Joseph Stiglitz defends public ownership

Periódico 26 | 5 de febrero 2007

Joseph Stiglitz Defends Public Ownership

Joseph Stiglitz, a 2001 Nobel Laureate for Economy, said the nationalization of businesses announced by Venezuelan President Hugo Chavez should not cause alarm, because in many countries, including the United States, there are publicly owned firms that work better than private ones, reported AFP.

In a telephone interview from New York with Caracol Radio of Bogota, Stiglitz spoke on the Free Trade Agreement signed between the United States and Colombia. He called it “neither fair nor free” and said it “will make it more difficult for Colombians to purchase medicines.”

“Public firms can be very successful, like the social security and pension system in the United States, which is more efficient than any private insurance company,” said Stiglitz who was an adviser to President William Clinton.

The economist questioned statements by President Bush on the privatizations in Venezuela. Stiglitz pointed out that the issues involved are complex and that the US president appears not to fully understand.

“Firstly, President Bush is not an expert on anything. He is one of the most incompetent and corrupt leaders. Privatization and nationalization are very complex,” said Stiglitz, in the interview translated by Caracol Radio.

Bush says he is worried about democracy and the nationalizations announced by Chavez in Venezuela, which he says "will make it harder for the Venezuelan people to be lifted out of poverty, will make it harder for the people to realize their full potential."

Upon taking office on January 10, President Chavez announced plans to nationalize six electric companies.

Stiglitz told Caracol that the Free Trade Agreement “is called free, but if that were so, it would eliminate US government subsidies on agriculture and tariff barriers that, for example, have kept Colombian flowers out of the United States.”

“What is really happening is that small Colombian industries are going to face competition from the big US multinationals. It’s a competitive disadvantage, and at the same time, the United States is not being reciprocal in areas like agriculture,” he added.

The Nobel prizewinner said he believes neither Colombia nor the United States needs a Free Trade Agreement.

“It’s not necessary. One of the problems is that within these treaties there isn’t really much commerce. They are mainly about protection of investments and intellectual property that will make it harder for Colombians to acquire medicines that can save their lives,” Stiglitz said.

Stiglitz’ quotes taken from the Spanish translation

source: Periódico 26