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The World Bank’s Broken Promise to the Poor (2015)
- virgil_disgr4ce 9y agoCapitalism: "lol sux 2 be them"
- djschnei 9y agoThe world bank (and central banks in general) are extremely antithetical to the central ideas of capitalism.
- throwawayjava 9y agoThe World Bank pushes privatization of infrastructure, natural resource extraction, agricultural resources, etc. the IBRD's Articles of Agreement explicitly identify "promoting private investment by private investors" as a goal. If that's not part and parcel with capitalism, I'm not really sure what is. Perhaps you protest the other investments WB makes, which fall under its goal of producing "suitable conditions" for private investment (in practice, that means sucking governments dry until/unless they agree to privatization and occasionally ousting non-capitalist leaders from power.) But saying that capitalism stops being capitalism as soon as private investment starts controlling governmental decisions is just defining your way out of a very real and substantive critique of capitalism. Reality and real problems don't go away just because you're being pedantic about the definition of capitalism. The World Bank may not embody "your" capitalism. But by any reasonable definition that avoids this sort of No-True-Scotsman distinction, the World Bank is aggressively capitalist. And certainly the bankers describe themselves (earnestly!) as capitalists. So instead of saying "that's not capitalism", we should discuss whether any system which deifies private investment will eventually end up with organizations like the World Bank. And how to curb those excesses. (Also, the world bank is not really a central bank. If the World Bank is a central bank then we might as well call any very large bank a central bank as well. In both cases, there are analogies but also important distinctions.)
- djschnei 9y agoWould you not agree that distinguishing between free-market capitalism and crony-capitalism brings important value to the discussion? The inclusion of government force or government collusion is hardly a secondary consideration. The ability to wield what is essentially a monopoly on force, is THE most important factor when discussing capitalism vs cronyism. The world bank is the physical embodiment of cronyism, and I maintain, not capitalism. I think it's kind of BS that you can point to THE distinguishing factor between something I argue for and something I argue againsts and say "pedantics"...
- throwawayjava 9y ago> Would you not agree that distinguishing between free-market capitalism and crony-capitalism brings important value to the discussion? As I said, >> saying that capitalism stops being capitalism as soon as private investment starts controlling governmental decisions is just defining your way out of a very real and substantive critique of capitalism Money can buy political power, and in a system that incentivizes profiteering, that political power will eventually be used to generate profit. You call that cronyism. I claim it's the logical conclusion of human nature unfolding within an unabashed free market. You're more than free to re-define terms, but it doesn't change the reality that free market systems invariably cycle through periods of cronyism. Playing around with the definition of capitalism is terminally non-responsive to the claim that free markets, given enough time, invariably breed this style of cronyism. It's like claiming that sugary/fatty foods can't cause coronary artery disease because heart disease is caused by plaque. Technically true, but literally everyone's response is going to be an eye-roll. > The ability to wield what is essentially a monopoly on force Ugh. There's no such thing as a "monopoly on force". It's literally the great equalizer among not just humans but all organisms. You're more than free to go out and build an unbeatable military and take down the evil crony-(not?)-capitalist world order. Who's gonna stop you? If you can't or won't build up the resources and mind share to do so, well, welcome to reality.
- djschnei 9y agoCompletely illogical... > You call that cronyism. I claim it's the logical conclusion of human nature unfolding within an unabashed free market. A free-market is reliant on government power to protect/enforce property rights. You claiming a system which strictly enforces property rights always leads to a system which disregards property rights is absurd. Are you arguing that in order to keep people from wielding governmental power against others, we need to strengthen government? Really? Why not make it so government power being wielded is a non-issue? > It's like claiming that sugary/fatty foods can't cause coronary artery disease because heart disease is caused by plaque. Technically true, but literally everyone's response is going to be an eye-roll. A terrible analogy... What you're arguing is that a diet that avoids sugary/fatty foods will cause heart disease because people end up ignoring diets. That's not a good argument against dieting...
- 1001101 9y agoPerhaps you mean anarchocapitalism or some libertarian strain of capitalism, because, otherwise, this is straight out of the modern capitalism playbook.
