I've asked this on many forums but I feel I don't understand it yet. I also want an Austrian perspective
Are you kidding? ARE YOU KIDDING?International bankers always want whats best for everyone...
You should have gone here and here first. This is largely related. Also note that the World Bank and USAID are similar institutions controlled by the same interests.
Basically the IMF gets foreign leaders to take out huge loans. Sometimes they don't need to prod because the dictator doesn't care about the country's future, sometimes they bribe them to take out loans. However it happens, the IMF makes sure the loan doesn't get payed back, which is when the trouble starts. They raise the interest on the loan, apply all sorts of fees etc etc that put the country in permanent debt slavery. In addition to the raw cash they must pay out, the IMF also requires that they make structural adjustments to supposedly strengthen their economy. Under the cover of free market vocabulary, the nation's resources are "privatized" i.e. given to western corporations, establishing basically a government granted monopoly of corporation X over things like the country's water supply.
Guatemala currently pays 50% of its GDP every year towards servicing IMF debt. This is like... what if you lent money to someone, they failed to pay you back, and now you think his family owes you money. Worse, what if you bribed him not to pay back the loan? What if the people who assume his debt had nothing to do with him at all?
The G8 also use organizations like the IMF to leverage political power. Many third world countries are dependent on IMF loans and other types of aid. So we threaten to cut off the juice if they vote us down in the UN. I remember reading about how Yemen voted against us on some resolution, and our delegate come up to him and said "that was the most expensive vote you ever cast". You can guess what happened to Yemen's aid. The IMF is just neo-imperialism. Its one of the reasons why socialism "works" in Europe, because most of their quality of life is supported by de facto slave labor that arises from the IMF. And the free market takes the blame because they use words like "privatization". Its real nice of them.
What good do they do?
I can not get beyond the evil in that the IMF and WB receive money stolen from tax payers. I consider any organization that has to use violence to extract money or any organization that receives this stolen money as not legitimate. I want a world where people associate freely and wealth changes hands for mutual benefit voluntarily instead of at the point of a gun.
But going beyond the funding. The IMF and WB like any other organizations that do not server consumers will waste the money as they can not lose by giving it out. Furthermore they do not any measure of success. Then these loans go to the worst of hummanity who use the money to exercise more force over their populations.
I am especially skeptical of their "SUCCESSES" in programs like Micro-Lending and what not. If these could be successful then free individuals would engage in these activities themselves. Also look at the those receiving the money when there are thousands to millions that don't. How is that good for an economy to have mannah from heaven raining down to certain individuals all with a cut going to the local gang of thugs called government.
The economist Hernando De Soto has a much better idea which is to recognize private property rights for the people of the world who are currently homesteading the property. Then these people could use this property as colateral or sell it to obtain other property. You can find a lot of information at this web site about him.
From a point of view of an ordinary citizen in a recipient country several bad things come to mind:
Snowflake: The IMF is just neo-imperialism. Its one of the reasons why socialism "works" in Europe, because most of their quality of life is supported by de facto slave labor that arises from the IMF.
The IMF is just neo-imperialism. Its one of the reasons why socialism "works" in Europe, because most of their quality of life is supported by de facto slave labor that arises from the IMF.
I doubt that. 50% of Guatemala's GDP may be a lot for Guatemala but it is a drop in the bucket for Europe.
I have jet to be shown how any form of imperialism benefits the population of the imperial metropola at large. The elites? Of course, but ordinary people I don't think so.
Kenneth: I've asked this on many forums but I feel I don't understand it yet. I also want an Austrian perspective
Where do the IMF and World Bank get their funds? From national governments.
Where do national governments get their funds? By stealing it from people.
Do the IMF/World Bank rely on making profitable loans to continue existing? No.
Will anything good come out of all this? No.
I know many people involved in domestic African banking and they deal a lot with "development funds" and the like. It's all about the suppliers of credit (i.e the World Bank) lining the pockets of the regime in charge in order to guarantee preferential treatment (read: monopolization, anti-competition, government subsidies) for their corporatist partners.
How do you think the regime in Zimbabwe is still around? Never mind a dictatorship like Zim, a full-blown liberal democracy like South Africa is permeated with this neo-colonial corruption. Here's an example:
In order to fulfill the obligations FIFA and their corporate cronies impose for the World Cup Soccer, South Africa passed a law that, effectively, prevents any kind of non-volunteer labour being used by event organizers and the like. So much for creating jobs. The only people with the level of education and time to devote to non-paid labour will be wealthy suburban kids. The SA Bill of Rights is incredibly liberal and is riddled with entitlement rights to citizens. This law violates swathes of the constitution, but don't expect it to show up in the ConCourt any time soon. The President just stacked the constitutional deck with judges allied to him.
Furthermore, businesses with advertising and/or products that are not part of the official FIFA sponsorship cartel will have to remove these items for the duration of the tournament. The law reserves the right for government to designate "zones" for where this must occur. These zones include areas nowhere near the actual stadiums. So much for generating free enterprise among the citizenry.
A lot of the SA economy is "black market", what the bigwigs like to call "the informal sector" (read: average Joes who sell stuff without paying taxes). Naturally, your typical South African street vendor who hangs around stadiums during games is probably going to be selling merchandise that is either "pirated" or is not produced by the corporate entities FIFA likes. So, instead of hiring these experienced merchants or simply supplying them with legit merchandise, FIFA will compel the SA gov. to send armed men out to shoo them away... or worse.
And, when the spectacle of the games is over, when the government has had its vanity project on display, they'll turn around and wonder why unemployment didn't change. They'll wonder why more people aren't moving away from the "informal sector" and paying taxes. They'll wonder why businesses are pissed off because they couldn't advertise and lost their sponsorship partners.
