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Joel Geier

International Monetary Fund: Debt Cop

(April 2000)

From International Socialist Review, Issue 11, Spring 2000.
Downloaded with thanks from the ISR Archive Website.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The International Monetary Fund (IMF) was set up in 1944 by the U.S. in order to restore the world trading system after its breakdown during the Great Depression of the 1930s and the Second World War. For 50 years, the IMF has been an instrument to serve the changing needs of the U.S. in its pursuit of an unwavering goal: unification of the world capitalist market under U.S. domination.

The IMF is the ultimate financial arbiter. It decides which countries are eligible for international loans. It was established originally to advance loans to countries to pay for the import of materials and goods vital for modern production and social life. Later, the IMF regulated debt, and currently its main role has been to support troubled banking systems. The IMF dictates policies that determine economic conditions for nations – and often the margin between life and death for many people.

Nominally, the IMF is an international body of 182 member countries, but even the New York Times, in an amazing flash of candor, confessed, “It acts as the lap dog of the U.S. Treasury.” [1] The U.S. leverages its control over this ostensibly multilateral body to force compliance from other countries with U.S. economic policies.

The IMF and the Bretton Woods system

If war aims are stated which seem to be concerned solely with Anglo-American imperialism, they will offer little to people in the rest of the world, and will be vulnerable to Nazi counter promises. The interests of other peoples should be stressed, not only those of Europe, but also of Asia, Africa and Latin America. This would have a better propaganda effect.
Confidential memo from the Economic and Financial Group of the Council on Foreign Relations to the State Department, April 17, 1941. [2]

The IMF and the World Bank were set up at an international conference held at Bretton Woods, New Hampshire, in July 1944. This parley of the coming victors of the Second World War framed the financial architecture of the postwar economic settlement. John Maynard Keynes for Britain and Harry Dexter White, the Under Secretary of the U.S. Treasury, were the principal authors of the Bretton Woods Agreement. White was a leading left-wing New Dealer and the highest government official to be charged as a Communist spy under McCarthyism. White more than Keynes crafted the original IMF plan and made it conform to American requirements. But White clearly agreed with Keynes’ revision of classical free market doctrine, supporting government intervention to stimulate demand and market regulation as a means to overcome the market’s tendency to periodically self-destruct. [3]

The IMF’s goal was to avoid a repeat of the debacle of the 1930s, when currency exchange controls undermined the international payments system that was the basis for world trade. Trade in the 1930s became largely restricted to currency blocs (groups of nations that use an equivalent currency, such as the Sterling Bloc of the British Empire). These blocs retarded the international flow of capital and foreign investment opportunities. Moreover, the “beggar thy neighbor” policies of 1930s governments – using currency devaluations to cheapen and therefore boost exports – produced a deflationary spiral, which caused decreasing national incomes, shrinking demand and a decline in world trade. The breakdown of world trade exacerbated the Depression. Unless this problem was corrected, American capitalism’s postwar international expansion would be threatened. [4]

During the war, the U.S. experienced rapid industrial growth and capital accumulation, while its rivals were militarily and economically shattered. The U.S. temporarily held a majority of world investment capital, manufacturing production and exports. It used its predominant position to restore an open world economy, unified under American control, that gave the U.S. unhindered access to markets and raw materials. The U.S. aimed to penetrate markets that had been previously closed to other currency trading blocs, as well as to open up opportunities for foreign investments for U.S. corporations by removing restrictions on the international flow of capital. The White-Keynes IMF plan sought to end restrictions on the transfer of goods and services from one country to another, eliminate currency blocs and lift currency exchange controls. Payments for international trade would occur through convertible currencies, all interchangeable at fixed rates to the dollar, which in turn was convertible on demand to gold. The rule of the dollar-gold standard was the pivot of the Bretton Woods agreement. Daniel Singer explains:

