How do the World Bank and IMF do more harm than good?

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:

• you do not want your tin pot dictator saddling you with a huge debt, IMF makes this possible
• you do not want your tin pot dictator getting a huge money injection to buy things to screw you over with, keep you in check with and perpetuate his rule with
• you do not want your tin pot dictator possibly in an underhand deal giving away something like monopolistic mining concessions in return to the loan issuers 
• you do not want your tin pot dictator to implement the reforms that the IMF demands be implemented after they issue a loan that keep wrecking economy after economy

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.

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.

In nominal terms you're right, but that doesn't measure the Europe's dependence on superficially cheap consumer goods.

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.

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?

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?

I'm saying Europe doesn't have socialism because most of its workers and resources are overseas in semi-slave labor conditions. Of course you can live well if you have a 10:1 ratio of slaves to citizens :)

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?

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...

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?

Well, for one thing, if your economy is collapsing because of your debts, there's no investment and therefore the western powers that be have a monopoly on all factories in that country.

Marko:

Prices are brought down by competition on the market. That is the only way.

Also, consider that if the country must constantly devalue its currency, then we'll be able to get really good deals on their products before prices readjust downwards.

Marko:

If the IMF ruins the economy it makes it produce less stuff which therefore makes the stuff more expensive.

More expensive for the people who live there... not more expensive for the corporations who now own the resources and factories.

Marko:

But how does this make the sneakers cheaper?

Because you're using slave labor, which is cheaper than regular labor. Granted that nike still charges a lot for its sneakers, obviously pocketing a large portion of the wealth extracted, but consider that shoes prolly would get to be more expensive without slave labor, and (don't shoot me) maybe there's a trickle down effect since these mega rich guys all invest and consume inside the united states.

Which is why you don't see any trickle down from the wealth in third world countries, because the ruling elites don't participate economically in their own countries.

Marko:

Who is "we"?

The G#. G8/9/14/20 whatever. If you look up United States sponsorship of state terrorism on wikipedia its just full of our campaigns in latin america.

Marko:

The oil companies whatever the price they got the oil for, did not sell it to consumers bellow market prices.

You're right that a private business would never do this, but consider that one way or another the oil in latin america is government owned and its distribution is therefore subject to political pressure. So, say for example, if you were the ruling class in a country and Uncle Sam paid you a visit promising that he would keep you in power forever and ever but only if you sold him oil at 50% discount. Otherwise he'd remove you from power and find someone else who would... This is what happened in Venezuela before Chavez.

Marko:

How does keeping someone poor make him a better market for anyone than if he was rich and had more to spend?

For the same reason that a slavowner doesn't want his slaves to be rich. Someone's gotta shovel the shit; no point making them rich off of it... But no you would be absolutely right in a market setting.

Marko:

The fact is that by screwing up economies around the world IMF enacts a huge price on all of us.

But the ruling elite come out waayy ahead.

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.

Yes. So this must mean that the elites don't see it that way, because they're obviously trying to perpetuate the worldview I'm describing, rather than the rational and humane things you describe.

I think that raw power is one thing the market can't provide. Maybe they don't value superspaceage technology as much as fleecing people for the skin on their backs? I'm open to suggestions ><