Re: World Bank: Yes or No?

["Patrick Bond" <pbond@xxxxxxxxxxxxxx>]

> From:          Chris Brady <chris_brady@xxxxxxxxxxxxx>
> Is there need for much discussion about whether Marxists
> would be in favor of abolishing the World Bank... ?
> For practice, maybe...

Well, if you ask, here's a bit of my piece from the July-August
Monthly Review:

Defunding the Fund,
Running on the Bank

 Two once-impenetrable financial institutions--the International
 Monetary Fund and World Bank--have finally come into activists'
 focus, in a way that in turn sharpens what are often fuzzy
 discussions surrounding globalization and popular resistance. Around
 30,000 protesters joined the Mobilization for Global Justice in
 Washington on April 16, capping a week that began ominously with a
 chilled, poorly attended Jubilee 2000 USA debt relief rally on April
 9 (controversially addressed by neoliberal Clinton economist Gene
 Sperling), a "No Blank Check for China" AFL CIO demonstration of
 15,000 workers at the Capitol on April 12, and dozens of other
 related events. Auspiciously, the bulk of the A16/17 protesters
 rallied around a call for the IMF and Bank to be defunded (not
 reformed), taking further the Seattle spirit that had divided
 "shut-down" demonstrators against the World Trade Organisation from
 reformist leadership of big labor and greenwashed environmentalism.
 God smiled on the 16th, giving the Mobilization the warmth and
 sunshine denied the Jubilee protest, and many more people left
 Washington convinced that taking away the IMF and World Bank's money
 is a logical next step.

 Socialists across the world should be heartened. With momentum thus
 captured by the far more radical Mobilization, enormous ideological
 progress and political maturity can be claimed and consolidated.
 A16/17 was built upon a militant, internationalist platform and
 slogan  "Break the Bank, Defund the Fund, Dump the Debt!"  endorsed
 by a coalition of forces as strong and diverse as Seattle's. The
 legal rally/march was joined by initially nervous trade unionists,
 NGO developmentalists and left-leaning environmentalists. Skillfully,
 the Mobilization's official core of left leaning Washington thinktank
 and NGO staff--notably, 50 Years is Enough, Alliance for Global
 Justice, Center for Economic and Policy Research, Center for Economic
 Justice, the Nader group Essential Action, and Jobs with
 Justice--helped to at least temporarily merge the very different
 agendas of inside Beltway bureaucrats and grassroots activists.
 Labor/NGO/green officials have historically wobbled when faced with
 global political economy issues, as a result of the disadvantageous
 balance of forces prior to Seattle, their often debilitating ties to
 the Democratic Party (and fears of being seen in alliance with
 Republican IMF/Bank bashers), and a faux professionalism heightened
 by dependence upon bourgeois funders. The AFL CIO even supported the
 $18 billion recapitalization of the IMF in late 1998, after obscure
 deal making with the Clinton administration.

 The activists, in contrast, were anxious to conduct a joyous symphony
 of Seattle like lockdowns and street parties to blockade the Bank/IMF
 Spring meetings. To do so, they introduced a cultural liberation
 ambience virtually unknown to Washington, utilizing radical
 participatory democracy and affinity group cell structuring in
 strategy sessions and trainings facilitated by striking young talents
 from the Direct Action Network. In this milieu, Michael Albert
 reported in Z magazine,

 The various tactical wings of the movement  whether seeking to get
 arrested, to militantly protest, to make a public but peaceful
 statement, or just to learn or teach  worked together marvelously.
 Diverse tactics did not trump one another. Tension was minimal.
 Intercommunication was considerable. Coalitions were strengthened
 rather than dissolving into tactical disputes. There was in the
 street mutual aid, careful planning of venues and events, and pre
 demonstration communication of aims.

 Results included abundant forms of civil disobedience and 1,300
 arrests (although the first 600 were unwilling, as police used
 dramatic force during an April 15 Free Mumia protest march and also
 shut the activists' Convergence space on absurd fire code charges).
 Encouragingly, unlike Seattle, the 1,000 strong Revolutionary Anti
 Capitalist Bloc of black clad anarchists worked in harmony with those
 carrying out civil disobedience, and had the honor of attracting a
 police helicopter devoted solely to trailing their movements across
 Washington on April 16. Commitments were made to hone tactics for
 upcoming Philadelphia and Los Angeles political party convention
 demonstrations.

