Private State Departments?

William Krehm

At the very time that American foreign policy seems in full crisis, we are confronted with another puzzling phenomenon. In many areas of foreign policy, the lone surviving superpower is simply not around -even for payments already scheduled. Consequently, it is falling to individual philanthropists of unusual wealth and motivation to step in to replace it. But let Tina Rosenberg (The New York Times, 12/08/01, “Building Their Own Private State Departments”) take up the strange tale:

“When broadcasting mogul Ted Turner agreed last December to pay $34 million of America’s dues to the United Nations, it marked a brave new world of privatization. The Clinton administration turned to a wealthy individual when Congress, embarrassingly, refused to meet an American commitment abroad.

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26

But that would mean that the capitalist principle would have to be observed:

borrowers have the responsibility, lenders take the risk. And that plainly won’t do, when the concentration of power makes it possible to socialise cost and risk.

On First World responsibility for the debt crisis, it is huge — and in this case, the responsibility extends to citizens, insofar as their countries make possible some degree of participation in policy formation, and they do.

The current debt crisis can be traced back to policies of the IMF and World Bank encouraging lending/borrowing to recycle petrodollars in the 1970s. Their very confident recommendations that this was just great for all concerned continued up to the moment of the Mexican default in 1982, when the system threatened to crash, and the same institutions stepped in to socialise cost and debt.

Culpability

Another factor was the sharp rise in interest rates in the US, under the late Carter/Reagan policies of a form of “structural adjustment” here, undertaken with no concern, of course, for the fact that this would impose a crushing burden on Third World debtors, as it did.

Another factor, of course, is Western support for the murderers, gangsters and robbers who borrowed the money for themselves and, naturally, don’t want to pay it back, when they can get the burden shifted to the poor by the same institutions that created the debt in the first place.

First World responsibility is enormous, so much so that if honesty were conceivable, those who supported folks like Suharto in Indonesia, drove the lending-borrowing craze (then bailing out the banks), and sharply increased interest rates as part of the further shift of power to the rich and privileged in the US (and that’s not all), should be paying the debt themselves.

The culpability of Third World governments — say, Suharto in Indonesia – is enormous, but remember that these governments are Western clients, outposts virtually, whose task is to open their countries to foreign plunder, repress the population (by huge massacres if necessary), and enrich themselves if they feel like it (that’s not a responsibility, just an incidental benefit accorded them).

Suharto was “our kind of guy”, as the Clinton administration put it, as long as he fulfilled this role. Much the same holds for other Third World governments.

Those that try to follow another course typically get smashed. For example, Nicaragua has one of the highest debts in the world. The Sandinistas were doubtless corrupt, though not by preferred US standards, but that’s not the reason for the debt: rather, the fact that the US waged a brutal and murderous war to get them back into line.

Note again that culpability of our governments (and their institutions, like the IMF-WB) are also our culpability, to the extent that we have the capacity to influence policy and don’t.

[From Znet Free Update, 2001, April 16.]