Joseph Stiglitz on How to Build Shock-Proof Supply Chains

SPEAKER_1 (0:03)

Bloomberg Audio Studios, podcasts, radio, news.

Tracy Alloway (0:20)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:24)

And I'm Joe Weisenthal.

Tracy Alloway (0:26)

Joe, you did international relations at university, didn't you?

Joe Weisenthal (0:30)

Yeah, I did. I don't remember any of it. Actually, technically at University of Texas, the major was called government, which was sort of poli-sci, international relations.

I don't remember any of it at a good time, but yeah, anyway, yes.

Tracy Alloway (0:45)

It is all a blur for me as well, however.

Joe Weisenthal (0:47)

Also, just to be clear, it's not because I was like partying like crazy. I didn't have much fun in college.

It's just one of those sort of liberal arts degrees that you remember a few ideas from and then you move on. I don't want to make it seem like I was like, oh, it's all a blur to me because it's such a good, no, I wasn't a great student.

Tracy Alloway (1:03)

Okay, well, to be fair, I feel like one of the things about international relations is that, I don't know about you, but I feel like I didn't learn very much. I basically learned how to write essays and arguments, and I don't feel like I actually internalized a lot of what's going on in the world.

That said, I remember in my first year, there was one book that was on our reading list, and it kind of blew my mind at the time. I was like, whoa.

So it was Globalization and its Discontents by Joseph Stiglitz. Do you remember that one?

Joe Weisenthal (1:33)

I did not read it at the time. I probably should have. I think that came out in early 2000, 2002, it looks like, according to Wikipedia.

And it feels very ahead of its time because now this is just such a pervasive theme.

Tracy Alloway (1:47)

It does. And the thing that kind of blew my mind about it was, I had done a little bit of international relations at my high school in Tokyo. They have a course, but most of it felt very history. It was like World War I happened and then World War II happened and then all these international institutions get set up and here are all their various names and acronyms. But globalization and its discontents was the first time I had read an actual critical study of some of these institutions. And I thought it was so good. I was like, oh hey, these weren't inevitable by any means and we can have a discussion over what it is they do and how they should function.

Joe Weisenthal (2:25)

Yeah, the lack of inevitability when it comes to policy choices is I think really important. People make decisions and things don't necessarily unfold on some path that must have always been the case.

Very easy to forget that. And also, all of this stuff is very new and none of these things are ancient by any stretch. You could argue nothing has really proven the test of time as of yet. And so the possibility that things could disintegrate, that globalization could go in reverse, that institutions lose credibility, feels like these are all open questions to me.

Tracy Alloway (3:01)

Absolutely. So I am very happy to say that today we do in fact have the perfect guest on Odd Lots. We are going to be speaking with Professor Joseph Stiglitz. He is of course a Nobel Prize winning economist, the author of Globalization and It's Discontents. And he has a new book out now as well. It is called The Road to Freedom, Economics and the Good Society. So Professor Stiglitz, thank you so much for coming on Odd Lots.

Joseph Stiglitz (3:25)

Glad to be here.

Tracy Alloway (3:27)

So I have to say your book actually featured in one of my most annoying and overconfident international relations essays of all time, where I wrote that Stiglitz made a fair criticism of international institutions, but he should have gone even further, maybe in the outro. I'll spare you this, Professor, but maybe in the outro, I'll read some of it to the other Joe here, to my co-host.

Joe Weisenthal (3:51)

Looking forward to that.

Tracy Alloway (3:52)

Yeah. But one of the reasons we wanted to have you on the show was not necessarily because of the new book, although it looks really interesting, but you also just published a working paper over at the Federal Reserve, and it's called Our Supply Networks Efficiently Resilient.

How did that get on your radar?

Joseph Stiglitz (4:12)

It all went through the pandemic and the post-pandemic inflation. And a lot of the problems in the pandemic and after the pandemic were about supply chains. Car companies couldn't get ships. A lot of people couldn't get one thing or another. There was a shortage of women, feminine products, diapers, all kinds of things, the baby formula.