 But most importantly for our purposes here, the Mobilization drew the
 eco socio economic concerns of the Global South far deeper into the
 fabric of the US movement than ever before. Granted, the protest
 failed to obstruct the IMF/Bank meetings due to the massive police
 presence. No matter, the combination of thorough preparation and the
 large size of the turnout in Washington

 _ helped raise public consciousness about the IMF and Bank to
 unprecedented levels,

 _ brought sympathetic activists from different constituencies into
 successful coalition,

 _ taught organizers a great deal about Washington logistics (and how
 they can really be gummed up next time),

 _ showed South allies the extent of solidarity possibilities
 (encouraging them to intensify their own local critiques of the
 IMF/Bank), and also

 _ facilitated a long overdue split amongst development NGOs (a group
 of 22 conservative organisations under the banner of "Interaction"
 sent a bizarre, self discrediting endorsement note to the Bank and
 IMF).

 These protests have set an excellent stage for several years of
 intense grassroots campaigning across the globe aimed at closing the
 Bretton Woods twins, thus fundamentally reorienting our understanding
 of development finance, and in the process rejigging power relations
 in ways that could benefit radical political movements across the
 South. Of course, an activist focus purely on the institutional forms
 of global capitalist (mis)management  the Bank, IMF and WTO  would
 detract from an understanding of both the capital accumulation
 process and class based resistance, and hence could lead to partial
 and imperfect strategic insights about power and social
 transformation.In addition, a focus on these global institutions
 might lead us to neglect national and regional issues and areas in
 which resistance might be more fruitful. Such debates have inspired
 this article, which attempts to interrogate the main lines of
 thinking within the Mobilization and allied groups, and to brainstorm
 about the different ways forward for the growing movement. The main
 conclusion reached is that "bond-boycotting" the Bank and defunding
 the Fund should be supported as integral and unifying components of a
 broader mobilization for class, gender, ethnic, and environmental
 justice.

The IMF, the Bank and the Financial Explosion

 In 1944, the Bretton Woods resort in New Hampshire hosted a
 conference of delegates cochaired by Harry Dexter White representing
 the US Treasury, and John Maynard Keynes representing Britain (but
 more broadly, the interests of the vast majority of countries then in
 debt). The overarching problem was, simply, the restoration of global
 capitalist order at a time when capitalists were profoundly
 discredited (partly thanks to associations with Nazism) or were
 otherwise in political economic retreat, and when socialism appeared
 a dangerous specter (not only because of the USSR's durability but
 because communist and labour movements were resurgent in Europe).
 Reflecting the power of U.S. capital, White was able to establish the
 dollar as the world's primary currency and to construct the Fund and
 Bank so they could be controlled from the White House and U. S.
 Treasury.

 Although the Fund initially encouraged nation-state exchange controls
 so as to limit capital flight, the two institutions founded at
 Bretton Woods would soon reverse that formula by promoting the
 globalization of capital over the globalization of people. The Fund
 was meant to balance the accounts of payments between countries
 (through money exchanged in trade and financial transactions), while
 the World Bank would make injections of project finance starting in
 war-ravaged Western Europe, and later in the South. A few years
 later, the World Trade Organization's seeds were sewn in the founding
 conference of the General Agreement on Tariffs and Trade (GATT) in
 Havana. But it was only in the late 1970s that the full significance
 of the Fund, Bank, and GATT became evident, as institutions which
 could solidify the control of capital in the North over that in the
 South during a period of capitalist crisis marked by a financial
 explosion and stagnating wage compensation, intensifying
 environmental degradation, and the crash of the living standards and
 cultures in the South. They proved very useful in stalling and
 shifting the costs of various crises (the Third World debt crisis of
 the early 1980s, energy finance shocks in the mid-1980s, crashes of
 international stock  and property markets in 1987 and 1992-93, long,
 terribly deep crash of non-petroleum commodity prices from 1973-1999,
 and a spate of bank failures), from the rich capitalist nations onto
 those less powerful. And they contributed to the collapse of several
 decades' worth of ordinary people's living standards across the South
 since the late 1970s, in Eastern Europe since the late 1980s, and in
 Emerging Markets since the mid 1990s.

