (SG) start off by arguing that learning, learning how to learn, and innovation are the key to increased productivity and economic growth. But, they point out, learning has strong spillover effects, i.e. the costs fall on the person or firm doing the learning, but the benefits accrue widely, in large part to others. Even if there are no spillovers to others, there likely will be spillovers over time -- learning today will enable even more learning tomorrow. As a result of this mismatch, governments should intervene to encourage learning (correcting a market failure).
So far this is uncontroversial. It is also not very new. Governments already provide free primary and secondary education in most countries, as well as aid to university education, grants and tax credits to companies for research, demonstration projects (DARPA for the Internet), and so on.
But SG argue that most learning happens on-the-job, within firms. (The disti9cntion between individual learning and innovation via R & D is blurred, and the authors switch between the two without warning, even though they are very different.) Furthermore, according to SG, the rate of learning and the size of the spillovers vary by sector of the economy. As well, learning in firms depends on size of firms, increasing as output increases. Accordingly, government intervention should be targeted. to sectors with lots of learning and spillovers. As well, governments should discourage innovation that would have negative effects -- encourage use of "dirty" energy, or reduce demand for labor (automation) or otherwise negative (SG really hate financial innovation).
This of course begs the question: how to pick the "good" sectors" and the "bad" sectors. SG assume that industrial production is the good sector that should be encouraged. But they only consider industrial production (which seems to be synonymous with manufacturing) and "crafts", and basically wave their hands to argue that manufacturing is better than the other two at encouraging learning. Interestingly, in a comment, Kenneth Arrow states that "the rate of growth of productivity in the U.S. has been comparable quite comparable to that of non-agricultural sectors". (page 507 of the book). More importantly, SG never mention the services sector -- it is not even listed in the index.
All of this illust6rates how difficult it would be for government to implement SG's new industrial policy. True, government would no longer have to pick sectors who create the most jobs, or exports, But now it would have to pick sectors with the highest learning rates, and the largest spillovers to other sectors -- a much harder task.
But assume that SG have it right, and that manufacturing is the sector to be encouraged. How to do this? The best way would be through government subsidies. But that, in turn, would require very high taxes to fund the subsidies. As a second best substitute, SG recommend protectionism. Keep foreign products out, or at least reduce their quantities, and let the domestic manufacturing sector grow, so that it can learn faster, and share with the other domestic sectors. But alas tariffs and quotas are no longer possible, due to the evils of free trade agreements and the WTO (SG seem to dislike free trade quite intensely). The next best instrument is an artificially low foreign exchange rate. And that is what SG recommend, in two different parts of their book.
But won't other countries retaliate if one country tries to grow its exports by manipulating its FX rate? SG are silent on this. More generally, if every country tries to export its way to growth, there will be an incompatibility in objectives that may lead to trade wars. Again, silence. Finally, while government subsidies to manufacturing are funded through income tax, protectionism is funded by higher prices to consumers -- a form of consumption tax, but invisible, so politically more acceptable. However, protectionism is likely to place a greater burden on the poor than an income tax would. So SG are recommending regressive policy here.
SG don't like free trade in goods (they never mention services). They also don't like free movement of capital. According to them, that contributes to instability in financial markets, and economic downturns, which, in turn, reduce learning. Indeed, SG claim, recessions kill firms, and those firms' learning dies with them. So capital controls can be desirable, so as to maximize learning.
If you want to constrain free flows of products and of capital, can constraints on the mobility of labor be far behind? And indeed, at page 413 SG express their unease with free flow of labor (e.g. a "brain drain"), although they stop short of recommending strict exit controls.
On the other hand, SG at several places take pains to emphasize that they are against autarky -- a nation completely cutting itself off from others.
This raises a question: why postulate that more output within a country increases learning, and hence should be expanded, while discounting increased output abroad? Why is the country the optimum size for learning? (especially since the size of countries varies so widely) Why not protectionism between regions of the same country, since learning is chiefly local? While SG argue that national borders are barriers to transfer of knowledge, they essentially wave their hands again.
Nevertheless, SG present the strongest modern argument for industrial policy, and for widespread government intervention, that I have seen. Whether it is strong enough to be convincing is another matter..
11 internautes sur 15 ont trouvé ce commentaire utile
Robert David STEELE Vivas
- Publié sur Amazon.com
Among all economists in the English language, I hold Joseph Stiglitz to be among the most enlightened and virtuous. When I formed a "dream" coalition cabinet in 2012, he was on it. His co-author is of less interest to me -- finance geeks have been demonstrably impotent these past fifty years -- and particularly those who fall prey to mathematical formulas lacking in social integrity -- and I believe with book would have been stronger had Stiglitz either gone it alone, or collaborated with an educator such as Derek Bok. The book is also rooted in old lectures, starting in 2008, and it is focused on Kenneth Arrow's work, which is best appreciated on its own merits. See, for example:
Moral Hazard in Health Insurance (Kenneth J. Arrow Lecture Series)
The Limits of Organization (Fels Lectures on Public Policy Analysis)
General Competitive Analysis, Volume 12 (Advanced Textbooks in Economics)
The weakest point of this book, which does indeed have much to offer for anyone who cares about the future of academia, commerce, governance, and society, is that is "assumes" integrity on the part of the government, and that industrial policies are somehow going to corrupt deep ethical and intellectual failings across all major forms of organization (academia, civil society, commerce, government, law enforcement, media, military, and non-governmental/non-profit). This is the same mistake made by Limits to Growth: The 30-Year Update and the Club of Rome. The *losing* alternative to the Limits to Growth assumption that top-down government would deal responsibly with climate change and other high level threats focused instead on education from the bottom up -- the central point of Will Durant's 1919 doctoral thesis, now available as Philosophy and the Social Problem: The Annotated Edition.
I have published an online slide show of my Amazon reviews in this area, easily found by searching for the title, < Robert Steele: Online Review Books on Education, Intelligence, Research >, and for me the bottom line is clear: holistic education and a grasp of true cost economics such as championed by Herman Daly in Ecological Economics, Second Edition: Principles and Applications are the foundation for a learning society, *not* economists and financial mathematicians (the worst possible juxtaposition).
The book's attention to the perversion of intellectual property laws and the need for more attention to open source technologies is constructive but insufficient. The avant guarde now seems to understand that open source is a meme and a mind-set and that only an "all in" approach embracing ALL of the opens will do. I am off to London soon to help create an Open Source Everything Innovation Hub at a great university, precisely because I could not get MIT, George Washington University, or the University of Maryland, among others, to break with corrupt legacy constructs and think truly big thoughts. Richard Stallman, Linux Torvalds, and Lawrence Lessig, among others, remain heroes of mine, and I commend their varied works to readers of this review.
On a most positive note, while this book glosses over the great crimes of both government (e.g. 935 Lies: The Future of Truth and the Decline of America's Moral Integrity) and banking (e.g. Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History), it is a helpful venture by an economist I regard very highly, into the foreign territory of integral consciousness and consilience. Mathematical formulas are an annoying waste of time at this level of thinking, and I hope that Stiglitz will in the future connect to the humanities -- I would recommend starting with E. O. Wilson's Consilience: The Unity of Knowledge and Steve MacIntosh's Integral Consciousness and the Future of Evolution.
Best wishes to all,
Robert David STEELE Vivas
THE OPEN SOURCE EVERYTHING MANIFESTO: Transparency, Truth, & Trust