Nobel-winner Stiglitz opens UN colloquium

Photo by Jay Kwak

Nobel laureate Joseph Stiglitz argued for global collective action to advance public goods.

Photo by Jay Kwak

U.N. Secretary-General Kofi Annan sits with President Tilghman Tuesday afternoon at the keynote address by Nobel laureate Joseph Stiglitz, kicking off a two-day colloquium on global challenges.

Nobel Prize-winning economist Joseph Stiglitz kicked off the Second Annual Global Colloquium of University Presidents yesterday afternoon, with United Nations Secretary-General Kofi Annan among the audience in a packed Dodds Auditorium.

The Secretary-General, whom President Tilghman introduced as "a voice of conscience in a world marred by ... suffering," will chair the private two-day event, which is meant to facilitate discussion among universities on global policy challenges.

Twenty-four university presidents from 18 countries, including those as distant as Argentina, Thailand and Uganda, are attending the colloquium. The topics under discussion include "The Social Benefits of the Research University in the 21st Century" and "Innovative Sources of Funding for Global Public Goods," which was the focus of Stiglitz's keynote speech.

While he remained quiet for most of the event, Annan spoke up briefly at the end of Stiglitz's address, when an audience member mentioned how some Texans believe the United States should get out of the United Nations and the United Nations out of the United States. "The U.S. would lose in both accounts," Annan chuckled.

Keynote address

Stiglitz, who taught at the University from 1979 to 1988 but currently works at Columbia, won a Nobel Prize in 2001 for his "analyses of markets with asymmetric information."

His address yesterday presented three ways the world can finance global public goods, which Stiglitz defined as goods that can be used worldwide without diminishing their value to all parties.

Just as a candle retains its flame even after lighting another candle, ownership of global public goods does not exclude others from their benefits, Stiglitz said.

Examples of such goods include knowledge, the global environment, global economic stabilities, health concerns, peace and war.

These goods "have to be financed and provided collectively," Stiglitz said. "The market will not produce an adequate amount of global public goods."

Three ways to globally finance these goods, Stiglitz said, are to auction off global natural resources, tax cross-border trade and issue a new form of global money he called "global greenbacks." For example, auctioning off fisheries, rights to carbon emissions and satellite spots in space would all produce revenue to fund global public goods and to protect the environment.

Similarly, taxing harmful cross-border trade products could provide revenue to counter their negative impact.

"If we have large taxes on arms sales cross-border, with the revenues going to finance the UN peace keeping operations," the global community could "match a negative with a positive," Stiglitz said.

Finally, Stiglitz argued that money is being forced into the ground by reserves that developing countries hold to protect themselves against economic crises.

He proposed an annual issuance of global greenbacks to "offset the money that is being put into reserves" and finance global public goods, especially development.

But Stiglitz sees a difficult future for the reformation of the global reserve system.

"If we had a reasonable administration one might be able to persuade them that switching to this alternative framework might be an advantage to the United States," he said.

Despite the poor chance his initiatives will be implemented in the near future, Stiglitz emphasized the importance of change.

"What I hope I have done is persuade you there is a really serious need for global collective action," Stiglitz said. "We can pursue the needs that we have as a world, and at the same time we can enhance global economic efficiency."