Economist Joseph Stiglitz has been called "dangerous." He has been called a "maverick." He has been called a number of other things, too. Some nice, some not-so nice. All because Stiglitz's economic philosophy is a bit controversial.

A creator of the school of the "economics of information," Stiglitz doesn't fall into either camp of pro-private sector or pro-government. Rather, Stiglitz believes there is a third way to approach economics: governments and corporations complementing each other. Deregulation with regulation, if you will.

A hybrid approach of providing incentives to the public sector while keeping the government's paws off the outcome doesn't always engender smooth relations. Indeed, as the chairman of former President Clinton's Council of Economic Advisers and a chief economist for the World Bank, Stiglitz has a reputation for working in the public sector but speaking out against it.

When he was at the World Bank, for example, Stiglitz joined a group of protesters who criticized the organization's sister group, the International Monetary Fund, for its lackluster policies to fight global poverty. He even penned a highly charged article in The New Republic about his thoughts and experiences.

"Next week's meeting of the International Monetary Fund will bring to Washington, D.C., many of the same demonstrators who trashed the World Trade Organization in Seattle ... They'll say the IMF is arrogant. They'll say the IMF doesn't really listen to the developing countries it is supposed to help. They'll say the IMF is secretive and insulated from democratic accountability. They'll say the IMF's economic 'remedies' often make things worse-turning slowdowns into recessions and recessions into depressions. And they'll have a point," Stiglitz wrote last year. Stiglitz's own point is that free trade and open markets can be positive economic forces if they are managed in the proper way by governments.

He points to the deregulation policies of former President Reagan. "Our weaknesses were brought out into the open," says Stiglitz. The United States slipped into a recession in the early 1990s because those weaknesses weren't addressed properly or managed properly by the government, he says.

"In 1991, there was a recession, in large measure, because of mismanagement by the Federal Reserve," Stiglitz says. "They didn't recognize the consequences of the restructuring of savings and loans [institutions] during deregulation."

The same ignorance may again be occurring, according to Stiglitz. And the culprit may be St. Alan himself. "Perhaps the biggest mistake [Federal Reserve Board chairman Alan] Greenspan made in 2000 was to focus on the T-Bill rate instead of the lending rate," says Stiglitz. "The T-Bill is up, charting off demand. The models are based on the old theory that doesn't talk about lending rates or any other rates. The failure to recognize that could come back to hurt us."

With so many corporations operating on a credit-based financial model, lending rates are the most direct forms of igniting or extinguishing growth, in Stiglitz's view. Changes in T-Bill rates lag general effects on the economy by months or even more than a year. So we really don't know what type of economic shape we're in because of a lack of information.

The Federal Reserve, in part, agrees with this. Alternative forms of currency and rapid advances in technology have left Fed policies in the dust. Greenspan himself has admitted that changes in technology have yet to be properly understood and examined by the Fed. "I am certain that the possibilities for creatively harnessing technology for the improvement of economic measurement are much broader in scope-although, as in many other areas of endeavor, the precise directions those advances will take are difficult to predict. If we had the appropriate database, of course, who knows?" he said in a speech to the National Association for Business Economics.

This lack of information interpretation is exactly what Stiglitz is talking about. Stiglitz says that in today's society, information is king, the most precious asset out there. Managing the true impact of how money is utilized in the world will lead to prosperity.

"Credit is information," Stiglitz says. "So if credit is what makes economies grow, and if institutions' acceptance of credit has become more central, the government's regulation of banks is more critical."

That has hardly been the case. Banks own broker-dealers. Insurance companies own banks. What is lost is the tracking of the patterns of individual spending. "We are a society that operates more and more on credit," Stiglitz says.

But how that credit is spent is more elusive. Take monetary policy, for example. Until just last year, the Federal Reserve tracked and set monetary policy by money supply-the sheer amount of dollars in existence on the planet-with M1 being readily accessible cash and coins, M2 being checklike and bank deposits ($100,000 or less), and M3 being institutional credit, commercial paper and the like ($100,000 or more).

But people in general use credit more and more-charge cards and credit cards. This wasn't accounted for in money-supply data, so the Fed abandoned the use of money supply as a gauge of the economy last July. Also, alternative currencies and means of payment have become more ubiquitous. The Fed is researching the effect of these currencies on money supply, according to people familiar with the study. That means everything from frequent-flier miles to award points to electronic currencies are having some type of effect on the economy-but no one knows what.

What is known for sure, however, is the ease with which credit information can be accessed. This phenomenon, enabled by the technology revolution, puts the need for currency less in terms of dollars and more in terms of information.

"You can be in Malaysia, and in an instant, someone can find out your creditworthiness," says Stiglitz. "That is changing the world. New technology has made feasible what would otherwise have been unthinkable. Money has always been an imperfect system for credit. Now, we have a much better system."

The individuation of credit makes it a much better means of payment than a single currency, Stiglitz says. Credit can be more readily tracked, assessed and managed. Money, or currency, by its nature is anonymous and cumbersome. Of course, this impedes control, because credit can be better managed through lending rates or other mechanisms that directly sway purchasing and production.

Paul Volcker, the Federal Reserve chairman before Greenspan, disagrees, saying a unified currency would be of great value. "I have come to the conviction that the full implication of a truly global system of trade and finance will ultimately be a common currency encompassing most of the world," Volcker said recently in a speech.

Stiglitz, in sticking with his economic philosophy, says a common fiscal policy would suit the world, not a common currency. "There are too many problems," Stiglitz says. "First, there is commonality shock, then there is the flexibility of wages across borders, then there is the ability to migrate."

He says: "The euphoria on flexible exchange rates is not shared by everyone. But they realize the downside of a single currency. That would be like going back to a fixed rate of exchange."

What Stiglitz sees is a future in which the market will be free, but policies will be united to forge global growth. Right now, he says, we aren't on the path of growth. We are fishing in the dark and have been lucky.

"That could all change quickly, with one wrong move," says Stiglitz. "The economy is in a tenuous spot." And Greenspan, he believes, is looking at the wrong remedy.

The remedy lies in credible information on what matters most these days. And that's credit. As companies largely have been cut off from the equity markets as a source of financing, they have increasingly turned to the credit markets. This will direct the economy in the near term, Stiglitz says. Moreover, a more open stance and willingness to change and hear alternative methods for economic salves should be welcomed by the government-not shunned as they so often are.

"Since the end of the Cold War, tremendous power has flowed to the people entrusted to bring the gospel of the market to the far corners of the globe. These economists, bureaucrats and officials act in the name of the United States and the other advanced industrial countries, and yet they speak a language that few average citizens understand and that few policy makers bother to translate. Economic policy is today perhaps the most important part of America's interaction with the rest of the world. And yet the culture of international economic policy in the world's most powerful democracy is not democratic," says Stiglitz in defense of his stance on open markets and open policies, with unified enforcement.

There are many parallels to be explored there. But a parallax view is one that Stiglitz enjoys and keeps putting forth in both the public and private sectors. Maybe one day they'll even come together.