Joseph Stiglitz’s Curious ‘Outside Activities’

by Eliana Johnson
The self-styled champion of the poor is not eager to disclose his ties with foreign leaders.

Columbia University economics professor Joseph Stiglitz, the liberal economist and scourge of the International Monetary Fund (IMF), has a long list of accomplishments. His curriculum vitae runs 56 pages, to be exact.

It nonetheless omits a number of his speaking and consulting engagements and puts the Nobel laureate in violation of Columbia Business School’s basic academic transparency and disclosure policies. That’s a particularly sensitive matter for Columbia, which drastically tightened those policies in 2011, when an Academy Award–nominated documentary brought embarrassing and unwanted attention to some of the university’s most respected faculty members. The movie, Inside Job, shone a light on what appeared, at least to some, to be conflicts of interest: As the nation’s economy melted down, Columbia professors profited from undisclosed consulting agreements with some of the institutions at the center of the financial crisis at the same time that they were weighing in as supposedly objective policy experts.

That’s why the policy Columbia adopted in 2011 requires faculty members to maintain a current curriculum vitae on their official Columbia Business School webpage that includes a section titled “Outside Activities.” The new policy specifies the following:

The section must list the nature of the activity and the name of all outside organizations for which he or she has provided paid or unpaid services during the past five years, including but not limited to services provided as researcher, consultant, case writer, teacher, speaker, board member, executive, or expert witness.

Stiglitz, a former chairman of the White House’s Council of Economic Advisers and chief economist at the World Bank, makes the bulk of his considerable income from these outside activities. As he has pushed for changes in the rules of global capitalism, he has profited handsomely as a capitalist himself. He has written more than a dozen books; he commands international speaking fees starting at $40,000 (his speaker’s bureau flashes the cover of his book, The Price of Inequality, on his speaker page, next to his stated fee: “over $40,000”); he is paid $1,000 an hour for his expert testimony; he has even starred in a documentary, Around the World with Joseph Stiglitz. In the wake of a nasty divorce, he sued his own divorce attorney in 2005 in part for her failure to protect from his ex-wife the $300,000 he received from the Nobel Committee.

Inside Job explored the 2008 meltdown of the American economy. In the documentary, Columbia Business School dean Glenn Hubbard sat for an interview with the director about why his paid consulting arrangements were not disclosed on his curriculum vitae. (Hubbard is paid $250,000 a year to serve on the board of MetLife, one of the largest insurance companies in the world, and sat on the board of the mortgage lender Capmark until shortly before its bankruptcy in 2009.) The movie also pilloried Business School professor Frederic Mishkin for his failure to disclose the $134,000 he had received from the Icelandic Chamber of Commerce to write a paper that, in 2006, said the nation’s economy was relatively stable. (In 2008, the country’s banking industry collapsed in one of the biggest crashes any country has ever experienced.)

Stiglitz wasn’t interviewed for the documentary, but, had the director expanded his scope, he might have been. The university’s most famous economics professor doesn’t include on his curriculum vitae the required “Outside Activities” section. He didn’t respond to an interview request, but a spokesman from his office said in an e-mail: “We believed we were in compliance. We have now been advised of the need for some more updates, and we are revising the CV accordingly.” A spokesman for Dean Hubbard said he was not available for comment, and a spokesman for Columbia Business School, Chris Cashman, did not respond to a request for comment. 

In Stiglitz’s case, the potential conflicts of interest, which the university’s new disclosure policies were meant to bring to light, are similar to those that earned his colleagues critical scrutiny: a $40,000 speaking engagement in Dubai in April 2011 where he addressed the clients of Standard Chartered Bank, and a July 2011 speech at a Chevron-sponsored conference in Luanda, Angola, for which he was paid a similar fee. Readers of CABGOC Magazine, Chevron’s trade publication in Angola, where the speech was advertised, would have known about it, but readers of his scholarly papers, including “Industrial Policy in an African Context” and “Strategies for African Development,” would not.

From Luanda, Stiglitz flew to Athens to meet with Greek prime minister George Papandreou, for whom he served as an adviser during the euro-zone crisis and whom he has described as “an old friend.” In the media, Stiglitz weighed in as an expert on the crisis, and the scholarly articles he has authored on it do not disclose his role behind the scenes with the Papandreou government. Whether he was paid for his services remains unclear, but a Greek newspaper reported in 2012 on the slush fund Papandreou maintained for his team of “special advisers.”

In February 2010, two years before Greece took a bailout from the EU and the IMF to avert a default, Stiglitz told Bloomberg Television: “There’s clearly no risk of default. I’m very confident about it.” He railed against austerity plans, calling them a “suicide pact” and likening the measures to medieval “bloodletting.” The friendly relationship between Stiglitz and Papandreou persists: Last year, the former Greek prime minister appeared on a panel with Stiglitz at Columbia, where he is now a professor, to discuss the European economic climate.

Something similar is happening now with respect to Stiglitz’s involvement with the Kirchner government in Argentina. Stiglitz filed a friend of the court brief on behalf of Argentina’s bid to appeal an American lower court’s ruling that would force it to honor $1.3 billion in bonds on which it defaulted in 2001. Stiglitz did not disclose — nor has he disclosed in his public statements or writings about Argentina, where he has argued that the country had no choice but to default on his debt — that he served as a paid expert for Argentina in a 2012 case before the World Bank’s International Centre for Settlement of Investment Disputes. Over the years, he has also traveled regularly to Argentina to advise the now-deceased Argentinian president Nestor Kirchner as well as his wife, the country’s current president, Cristina Fernandez de Kirchner and delivered several paid lectures there.

Stiglitz’s colleagues took a public beating for their failure to adequately disclose potentially compromising business interests. It remains to be seen whether he will suffer the same fate.

— Eliana Johnson is media editor of National Review Online.

Did you like this?