Editing Joseph Stiglitz (section)

=== Views on free trade ===
{{Tone|section|date=October 2019}}

====Advice for the eurozone countries====
In the 1990s, he wrote that "countries in North America and Europe should eliminate all tariffs and quotas (protectionist measures)".<ref>{{cite web|url=http://www.commondreams.org/views/101100-101.htm|title=Joseph Stiglitz -- A Dangerous Man, A World Bank Insider Who Defected|date=14 August 2013|url-status=dead|archive-url=https://web.archive.org/web/20130814032443/http://www.commondreams.org/views/101100-101.htm|archive-date=14 August 2013}}</ref> He now advises the [[Eurozone|eurozone countries]] to control their trade balance with Germany by means of export/[[import certificates]] or "trade chits" (a protectionist measure).<ref>{{cite web|last=Collier|first=Paul|date=September 30, 2016|title=Euro septic: Paul Collier on the problems with the European single currency and the unlikelihood of a solution|url=https://www.the-tls.co.uk/articles/public/euro-septic/|access-date=2021-05-05|website=The TLS}}</ref><ref>{{cite book|url=https://books.google.com/books?id=rBycCgAAQBAJ&q=trade+chits&pg=PT205|title=The Euro: How a Common Currency Threatens the Future of Europe|first=Joseph E.|last=Stiglitz|date=16 August 2016|publisher=W. W. Norton & Company|via=Google Books|isbn=9780393254037}}</ref><ref>{{cite web|url=https://lahcenbounadereconomics.blogspot.com.ar/2016/12/a-critical-issue-adressed-to-joseph.html|title=Lahcen Bounader's weblog: A Critical Issue Addressed to Joseph Stiglitz|first=Lahcen|last=Bounader|date=31 December 2016}}</ref>

Citing Keynesian theory, he explains that trade surpluses are harmful: "[[John Maynard Keynes]] pointed out that surpluses lead to weak global aggregate demand – countries running surpluses exert a "negative externality" on trading partners. Indeed, Keynes believed it was surplus countries, far more than those in deficit, that posed a threat to global prosperity; he went so far as to advocate a tax on surplus countries".<ref name=":0">{{cite web|url=https://www.theguardian.com/commentisfree/2010/may/05/reform-euro-or-bin-it-greece-germany|title=Reform the euro or bin it - Joseph Stiglitz|first=Joseph|last=Stiglitz|date=5 May 2010|website=The Guardian}}</ref> From the beginning of 1930, Keynes stopped believing in free trade, denounced the theory of [[comparative advantage]] (the basis of free trade) and adhered to protectionism.<ref name="J.M. Keynes, free trade and protectionism">{{Cite journal|doi = 10.7202/045556ar|title = J.M. Keynes, le libre-échange et le protectionnisme|year = 2011|last1 = Maurin|first1 = Max|journal = L'Actualité Économique|volume = 86|pages = 109–129|doi-access = free}}</ref><ref name="National Self-Sufficiency">{{cite journal|url=http://www.mtholyoke.edu/acad/intrel/interwar/keynes.htm|author=John Maynard Keynes|title=National Self-Sufficiency|journal=The Yale Review |volume= 22 |number= 4 |date=June 1933 |pages=755–769|access-date=14 May 2021|archive-date=15 May 2011|archive-url=https://web.archive.org/web/20110515044928/http://www.mtholyoke.edu/acad/intrel/interwar/keynes.htm|url-status=live}}</ref>

Stiglitz writes: "Germany's surplus means that the rest of Europe is in deficit. And the fact that these countries import more than they export contributes to the weakness of their economies". He thinks that surplus countries are getting richer at the expense of deficit countries. He notes that the euro is the cause of this deficit and that as the trade deficit declines GDP would rise and unemployment would fall: "The euro system means that Germany's exchange rate cannot increase compared to other euro area members. If the exchange rate were to rise, Germany would have more difficulty exporting and its economic model, based on strong exports, would cease. At the same time, the rest of Europe would export more, GDP would rise, and unemployment would fall".<ref name=":0" />

He also thinks that the rest of the world should impose a carbon-adjustment tax (a protectionist measure) on American exports that do not comply with global standard.<ref>{{cite web|url=https://www.theguardian.com/business/2017/jun/02/paris-climate-deal-to-trumps-rogue-america|title=How to respond to Trump's America - Joseph Stiglitz|first=Joseph|last=Stiglitz|date=2 June 2017|website=The Guardian}}</ref>