 A socialist analysis of the dynamic behind finance is critical to
 comprehending the power of the IMF and Bank. What were eloquently
 explained by Harry Magdoff and Paul Sweezy as "financial explosion"
 symptoms of crisis may have stemmed from what some Marxist scholars
 argue is a general tendency to capital "overaccumulation." This
 condition is usually a precursor of massive debt buildup and
 speculation  and subsequent depression  and has recurred periodically
 (1825 45, 1872 92, 1929 48, and 1973 present). Consequent with
 growing gluts in local and then global markets, the supply side of
 capital responds to falling profit rates by seeking higher returns in
 increasingly speculative financial outlets. On the demand side, ever
 amplifying uneven development assures that the growing crisis can be
 "displaced" (moved around, across space and through time), permitting
 flows of funding to switch from one to another circuit of capital,
 sector of investment, geographical location and even level of
 activity (from local to global and back). Financial markets are
 central to this process for they facilitate near instantaneous
 movement of capital across the world, and they convert an obligation
 to pay in cash now for consumption into a future liability, so that
 gluts of overproduced commodities can be (at least temporarily)
 whittled away by credit.

 In very real ways, displacement meant that when bubbles burst  the
 Third World debt crisis (early 1980s), energy finance shocks (mid
 1980s), crashes of international stock (1987) and property (1991 93)
 markets, and the long, terribly deep crash (from 1973 99) of non
 petroleum commodity prices, not to mention a spate of major bank
 failures  it was feasible to shift the costs onto those less
 powerful. Hence the collapse of several decades' worth of ordinary
 people's living standards across the South since the late 1970s, in
 Eastern Europe since the late 1980s, and in Emerging Markets since
 the mid 1990s all felt acutely by workers, peasants, women, children,
 the elderly, indigenous groups and disabled people, as well as
 environments.

 During this period, the Fund and Bank acquired a qualitatively new
 role: coordination power over both economic policymaking and
 financial/aid flows in subordinate countries (though still through
 the overall permission of the US Treasury Department and consistent
 with the State Department's agenda). Fund and Bank coordination has
 meant not merely the certification of countries' policymakers as
 sufficiently pro-market (i.e., especially welcoming of currency
 devaluation, state shrinkage, loss of national economic sovereignty,
 and inflowing financial, trade and foreign direct investments, partly
 to capture privatized assets at healthy discounts and partly just to
 speculate). From the early 1980s, the Fund and Bank also played a
 crucial debt-policing role, firming up the weakened balance sheets of
 those Northern commercial banks and investment funds which stood
 exposed due to the demise of unpopular client-dictators during the
 1980s, and then late 1990s "emerging market" stocks, bonds and
 property. Fund/Bank bailouts were arranged so that New York, London,
 Frankfurt, Zurich, and Tokyo banks could recover (and indeed prosper)
 from 1980s-era Third World debt (which remained on the liability side
 of borrowers' balance sheets), as well as from the devastation of
 currencies associated with speculative runs on Mexico (early 1995),
 South Africa (early 1996 and mid-1998), Southeast Asia (1997-98),
 South Korea (early 1998), Russia (periodic but especially mid-1998),
 and Brazil and Ecuador (early 1999).

 The negative impact of World Bank and IMF policies was so stark and
 obvious that professional and intellectual justification was
 required. The protectionist and inward-oriented economic policies of
 many developing nations were attacked by proponents of a
 laissez-faire, "neoliberal" philosophy consistent with the
 liberalizing interests of international financial/commercial
 capitals. The "Washington Consensus," a market-Stalinist world view
 imposed by the United States through the IMF and the World Bank, and
 supported by associated think-tanks, insisted that the alleged merits
 (future growth and prosperity) of free-market "structural adjustment"
 outweighed the enormous short-term economic, social, gender,
 generational, public health and environmental costs.

