-----Original Message----- From: Patrick Bond <pbond at wn.apc.org> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com>
-Comrade Nathan, your fine supply of inside-beltway details and grasp -of Democratic Party subtleties bring out a certain degree of fury -about financial injustice in me, so permit me a rave.
I don't think your comments are a "rave", especially given the consequences of the IMF in devastating economies around the world. And your argument that the very existence of the IMF helps strengthen reactionary elements within government vis a vis progressive mass forces is exactly the progressive argument against IMF recapitalization. And you can point to examples of times of capital repudiation (although the 1930s is problematic as a low point of capitalist confidence globally).
It is especially compelling in the democratic states like Brazil and South Africa where the IMF so specifically intervenes based on domestic politics in a fundamentally undemocratic way. As the NY TIMES reports about the Brazilian package, "inside the U.S. Treasury, there is concern that President Fernando Henrique Cardoso may not have the clout necessary to push through some of the politically painful spending cuts that the loan package requires. Like most IMF aid, the Brazil package will be turned over to the country in stages, as the Congress enacts the conditions."
But I also think you simplify the politics of emerging economies to assume that left forces all would prefer having the oxygen of IMF help (however foul the air) cut off completely in the hopes that the left could win out in the financial chaos that would follow. South Korean unions not only signed on to the IMF loans but actively lobbied for the money: "Park In Sang, president of the Federation of Korean Trade Unions, said after the meeting [with Kim Dae Jung] that he would write letters to the International Monetary Fund and to international bankers to assure them that his unions would respect the $57 billion I.M.F. agreement to help rescue South Korea, including the requirements that Seoul loosen labor practices and open financial markets."(NY TIMES, Dec 27, 1997) Their judgement, possibly misplaced, was that they would do even worse in the absence of the bailout, even as those same unions have sponsored a series of mass strikes against specific terms of that IMF austerity plan.
The AFL-CIO and other left forces in the US that have supported IMF recapitalization may be responding for some of the bad reasons you note (ignorance, self-interest) but there is also a strong element of responding to progressive forces in places like South Korea and, yes, South Africa who favor the availability of IMF loan bailouts as the lesser of evils.
As you note, there are deep divisions in the South Africa progressive movement over accepting IMF funds. Given those deep divisions there, you should hardly be surprised if there are divisions among people of good faith in how to respond to progressive divisions over the IMF in places like South Korea, South Africa and Brazil.
Is it really the proper role of progressives in the United States to say, well, Kim Jae Jung & the Korean unions and Nelson Mandela & COSATU leadership are stupid and we know better than them what is good for their political/economic health, so as United States activists we will cut off loans that their democratically-elected governments have requested?
Of course, the IMF itself then undermines those democratic governments by blackmailing them into austerity programs. So that is the argument for US progressives fighting to cut off recapitalization, despite the desires of many progressive forces in those countries to, however reluctantly, accept the lure of IMF bailouts.
This is a global democratic dilemma where both the economic and political consequences of either choice is not clear, so people of good faith and similar values can end up on opposite sides.
The best solution, obviously, is to escape this Prisoners Dilemma altogether and have institutions of multilateral lending based on values of economic equity and sustainability rather than primarily serving the interests of financial elites.(And I emphasize "primarily" since it is the secondary results that lead some progressives in all these countries to reluctantly support the continuation of the IMF). Just as US progressives have pushed for labor and environmental standards to become key parts of any new trade agreements, they are pushing for such standards to become part of the IMF.
As I detailed, the Progressive Caucus and other allies don't have majority control of the government. They can bargain with the executive branch to push for changes, but we need to expand progresive power within our government to really succeed in that endeavor. Now, there is one argument (especially by those in the US who disdain really fighting for power within the electoral realm, preferring propaganda efforts to campaigns that lead to election) for just saying no to the IMF on the assumption we will never have the power to change it.
The other side of this whole dilemma is strengthening the coordination and strategic planning between progressive forces in emerging economies and with the US & Europe. Any real reform of the international financial system will need a much more coordinated sense of alliances across national boundaries.
But given the heinous, inhuman results of these day-to-day choices in the present system of financial austerity and debtor's prisons, these divisions among progressives over strategy are going to be deep and often nasty.
My biggest worry is that such divisions (a natural result of such shitty alternatives created by the capitalist system) will go beyond a vigorous internal ideological struggle but instead retard the broad global mass grassroots unity we need to fight for a better alternative system.
--Nathan Newman