- djschnei 9y agoNope, I mean capitalism. Not going to change the definition because cronyism is an easy target to criticize. Crony-capitalism =/= capitalism.
- nfoz 9y agoAre there good examples of non-crony capitalism, when we're discussing markets and populations at this scale? This sounds an awful lot like "authoritarian communism =/= communism".
- djschnei 9y agoAre you talking currently or historically? Historically, TONS. America was for quite a while (still is in some cases, others not at all). Currently, Hong Kong is a great example of a largely free economy. https://www.fraserinstitute.org/economic-freedom/dataset?year=2014&page=dataset&min-year=2&max-year=0&filter=0&most-free=1&quartile2=1&quartile3=1&least-free=1 https://www.fraserinstitute.org/economic-freedom/dataset?yea...
- gasbag 9y agoI'm curious to see some of the historical examples in America, especially if there are TONS of them. Because when I think of "American capitalism at scale" in the old days the only thing I picture are the robber barons.
- djschnei 9y agoI said there were tons of examples historically and that America was one of them (and obviously not in every aspect... these types of things are always on spectrums and not devoid of anomalies)
- wonderous 9y agoIf there is a full-text article on the page, I am not seeing it. Page appears I be for a project and link to a number of other pages. Anyone able to find a better link?
- whorleater 9y agoThe link is to a project by the ICIJ title "Evicted and Abandoned" which consists of a series of articles
- Angelica34 9y agountil I looked at the check of $7869 , I accept that…my… brother had been truley erning money in their spare time on their laptop. . there friend brother has done this for under ten months and as of now paid for the loans on there apartment and bourt a gorgeous opel . pop over to this web-site ====http://www.joinmate2.com http://www.joinmate2.com
- amelius 9y ago> Over the last decade, projects funded by the World Bank have physically or economically displaced an estimated 3.4 million people, forcing them from their homes, taking their land or damaging their livelihoods. And we're finding out about this only now?
- mistermann 9y agoLots of people have known this and other things for a very long time, occasionally it leaks into the mainstream media.
- throwayawnotime 9y agoHello, if I may advise, when I see the term "mainstream media" this is a red-flag for the rest of the post's contents. I think I am not the only one, so you may want to reformulate towards more precision.
- Lagged2Death 9y agoThe World Bank specifically and the neo-colonialist world-view it embodies have both been severely criticised in pretty much this vein since not too long after the bank was founded.
- bostonscott 9y agoSo what's the moral of the story, practically speaking? If you drill a hole in the bottom of your boat; Be selective about whom you let save you?
- pm90 9y agoYou seem to have a prevailing view of undeveloped counties as being there fundamentally because of their "own fault". This is very much akin to blaming the poor to being lazy or incompetent or stupid. While its certainly true that a lot of countries don't have their shit together now, its also true that most undeveloped countries were either under foreign domination (e.g. Indian Subcontinent, most of Africa) or domination by proxy (e.g. China). The moral of the story is: don't accept the propaganda of "International Financial Institutions" as existing strictly for the assistance of developing countries (their stated goal) but rather as a continuation of exertion of power over developing counties through financial means.
- virtuexru 9y agoThis page links to a portal looking landing page; is there supposed to be an accompanying article?
- dublinben 9y agoIt's a collection of articles, but this one appears to be the most relevant to the title: http://projects.huffingtonpost.com/worldbank-evicted-abandoned http://projects.huffingtonpost.com/worldbank-evicted-abandon...
- Torai 9y agoThe World Bank is an organization to steal public and natural resources for private banks and corporations, and alongside the IMF one of the biggest generator of poverty. But I guess we can keep pretending they try to help to Third World countries.
- socratees 9y agoThe article definitely points out the wrongs done by IMF/World bank. Are there any resources you can point me to, such as data / financial reports which highlight how the resources are misused / mishandled?
