[Fwd: Henwood on Kanbur and Stiglitz]

[Xxxx Xxxxx Xxxxxx <xxxxxxxx@xxxxxxxxxxxxxxx>]

See how the Nation magazine article muddles the political discourse and
then turns it against Marxists by its liberal preachers.

Xxxx
--

Xxxx Xxxxx Xxxxxx
PhD Student
Department of Political Science
SUNY at Albany
Nelson A. Rockefeller College
135 Western Ave.; Milne 102
Albany, NY 12222



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You say humanist as if its a bad thing.

Wasn't Marx a humanist, broadly defined? Come to think of it, he was an
imperialist too. To wit, his well known passage on India. Perhaps his
imperialism and ethnocentrism got the better of his humanistic tendencies
from time to time.



-----Original Message-----
From: Xxxx Xxxxx Xxxxxx
To: ipe@xxxxxxxxxxxxxxxx
Sent: 9/21/00 11:10 PM
Subject: Re: Henwood on Kanbur and Stiglitz



Stiglitz is a "humane reformer who sincerely care about the world's
poor"? The article is a humanist/imperialist propaganda, broadly
defined.


Xxxx




>Clifford Poirot wrote:


>Many thanks for this article. It fits in perfectly with topics I am
>discussing in development economics at present.

There is much I liked about this article, but it did not explore the
differences between those who want to reform the IMF/World Bank and
those
who want to abolish it. Surely, this difference is a good topic for the
list. Also, if we are going to discuss those who want to abolish the
IMF/World Bank we should include more mainstream and free-market
critiques
of the Bretton Woods Institutions.


