They put themselves in a comparative advantage, and we haven’t come to terms with that.”
China’s success in electric vehicles is also evidence for Stiglitz that, in climate policy, regulations often work better than subsidies. More than a decade ago, “I was in a meeting with the premier [Wen Jiabao] where he told the car companies: you have to be electric within five years or you’re out of here. China has made it clear it will be an EV country; we haven’t.”
So does Stiglitz support bringing industrial jobs back home? “The pandemic made it very clear that we don’t have a resilient economy and that borders do matter and, no matter what our agreements are, when push comes to shove, we’re going to put our citizens number one.”
A fellow Nobel laureate, Angus Deaton, recently switched to arguing that the leaders of rich countries must prioritise their own citizens over the world’s poorest people. Stiglitz disagrees: if the west is seen to prioritise its own people, it will fail to encourage global co-operation, for example, on climate change. “We can implement industrial policies in which there is more sharing of green technologies.”