From his Economic Times op-ed:
... I have complained so loudly and vociferously about the problems of globalisation that many have wrongly concluded that I belong to the anti-globalisation movement. But I believe that globalisation has enormous potential - as long as it is properly managed.
Some 70 years ago, during the Great Depression, John Maynard Keynes formulated his theory of unemployment, which described how government action could help restore full employment. While conservatives vilified him, Keynes actually did more to save the capitalist system than all the pro-market financiers put together. Had the conservatives been followed, the Great Depression would have been even worse and the demand for an alternative to capitalism would have grown stronger.
By the same token, unless we recognise and address the problems of globalisation, it will be difficult to sustain. Globalisation is not inevitable: there have been setbacks before, and there can be setbacks again.
The prescription for making globalisation work is what is generally called "the Scandinavian model." That means high levels of investment in education, research, and technology plus a strong safety net. That of course also entails, as in the Scandinavian countries, a highly progressive income tax.
Far from making these countries less competitive, it has made them more so. Though it may seem a contradiction to conservative ideologues who think cutting taxes is the answer to everything, the fact is that people are more willing to take entrepreneurial risks if they can count on a safety net and if they have the training to be innovative.
In Sweden, the social democrats who fashioned this policy have just been turned out of office. But we should not read that as some kind of a rupture in the social consensus. The new, more conservative government will only be about fine-tuning the model.
In the same interview, this is what Stiglitz says about what the east Asian economies did to benefit from a more globalized world:
The East Asians — first Japan and later countries like Singapore, Taiwan and South Korea and now China — understood that their gap with the advanced world was in knowledge and technology. So they encouraged direct foreign investment, insisting that technology transfer come along with it, and invested massively in education and infrastructure, largely through their own national savings, which are the highest in the world.
China, especially, has embraced globalisation on its own terms. It was slow to open up its markets for imports and even today does not allow the entry of speculative, short-term capital flows that so easily lead to boom and bust cycles in emerging economies.
But on top of this, China, like the others, has not relied on trickle-down wealth to lift up those at the bottom, but has sought to raising the poorest through government intervention. In the past decade and a half, hundreds of millions have been lifted out of absolute poverty there.
Now that a wealth gap is emerging because of sustained, rapid growth, the Communist Party has put the new policy of "harmony" at the top of its agenda, aiming to stop the gap from growing too large.