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The New International Solidarity: Book Review

"Designing change is possible and necessary. The chances for this may be better than in the past. This is the common message of four very different books occupied with the time after the end of the old world order, the time after the industrial society and after the disenchantment of socialism and capitalism. This book review of recent books by Robert Reich, Joseph Stiglitz and Noreena Hertz is translated from the German in: die tageszeitung, July 2002.
The New International Solidarity

by Warnfried Dettling

Globalization must not only benefit the rich, the economists Robert Reich, Noreena Hertz and Joseph Stiglitz believe. Reform proposals based on politics are offered in their books.

[This book review originally published in: die tageszeitung, July 18, 2002 is translated from the German on the World Wide Web, www.taz.de/pt/.nf/spText.Name,neoliberalismus,idx,2.]

Designing change is possible and necessary. The chances for this may be better than in the past. This is the common message of four very different books occupied with the time after the end of the old world order - the time after the industrial society, after the disenchantment of socialism and capitalism. Traces of awakening are found in all the books. Whether politics on the different planes will succeed in finding the necessary answers for family- and international monetary policy is still an open question. These books prepare the ground for this challenge. they hold to the nearly old-fashioned belief that ideas can improve politics.

Robert Reich's books are convincing by connecting the great changes in the global economy with dramas occurring on the very personal plane. The former Secretary of Labor under President Bill Clinton and professor of economics and social sciences at Brandeis University commands the mountain of data and is careful not to suppress the elementary questions: When is a society really successful? What constitutes the value of life and the quality of society? What is ultimately the strength of the economy and the security of society? ("Our common strength lies in our bonds, not in our bombs.") Starting from the acceleration in the economy, Reich analyzes an economic development that is successful for people in their roles as investors and consumers. However people also live in social relations with children, families and friends. According to Reich's thesis, the balance is disturbed between these two aspects of life, between the economy and society, between life and work. In this sense, "The Future of Success" describes the new work, the new life and the consequences for individuals and society.

Reich's political recommendations can be read in a concise political manifesto presented on the occasion of his candidacy for governor of Massachusetts. This is a little book about great questions. The subtitle "Essentials for a Decent Working Society" points to features for a "decent" working society. Reich is astonished why Americans react very differently to the new challenges than to the Great Depression, hot or cold wars in the past. At that time, it was said: We are all in it together. More solidarity, mutual obligation and responsibility were the results. What should be done today? The author proposes a middle way, sharing risks and expanding the "circle of prosperity". His proposals emphasize a minimum wage or a basic security, better care and loving affection for children and senior citizens and more investments in education and training.

While Reich reflects on how politics should react to global capitalism to prevent the hegemony of the economy and compensate disadvantages, Joseph Stiglitz writes brilliantly about the reactions of states and their institutions to the worldwide transformations since 1989. The Nobel prize winner for economics was the chairman of President Clinton's council of experts and chief economist of the World Bank. He does not argue from a distance but as an affected and involved participant. As Reich did not attack capitalism but contemporary capitalism in the US, Stiglitz does not criticize globalization as a whole but describes its shady sides. He attacks the regime of the International Monetary Fund (IMF) and the World Bank which with its "mantra of the free market economy" often only worsens the problems in the East and in the South of the hemisphere. It is sad to see how false theories that immunized themselves against refutation (all the problems were "transitional problems") have increased hardship and poverty in many countries. It is also sad to see how Europe failed in ideals in that time and left the field to economists from the US. They had the theory and tradition of the social market economy at their backs. What is central is building a correct regulatory framework, not only deregulation. It is just as na´ve to believe that the state can remedy every market failure as to foolishly assume that markets by themselves can solve every social problem.

As Stiglitz recalls, convictions like these underlay the founding of the World Bank and the IMF in Bretton Woods in 1944. Then the turn came in the 80s. The IMF and the World Bank were "missionary institutions". While people previously asked "why the market failed in developing countries and what states could do to improve the efficiency of markets", people afterwards saw the problem in the state and were hardly interested in fighting poverty. Open markets were the solution for the problems of developing countries.

Thus the shady sides of globalization were obscured, Stiglitz argues. he proposes the first steps of a reform: stronger transparency and democratization allied with an expansion of technology assessment (that considers poverty, unemployment and social balance, not only money supply and growth) and a kind of "competitive pluralism". A country should have the possibility of choosing a beneficial idea out of several proposals of the IMF.

Noreena Hertz, economist at Cambridge University, management consultant and engaged activist in social movements, criticizes global capitalism. Her book focuses on the explosive problem of the "silent takeover". In global capitalism, a creeping takeover of politics by the economy occurs resulting in the "death of democracy". The mammoth corporations fixed rules of the game and became the only social and economic hope as "missionary entrepreneurs" in many African countries where the state disappeared long ago. "Who watches the watchmen?, she asks, when businessmen claim the original powers of the state?

Noreena Hertz has lost faith in the state and the economy. However she has also discovered a new subject of change. "The protest of the broad masses will soon be the only way to realize political goals and check the excesses of business activity." Thus protest is a catalysor of reform since protest changes the conditions under which the new elites operate and forces up the costs of decisions. While the book is sometimes inconsistent, it offers new perspectives to the debate and delivers us from many trenches. Being for or against capitalism or globalization is not enough. That is the general discovery of all four books. The exciting questions first begin. What a shame these questions are hardly heard in the German election campaign!

[Book review of Robert Reich: "The Future of Success. How We Will Work Tomorrow", 2002, "Essentials for a Decent Working Society", 2002
Joseph Stiglitz, "The Shadows of Globalization", 2002
and Noreena Hertz, "We Will Not Be Sold!", 2002]

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