Please excuse the condescending tone of the next few paragraphs. While you, the esteemed reader of Cyberista, do not need to be reminded of such basic knowledge, there are people that simply do not know the mechanisms of sovereignty or good government. Unfortunately, these people happen to be in charge of government in the United States. The same kind of people also run such noble institutions like the World Bank and the International Monetary Fund (IMF).
Nations are not nations because of membership in the UN or because they are signatories to the “Treaty of Nationhood” and the “Order of Diplomats For Iced Mocha.” Nations are nations because they are self-sufficient entities that can defend themselves and provide for their people.
Nations tend to be run by governments. In a perfect world, the governments of Nations are legitimate governments. Such governments make sure that, aside from defense, that people have jobs, food/water, housing, health care, education and an infrastructure in the form of roads, waterways, irrigation, harbors, power plants, etc.
Both legitimate and illegitimate governments consider jobs to be their top priority but in much different contexts.
A legitimate government knows that when everyone has a job, the people are partners in the acquisition and creation of food/water, housing, health care, education and the infrastructure itself. A legitimate government knows that a significant amount of debt can be tolerated as long as the money is going towards the general welfare of the people. Such debt can be tolerated because a social and political cost of not providing for basic needs is a much, much higher them simply serving and protecting the nation in the right way the first time.
Illegitimate governments, such as those cultivated–perhaps unintentionally, perhaps not–by the World Bank/IMF, consider government spending to be a four-letter word. The only direction that money should flow is into the pockets of leadership and their friends in the aristocracy. The overall condition of the nation is secondary, if paid attention to at all, to the needs of a few individuals. First-class attention is given to those who pay for it. Employment is distributed in the context of efficiency. Jobs are given to the highest qualified persons at the lowest possible price. The accumulation of material for its own sake becomes the first entrance into a labyrinth of socially constructed divisions designed to keep people plotting against each other in order to plot for their basic needs.
It is important to emphasize that the previous two paragraphs focus on the legitimacy verses that illegitimacy of any given government. It does not distinguish between capitalist or socialist economies.
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So the question becomes: Which side of the “World Bank/IMF” tandem is worse?
Both the World Bank and the IMF were created at the Bretton Woods Conference of 1944. The mission of the World Bank is to provide financing for infrastructure projects and basic needs such as schools and hospitals. The mission of the IMF is to provide short-term credit on the condition of policy reforms, better known as “Structural adjustments”, to create financial conditions favorable to foreign direct investment.
In 1992, the World Bank realized that the business of alleviating poverty was not very profitable and has been in a tailspin identity crisis ever since. The IMF, for its part, has never had any publicly evident problems with their mission. They have no publicly evident issues with the morals and ethics of sending country after country into an economic hellhole. The IMF clandestinely orchestrates currency speculation to crash markets so they can turn around and lend a helping hand on the condition that their conditions are accepted.
Creating an environment favorable to foreign direct investment is diametrically opposed to the needs of developing nations. Such nations, collectively understood to be the “Third World” to U.S. Americans, do not have luxury of debating the value of government expenditures and social programs. They must spend on people, resources, education, health care and infrastructure. Developing nations, assuming that they care about the people they govern, cannot neglect their citizens.
Because developing nations have most of their population living in poverty, structural adjustment conditions like privatization, government austerity, tariff elimination, export focus and high interest rates can hamstring a nation into massive unemployment and abject poverty–the ingredients for civil war and long term despair.
Privatization combined with the export focus is particularly troublesome. When a developing nation chooses to privatize, the only prospective buyers are either criminal operations that have money regardless of the regime in power or foreign investors. A sale to either type of buyer of a service that should belong exclusively to government is a loss of sovereignty and a treasonous abdication of power by the leadership of the nation taking the IMF loan.
Institutions like the World Bank/IMF exist to keep every possible commodity available in the world on the shelves of Western nations at the lowest possible cost. To keep the products flowing, the terms and conditions are made to be inescapable by any means short of debt relief or a lonely march of defiance of the global capital system with a nice little “rogue state” label.
Despite some of the more embarrassing elements inside that anti globalization movement and despite the maddening dissonance in their message, being against the current regime of global capital is the right place to be. The West is wealthy enough and certainly smart enough to stop demanding capitalism where capitalism is hundreds of years away.