On paper the draftsmen set up a multilateral, international institution to deal with the financial problems of the world. At its heart was the International Monetary Fund (IMF), which was to authorize the very exceptional adjustments in the fixed rates of exchange, but also to act as a supplier of liquidity. (Gradually it became a lender of last resort.) It was to fulfill this function thanks to a fund filled by members’ contributions according to a complex mechanism of quotas, determined by the given country’s economic strength, which also signaled the amount of money that country could borrow – To show accurately the crucial role of the United States, it is not enough to point out that the American quota in the IMF, by far the biggest, prevented any decision from being taken without Washington’s consent or even to stress that the new monetary arrangement was in fact a gold-dollar exchange standard, since all currencies were linked to the dollar valued at $35 per ounce of gold. To do it full justice, one must describe the arrangement itself as an instrument of American domination.

The reasons for the precedence given to the American delegation and U.S. business interests are plain to see. At the end of the war, in economic terms, there was only one victor. The United States accounted for about half the world’s manufacturing production, one-third of its exports and 61 percent of its gold reserves. Bretton Woods was, in a way, a belated transfer of power. The nineteenth century had been economically dominated by Britain. The second half of the twentieth was to be American. [5]

The IMF was charged with managing various nations’ trade deficits so that they would not produce currency devaluations that would trigger a decline in imports. Short-run trade difficulties and balance of payment deficits would be overcome by IMF loans – then called special drawing rights – which would facilitate stable currency exchange rates. In effect, the IMF extended Keynesian measures – government intervention to prop up demand and avoid recession – to protect the U.S. and the stronger economies from disruptions of international trade and growth. If more fundamental, structural trade problems developed, the IMF was to correct them through controlled currency devaluations, usually of no more than 10 percent. The IMF would exercise “surveillance” over other economies for the U.S. Treasury, in return for its loans to prop up national currencies.

The linchpin of the Bretton Woods system, of which the IMF was only one part, was unrivaled U.S. economic supremacy. Stable, fixed exchange rates could only be maintained by Washington’s power to override conflicting national interests and impose its fiscal and monetary policy over Europe and Japan. The system survived through the years of the great postwar boom of the 1950s and 1960s, when the U.S. economy was the engine for world growth and prosperity. The U.S. boom was based on enormous government stimulus through uninterrupted military spending. The permanent arms economy annually consumed from 8 to 12 percent of GDP and half of the U.S. government budget (in today’s terms, almost one trillion dollars a year). The U.S. could underwrite massive arms spending to prop up the boom only as long as it had no significant competitors for the world market.

But the permanent arms economy would, by the late 1960s, be one of the key reasons for the relative economic decline of the U.S. compared to its main rivals, Germany and Japan, who had emerged as competitors of the U.S. on the world market. A key element in the economic revival of Germany and Japan was the fact that they did not have to carry the burden of military spending. By the end of the 1960s, the period of unrivaled U.S. hegemony was coming to an end. Both the U.S. military defeat in Vietnam and the inflation spiral caused by war spending further contributed to, and highlighted, the relative decline in U.S. power.

It was clear that the U.S. could no longer maintain its domination of the world system in the old way. The system created by the Bretton Woods agreement could no longer be maintained. As the dollar weakened, the U.S. could not afford a system of fixed exchange rates pegged to gold. There were a series of currency crises among its weaker rivals – first of the French franc, then the British pound, and finally of the dollar. In 1971, President Richard Nixon announced that the U.S. would no longer exchange dollars for gold. Two years later, fixed rates of exchange were abolished and replaced by floating exchange rates. The postwar boom gave way to a long-term economic crisis marked by the return of economic instability and periodic sharp recessions. [6]

The return of neoliberalism:
Structural adjustment programs

Better, sometimes, to have multilateral agencies prepare the path for direct Western corporate investments than for the U.S. to dictate to foreign governments.
Baltimore Sun, June 18, 1981. [7]

During the 1970s, the waning of U.S. power and the collapse of the Bretton Woods Agreement reduced the authority of U.S. institutional agents. The IMF and the World Bank lost influence in international financial markets to private banks and credit agencies. European, U.S. and, in particular, Japanese banks began to assume the central role in floating government loans. [8]

The debt crisis of the 1980s opened the door for the U.S. and the IMF to reassert their power. The Reagan administration initially dismissed the IMF as a handmaiden of Keynesian state regulation inimical to free market efficiency, and as a socialistic cash cow for Third World welfare states. However, the Reaganites changed their tune after the Mexican banking crisis of 1982, when they realized that the IMF could be used to reimpose a neoliberal, free market agenda.

