The anti-capitalist IMF
Noam Chomsky makes an excellent point about the IMF:
"The IMF’s former U.S. executive director Karin Lissakers accurately described the Fund as the credit community’s enforcer. The IMF is very anti-capitalist. For example, suppose I lend you money. And I know that you’re a risky borrower, so I insist on a high-interest rate. Now, suppose that you can’t pay me back. In a capitalist system, it’s my problem. I made a risky loan. I got a lot of profit from the interest. You defaulted. It’s my problem.
That’s now what the IMF is about. What the IMF is saying, to put it in personal terms, is that your friends and neighbors have to pay off the loan. They didn’t borrow the money, but they have to pay it back. And my friends and neighbors have to pay me to make sure that I don’t lose any money. That’s essentially what the IMF is.
If Argentina takes out an IMF loan with huge interest rates because it’s risky and then they default, the IMF comes along and says the workers and peasants and other people in Argentina have to pay for that. They may not have borrowed it, it may have been borrowed by a military dictatorship, but they have to pay it back. That’s what structural adjustment is. And the IMF will ensure that western taxpayers pay off the bank. It’s radically anti-capitalist, whether you like that or not. The whole system has no legitimacy. In fact the whole debt system in the world, which is crushing much of the world, most of it is fake debt.
If Suharto, one of the biggest debtors in the world, borrows money and ends up the richest man in Indonesia or maybe the world, why is it the responsibility of the farmers in Indonesia to pay it off? They didn’t borrow it; they didn’t get anything from it. They were repressed, but they have to pay it off. And the IMF makes sure that the lenders don’t lose money on their risky loan after making a lot of profit from it. Why should the system even exist?"
Read the rest here.
See also from Chomsky, "Starving the Poor" and an audio talk on the rise of South America (talk begins at 16.17mins).
"The IMF’s former U.S. executive director Karin Lissakers accurately described the Fund as the credit community’s enforcer. The IMF is very anti-capitalist. For example, suppose I lend you money. And I know that you’re a risky borrower, so I insist on a high-interest rate. Now, suppose that you can’t pay me back. In a capitalist system, it’s my problem. I made a risky loan. I got a lot of profit from the interest. You defaulted. It’s my problem.
That’s now what the IMF is about. What the IMF is saying, to put it in personal terms, is that your friends and neighbors have to pay off the loan. They didn’t borrow the money, but they have to pay it back. And my friends and neighbors have to pay me to make sure that I don’t lose any money. That’s essentially what the IMF is.
If Argentina takes out an IMF loan with huge interest rates because it’s risky and then they default, the IMF comes along and says the workers and peasants and other people in Argentina have to pay for that. They may not have borrowed it, it may have been borrowed by a military dictatorship, but they have to pay it back. That’s what structural adjustment is. And the IMF will ensure that western taxpayers pay off the bank. It’s radically anti-capitalist, whether you like that or not. The whole system has no legitimacy. In fact the whole debt system in the world, which is crushing much of the world, most of it is fake debt.
If Suharto, one of the biggest debtors in the world, borrows money and ends up the richest man in Indonesia or maybe the world, why is it the responsibility of the farmers in Indonesia to pay it off? They didn’t borrow it; they didn’t get anything from it. They were repressed, but they have to pay it off. And the IMF makes sure that the lenders don’t lose money on their risky loan after making a lot of profit from it. Why should the system even exist?"
Read the rest here.
See also from Chomsky, "Starving the Poor" and an audio talk on the rise of South America (talk begins at 16.17mins).
Labels: Economics, International Political Economy, Noam Chomsky
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