As the train chugs on, I start reading a book that had been sitting on my San Francisco bookshelf for a long time: Globalization and its Discontents. The book is a broadside against the IMF by a former chief economist at the World Bank.
Joseph Stiglitz isn’t exactly an outside radical. Before joining the World Bank, he served in U.S. President Bill Clinton’s cabinet as an economic advisor. But after leaving Washington, he let loose on the International Monetary Fund and the economic policies he says have impoverished much of the world.
According to Stiglitz, the religion of trade liberalization frequently destroyed 3rd World jobs without creating replacements. An example he offers is that of local ice cream producers versus Unilever. As trade barriers fell willy-nilly, local 3rd World ice cream producers were unprepared to face the international ice cream giant Unilever. Local jobs and businesses lost out as the multinational giant moved in. Local manufacturing jobs were destroyed, but Stiglitz argues that new jobs weren’t created in their place.
The story of Khosla shows how local producers might benefit by partnering with multinational companies like Pizza Hut. But do these jobs make up for the jobs lost when entire industries are pummeled by 1st World products?
After serving me my hot vegetarian Indian dinner, the train attendant brings me dessert. It is a little cup of vanilla ice cream.
Made by Unilever.
