No other financial organization has affected the lives of the majority of the world’s population more profoundly over the past fifty years than the International Monetary Fund (IMF). Since its inception after World War II, it has expanded its sphere of influence to the remotest corners of the earth. Its membership currently includes 188 countries on five continents.
For decades, the IMF has been active mainly in Africa, Asia and South America. There is hardly a country on these continents where its policies have not been carried out in close cooperation with the respective national governments. When the global financial crisis broke out in 2007, the IMF turned its attention to northern Europe. Since the onset of the Euro crisis in 2009, its primary focus has shifted to southern Europe.
Officially, the IMF’s main task consists in stabilizing the global financial system and helping out troubled countries in times of crisis. In reality, its operations are more reminiscent of warring armies. Wherever it intervenes, it undermines the sovereignty of states by forcing them to implement measures that are rejected by the majority of the population, thus leaving behind a broad trail of economic and social devastation.
In pursuing its objectives, the IMF never resorts to the use of weapons or soldiers. It simply applies the mechanisms of capitalism, specifically those of credit. Its strategy is as simple as it is effective: When a country runs into financial difficulties, the IMF steps in and provides support in the form of loans. In return, it demands the enforcement of measures that serve to ensure the country’s solvency in order to enable it to repay these loans.
Because of its global status as “lender of last resort” governments usually have no choice but to accept the IMF’s offer and submit to its terms – thus getting caught in a web of debt, which they, as a result of interest, compound interest and principal, get deeper and deeper entangled in. The resulting strain on the state budget and the domestic economy inevitably leads to a deterioration of their financial situation, which the IMF in turn uses as a pretext for demanding ever new concessions in the form of “austerity programs”.
The consequences are disastrous for the ordinary people of the countries affected (which are mostly low-income) because their governments all follow the same pattern, passing the effects of austerity on to wage earners and the poor.
In this manner, IMF programs have cost millions of people their jobs, denied them access to adequate health care, functioning educational systems and decent housing. They have rendered their food unaffordable, increased homelessness, robbed old people of the fruits of life-long work, favored the spread of diseases, reduced life expectancy and increased infant mortality.
At the other end of the social scale, however, the policies of the IMF have helped a tiny layer of ultra-rich increase their vast fortunes even in times of crisis. Its measures have contributed decisively to the fact that global inequality has assumed historically unprecedented levels. The income difference between a sun king and a beggar at the end of the Middle Ages pales compared to the difference between a hedge fund manager and a social welfare recipient of today.
Although these facts are universally known and hundreds of thousands have protested the effects of its measures in past decades, often risking their lives, the IMF tenaciously clings on to its strategy. Despite all criticism and despite the strikingly detrimental consequences of its actions, it still enjoys the unconditional support of the governments of all leading industrial nations.
Why? How can it be that an organization that causes such immense human suffering around the globe continues to act with impunity and with the backing of the most powerful forces of our time? In whose interest does the IMF work? Who benefits from its actions?
Human beings have become 'civilized' during their history on planet Earth. As part of the process of becoming civilized, economies have developed. Rather than each person bartering for things they want and/or need, and rather than a social system that provides basic needs for everyone who participates, civilization has produced a system wherein a value system is set in place and everything is measured against that system of values. Gold, has been historically valued, identified as 'the standard' and used as a trading mechanism. Silver, art, and many other items have been used and are used, but gold and the perceived value of gold are the standard by which other objects and people are measured.
In a local area, one person who is able to accumulate the greatest wealth (greatest value in terms of holding of gold) would become the dominate person in that area. The wealth could be described in terms of land owning, or cattle, or in many other terms, but the bottom line evaluation would be against a background of gold.
Internationally, one nation is valued against another by the wealth it controls compared to other nations in much the same way individuals are ranked on a local level. Today, on the world stage, oil has great value.
Failures of feudalism were an impediment to development of Europe's industrial economic growth. Adam Smith convinced the world that the best economic model would follow the dictates of capitalism.
The basic principles of capitalism appear sound. It is a social system based on the principle of individual rights. In politics, the idea is to allow things to proceed on their own without interference from government. We love to throw in the word "freedom" or "laissez-faire" to make it sound good. On the legal side, it imposes a series of laws. According to the theory, these would be 'objective laws' making such a system superior to laws arbitrarily imposed by other humans. Economically, this is where it all counts, these freedoms and laws are applied to economic production and theoretically results in a 'free market'.
Since world war two, the idea of capitalism and developing countries have been merged. Those countries whose economies were not up to 'world standards' were deemed in need of support. To assist those 'developing countries', the capitalist nations who were victorious in the war, established various mechanisms to assist those less fortunate countries. Chief among the tools used to 'assist' the poor nations of the world was the IMF... the international monetary fund.
The IMF has the ability to lie and deceive on a scale beyond understanding. This is an organization that has absolutely no integrity. While pretending compassion, the IMF demonstrates that it has only contempt for humanity as it turns a 'blind eye' to humankind's suffering.
John Maynard Keynes, representing the failed empire of England, was looking to regulate the world-wide balance of trade. His concern was that countries with a trade deficit (bombed out England) would be unable to improve by paying ever greater interest amounts to service their ever growing debt. The IMF and similar institutions would be the accounting department between nations and would measure the value of trade between nations.
Headquartered in the United States, the IMF has used exactly this sequence of more and more interest required to pay against an ever growing debt to dominate poor nations of the world and to transfer whatever wealth was there to the industrial nations of the world.
This systematic rape of third world countries is now moving into the poorest countries of western Europe. Most recently in the news, we've had Greece, Portugal, Ireland and Spain.
In the European Union, most real decision-making power on money, rests with each of the 19 national governments who use the euro as their currency. Under these organized operations, run by the wealthy persons and wealthy nations of the world, we are exaggerating the divisions of the world along lines of wealth and making the entire situation worse for all of us.
Common sense lets us know that eventually, there have to be consequences. Some form of corrective action will ensue. It cannot go on and on without adjustment. Are we paying attention to what is going on in the world around us? A planned reversal would be better than riot and revolution. And, that is the truth !!!
of Various Subjects