 IMF and Bank influence does not occur without contestation, but mass
 popular resistance--the "IMF Riot"--has only rarely been coordinated
 to challenge state power and neoliberalism more generally, and to
 evolve into more durable, democratic movements combining Left
 critique and indigenous organizing processes. At times, Third World
 nationalism has sounded resurgent, as in Venezuela under Chavez. But
 this tradition just as quickly fizzles out once IMF/Bank screws are
 tightened, or worse, turns inward to repress the Left, as in
 Mahathir's Malaysia and Mugabe's Zimbabwe. More hopeful signs include
 the emergence of Zapatismo in 1994, Korean workers' fightback against
 IMF restructuring, mobilizations by the Brazilian Movement of the
 Landless, the graduation of India's National Alliance of People's
 Movements from world class protests against dams and genetic
 engineering to campaigns against neoliberalism more generally
 (including Bill Clinton's recent visit), this January's uprising of
 Ecuadoran Indians against neoliberalism, February's emergence of
 Thailand's Forum of the Poor at a major UN Bangkok meeting, the
 dramatic April revolt of Bolivians against water privatization and
 protests in Chiang Mai, Thailand against the Asian Development Bank
 meetings in May. Though none generated conclusive victories, they
 provide important if incomplete lessons for other protest
 trajectories, alongside recent North led campaigns to halt the
 Multilateral Agreement on Investment, ban landmines, halt toxic waste
 dumping, and prevent the WTO from launching its Seattle round.

 The IMF and Bank are central to imperialism's reproduction, both in
 terms of their power to dictate how the poor countries will "develop"
 and their power to displace the effects of capitalist crisis onto the
 world's poor. They carry out their mandate in a way that entails both
 universal suffering by subordinate classes and the environment. But
 in the wake of the April protests, there are now prospects for a more
 sustainable and radical resistance strategy. For even if the IMF/Bank
 represent merely institutional vehicles through which crisis
 displacement and uneven capitalist development are coordinated, they
 are exceptionally important targets (at least until more serious
 challenges are generated by shopfloor, community, feminist and
 environmentalist protest to local and global manifestations of the
 mode of production itself). Indeed, campaigning to abolish the
 Bretton Woods Institutions and the interests they serve, offers
 possibly the best focus for global class struggle in all its various
 spheres that the Left has yet witnessed.

Strategic Divergences

 There are those, however, who suggest that abolishing the IMF and the
 World Bank is an inappropriate radical strategy. Some envision the
 development of a world state. As the logical consequence of the rapid
 globalization of capital, such a state would imply the creation of a
 global working class and its representation by a working-class party.
 Such a global working class could then contend directly with capital,
 struggling for environmental protection, wealth redistribution,
 peacekeeping, and human rights policing. Socialist intellectuals
 working from the world-systems tradition, social justice philosophy,
 and "cosmopolitan democracy" theory are advancing such a case. Here
 are Terry Boswell and Chris Chase-Dunn in The Spiral of Capitalism
 and Socialism:

 The interstate system is the political structure that stands behind
 the maneuverability of capital and its ability to escape organized
 workers and other social constraints on profitable accumulation.
 While a world state may at first be largely controlled by
 capitalists, the very existence of such a state will provide a single
 focus for struggles to socially regulate investment decisions and to
 create a more balanced, egalitarian, and ecologically sound form of
 production and distribution.

 Sceptical, University of Chicago philosopher Iris Young recommends
 closure of the IMF and Bank, which "do not even pretend to be
 inclusive and democratic." Instead, she argues that a "reasonable
 goal" is reform of the United Nations, "the best existing starting
 point for building global democratic institutions... As members of
 the General Assembly, nearly all the world's peoples today are
 represented at the UN." Moreover, the UN is a site where imperial
 powers "seek legitimacy for some of their international actions" and
 where states "at least appear to be cooperative and interested in
 justice." Likewise, civil society organisations have mobilized around
 UN events and issues.

 The primary problem here is that given the existing and foreseeable
 balance of international power, hopes for eco social progress through
 world state building are utopian (maybe dangerously so). Far more
 likely if this course is pursued, is an expansion of neoliberalism,
 the universal rule of property, and the commodification of all
 aspects of daily life everywhere, with consequent destruction of non
 capitalist eco socio economic processes, amplified through far more
 devastating punishment meted out in the "international community" for
 transgression by oppositional states or popular movements.

