Re: Joseph Stiglitz and IMF Criticisms
As is common these days, I came across a post where someone was passionately blaming the IMF and World Bank for our economic woes. Normally, I would have scrolled past, dismissing it as just another emotional outburst lacking serious substance. However, my attention was captured when the person referenced Joseph Stiglitz to support their argument.
For those unfamiliar, Stiglitz is a prominent economist who served as the Chief Economist of the World Bank from 1997 to 2000 and won the Nobel Memorial Prize in Economic Sciences in 2001. Since leaving the World Bank — much like John Perkins, who gained fame through his book “Confessions of an Economic Hit Man” (which I’ve challenged multiple times) — Stiglitz has become a vocal critic of both the IMF and the World Bank.
Despite evidence to the contrary from many other influential economists, Stiglitz challenges the concept of the “invisible hand of the market,” argues that the probability of default by Government-Sponsored Enterprises (GSEs) is minimal, advocates for taxing the super-rich up to 70% to combat inequality, and views the climate crisis as “humanity’s World War III,” requiring urgent global action.
So when I saw this person elevating Stiglitz’s views as the definitive word on IMF and World Bank policies in countries like Nigeria, it made me pause. This isn’t the first time I’ve encountered such arguments. Dr. Tope Fasua, for instance, has been a staunch critic of Bretton Woods assistance for many years, though he now finds himself part of a government seeking such loans (which brings to mind the Yoruba saying, “Enu dun rofo”). I’ve also seen a highly respected economist in Nigeria anchor an entire argument against a neoliberal worldview solely on Stiglitz’s ideas.
But Stiglitz is not the ultimate authority on economics. If there’s one field with a wide range of conflicting opinions, it’s economics. Multiple schools of thought are constantly vying for dominance. Take, for example, Stiglitz’s strained relationship with former US Treasury Secretary Lawrence Summers, another influential economist of our time. Summers, who became a professor of economics at Harvard University in 1983 and served as Chief Economist of the World Bank before Stiglitz, frequently clashes with him on economic issues.
The notion that Stiglitz’s views should be accepted without scrutiny reflects poor judgment. This isn’t to say that Stiglitz is wrong, but his ideas — like those of any economist — should be critically evaluated. After all, Stiglitz himself critiques Adam Smith, an even more influential figure in economic thought.
My point here is not to counter Stiglitz’s arguments — I’ll save that for another post. If you have even a passing interest in economics, you’ve likely seen his views battered many times. I plan to address the aspects of his arguments that I disagree with in a future discussion.
For now, my aim is to emphasize that Stiglitz, like all economists, is human and subject to biases. It’s also worth noting the selective way Nigerians often invoke Stiglitz: they eagerly quote him on IMF and World Bank matters but overlook his urgent warnings about the climate crisis — likely because it doesn’t align with their biases.
Furthermore, while they invoke Stiglitz to justify aligning our economic policies with those of China, they conveniently ignore the criticisms from influential Chinese scholars like Xu Zhangrun, Hu Shuli, and Wu Jinglian (often at personal risks). These scholars regularly critique the Chinese model, especially under Xi’s regime, pointing to it as a source of growing income inequality, a high debt-to-GDP ratio, and the lack of transparency that has recently spooked investments.
So no, the foundation upon which many anti-liberals stand is not as solid as they would have us believe.
One of them once tried to chide me by saying, “Do you know more than Joe Stiglitz?” While I resisted the temptation to answer him in equal measure, I silently muttered to myself, “It’s not so bright to invoke that fallacy.”
