Joseph Stiglitz made his speech in Helsinki, Finland, on 7 January 1998, and so far it has been little reported. Furthermore, there is no evidence of a 'slippery slope' - there is no evidence that one increase in inflation causes further increases. Minimising or avoiding major economic contractions should be one of the most important goals of policy. And the gains occur prior to privatization, through a process of 'corporatization' which involves creating proper incentives. China 'eschewed a strategy of outright privatization'.
Private monopolies can lead to excess profits and inefficiency.
Government must intervene to create competition. But here, Stiglitz has two caveats. He wants to see the training of more scientists and engineers and not extra liberal arts graduates as were trained in much of Africa. Financial markets do not do a good job of selecting the most productive recipients of funds or of monitoring the use of funds, and must be controlled. Stiglitz calls for a new 'post-Washington Consensus' which, he says, 'cannot be based on Washington'.