The international “stagflation” crisis of the early 1980s – severe recession combined with rampant inflation – generated an explosion of debt throughout Africa and Latin America. The private banks were in a panic over potential loan losses and became unwilling to extend new credit. The ten largest international banks had their entire capital and reserves at risk in countries that now threatened default. To overcome this potential free market debacle of the global financial system, the U.S. recast the IMF as an international lender of last resort. Its new role was to provide loans when private credit agencies refused the risk. This was a role similar to that played by the Federal Reserve and other central banks in relation to private banks. [9]

The IMF would provide “bridge loans” to countries in order to facilitate their ability to pay back and restructure loans made to them by international private banks. IMF loans were granted on “conditionality.” That is, the IMF imposed a series of conditions to which the borrowing country must adhere in order to receive its funds. The IMF, by the sheer size of its loans, its role as a guarantor for international lenders and its relation to U.S. imperial power, assumed the authority to impose conditions that no private bank would have dared to suggest.

Under the original Bretton Woods system, IMF loans were aimed at preventing devaluation and propping up demand. U.S. capital accepted these Keynesian measures when the U.S. was the major world exporter, ran large trade surpluses and the rest of the world depended on its currency to pay for those imports. But in the 1980s, the IMF turned all of its previous policies on their heads: It now deliberately imposed devaluation and forced reductions in national income and demand in order to limit imports – all as a means to guarantee repayment of debt to international finance capital.

IMF loans were only granted to countries that agreed to accept “structural adjustment programs.” Through these programs, the IMF demanded privatization of state-run enterprises. This was justified on the grounds that state enterprises were inefficient and state intervention hurt profits. If that didn’t fly, it was justified simply on the grounds that the sale of state-owned enterprises would raise the cash necessary to pay down the debt. In the name of reducing government deficits and debt, the IMF also ordered social welfare spending reduced for health, education and pensions. It demanded that currency be devalued in order to cut real wages. The aim was to restrict demand for imports and encourage export-led growth. Subsidies that helped to keep food affordable would also be cut in order to increase exports. [10]

IMF loan conditions also compelled “deregulation” – the elimination of subsidies to local industries and the lowering of trade barriers. The IMF-U.S. plan set out to destroy the strategy of “import substitution,” of development through protected domestic markets for locally produced substitutes. The IMF plan was to use loans as a weapon to promote “export- led” strategies that serve foreign markets and the interests of the transnational corporations and international banks. The IMF pushed the elimination of restrictions on foreign investments and promoted incentives to attract foreign capital. [11]

No country would sign up with such draconian conditions until the debt crisis of the 1980s made it impossible for them to get foreign loans, and therefore unable to import the food, raw materials and machinery necessary for normal production. Loan and trade policy was the weapon to bind debt-burdened countries more tightly into the web of a world trade system that chiefly served the needs of U.S. corporations and banks.

In the 1980s, 187 structural adjustment loans were negotiated. They were the bitter medicine that only a seemingly objective, non-profit multilateral organization like the IMF could get away with politically. Structural adjustment led to hunger, malnutrition, poverty, disease and death throughout the Third World. Under IMF surveillance and enforcement, virtually every nation in sub-Saharan Africa entered a structural adjustment program. In every case, they were a disaster for the people of Africa and did nothing to restore growth. In the 1980s, GNP in sub-Saharan Africa fell by 2.2 percent per year, and per capita income fell below pre-independence levels. To pay back the debt, government health expenditures were cut by 50 percent and education by 25 percent. In Tanzania, debt repayment was six times the expenditure for health costs – which is all the explanation one needs to understand why 40 percent of the population of Tanzania dies before age 35. [12] Flood-ravaged Mozambique – whose debt was $8.3 billion in 1998 – pays $1.4 million per week in debt repayment. It will pay out in less than one year more than it has been promised in flood relief.