====Advice for the United States====
[[File:Empfang Joseph E. Stiglitz im Rathaus Köln-1473.jpg|thumb|Joseph Stiglitz]]
Contrary to Keynesian theory and these analyses on the eurozone, he argues that the United States should not rebalance the trade account, and that the country can no longer apply protectionist measures to protect or recreate the well-paying manufacturing jobs, saying: "The very Americans who have been among the losers of globalization stand to be among the losers of a reversal of globalization. History cannot be put into reverse".<ref name=":1">{{cite web|url=https://www.vanityfair.com/news/2017/02/donald-trump-china-economics-trade|title=Trump's Most Chilling Economic Lie|first=Joseph E.|last=Stiglitz|website=[[Vanity Fair (magazine)|Vanity Fair]]|date=17 February 2017}}</ref>

On the other hand, he admits that as trade deficit declines, "GDP would rise and unemployment would fall", further stating: "...the fact that these countries are importing more than they are exporting contributes to their weak economies."<ref name=":0" /> He also notes that trade deficit is correlated with loss of manufacturing jobs: the increase in the "value of the dollar will lead to larger trade deficits and fewer manufacturing jobs".<ref name=":4">{{cite web|url=https://www.project-syndicate.org/commentary/globalization-of-discontent-by-joseph-e--stiglitz-2017-12|title=The Globalization of Our Discontent by Joseph E. Stiglitz|first=Joseph E.|last=Stiglitz|date=5 December 2017}}</ref>

Contrary to most economics historians who argue that tariffs played only a minor if any role in the [[Great Depression]],<ref>{{cite web|url=https://krugman.blogs.nytimes.com/2016/03/04/the-mitt-hawley-fallacy|title=The Mitt-Hawley Fallacy|date=4 March 2016}}</ref><ref>{{cite book|url=https://books.google.com/books?id=squLnSDrJ4EC&q=peter+temin+smoot+hawley+Lessons+from+the+Great+Depression&pg=PA46|title=Lessons from the Great Depression|first=Peter|last=Temin|date=8 October 1991|publisher=MIT Press|via=Google Books|isbn=9780262261197}}</ref><ref>{{cite book|url=https://books.google.com/books?id=oz_BDgAAQBAJ&q=Milton+Friedman++Smoot%E2%80%93Hawley+tariff+did+not+great+depression&pg=PA116|title=Peddling Protectionism: Smoot-Hawley and the Great Depression|first=Douglas A.|last=Irwin|date=24 October 2017|publisher=Princeton University Press|via=Google Books|isbn=9781400888429}}</ref> Stiglitz, to convince the United States not to use protectionist policies, says that tariffs would be harmful to the United States economy today because it contributed to the Great Depression: "Following that, U.S. exports fell by some 50 percent—contributing to our Great Depression".<ref name=":1" />

He denounces the "trickle-down" policies of liberalism and [[neoliberalism]] (''[[laissez-faire]]'')<ref>{{cite web|url= https://www.theguardian.com/business/2019/may/30/neoliberalism-must-be-pronouced-dead-and-buried-where-next
|title=Neoliberalism must be pronounced dead and buried. Where next?|website=[[TheGuardian.com]]|date=30 May 2019}}</ref><ref>{{cite web|url= https://www.socialeurope.eu/the-end-of-neoliberalism-and-the-rebirth-of-history|title=The end of neoliberalism and the rebirth of history|date=26 November 2019}}</ref><ref name=":2">{{cite web|url=http://www.livemint.com/Opinion/mssPFfoIzskf8gQCuRrSIO/Joseph-Stiglitz--The-age-of-Donald-Trump.html|title=Joseph Stiglitz - The age of Donald Trump|first=Joseph E.|last=Stiglitz|work=mint |date=30 December 2016}}</ref> However, he calls for lowering trade barriers and promoting free trade (policy of deregulation of foreign trade which is part of the ''laissez-faire'' economic model).<ref>{{Cite web|title=Free Trade - Definition & Facts|url=https://www.britannica.com/topic/free-trade|access-date=2021-05-05|website=[[Encyclopedia Britannica]]|language=en}}</ref>

According to him, it is not China (which has a large trade surplus) that makes "trade war", but the United States (which has a large trade deficit).<ref name=":1" /> He advises China to take sanctions against the United States<ref name=":1" /> 'where it hurts economically and politically' if the US tries to raise tariffs to protect its industry, saying: "For example, cutbacks in purchases by China will lead to more unemployment in congressional districts that are vulnerable, influential, or both.<ref name=":1" /> ... China can retaliate anywhere it chooses, such as by using trade restrictions to target jobs in the congressional districts of those who support US tariffs.<ref name=":2"/> ... China may be more effective in targeting its retaliation to cause acute political pain. ... It's anybody's guess who can stand the pain better. Will it be the US, where ordinary citizens have already suffered for so long, or China, which, despite troubled times, has managed to generate growth in excess of 6%?<ref name=":3">{{cite web|url=https://www.theguardian.com/business/2017/jan/09/my-new-year-forecast-trumpian-uncertainty-and-lots-of-it|title=My new year forecast: Trumpian uncertainty, and lots of it|first=Joseph|last=Stiglitz|date=9 January 2017|website=The Guardian}}</ref>"

