agent is the International Monetary Fund, which is the creature of the Wall Street-US Treasury complex. A Bretton-Woods institution once envisioned by Keynes as an international regulator to prevent just what the IMF now enforces, it has mutated into speculative finance�s universal wrecking ball for dismantling societies� defences against unlimited looting in the name of �free trade.�

IMF Commands for Social Suicide to Serve Global Bank Investors

Professor Stiglitz explains that the World Bank, the IMF and their majority stockholder, the US Treasury, issue the same four commands from the centre as obligatory prescriptions to every country across the world. His explanation demonstrates that this omnibus four-step dictate is structured to ruin their economies by every step, and to do so systematically. The first step is what Stiglitz calls �briberization-privatization� � a program of �market reform� by which corrupt officials (e.g., in the former USSR and Brazil) privatize vast resources like oil, electricity, industrial assets, and water for their own 10% commission on hundreds of billions of sales.

The second step is �capital-market liberalization� or the �Hot Money Cycle� in which foreign bank-backed cash speculates in currency, real estate and portfolio funds, flees, drains national reserves in hours or days, and host governments are then required by the IMF to raise interest rates to 30-80% to tempt back the financial speculators who have hijacked the country�s capital funds.

The third step is �market-based pricing� or steeply raising prices on basic life means like food, cooking oil and water, to �squeeze the blood out of� the poor countries (e.g., Indonesia, Ecuador and Bolivia) until �social unrest is predictably sparked� and the �IMF riots� bring in the military solution in which Washington is most internationally invested, while the accompanying flights of capital and public bankrupting allow foreign corporations to pick off the remaining assets �such as mining concessions or ports� at �fire-sale prices.�

Finally, the fourth step is the so-called �poverty reduction strategy by Free Trade� or, in fact, forced mass imports and �tributes� to foreign corporations coerced by �financial blockade� until domestic markets are open to floods of foreign US imports.

By this four-pronged war of financial movement on the third world�s domestic economies, people are, in Stiglitz�s words �condemned to death� by such mechanisms as �impossible� prices for branded medicines monopolized by foreign pharmaceutical companies and forced import of health-despoiling commodities. Throughout, the money loan system has a set of uniform �triggers� for repayment (e.g., �for school building�) which requires every �conditionality� to be accepted, with 111 such �conditionalities� the average of these prescriptions for stripping economies.2

Ergo, the Destruction of Argentina

As all �necessary reforms� in the global market era, the death prescriptions for societies are proclaimed to mean the very opposite of what they demand. False claims are the medium of market communication, including by the ministers of your government. The more false, the greater the certitude of proclamation. Thus under the bold heading of �Improving the Conditions of the Poor,� the IMF demanded in a September 5, 2000, memorandum signed by the Central Bank that Argentina reduce $200-a-month public service salaries by 20%, eliminate union contracts for �labour flexibility,� and slash 13% from the elderlys� meagre pensions. It also demanded �the reform of the [govern�ment�s] revenue-sharing system� so that Wall Street and foreign banks would be paid compound-interest charges on time by siphoning the money from education, health insurance and other public life supports.

Lacking any more public infrastructure to privatize, even water, the IMF demands also included �an open trade policy.� This pegged Argentinian exports to the US dollar for certain loss in the panacea of �global market competition.� Thus domestic industries were undercut at the same time as the public sector was bled dry for foreign banks. The $20 billion loan received from the IMF in this case was retained by Wall Street and its junior partners to pay the $27 billion annual debt-charge payment.

Not to be outdone by the IMF, the World Bank�s President James Wolfensohn � adoringly interviewed by Pamela Wallin last year for Canadian consumers � warmly endorsed the �reforms.� He expressed pleasure at the liquidation of �outdated labor contracts,� and remained confident through the collapse of the economy that the prescriptions were the �appropriate strategy� and all that was needed was �reduce the costs of production� by a �flexible workforce.� Millions of people are now, appropriately, jobless, ruined, and on the streets. The foreign banks, including Canada�s, have refused to redeem the local people�s deposits, but the government freeze on the lower-and-middle-income accounts still allowed the money class to bleed up to $750 million a day out of the country to foreign financial havens.3

In such ways we can decode the ruling formula of turning people�s livelihoods and life conditions into unearned investor accounts, the formula now ruling your own government�s �global free market� policies.

John McMurtry, F.R.S.C.
Professor of Philosophy
University of Guelph

John McMurtry�s Value Wars: The Global Market versus the Life Economy has just been released by Pluto Press (London G.B. and Sterling, Va., 2002).

1. The Cancer Stage of Capitalism. London and Tokyo: Pluto Press and Springer-Verlag, 1999, p. 140. Stiglitz�s original statement was reported by U.S.A. Today, February 16, 1996, p. A1.

2. The text of the Stiglitz interview was reported in �The Globalizer Who Came in from the Cold,� The Observer, October 10, 2001, www.gregplast.com.

3. The September 5, 2000, Technical Memorandum of Understanding and its effects are reported by Greg Palast in �Argentina�s Economic Collapse Engineered by IMF, World Bank,� CCPA Monitor, May 2002, pp. 10-11.

�from Economic Reform, September 2002