Time to bury the IMF

Towards an International Bank for Reconstruction and Reparations

Published on Pambazuka News, by Horace Campbell, June 2, 2011.

The demise of the IMF’s former managing director Dominique Strauss-Kahn is an opportunity to dismantle the fund and replace the current financial architecture with one that ‘invests in the repair and reconstruction of livelihoods and the planet’ instead of ‘destruction, dehumanisation, exploitation, and rape,’ writes Horace Campbell …

… EUROPE FEARS THE DEATH OF THE SYSTEM 

With each passing day there are clear signs of the depth of the international capitalist crisis. Austerity measures to save banks in Europe have intensified resistance by workers, youths and students. Inside the USA, the debt ceiling has now placed the US system in a precarious state while the treasury secretary, Timothy Geithner (a member of the Board of Governors of the IMF) fiddles the books to postpone the need for tough decisions to rein in the system where the US can spend a trillion dollars on the military while schools and hospitals are starved of funds. Economists, financiers, journalists, policymakers, politicians and speculators draw attention to the fact that the entire international financial system is now in its death throes. Whether it is the warnings of George Soros who continuously cried that, what we are going through is the crisis of the ‘gigantic circulatory system’ of a ‘global capitalist system that is … coming apart at the seams,’ or economists and activists from the south, there are voices that have made it clear that capitalism is going through a defining moment.

A former chief economist of the IMF, Simon Johnson, argued that the financiers are now using their influence to prevent precisely the sorts of reforms that are needed. Johnson, who wrote about the ‘Quiet Coup’ in relation to the political power of the bankers and financiers in the United States, observed later in his book, ‘13 Bankers: The Wall Street Takeover and the Next Financial Meltdown’, that the financial oligarchs cannot halt the rush to a new financial meltdown. The question is whether societies all over the world, especially Africa are ready for alternatives when this meltdown takes place.

According to Johnson, ‘What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big.’ On the complexity and depth of the crisis, Simon Johnson is not alone. Writing in the London based Financial Times on 8 March 2009, Martin Wolf held that:

‘It is impossible at such a turning point to know where we are going. In the chaotic 1970s, few guessed that the next epoch would see the taming of inflation, the unleashing of capitalism and the death of communism. What will happen now depends on choices unmade and shocks unknown. Yet the combination of a financial collapse with a huge recession, if not something worse, will surely change the world. The legitimacy of the market will weaken. The credibility of the US will be damaged. The authority of China will rise. Globalisation itself may founder. This is a time of upheaval. Technical arguments abound in relation to the necessity for regulation of the financial markets but these interventions fail to grasp the political nature of the depression and the need for a fundamental break with the social production of wealth by the majority and the accumulation by a few.’

These warnings from mainstream commentators seek to divert attention from those in the oppressed South who are calling for the dismantling of the Bretton Woods system and plan for increased taxation of the bankers, especially in the short run with a financial transaction tax.

TIME TO BURY THE IMF: … (full long text).

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