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

Snowflake:

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.

And how does that monopoly help the consumer in the West?

Snowflake:

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.

You mean before they readjust themselves upwards. I suppose that is right. But why must it devalue its currency? The loan is made in dollars, they must pay back in dollars. Devaluing their currency does not help them pay off their debt. That is only true for the US.

Snowflake:

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.

More expensive for the consumer in the West.

Snowflake:

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,

But Nike does not use slave labour. They do not use indentured servants. Go back and see what you made your example for. And on a general note slave labour is not cheaper. It is only cheaper if you can externalize the costs associated with keeping the slaves in check.

Snowflake:

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.

Which has nothing to do with what an American pays at the gas station. Why would the fact Chevron has taken over Nigeria benefit him at the gas station? It is obvious that as a consumer any monopoly is against his interests. Including Chevron's monopoly on Nigerian oil.

Snowflake:

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.

Snowflake:

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 you have forgotten what is the point that we are arguing. Yes the western elites come out ahead in this deal. But they do it in a way that does nothing for the western populaces, but that indirectly actually hurts them. So no, it is not what makes European Socialism work. It is a threat to welfarism in Europe. Welfarism requires market prosperity to feed off from and IMF does its part to stagnate that prosperity.

To clarify my position:

• Is there neo-imperialism being perpetrated through IMF and World Bank? YES
• Does it destroy the recipient countries? YES
• Does it help the elites, particularly in the US? YES
• Does it do anything at all for the general populace in the west? NO  

Snowflake:

.. 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.

I'll concede that there must be some trickle down (for the yacht makers and the like) but for the most part these guys spend most of their money buying up politicians to further their imperial agenda. Which further hurts the general populace which must then fund punitive expeditions abroad done on behalf of the business interests.

Marko:

And how does that monopoly help the consumer in the West?

B/c buying things from cavemen is cheaper than buying things from folks with alternatives...

Marko:

But why must it devalue its currency? The loan is made in dollars, they must pay back in dollars. Devaluing their currency does not help them pay off their debt. That is only true for the US.

Well, its what they do. Its basically a hidden tax so it doesn't piss people off..

Marko:

More expensive for the consumer in the West.

Potentially.I think that because they can use cheaper labor they CAN offer lower prices.

Marko:

But Nike does not use slave labour. They do not use indentured servants. Go back and see what you made your example for. And on a general note slave labour is not cheaper. It is only cheaper if you can externalize the costs associated with keeping the slaves in check.

that's what governments are for. I'm not using slave labor as a rhetorical term for voluntary employment in sweatshops.

But you're right (maybe), I don't actually know if nike does this anymore, but there are non-free market sweatshops where the multinational will cut a deal with governments to look the other way and/or support the multinational as it embarks on.. morally questionable enterprises.

Marko:

Which has nothing to do with what an American pays at the gas station. Why would the fact Chevron has taken over Nigeria benefit him at the gas station? It is obvious that as a consumer any monopoly is against his interests. Including Chevron's monopoly on Nigerian oil.

Well having a monopoly on gas in nigeria doesn't mean you have a world monopoly. You're still competitive with other corporations for American markets.

So, you would be right if say for example corporations owned all of Africas resources AND also managed to cartelize it so they would have a world monopoly. But they don't. Food/energy/clothing can be produced in many, many, places around the globe. They can't sell their extorted goods at a higher price than one could get them elsewhere legitimately.

Marko:

Yes the western elites come out ahead in this deal. But they do it in a way that does nothing for the western populaces, but that indirectly actually hurts them.

You also didn't address my observation that there is trickle down in western countries because elites invest their wealth in western markets.

Marko:

Does it do anything at all for the general populace in the west? NO  

So what do you say about the fact that we buy tons and tons of cheap stuff from them?

 

Snowflake:

B/c buying things from cavemen is cheaper than buying things from folks with alternatives...

A caveman has nothing to sell you. He produces nothing and depresses the world market price of nothing.

You need to brush up on your economics. If you do not understand this then this exchange is going to be pointless.

Snowflake:

Marko:

But why must it devalue its currency? The loan is made in dollars, they must pay back in dollars. Devaluing their currency does not help them pay off their debt. That is only true for the US.

Well, its what they do. Its basically a hidden tax so it doesn't piss people off..

Sure they do it. But you have nowhere shown they do it because of the IMF.