- Torai 9y ago"On private water: The case for the World Bank to divest" https://www.stopcorporateabuse.org/sites/default/files/resources/shutting_the_spigot_on_private_water_corporateaccountabilityinternational.pdf https://www.stopcorporateabuse.org/sites/default/files/resou... "Impoverishing a Continent: The World Bank and the IMF in Africa" http://www.halifaxinitiative.org/updir/ImpoverishingAContinent.pdf http://www.halifaxinitiative.org/updir/ImpoverishingAContine... "Dismantling The World Bank’s Myths on Agriculture and Development" https://www.oaklandinstitute.org/sites/oaklandinstitute.org/files/OurBiz_Brief_UnfoldingTruth.pdf https://www.oaklandinstitute.org/sites/oaklandinstitute.org/...
- stephen_g 9y agoIt sounds like ridiculous hyperbole, but sadly that is literally how it's turned out. Start by offering development loans to build infrastructure like ports, mines, etc., but then all the proceeds from the resource extraction or agriculture or whatever go back to paying off the loan. Often that's not enough, so the IMF imposes conditions like services to the local population being cut or infrastructure being privatised (usually to foreign companies) to pay back the debt.
- qyv 9y agoWhat is the alternative for the nations that engage them?
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- justinzollars 9y agoIf you want to understand libertarians read: The Creature of Jekyll Island. This goes into the function of the World Bank.
- djschnei 9y agoCentral banks create poverty and maintain power structures; this isn't news.
- azurelogic 9y agoI remember doing a long research paper on the World Bank and IMF around 2000. They're the equivalent of "pay day loans" for 3rd world countries. It's predatory lending at its finest. For those unfamiliar, they generally only give money if countries cut spending on the people (education, health, etc) and open up natural resources for exploitation by foreign corporations.
- JumpCrisscross 9y agoThe countries the World Bank lends to are typically spending at unsustainable levels. It's not a choice between IFC loans and high social spending. It's defaulting on lenders, who may be allies or the domestic population, cutting social spending due to not having money and/or running the presses to hyperinflation.
- chaostheory 9y agoYes and there's a reason why they are spending so much. It's encouraged. The developing country's elites get a big kickback, their nation gets saddled with a horrible loan, while their raw resources leave the country. https://www.amazon.com/Confessions-Economic-Hit-John-Perkins/dp/1576753018/ https://www.amazon.com/Confessions-Economic-Hit-John-Perkins...
- JumpCrisscross 9y agoThe Dictator's Handbook references more reliable and comprehensive research showing the anti-democratic effects of foreign aid. That said, the counterfactual (watching and waiting) risks anarchy. The World Bank was set up, in part, from the lessons of the Weimar Republic. It's a difficult debate that escapes easy answers.
- tomjen3 9y agoDo you know how much it costs to get your water and electricity turned back on? Not to mention that you have to toss any food you have saved and you have to find some way to live without access to toilets, etc for the duration. Compared to that, a payday loan is cheap. Yeah being in that situation is shitty in the extreme, and no none of your options are good, so you are trading very bad for worse.
- Top19 9y agoJohn Cabot, an ambassador in the 1950s, had a good quote: "The UN is meant to prevent you from going to hell, not take you to heaven." The IMF and the World Bank were part of the world superstructure set up alongside the UN, so this quote applies to them. Can't speak about the World Bank, it might indeed really suck. The IMF is a good organization that tries. They've made some bad mistakes, but have learned from them. A good example of this was during the Southeast Financial Crisis that in 97-98 that toppled the Indonesian government and still to this day has left abandoned skyscrapers in Bangkok. At the beginning of the crisis the IMF had a policy against restricting investor access to banks, believing it was better to "let the market work". By the end of the crisis, after South Korea had fallen (fallen meaning they were out of foreign currency reserves), and Japan / Russia looked like it might be next, the IMF had changed positions and was fully committed to using international law to stop irrational investor panic. People forget HOW HUGE THIS WAS. There was a Time magazine cover at the time that literally read "The Committee to Save The World" with Greenspan, Summers, and Rubin on it. Interestingly, though this problem would later help usher in the Dot Com bubble. The regulatory agencies had to lower investor rates to calm investor nerves, even though other people were asking them to not too because of the increasingly worrying NASDAQ IPOs. https://img.timeinc.net/time/magazine/archive/covers/1999/1101990215_400.jpg https://img.timeinc.net/time/magazine/archive/covers/1999/11...