Stiglitz does not want the United States to stop free trade. According to him, if China limits globalization, it will not hurt them, but if the United States stops with the process of free trade, it will be harmful. About China, according to him, if China depends less on [[economic globalization]], it will not be negative for the country.<ref name=":1" /> He writes that the decline in exports from China to the U.S. may not "hurt them more than it hurt us" because "China's government has far more control over the country's economy than our government has over ours; and it is moving from export dependence to a model of growth driven by domestic demand." Regarding the United States, he writes the opposite and advice to apply the opposite of the Keynesian theory of trade deficits seen earlier:<ref name=":0" /> "Walking away from globalization may reduce our imports, but it will also reduce exports in tandem. And, almost surely, jobs will be destroyed faster than they will be created: there may even be fewer net manufacturing jobs". "[The] erection of barriers to trade and the movement of people and ideas more likely than not will be one in which the U.S. almost surely will lose."<ref name=":1" />

In early 2017, he wrote that "the American middle class is indeed the loser of [[globalization]]" (the diminution of international trade regulations as well as tariffs, taxes) and "China, with its large emerging middle class, is among the big beneficiaries of globalization". "Thanks to globalization, in terms of purchasing-power parity, China actually has already become the largest economy in the world in September 2015".<ref name=":1" /> However, contrary to what he wrote earlier, he later argued in February 2017 that the fall in wages and the disappearance of well-paid jobs in the United States, are not due to free trade or globalization, but rather are inevitable collateral damage to the march of economic progress and technological innovation: "The United States can only push for advanced manufacturing, which requires higher skill sets and employs fewer people. Rising inequality, meanwhile, will continue ...".<ref name=":2"/> In addition, on December 5, 2017, contrary to what he wrote earlier, he wrote that the drop in wages in the United States is due to the actions of multinational companies rather than the globalization and the trade account imbalances between countries caused by free trade: "It was an agenda written by and for large multinational companies, at the expense of workers".<ref name=":4" />

In 2016, he said he believes that the economic situation of the United States is critical: "As the economists [[Anne Case]] and [[Angus Deaton]] showed in their study published in December 2015, life expectancy among middle-age white Americans is declining, as rates of suicides, drug use, and alcoholism increase. A year later, the National Center for Health Statistics reported that life expectancy for the country as a whole has declined for the first time in more than 20 years."<ref name=":2"/> ... With the incomes of the bottom 90% having stagnated for close to a third of a century (and declining for a significant proportion), the health data simply confirmed that things were not going well for swaths of the country".<ref name=":3" />

In June 2024, 16 [[Nobel Memorial Prize in Economic Sciences|Nobel Prize in Economics]] laureates, including Stiglitz, signed an open letter (which Stiglitz spearheaded) arguing that [[Donald Trump]]’s fiscal and trade policies coupled with efforts to limit the [[Federal Reserve]]'s independence would reignite inflation in the United States.<ref>{{cite news |last=Nichols |first=Hans |date=June 25, 2024 |title=Scoop: 16 Nobel economists see a Trump inflation bomb |url=https://www.axios.com/2024/06/25/nobel-prize-winners-biden-economy-trump-inflation |access-date=June 26, 2024 |website=Axios |publisher=Cox Enterprises}}</ref><ref>{{cite news |last=Picciotto |first=Rebecca |date=June 25, 2024 |title=Sixteen Nobel Prize-winning economists warn a second Trump term would 'reignite' inflation |url=https://www.cnbc.com/2024/06/25/nobel-prize-economists-warn-trump-inflation.html |access-date=June 26, 2024 |publisher=CNBC |archive-date=June 26, 2024 |archive-url=https://web.archive.org/web/20240626002547/https://www.cnbc.com/2024/06/25/nobel-prize-economists-warn-trump-inflation.html |url-status=live}}</ref><ref>{{Cite web |last=Picchi |first=Aimee |date=June 25, 2024 |title=16 Nobel Prize-winning economists warn that Trump's economic plans could reignite inflation |url=https://www.cbsnews.com/news/trump-economy-nobel-prize-winners-letter-inflation-warning/ |url-status=live |archive-url=https://web.archive.org/web/20240709175720/https://www.cbsnews.com/news/trump-economy-nobel-prize-winners-letter-inflation-warning/ |archive-date=July 9, 2024 |access-date=July 12, 2024 |website=www.cbsnews.com |language=en-US |quote=Trump's policies could prove to be inflationary, other economists also warned, such as his proposal to create a 10% across-the-board tariff on all imports to deporting immigrants. The tariff plan would add $1,700 in annual costs for the typical U.S. household, essentially acting as an inflationary tax, according to experts at the Peterson Institute for International Economics.}}</ref>