In IMF-“adjusted” countries, government spending per capita was reduced yearly from 1980 to 1987 and diverted to ever-increasing payments on debt interest. In Latin America, the portion of government budgets allocated to interest payments increased from 9 percent to 19.3 percent. Under IMF auspices, the 1980s were a lost decade for Latin America. In Chile, IMF loan conditions cut real wages by 40 percent. The IMF loan to Mexico in the debt crisis of 1982 cut real wages in half in the next decade, while investments in health, education and basic physical structure were also halved. Infant deaths in Mexico due to malnutrition nearly tripled in the same period. [13]

Yet, at the end of the decade, the debt of Third World countries was greater than when the structural adjustment programs began. Rather than “saving” these countries, the IMF had enmeshed them in an endless debt trap. Devaluations had increased the mountain of debt, which had to be paid in dollars. Austerity had so restricted growth that it was difficult to keep up with interest payments. New loans were arranged to keep interest payments flowing to the banks, and countries fell further and further into debt, requiring greater and greater proportions of national economies to serve as interest tribute to international capital. The IMF rationale was that loans would stimulate the economic growth that would allow for debt repayment. In truth, most existing international debts were serviced only by increasing international borrowing. From 1976 to 1982 Latin American foreign borrowing doubled. Seventy percent of new loans went to interest payments on old loans.

Despite the disasters it caused, the IMF declared that the 1980s debt crisis had been resolved through its structural adjustment programs. It attributed rising growth rates, expanding exports and new foreign investments to its programs. The reality was that low-income structural adjustment countries had their international indebtedness rise from $110 billion in 1980 to $473 billion in 1992, with interest payments going from $6.4 billion to $18.3 billion over the same period. In Indonesia, external debt rose between 1980 and 1992 from 29 percent of GDP to 67 percent. The seeds for the deeper financial crisis of the 1990s had been planted. [14]

The IMF enforced policies that sacrificed the lives and health of millions of workers and peasants to the usury of international finance capital. The United Nations reported that in half of the countries under structural adjustment the availability of food per person declined. This was a man-made disaster, born of IMF policies that forced Bangladesh, Tanzania, Peru, Egypt, Pakistan and others to abolish food subsidies. IMF free market policies forced more than one billion people into the misery of living on less than one dollar per day so that an enormous transfer of native wealth and assets could go to foreign capitalists. [15]

The IMF and the financial crisis of the 1990s

The Fund’s hidden purpose [in the South Korea bailout] is to open doors for American business.
The Economist, December 13, 1997. [16]

In the 1980s, the military power of U.S. imperialism that had been shattered by Vietnam was being incrementally restored by arms buildup and intervention in small, militarily helpless countries – Grenada, Libya, Lebanon and Panama. These interventions were the run-up to the greater interventions of the 1990s – in the Persian Gulf and Yugoslavia – which aimed to reestablish U.S. military hegemony. By analogy, the restoration of the IMF as lender of last resort in the Third World debt crisis of the 1980s was but a prelude to the bigger role the IMF would play in the financial crisis of the 1990s, as U.S. economic power was again ascendant.

As U.S. economic might grew, the centrality of the IMF to the functioning of world capital markets became apparent. Thailand, Indonesia, South Korea, Russia and Brazil became wards of U.S. financial power. Though officially beholden to the IMF, these countries are totally aware of the new power relations of imperialism. For example,

[When] South Korea slipped within days of running out of hard currency to pay its debts, it sent a secret envoy, Kim Kihwan, to work out a rescue package. “I didn’t bother going to the IMF,” Mr. Kim recalled recently, “I called Mr. Summers’ office at the Treasury from my home in Seoul, flew to Washington, and went directly there. I knew that was how this would get done.” The Treasury dispatched David Lipton, its most experienced veteran of emergency bailouts, to shadow the IMF negotiations with the government in Seoul. [17]

