Assuming it is true, it is a piece of utopianism that is arguably socialist in nature. For debtor nations to have to pay interest on their balance of payments deficit, only requires the existence of a global capitalist financial network.
A global financial institution which charges "interest" on the credit of creditor trading nations, means such an institution is levying a global tax, and is a vital organ of an embryonic world government presiding more over the circulation of commodities rather than the accumulation of capital.
Chris Burford
At 01:07 26/09/00 +0100, I wrote:
> From George Monbiot's spirited article in Thursday's Guardian.
>
>Do those knowledgeable in Keynes, accept this characterisation that
>Keynes's model proposed an international financial insitutution that would
>have placed interest charges on *both* creditors and debtors?
>
>Would that be qualitatively different in its workings?
>
>And would this idealist reform, actually represent a major step towards
>socialism - presumably not Keynes's intention?
>
>Chris Burford
>
>London
>
>
>>To me, the abiding mystery surrounding the World Bank and the IMF is why
>>anyone still believes that they are capable of reform. The New Economics
>>Foundation concludes its devastating critique of the two bodies by
>>suggesting only that they should "undergo democratic overhauls". Even the
>>Guardian's usually far-sighted economics editor, Larry Elliott, has
>>argued that those who believe the World Bank and IMF are inherently
>>corrupt "are not only wrong, but are giving succour to extremists on the
>>right who oppose all but minimalist government and despise
>>internationalism". There is, most commentators agree, no alternative to
>>the existing global financial system.
>>
>>This is not a consensus that John Maynard Keynes would have joined. In
>>1944, he warned that a
>>financial system which imposed penalties and strictures on debtor nations
>>but not creditor nations would ensure that the rich became richer and the
>>poor became poorer. He proposed a global financial institution which
>>would charge interest on both debt and credit. Creditor nations would
>>thus be encouraged to spend their surpluses in debtor nations,
>>automatically correcting imbalances in trade.
>>
>>The US proposed an alternative system. Help for debtor nations would be
>>confined to a fund and a bank which lent them money when they got into
>>trouble. These would both be based in Washington and effectively
>>controlled by the creditors. As Keynes foresaw, the US proposal would
>>ensure both that debtor nations fell further into debt and that creditors
>>- the US in particular - could exercise ever-greater economic and
>>political power over them. But the US told Britain that if we didn't
>>accept its proposal, we wouldn't get our war loan.
>>
>>The World Bank and the IMF, in other words, were conceived as the
>>policemen for a coercive and grossly unbalanced world order. The idea
>>that they could deliver anything but disaster for the world's poor is
>>laughable. If, as they will claim in Prague, they want to help build a
>>fairer world, then they must start by closing themselves down.
>
>