Not to worry, with their pockets suitably lined, they'll blame the Western capitalists or the old Apartheid regime and everyone can go back to sleep...
Did I mention the South African people have the privilege of forking out hundreds of billions of Rands to support this charade? And what will they get out of it in the end? A bunch of massive stadiums they have no use for. Gee, there really aren't more pressing issues to resolve in Africa...
For more information on the "2010 FIFA World Cup South Africa Special Measures Act", check out this local article.
/end rant.
My apologies for the previous post's long-winded rantingness.
I'm going back to SA in a few months (in time for the World Cup) and I just had a bunch of my business plans for that period shot to pieces by government intervention. Yes, I was going to do something as innocuous as using my car as a cab and my house as a bed and breakfast for weary foreigners.
Unfortunately, I haven't filled out all the forms and paid all the licensing fees to the government extortion racket in order to be "FIFA approved". I could be thrown in jail for doing those evil things, ya know... Being a helpful and generous local and all.
Very interesting! Now I'm curious about the other reasons of why socialism works in Europe?
Kenneth: Very interesting! Now I'm curious about the other reasons of why socialism works in Europe?
It doesn't. Not in the long run, anyways. How long do you think governments can go on printing money to pay for entitlements all the while exporting all their production and manufacturing to overseas providers? Socialism is a simultaneous delusion of government and dream of recipients.
Marko:I doubt that. 50% of Guatemala's GDP may be a lot for Guatemala but it is a drop in the bucket for Europe.
Marko:I have jet to be shown how any form of imperialism benefits the population of the imperial metropola at large. The elites? Of course, but ordinary people I don't think so.
This is also the case with a lot of non-opec oil. The reason we have venezuala so much is because we used to have a cozy deal with the old regime, who would sell us oil below market price. But chavez ruined that. We really have pillaged latin america for oil...
So a large % of our clothing, energy, certain types of agriculture (coffee/cotton/rubber), etc. Also by keeping this countries in sh*t we can make sure the G20 maintains a monopoly on technology, thus allowing us to continue leveraging them for their cheaper commodities and providing a market for corporations who would have died decades ago under international competition...
I'd say the elites certainly benefit from this arrangement, but we get in on the butter too so we'll support our governments. Everyone always says they would rather live here than some third world country... guess you know who to thank for that.
Kenneth:Very interesting! Now I'm curious about the other reasons of why socialism works in Europe?
Snowflake: Marko:I doubt that. 50% of Guatemala's GDP may be a lot for Guatemala but it is a drop in the bucket for Europe. In nominal terms you're right, but that doesn't measure the Europe's dependence on superficially cheap consumer goods.
How does an IMF loan make anything that comes from Guatemala cheaper?
Prices are brought down by competition on the market. That is the only way. If the IMF ruins the economy it makes it produce less stuff which therefore makes the stuff more expensive. The way to make stuff cheap is to mass produce it.
On the other hand if the recipient country signs over some natural resources over to a foreign corporation it again serves to make the resource more expensive as it is monopolized instead of everyone having free access.
Snowflake: So what if Nike promises a bunch of chinese workers they'll be paid X if they take a plane to work in their factories, then nike says to pay for your plane ticket, you owe me Y. But then when they get there, they get paid much less than X and owe much more than Y and are basically indentured servants for the next 20 years making our t-shirts and sneakers?
So what if Nike promises a bunch of chinese workers they'll be paid X if they take a plane to work in their factories, then nike says to pay for your plane ticket, you owe me Y. But then when they get there, they get paid much less than X and owe much more than Y and are basically indentured servants for the next 20 years making our t-shirts and sneakers?
But how does this make the sneakers cheaper?
Snowflake: This is also the case with a lot of non-opec oil. The reason we have venezuala so much is because we used to have a cozy deal with the old regime, who would sell us oil below market price. But chavez ruined that. We really have pillaged latin america for oil...
Who is "we"? The oil companies whatever the price they got the oil for, did not sell it to consumers bellow market prices. It just meant a wider profit margin for them.
Snowflake: Also by keeping this countries in sh*t we can make sure the G20 maintains a monopoly on technology, thus allowing us to continue leveraging them for their cheaper commodities and providing a market for corporations who would have died decades ago under international competition...
Also by keeping this countries in sh*t we can make sure the G20 maintains a monopoly on technology, thus allowing us to continue leveraging them for their cheaper commodities and providing a market for corporations who would have died decades ago under international competition...
How does keeping someone poor make him a better market for anyone than if he was rich and had more to spend?
The fact is that by screwing up economies around the world IMF enacts a huge price on all of us. We would all benefit from having 3rd world countries be more developed and be producing and exporting more stuff as it would drive down the prices, meaning our money would go further. Also they would be able to import more creating more business for our export-oriented companies.
Marko:How does an IMF loan make anything that comes from Guatemala cheaper?
Marko:Prices are brought down by competition on the market. That is the only way.
Marko: If the IMF ruins the economy it makes it produce less stuff which therefore makes the stuff more expensive.
Marko:But how does this make the sneakers cheaper?
Marko:Who is "we"?
Marko:The oil companies whatever the price they got the oil for, did not sell it to consumers bellow market prices.
Marko:How does keeping someone poor make him a better market for anyone than if he was rich and had more to spend?
Marko:The fact is that by screwing up economies around the world IMF enacts a huge price on all of us.
Marko:We would all benefit from having 3rd world countries be more developed and be producing and exporting more stuff as it would drive down the prices, meaning our money would go further. Also they would be able to import more creating more business for our export-oriented companies.