- marcosdumay 9y agoAs a Brazilian that grew up on the 90's watching this situation unwind, I'd thank a lot the IMF for helping us. They really did do good at that time. But they seem to have changed their direction recently, and are really insisting on pushing money into unsustainable places. I don't get their new goals, they don't seem to have any stabilizing effects.
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- derriz 9y agoI lived in a country that recently required IMF support, Ireland, and have a positive view of the IMF as a result. Of course, there were conditions attached to the loans but given that nobody else was willing to lend money to the state under any terms at all, it seemed fair enough. And the interest rate was nothing like "payday" rates. The alternative (a "cold turkey" end to government payments - e.g. no salaries for police, doctors, teachers, etc.) would have caused huge long term damage to society, the economy and would have undermined the legitimacy of the state. On a personal level, if I were lending money to a desperate down-and-out friend who had exhaused all the normal sources of credit including their family, I would probably also ask for lifestyle changes before giving them money.
- hellbanner 9y agoAnyone have a link to the paper by I think, the IMF or World Bank describing how a cryptocurrency (like Bitcoin) could be created? From the ~70s.
- maxlybbert 9y agoJust to play devil's advocate, I've been told that in a negotiation, it's always important to know what your best alternative is (e.g., https://ocw.mit.edu/courses/sloan-school-of-management/15-665-power-and-negotiation-spring-2014/lecture-notes/MIT15_665S14_Class_2_Lect.pdf https://ocw.mit.edu/courses/sloan-school-of-management/15-66... ; "I've been told" because I'm terrible at negotiating). When a country starts to negotiate with the World Bank, generally speaking, their best alternative is to print money; cause hyperinflation; and then pay off their existing debts with the new, worthless, money. It seems to me that the World Bank's terms are better for the poor than that.
- throwawayjava 9y agoIt's hard to tell because the World Bank is so young in the history of nations. Certainly in the short term things are less painful, but having your country's natural wealth siphoned off by other countries (or in many cases absurdly wealthy individuals/companies) has the potential to create real and systematic harms. We could imagine, for example, a United States that became and remained very poor after having all its natural wealth siphoned off by European firms under predatory terms during the Great Depression. It's hard to tell if the world would've been a better or worse place (maybe the profits would've been reinvested into stabilizing Germany's internal politics), but certainly US citizens would be much worse off today. On the other hand, could a World Bank have saved Germany from Nazism and ended the world wars after episode I? Probably. Who really knows.
- pm90 9y agoThis is a good point. In general, predatory lending has been a favorite tool of imperialism, and it continues to sort of be that way even though you don't see explicit imperialism anymore. The crux of the problem is that non-developed nations still have something that developed countries want: either natural resources, or human resources. The IMF is basically a modern version of the Paris Club, and is a tool used to make it cheap and easy to extract these resources/make them available to the global economy, without the explicit threat of military invasion. I don't really see a good solution for "Poor" countries. You can't have people dependent forever on foreign aid. But perhaps the developed part of the world becomes so productive that at least the necessities for productive lives, such as basic education and healthcare, can be provided to "poor" nations. This is what I view the Gates foundational work as doing. It is in the interests of the global community to have stable and safe economies all around the globe. I really hope we can reach that goal sometime in my lifetime....
- JumpCrisscross 9y agoBased on selectorate theory [1, lending to broken governments promotes cronies over the general population. Unfortunately, the alternative (waiting and watching) involves risking complete state collapse. Weighing the evils of the latter, i.e. the lessons from World War II, against the evils of the former, i.e. our present condition of sclerotic autocrats propped up by outsiders fearing outright anarchy, is tricky. This analysis does not appear to do that. Instead, it just measures the cost of being conservative with anarchy risk. The counterfactual (letting those governments collapse through hyperinflation, foreign and/or domestic default and/or austerity and the resulting civil strife) could be better or could be worse, and estimating it will involve lots of speculation. But it deserves to be explored. [1] https://en.wikipedia.org/wiki/Selectorate_theory https://en.wikipedia.org/wiki/Selectorate_theory
- vivekd 9y agoThis data isn't in context, it's not fair to take data like the negative impact of resettlement on its own without also looking at the benefit provided by the projects to the poor.