Globalisation and Its Discontents has a far better description of globalisation than the World is Flat, which I have previously reviewed. This even though the book is primarily concerned with global financial governance, the IMF and the World Bank, and how they behave, especially in the developing world. Stiglitz contends that IMF’ policies have attempted to serve Wall Street have failed not only developing countries but the global economy and so the United States. The explanations of the economics is clear, and easy to follow. This is all the more remarkable since Stiglitz is a Nobel Prize winning economist, rather than a journalist or trade author.

The narrative assumes a great deal of recent world history, so that someone without a knowledge of that history may not follow it that well. Stigliz argues his case forcefully and leaves the impression that he is sure of the answers, or most of the answers, since however these answers, in dramatic contrast to the IMF’s answers involve consulting the political and economic leaders of developing countries this flaw may be overlooked.

Stiglitz examines the history of the privatization of the Soviet bloc  and development efforts across the world but focuses most on global liquidity crises. Appropriate responses to these crises is a central theme of the book, which makes it extremely relevant to the present moment as the global financial system faces an unprecedented credit crunch.

According to Stiglitz the IMF have historically told developing countries to endure the pain of such crises by allowing large scale job losses. This has been accompanied by loans intended primarily to ensure the investments of developing world companies. Inflation must reduced at all costs. Pain and costs are no mere metaphors, the IMF insists that job losses, bankrupcies, foreclosures even starvation are all necesary. Stiglitz’s alternative strategyt is for government to retain or employ expansionary monetary and fiscal policy, provide for re-structuring in economy but do so by having quick relief for bankruptcy, along the lines of Chapter 11 of the US Code. This would enable enterprises to change ownership, have title assured quikcly, and be able to access credit without the enterprise being liquidated i.e. destroyed. This approach avoids destruction to economy of large scale bankruptcies caused not by individual business failure but liquidity crisis.

And it has “….and its Discontents” in its title.

Anyone living in a consumer society is likely to benefit from reading this book, finding it an insightful if disturbing expose of manipulation techniques employed by marketers, media and politicians. You will never trust a salesman again.

The author’s message is simple, salesmen and marketers do not intend their targets to behave rationally, they design their communications to influence their targets; consumers and citizens to behave irrationally. The books exploration of this is easy to follow, if somewhat limited. Rushkoff draws attention to his own use of the techniques, which he explains is a further technique to disarm the reader, by treating the readers as one of those in the know. This undercutting is intended to serve a further message, the conclusion at the end of the book, which is that there is no ‘they’, instead that ‘we’ are all somehow implicated in the coercion through manipulative techniques. The conclusion is positioned as empowering, by suggesting that we are all part of the problem, we are intended to conclude

To reach that conclusion the book fudges the difference between persuasion and coercion, fails to analyse the role of market structures, media culture and the history of diminution of moral capital. As a result the book fails to attain the status of critical cultural commentary.

It is however a useful primer on the range of manipulative marketing techniques employed in contemporary consumer societies. Read (or reread) the second chapter before setting out to buy a car.

This book was reviewed for the Shuttleworth Foundation bookclub.