The rich West must stop grabbing the profits but ducking the costs

Heroes of anti-capitalist protest don’t usually hang out at the Savoy. But Joe Stiglitz is different: the establishment figure who turned on the establishment. He’s a former chief economist at the World Bank and a Nobel laureate. He chaired Bill Clinton’s Council of Economic Advisers and he’s not afraid to tell you about it (‘When I was in the White House…’). He wears a nice suit and a tidy salt-and-pepper beard. He doesn’t even wear Birkenstock sandals, and he looked well at home amid the comforts of the de luxe London hotel when I met him there.

But beneath the professorial façade is a combative mind and an inability to keep his mouth shut — neither of which sat well with the US Treasury during his tenure at the World Bank. His repeated criticism of the International Monetary Fund, especially its handling of the Asian crisis in 1998, put him on treasury secretary Larry Summers’s blacklist, and he was eventually forced to resign.

His first book after leaving the World Bank — Globalization and its Discontents — vilified the IMF for enforcing austere one-size-fits-all monetary policies on countries in dire financial straits. It sold over a million copies in 35 languages. It didn’t make him many friends in Washington, but it turned him into an unlikely champion of the dispossessed.

His latest book — Making Globalization Work — argues that to do as its title says to the benefit of developing countries requires a radical revamp of global financial governance. In his world, lenders would have only themselves to blame if poor countries failed to repay their debts, GDP calculations would take account of ecological damage, limited liability rules wouldn’t protect multinational companies from being made to pay for their sins, and the dollar would no longer be the world’s reserve currency.