The IMF’s function as lender of last resort was central in the attempt to contain the financial crisis of 1997–98. In the early 1990s total IMF loans (with the exception of the Mexican bailout of 1995) only averaged eight billion dollars annually. But in 18 months in 1997–98, the IMF arranged bailouts to the tune of $200 billion. This sum, five times the size of the Marshall Plan after the Second World War, was beyond the capacity of any private banking system or any agency other than the U.S. state and its subsidiaries. The IMF was trying out a new role: the agent to prevent a breakdown of the international banking system.

The five largest bailout packages are well known. Each arose from the tremors that rocked financial markets from August 1997 to December 1998 – Thailand ($17 billion), Indonesia ($43 billion), South Korea ($57 billion), Russia ($21 billion) and Brazil ($41 billion). These loans, at below market interest rates, were meant to recapitalize national banking systems that were on the verge of collapse in order to protect depositors and foreign lenders. In the South Korean bailout, some foreign creditors were paid off directly by the IMF. With the IMF bailouts and “conditions,” foreign banks were then pressured to roll over their existing loans to these countries with the expectation that over time they would be repaid in full. Without these IMF loans, the financial meltdowns threatened an international credit crunch. The world’s bankers and industrialists feared that banks would suffer large capital losses from existing loans and become too weak to advance new loans, thus disrupting the functioning of the international financial system and throwing the world into a recessionary spiral. [18]

The first aim of the structural adjustment programs of the 1997–98 financial crisis was to save Western and Japanese banks and investors. But in finance there is no free lunch. The U.S. leads “a band of hostile brothers”; it protects international banks under its umbrella, but its policies are driven purely by self-interest. IMF loan conditions tried to reestablish U.S. domination, not over the impoverished underdeveloped countries as in the 1980s, but this time over Asia – the second-tier countries that are the fastest growing part of global capitalism. This was done at the expense of America’s rivals – the European banks, but more particularly, the Japanese, who had displaced the U.S. in Southeast Asia in the 1970s and 1980s.

Inter-imperialist rivalry between the U.S. and Japan for Southeast Asia initially allowed the crisis to spread and grow to disastrous proportions. At the beginning of the Asian crisis, the Japanese government offered to create a $100 billion Asian Monetary Fund for bailouts. This proposal threatened America’s global reach in Asia – which was considered far more important than stemming the spread of the current crisis. U.S. Secretary of the Treasury Robert Rubin vetoed the Japanese proposal on the grounds that it would weaken the authority of the IMF, “the closest thing the world’s monetary system has to an effective policeman.” Moreover, a bailout of the region under U.S.-IMF auspices gave cash-rich U.S. banks a better opportunity to supplant the weakened Japanese banks throughout Southeast Asia as a further opening for U.S. corporations to increase penetration of the region. [19]

The Thailand bailout package caused the British ruling-class magazine The Economist to complain, “Questions are being raised in Thailand about the haste with which, after a $3.9 billion IMF loan was approved in August, foreigners were allowed to snap up the local banks and financial companies.” The Korean package further provoked The Economist to discover that the IMF “has become an adjunct of America’s foreign policy – opening up South Korea to foreign banks [is an item] of America’s bilateral agenda.” [20] The IMF Asian loan conditions went far beyond the needs of stabilizing the situation and repaying debt. The IMF demanded that foreign banks (primarily U.S.) be allowed in immediately – in the depths of the crisis – so that they could acquire existing banks at fire-sale prices. This piece of U.S. robbery was justified in the U.S. press on the grounds that the Asian banking crisis grew out of Asian corruption, or “crony capitalism,” an unholy alliance of corporations, banks and government – something apparently different than the alliance between the U.S. government, U.S. corporations and the IMF.

The Korean IMF bailout package also called for restructuring to deliberately bankrupt some of the heavily indebted chaebols, or conglomerates, which were fierce competitors of U.S. corporations. One of them, Daewoo Motors, has some plants prized as more efficient than U.S. auto plants. Its IMF-demanded bankruptcy has allowed Ford and General Motors to compete for the chance to acquire it at the absurdly low price of six billion dollars.

