Customer Reviews

Your Money or Your Life: The Tyranny of Global Finance

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This book goes into detail on the problems of globalization, debt relief for developing countries, the international flow of capital, the World Bank, and the IMF. The book makes a very good case for debt relief for poor countries. As Toussaint points out, in most cases the borrowed money went straight into the pockets of dictators and corrupt officials, and was never invested in the country at all. It therefore seems nothing short of ridiculous to expect repayment from the present governments and peoples of these countries, who never saw any of the money. Do we really expect developing countries to shut down their school systems and courts to be able to make payments on these debts?

Toussaint is also convincing on the subject of radical reform or outright elimination of the World Bank and the IMF. These institutions have consistently failed in the economic stabilization and development of poor countries that was their supposed mission. Today they are more of a force dragging down developing countries than pulling them up. Toussaint is very good on the need for a Tobin tax and other controls on the international flow of capital.

Toussaint misses the boat on some economic issues. He points out that GDP is a poor measure of economic growth, but doesn't discuss more accurate statistics such as the Index of Sustainable Economic Welfare (ISEW). Toussaint wants growth so that the developing countries can be lifted out of poverty. What he doesn't mention is that if growth is accomplished by overexploitation of natural resources and pollution of the environment, as it usually is these days, in the long term this will mean more poverty. Since GDP does not account for changes in population, exhaustion of resources, or declining quality of life, increase in GDP is certainly not evidence of prosperity. I think the best we can hope for is the steady state economy; further economic growth is just not possible. This is not necessarily a bad thing. For more on this, I would suggest Herman Daly's book "Beyond Growth."

Toussaint is a fan of low prices for consumer products, apparently out of concern for the poor. I see the difficulty here as that low prices exacerbate the exhaustion of natural resources. Developing countries today are being systematically cheated out of the true value of their resources. An example is oil, today found mostly in developing countries. Given that a barrel of oil takes millions of years and tons of plant material to make, an accurate price would be nearer $700 a barrel than today's $70 a barrel.

Toussaint also wants the developed countries to open their borders to migrants from impoverished countries. This is totally wrongheaded. Such opening would very likely bring on a worldwide ecological collapse. Toussaint is being way too optimistic here about the worldwide economic future. The next decade is likely to see very substantial declines in the standard of living in both developed and developing countries, due largely to climate change and the passing of the global oil production peak. The developing countries are not going to be able to export their people or their problems to the rest of the world. Developing countries do have some advantages in these times, in that they are less oil-dependent than the developed countries are. Developing countries need to capitalize on their advantages, reduce their populations, and focus on their local markets. Dependence on international export for development is a futile exercise. In the developed countries, reducing unsustainable populations is equally necessary, and refocusing from global to local markets will be a must. For more on this, see Kunstler's book "The Long Emergency."

Toussaint also takes aim at the global patent system. Toussaint sees the patent problem as another example of the rich countries exploiting the poor, making drugs too expensive for people in poor countries to afford. The reality is that high-tech medicine in rich countries has long since reached the point of diminishing returns. The fact that a drug is under patent does not necessarily mean it is better than other drugs; in fact, the opposite is often true. In any case, most drug patents have surprisingly short lives, no more than a few years. The health care systems of developing countries would be better off if they forgot about patented drugs and focused on more-value-for-the-money health care improvements.

Toussaint opposes privatization of government assets and in some cases supports nationalization or re-nationalization of such assets. Toussaint makes a good case that in some countries privatization has been botched. I don't see, though, that the problem is privatization as such; more that the process should generally proceed slowly and that controls on the international flow of capital are a necessity. These assets, after all, were not contributing anything to government coffers when they were under government control; quite the contrary, they were a drag on the budget.

The book itself is rather unfocused, and is dull and academic in spots. It addresses many important issues, though. Some of Toussaint's proposals are excellent, others would only make matters worse. I would recommend the book for anyone with an interest in globalization and world poverty. Read it with a large grain of salt, though.