 Still other socialists insist upon a global regulatory agenda to
 reign in the power of capital, including the adoption of sanctions,
 usually through trade law, against country exports where child labor,
 health and safety, rights to trade union organizing and comparable
 social and environmental problems emerge. This debate is beyond the
 scope of our IMF/Bank argument (see Hart Landsberg's article in this
 issue for a wise critique), but at least one point should be firmly
 stated here. The first principle of political solidarity entails not
 promoting the power of an oppressor nation against an oppressed
 nation, especially without the consent and indeed request of the
 people most affected. Exceptions include Northern boycotts against
 goods from (or finance to) apartheid-era South Africa and Burma,
 where sanctions called for by mass-popular, democratic movements
 translate into a strategic attack on local oppressors. In cases where
 sanctions do not explicitly link into a mass movement's own
 liberation, it is strategically absurd to lend legitimacy to
 international institutions like the WTO, Bank, and Fund (as well as
 powerful Northern governments) for imposition of new controls on what
 is already a terribly unequal trade, investment, and financing
 relationship with the South.

 A parallel problem emerged in campaigning against the IMF and Bank
 beginning in the early 1980s: reformism has strengthened not weakened
 the two institutions. Indeed, some in Jubilee 2000 North chapters
 (US, UK, Germany and Japan) have viewed the current upsurge in
 protest as an opportunity to lobby for a greater, not lesser role,
 for the IMF, Bank, and their discredited "Highly Indebted Poor
 Countries" debt relief initiative. An impressive Jubilee South
 initiative emerged from debtor countries in 1999, yet it spends an
 unfortunately excessive amount of energy and time arguing against the
 highly-conditional, half-hearted reforms that Jubilee Northerners
 seek, allied with the Pope, Jeffrey Sachs, and bourgeois politicians.

 The US Right also mulls over abolition/reform. Aside from predictable
 hard right rabble rousers, even high profile establishment
 conservatives began calling for the Bretton Woods Institutions'
 closure in the wake of hapless East Asian crisis management.
 Subsequently, the Republican dominated Meltzer Commission reported to
 Congress in March that the IMF and Bank are so badly warped that they
 must shrivel, quite dramatically, before being straightened out. On
 such terrain, it is not unusual to find tactical intersections where
 Right meets Left. These are certainly worth worrying about, although
 a key Left navigator  Nader advisor Rob Weissman of Multinational
 Monitor magazine  insisted recently, "For now, we're so relatively
 powerless compared to [the IMF and Bank], our primary mission is to
 restrain their power. So it's less important to focus on the day when
 we run global institutions than on limiting the harm that they do."

 If running part of a world state remains out of the question, Left
 strategists are faced with the crude choice captured in the slogans
 "fix it" versus "nix it." (A more complex "fix it or nix it" lies
 inbetween to allow Public Citizen and the AFL CIO an opportunity to
 work fruitlessly for a year on WTO reform before perhaps then
 advocating abolition, and more recently a left leaning "shrink or
 sink" line to accommodate Public Citizen's newly radicalized
 constituents.) Fixers correctly argue that the IMF and Bank have been
 pressured to adopt reforms over the past 15 or so years. Nixers rebut
 that these must be measured against the worsening scale of eco socio
 economic damage done over the same period of crisis displacement.

 In five areas  environmental protection, gender awareness,
 transparency, community participation and post Washington Consensus
 economics  reformers can claim limited victories. But those very wins
 have provided the Bank and IMF a coat of whitewash, barely disguising
 their thorough going dedication to hardcore neoliberalism with talk
 of sustainability, in the process dividing unsophisticated
opponents.

[more]
Patrick Bond (pbond@xxxxxxxxxx)
home: 51 Somerset Road, Kensington 2094 South Africa
phone:  (2711) 614-8088
work:  University of the Witwatersrand
Graduate School of Public and Development Management
PO Box 601, Wits 2050, South Africa
work email:  bond.p@xxxxxxxxxxxxxx
work phone:  (2711) 717-3917
work fax:  (2711) 484-2729
cellphone:  (27) 83-633-5548