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Community Radio Prooratuname Diversitu For A attitt ,tratio DEverse eito P.O.Box 2116 Austin, Texas 78768-2116 Visit Us On The Web @ Rat Do La Comunidad Globalization, continued from page 7 warn students about in the first course in economics.” Stiglitz gives the Funders ample benefit of the doubt in describing their relentless push for lifting all controls on the movement of capital: “Surely, one might have argued, there must be some basis for their position, beyond serving the naked self-interest of financial markets.” Not necessarily. Naked self-interest is a powerful thing. It’s touching, though, to see that one of the world’s premier economists, a renowned practitioner of the dismal science that relies on the human emotions of fear and greed for its predictive power, believes so strongly in the innate, although misguided benevolence of the IMF. It’s also heartwarming to see Mr. Stiglitz willingness to forgive those staffers at the IMF who made such terrible mistakes over and over again, simply because they were so profoundly stupid, and thus to suggest to them that they see the error of their ways and correct their policies next time. For its part, the IMF seems to be neither repentant nor smarter. In December 2001, after Argentina defaulted on its debt, the Fund tried to impose tougher bankruptcy laws, lower wages for public sector workers and austerity measures comparable to those imposed on Russia. before. When the Argentine government balked, the IMF refused to lend. Earlier this year, as Brazil prepared to default, the IMF lent $30 billion for the purpose of shoring up the real so that foreign creditors could get their money out at face value. These Funders will not learn. Those who suggest that the IMF and its handmaiden, the World Bank \(which Mr. Stiglitz seems to exonerate completecomplicit in the misfortunes of the poor in borrowing countries are presumably the discontents of the book’s title. “Discontent” is a precious way to put itas if those people who found themselves suddenly bankrupt, jobless, hungry and ‘sick after the IMF passed through their national Finance Ministries werewhat? Slightly miffed? The damage done deliberately by the IMF and the World Bank in developing countries is more pressing than Globalization lets on. One IMF’er in a position to know, when speaking candidly about the rise of the mafia in Russia and the sacking of the public sector there, said “We knew that would happen.We didn’t care. The important thing was to dismantle central-planning before the economy recovered enough to revive it.” This has the ring of truth. It is what they did, after all. To be fair to Mr. Stiglitz, he does suggest that the IMF operates according to mandates that are other than charitable: …The IMF is pushing not just the objectives set out in its original mandate, of enhancing global stability and ensuring that there are funds for countries facing a threat of recession to pursue expansionary policies. It is also pursuing the interests of the financial community. This means that the IMF has objectives that are often in conflict with each other. The IMF is actually an institution in contradiction, not conflict. Its core proposition is market fundamentalismthe market solves all and works best when it’s left alonebut its mission is to manipulate markets. This is rather like a teetotaler who makes a nice living running a barroom. The ideological cover wears very, very thin. So that when Mr. Stiglitz tells us, “The IMF never wanted to harm the poor and believed that the policies it advocated would eventually benefit them,” we don’t really care. In fact, the IMF doesn’t “believe” anything. It is a financial institution, not a human being. It operates according to economic and political forces, and it doesn’t “want” or “not want.” Among the forces behind the IMF is the U.S. Department of the Treasurythe United States is the only shareholder at the IMF with the power of the vetoand we know what it responds to: Wall Street and the international financial community. To his credit, Mr. Stiglitz does his part to expose the IMF tendency to remake recessions into depressions. If at the World Bank and the IMF his visions had prevailed during the crises of the late ’90s, instead of the crackpot market madness of Lawrence Summers and Ann Krueger, the collapses might not have been so dramatic, the consequences not so calamitous. Mr. Stiglitz has some good ideas for reform, butand we’re sorry to report thishe is a neoliberal, left behind back there with the first generation of structural adjustments. Deep down in his economist’s heart, if in fact economists have hearts, he disagrees with the Bank and the Fund only over the pace and the crudeness with which they insisted on imposing privatization, decentralization and market liberalization. This insistence, he seems to think, came from the slow-wittedness of IMF specialists rather than the greed of their patrons. Because Mr. Stiglitz does not recognize the real logic of the IMF as an institution, his recommendations for reforming it are optimistic and superficial: It needs to be more transparent, developing country governments need to have more of a say, the financial experts at the IMF should pay more attention to the benign suggestions ofWorld Bank economists, and neoliberal policies should be imposed more gradually, more flexibly. But none of this will happen so long as the same financial forces hold the same place in the balance of political power. For an economist, Mr. Stiglitz does not seem to grasp adequately the uncomfortable fact that money talks. Gabriela Bocagrande repofts On globalization for the Observer. 1/11/03 THE TEXAS OBSERVER 17