Customer Reviews

10 Reasons to Abolish the IMF & World Bank (Open Media Series)

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I basically agree with most everything propounded in this little book - I just am not sure it's so simple. Jobs are created by demand.

The American public is unaware about how the U.S. government conducts its foreign policy through the IMF and World Bank. The U.S. media has failed to explain to the American public how exactly the World Bank and IMF operate to economically control thrid-world countries. These two organizations actually promote the economic colonization of the third-world. Programs like CNN Pinnacle with Willow Bay provide misleading portrayals of World Bank leaders (i.e. JAMES WOLFENSOHN, PRESIDENT, WORLD BANK). This book fills the gap left by the news media. A very interesting and short read!

Whatever the content of the book, the title agrees with my assertions in my book In the Presence of Our Enemies in which I cover the origins of the Unholy Three, basically created by Harry Dexter White, Soviet agent planted in the U.S. Treasury and John Maynard Keynes, neither of whom had the welfare of the U.S. on their minds at Bretton Woods. Their only differences appeared to be how much gold to leech out of the U.S. to start the agency, $5 billion or $25 billion! These agencies operate without restriction, the employees ride high wide and handsome, travelling at whim in a manner no U.S. employee would be free to do, while the record shows 70% of the projects undertaken end in failure. (ASIN Ellen McClay, In the Presence of Our Enemies)

Anyone who is looking for an economic analysis on why the IMF and World Bank (something that should be done rigorously) should be abolished should look elsewhere. This book is not a condemnation of the IMF and the World Bank, but a condemnation of free trade and capitalism.

He talks about how markets create inequality. My response to that is: so what? People by their very nature are unequal, with skills that are in various states of demand. It is not surprising that an electrical engineer is more valuable, thus gets paid more than and cashier and that a CEO gets paid more than an electrical engineer. The more scarce and in demand (i.e., valuable) your skills are the more you will get paid. Another example is the following: Suppose John makes $20/hr and Jason makes $15/hr, then at the end of the year John gets a 10% raise and Jason get a 5% raise. The inequality between the two have increased, BUT they are both better off because they each make more. Even more importantly, though, is that countries that evolved using markets (the West) have far less economic inequality than countries using so called "planned" economies, i.e., markets do NOT increase inequality, but centrally planned economies do.

He then talks about how businesses will deplete any and all resources in the name of the bottom line, using the logging industry as an example. No industry is so foolish and short sighted. The logging industry knows that if it cuts down every last tree, then it will no longer be in business, so they take steps to avoid this. They modify trees to grow faster, plant a tree for every one they cut down, and rotate through different patches, coming back to the same patch of trees when they are matured, thus they are able to produce on a finite amount of space, without having to expand. The faster a tree can grow the less space is needed to get the same amount of logging. In fact, forest coverage over the world has increased over that last 80 years. Not only is this push for efficiency (doing more with less) true for the logging industry, but is true for all industries. And as technology improves, so does the environment.

Outrageously, he says that the average worker in developed countries are worse off due to free trade. Any check on the facts shows this to be clearly false. Todays average citizen in any developed nation has so much wealth as to be incomprehensible to anyone who lived 100 years ago. In fact, we live in a time of such abundance that even those who can afford cell phones, cars, microwaves, refridgerators, cable TV, etc. are considered to live in poverty.

Another of his 'reasons' on the fallacy of free trade is that none of the developed countries developed in the absence of government intervention. While this is true, what he ignores is that the developed countries developed in an economic atmosphere of substantially less government intervention than in the past. In all of economic history, all around the world, governments have controlled and directed the economy. But most technological and commercial advances took place when governments were weak. As a result, the idea of personal liberty was established during the Enlightenment period. When this took place, the economies of the Western world exploded, giving them the capital to explore and develop. This is the primary reason for the dominance of the West.

Another idea about the evils of capitalism and free trade is downsizing. Companies downsize because they can do more with less. The agricultural revolution means that 1 or 2 people can create enough food for 98 or 99 people. This frees up the 98 or 99 people to do other things besides worry about where they are going to get their next meal. Today, the manufacturing sector in America produces 95% more than it did in 1970, with only 75% of the people in manufacturing during the 1970s. This means that productivity per worker increased by more than a factor of 2. When this occurs companies will naturally lay off workers. Instead of viewing this as an evil, it should be viewed as what it actually is: allowing labor to go where it is most needed. Due to the efficiency of agriculture people were free to work on other things (creating the division of labor), like manufacturing, and creating newer and better services, instead of toiling away on the farm.

I can't remember all of his 'reasons' since I wasn't foolish enough to buy this book, but all of his other 'reasons' are just as weak in fact and logic. Don't buy this book. All but 2 or 3 sentences are wrong.