> -----Original Message-----
> From: mckeever [SMTP:mckeever@xxxxxxxxx]
> Sent: Wednesday, September 20, 2000 10:46 AM
> To:   ipe@xxxxxxxxxxxxxxxx
> Subject:      FWD: Henwood on Kanbur and Stiglitz
>
> This article presents one view of the policies at the WB and IMF.
>
> McKeever
>
> The Nation - October 2, 2000
>
> Stiglitz and the Limits of 'Reform'
> Doug Henwood
>
> It's global protest time again. When Bill Gates and other members of
> the global elite gathered in mid-September for the World Economic
> Forum in Melbourne, Australia, thousands of union members and
> activists filled the streets to protest the effects of unfettered
> free trade. The next opportunity to trouble a convocation of the
> world's bigwigs is in Prague at the end of September, when the World
> Bank and International Monetary Fund hold their annual meetings. In
> April, their midyear meetings brought thousands to Washington and
> shut down the city
>
> There's a long-standing split among those who protest and criticize
> these institutions - and their close relative, the World Trade
> Organization - between those who'd reform them and those who'd prefer
> to shut them down. Two forced departures from the World Bank have
> made the limits of reform irrefutably clear.
>
> The first was the exit of former chief economist Joseph Stiglitz at
> the end of 1999. Stiglitz had made one too many public criticisms of
> the economic policies preferred by the bank and its ultimate master,
> the US government. And more recently, Ravi Kanbur, an outside
> economist whom Stiglitz brought aboard to supervise the writing of
> the bank's annual World Development Report, resigned "in anger" (as
> the New York Times put it) in June when he was ordered to revise the
> document to conform to the party line that growth is the highest good
> of economic policy.
>
> Stiglitz was appointed to his World Bank post in December 1996. Long
> regarded as one of the leading theorists in his field - and
> frequently tipped as a future Nobelist - he served on Bill Clinton's
> Council of Economic Advisers from 1993 until his move over to the
> bank. Despite this respectable pedigree, Stiglitz started causing
> trouble almost from the first.
>
> He attracted worldwide notice with a January 1998 lecture in Helsinki
> in which he criticized the "Washington consensus" - the austerity,
> privatization and deregulation agenda that had become the standard
> policy prescription for much of the world - as misguided and often
> disastrous. He pointed out that the historically unprecedented rapid
> economic growth in East Asia - and with it the increases in life
> expectancy, literacy and other social indicators - was the result of
> the sort of state intervention that the bank frowns on. He also
> pointed out that the 1997 financial crisis that interrupted that
> growth was in large part the result of the reckless decisions of
> private investors. But instead of drawing the proper conclusions,
> Stiglitz noted, market ideologues were using the crisis to discredit
> state intervention and promote more market liberalization. He further
> argued that moderate inflation is pretty harmless, budget deficits
> aren't necessarily evil, privatization isn't a panacea and
> deregulation of domestic and international financial markets can do
> serious harm. For a senior World Bank official to say these things is
> a bit like a Pope denying the Virgin birth.
>
> As his tenure progressed, Stiglitz elaborated on these themes. He
> publicly rued the fact that workers and small businesses were
> "getting screwed" because they were inadequately represented in
> decision-making. He criticized the IMF - without mentioning it by
> name - for making the Asia crisis worse by imposing austerity
> programs instead of stimulating imploding economies and shoring up
> social safety nets. He proposed that restricting the freedom of
> global capital movements could make the world less crisis-prone. He
> mused that the disastrous results of economic reform in Russia were
> "not just due to sound policies being poorly implemented" but to "a
> misunderstanding of the foundations of a market economy"earning him a
> public rebuke from World Bank president James Wolfensohn.
>
> The accumulation of sacrileges became too much, and Stiglitz's
> "resignation" was announced last November, an occasion that led
> Treasury Secretary Lawrence Summers to praise Stiglitz as a "major
> creative and intellectual force." The Clinton Administration said it
> had played no role in the exit. In fact, according to World Bank
> insiders Summers informed Wolfensohn that if he wanted another term
> as World Bank president, Stiglitz had to go - so Stiglitz went.
>
> Stiglitz was kept on as a consultant, but his contract was terminated
> in May. It's said the last straw was an article he wrote for The New
> Republic that, aside from reiterating his policy criticisms,
> contained this, passage: "The older men who staff the fund ... act as
> if they are shouldering Rudyard Kipling's white man's burden. IMF
> experts believe they are brighter, more educated, and less
> politically motivated than the economists in the countries they
> visit. In fact, the economic leaders from those countries are ...
> brighter or better-educated than the IMF staff, which frequently
> consists of third-rank students from first-rate universities." Policy
> disputes are one thing, but this was just too harsh a truth to utter
> in public.
>
> Ravi Kanbur was an inconvenient leftover from the Stiglitz days.
> Together they had opened up the drafting of the World Bank's annual
> World Development Report, its flagship document. A draft was posted
> on the web, and public comments were actively sought, Its drift was
> that contrary to standard development doctrine, growth wasn't enough
> to lift the poor out of poverty - policy had to be actively tilted in
> their favor. (It should be remembered that we're not talking about
> people who skip a meal now and then: The bank's definition of poverty
> is an income of less than $1 a day, a ration on which 1.2 billion of
> the world's people subsist.) This openness was a departure from past
> practice, in which the reports were written by staff economists under
> the supervision of elite journalists on loan from The Economist or
> the Financial Times.
>
> The US government, in the person of Summers, was outraged by Kanbur &
> Co.'s draft. As one participant in the process put it, the Clinton
> Administration had essentially embraced the trickle-down economics
> that Democrats had run against for decades. Kanbur was ordered to
> rewrite the report to be more "pro-growth." He resigned instead. In
> the final version, among other changes, discussion of the importance
> of income distribution to poverty reduction largely disappeared.
>
> A lot of bank staffers were upset by the departures of Stiglitz and
> Kanbur (though even Stiglitz's supporters concede he was a poor
> manager), but the public executions were a clear warning to any
> future dissenters. None of the sources for this article, for example,
> wanted to be quoted by name, even though the bank's mission statement
> swears that it is an institution based on an ethic of "personal
> honesty, integrity, commitment; working together in teams - with
> openness and trust; empowering others and respecting differences."
>
> Though ostensibly multilateral institutions, and formally part of the
> United Nations, the World Bank and IMF are essentially run by the US
> government. As MIT economist Rudiger Dombusch put it a few years ago,
> "The IMF is a tool of the United States to pursue its economic policy
> offshore." The bank has a reputation for being a bit softer than its
> neighbor across Washington's 19th Street; it is, by its mission and
> by the preferences of many of its staffers, devoted to poverty
> reduction and economic development, while the IMF is the guardian of
> financial stability and political orthodoxy. There are some good
> people with good intentions working for the bank; the fund is staffed
> mainly by disciplinarians. But the fates of Stiglitz and Kanbur make
> it clear that there are severe limits on how much good can be talked
> about, much less done, by the World Bank.
>
> Treasury Secretary Summers, who purged Stiglitz and Kanbur, was
> himself chief economist at the World Bank from 1991 to 1993. In that
> role, Summers made headlines when a memo attributed to him -
> suggesting that Africa was "vastly under-polluted" and that "the
> economic logic behind dumping a load of toxic waste in the lowest
> wage country is impeccable" - was leaked to the press. This past
> April, when I asked Summers whether Africa was still vastly
> underpolluted, he said, after conceding that this was a "fair if not
> friendly question," that it's long established that he was merely
> being ironic and provocative. He also praised the 'moral energy" of
> the protesters who'd come to Washington to complain about the World
> Bank and the IMF, unaware that I'd overheard him just an hour earlier
> celebrating the "proactive" arrest of hundreds of them who hadn't
> committed any crime.
>
> Neither Stiglitz nor Kanbur is a radical by any standard; both are
> humane reformers who sincerely care about the world's poor. But even
> that was too much for the World Bank and the IMF. The impeccable
> logic by which they operate will hear no appeals; their decisions are
> final.
>
> ----
>
> Doug Henwood, a Nation contributing editor edits the Left Business
> Observer. His latest book, A New Economy?, is due out late this year
> from Verso.
>
>
>
> _______________________________________________
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> http://lists.essential.org/mailman/listinfo/stop-imf
<http://lists.essential.org/mailman/listinfo/stop-imf>


--


Xxxx Xxxxx Xxxxxx
PhD Student
Department of Political Science
SUNY at Albany
Nelson A. Rockefeller College
135 Western Ave.; Milne 102
Albany, NY 12222


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