The World Bank and the IMF.

[BurnTheOliveTree]

I'm doing a history project on the origins of these two institutions, and would welcome any contributions from the members here.

Basically I differ from the modern consensus, as I'm sure most of you do. I don't think that either are benign institutions with global economic security as their primary concern. Rather, I think that they were and are an attempt to enforce the "washington consensus" of deregulated markets and privatization.

Are there any good marxist histories on this, or left-wing commentaries? So far I've only encountered Naomi Klein, who is fine, but doesn't cut it by herself.

-Alex

[President]

Here's random information from Chomsky I found, which you can I'm sure elaborate on: its just a platform on which you can build.


Shank: Analysts in the media are questioning whether or not the Bank can redeem itself post-Wolfowitz. Can it redeem itself or is it done?

Chomsky: Redeem itself from what? Through the 1970s, the World Bank and the International Monetary Fund were pressuring countries to take loans, borrow, and create huge debt. They argued that it was the right thing to do. In the early 1980s, with the Volcker regime in Washington, the whole system collapsed and the countries that had taken the debts were hung out to dry. Then the World Bank and the IMF pressured them strongly to introduce structural adjustment programs -- which means that the poor have to pay off the debts incurred by the rich. And of course there was economic disaster all over the world.

That’s the World Bank. They’ve done some good things. I’ve seen some World Bank projects that I think are great. For example, in Colombia the World Bank has supported very interesting projects run partly by the church, partly by human rights organizations. They are trying to create zones of peace, which means communities that separate themselves from the various warring factions and ask the military, paramilitaries, and guerillas to leave them alone. The people that are doing that are very brave, honorable people. It’s very constructive work, and it’s supported by the World Bank.

So again, I think that’s good. But if you look at the overall range of the Bank’s policies, it hasn’t been benign by any means. The Bank would have a long way to go to “redeem itself.”

Shank: So it’s the same problem facing Iraq, the whole conversation is wrong?

Chomsky: The conversation is too narrow. Within the narrow framework, yes, it’s a good thing to get rid of corruption and press for good governance. But there’s a much wider framework…

Shank: …that’s not being talked about.

Chomsky: Right. Take the IMF. The IMF is not the World Bank, but it’s closely related. The IMF’s former U.S. executive director Karin Lissakers accurately described the Fund as the credit community’s enforcer. The IMF is very anti-capitalist. For example, suppose I lend you money. And I know that you’re a risky borrower, so I insist on a high-interest rate. Now, suppose that you can’t pay me back. In a capitalist system, it’s my problem. I made a risky loan. I got a lot of profit from the interest. You defaulted. It’s my problem.

That’s now what the IMF is about. What the IMF is saying, to put it in personal terms, is that your friends and neighbors have to pay off the loan. They didn’t borrow the money, but they have to pay it back. And my friends and neighbors have to pay me to make sure that I don’t lose any money. That’s essentially what the IMF is.

If Argentina takes out an IMF loan with huge interest rates because it’s risky and then they default, the IMF comes along and says the workers and peasants and other people in Argentina have to pay for that. They may not have borrowed it, it may have been borrowed by a military dictatorship, but they have to pay it back. That’s what structural adjustment is. And the IMF will ensure that western taxpayers pay off the bank. It’s radically anti-capitalist, whether you like that or not. The whole system has no legitimacy. In fact the whole debt system in the world, which is crushing much of the world, most of it is fake debt.

If Suharto, one of the biggest debtors in the world, borrows money and ends up the richest man in Indonesia or maybe the world, why is it the responsibility of the farmers in Indonesia to pay it off? They didn’t borrow it; they didn’t get anything from it. They were repressed, but they have to pay it off. And the IMF makes sure that the lenders don’t lose money on their risky loan after making a lot of profit from it. Why should the system even exist?

[BurnTheOliveTree]

Thanks mate. :)

I found his analysis that the IMF were not even a capitalist organisation so much as thieves-writ-large particularly interesting, it wasn't an angle I'd considered.

-Alex

[Yehuda Stern]

I found his analysis that the IMF were not even a capitalist organisation so much as thieves-writ-large particularly interesting

I think you'll find that many people on this forum will argue that all capitalism is just thieving-writ-large.

[ComradeOm]

Indeed. You might want to read on on Harvey's theories on the role the IMF plays in capitalist 'accumulation by dispossession' (aka ongoing primitive accumulation)

[BurnTheOliveTree]

I think you'll find that many people on this forum will argue that all capitalism is just thieving-writ-large.


Well yeah, thanks for that. :rolleyes: I meant explicit theft as opposed to institutionalised theft.

Thanks Comrade Om, I'll have a butchers.

-Alex

[Sendo]

Confessions of an Economic Hitman