Snowflake:

Marko:

More expensive for the consumer in the West.

Potentially.I think that because they can use cheaper labor they CAN offer lower prices.

Nonsense. If this were the case the cheapest cars would come from Chad. Destruction of factories does not make things more abundant aka cheaper. It makes things more scarce aka more expensive.

Snowflake:

Marko:

Which has nothing to do with what an American pays at the gas station. Why would the fact Chevron has taken over Nigeria benefit him at the gas station? It is obvious that as a consumer any monopoly is against his interests. Including Chevron's monopoly on Nigerian oil.

Well having a monopoly on gas in nigeria doesn't mean you have a world monopoly. You're still competitive with other corporations for American markets.

So, you would be right if say for example corporations owned all of Africas resources AND also managed to cartelize it so they would have a world monopoly. But they don't. Food/energy/clothing can be produced in many, many, places around the globe. They can't sell their extorted goods at a higher price than one could get them elsewhere legitimately.

I nowhere claimed they need to charge above market price to screw the western consumer. The fact that they can use the state of Nigeria to bar competitors entering Nigeria instead of allowing for free homesteading of resources is quite enough to protect themselves from competition to a certain extent and to not have their prices as suppressed as they could be.

Snowflake:

 

Marko:

Yes the western elites come out ahead in this deal. But they do it in a way that does nothing for the western populaces, but that indirectly actually hurts them.

You also didn't address my observation that there is trickle down in western countries because elites invest their wealth in western markets.

I didn't address it because I doubt they do any such thing. People who are good at predatory ways of earning money are very ill suited to operate on the market. Most likely they buy up stock of Lockeed-Martin, Blackwater, Goldman-Sachs and the like thus rewarding the people who had invested into corporatist entities, thus sending a pro-corporatist signal. In any case no trickle down could make up for the opportunity cost of lost abundant imports from what are now countries barely participating in the global division of labour.

Snowflake:

Marko:

Does it do anything at all for the general populace in the west? NO  

So what do you say about the fact that we buy tons and tons of cheap stuff from them?

I say that A.) We pay for it (we pay the full price to the corporations, don't tell me that out of the goodness of their harts they sell it to us bellow the market price , the fact that only some of it reaches the folks who make it is a different issue). B.) It would be even cheaper if they had the technology to make more of it.

Marko:

A caveman has nothing to sell you. He produces nothing and depresses the world market price of nothing.

But if you force him to work in your factory at a wage he would never agree to...

Marko:

Sure they do it. But you have nowhere shown they do it because of the IMF.

Gahhh ctrl + f "devalue". Yes. They could simply tax their citizens the extra amount, but they choose to employ inflation as a hidden tax for political stability reasons.

Marko:

 

Nonsense. If this were the case the cheapest cars would come from Chad. Destruction of factories does not make things more abundant aka cheaper. It makes things more scarce aka more expensive.

Right but extracting wealth from these countries to keep them poor is not the same thing as a natural disaster. More factories still get built, its just that we own them all and their government protects us from laws and local competition.

Marko:

is quite enough to protect themselves from competition to a certain extent and to not have their prices as suppressed as they could be.

Right but it still lowers the overall world price of whatever commodities.

Marko:

In any case no trickle down could make up for the opportunity cost of lost abundant imports from what are now countries barely participating in the global division of labour.

I agree it is probably a weak influence. It might not be but maybe it is...

Marko:

I say that A.) We pay for it (we pay the full price to the corporations, don't tell me that out of the goodness of their harts they sell it to us bellow the market price

They sell it to us at below FREE market price though.

Marko:

B.) It would be even cheaper if they had the technology to make more of it.

Well there is capital investment, in the form of factories and such, to increase worker productivity. But you can't say a priori that technology is cheaper... in some cases there probably isn't a point in investing in technology because you might be able to pay the workers even less.

I mean... the price at which we import coffee and cotton is pretty depressed :P I'm sure it could go much lower with big machines and stuff but the rate of return on the investment might be scant. There are probably many many other sectors in the world economy that offer better returns. So even if you were right about capital investment being able to increase productivity and therefore lower prices of goods in TWCs, I doubt those investments would get made on the free market.

So imagine what if Europe had to grow its own coffee. Price of coffee goes up. Not for lack of farmland, or capital, or labor, but because europeans demand a higher wage.