IMF money saved the skins of the international banks and, ultimately, in conjunction with U.S. and Japanese reflation policies, succeeded in containing the crisis – even as 40 percent of the world was thrown into the worst recession since the Second World War. But this victory is bittersweet. It is widely accepted in financial circles that the IMF programs helped to make the crisis more severe and to spread the “Asian flu.” The IMF ordered currency devaluations on the basis that this would help countries export their way out of the crisis. They cut currencies like the Korean won by half and the Indonesian rupiah by two-thirds. This aggravated an already crushing debt burden, which had to be repaid with increasingly expensive dollars. This, in turn, exploded the national banking systems and led to the financial meltdowns.

IMF-ordered interest rate hikes designed to prevent capital flight and attract foreign capital added to the slump. With debt two or three times its pre-depreciation size, previously strong companies could not meet their debt payments and went officially bankrupt, taking national banking systems down with them. Foreign capital continued to flee the area despite – or because of – the IMF programs. Even the World Bank complained that the IMF was making a botch of things, turning the regional crisis into a global catastrophe. [21]

The failure of the IMF’s Asian bailout strategy spooked world stock markets and led to a run on the currencies of emerging countries in Eastern Europe, Latin America and Africa in the summer of 1998. The new weak links in the international system became Russia and Brazil. In June 1998, the IMF organized a $21 billion bailout for Russia. Assuring investors that Russian fundamentals were excellent, the IMF encouraged the international capital markets to float Russian debt. The oligarchs who run the Russian banks pocketed the loans to finance the transfer of their assets out of Russia. This capital flight brought down the ruble, caused a run on the banks and prompted the Russian government to repudiate payments on the national debt. This opened up the financial crisis of the summer of 1998 – the greatest threat to the world financial system since the banking collapse of the 1930s. The international banks took severe losses in Russia despite IMF assurances, and a once obscure multibillion dollar hedge fund, Long-Term Capital Management (LCTM), went bankrupt. The Federal Reserve intervened to engineer LCTM’s bailout, claiming that the liquidation of LCTM’s portfolio had the potential to threaten the U.S. banking system. [22]

As the crisis spread to Brazil, and with IMF policies coming under greater scrutiny and outrage, the IMF was forced to shift gears. It arranged a $41 billion bailout of Brazil, this time on the condition that Brazil not devalue, despite widespread market recognition that its currency, the real, was highly overvalued. To stave off devaluation, IMF policies forced Brazil to raise interest rates to 30 percent and higher. But capital continued to flee Brazil knowing that an overvalued currency couldn’t be defended for long by a bankrupt government. The IMF policy didn’t save the real, but it did guarantee that Brazil and most of Latin America fell into recession in 1999. [23]

The human impact of IMF loan conditions on the countries that became its wards was (and continues to be) horrendous. In Korea, the IMF imposed mass layoffs, leading to the joke that IMF stood for “I’M Fired.” Children abandoned by destitute parents were called “IMF orphans.” In Thailand, large numbers of children were thrown into child prostitution. In Indonesia, school enrollment dropped by a quarter. IMF loan conditions for Argentina demanded that labor laws be altered to eliminate national bargaining and grant employers the right to fire workers at will. The IMF program that was imposed on the Suharto dictatorship raised the price of rice by 38 percent, cooking oil by 110 percent and fuel by 70 percent This provoked the rioting that led to Suharto’s fall in 1998. IMF austerity conditions were now becoming dangerous to the health of local ruling classes. The IMF was forced to backtrack; loan conditions had to be less draconian for fear that no local ruling class, no matter how corrupt and subservient to Western capitalism, could carry them out without provoking a major upheaval.

Despite mistakes that threatened the whole world financial system, and despite policies that helped throw 30 to 40 percent of the world into recession, the IMF and its U.S. masters came out of the crisis smiling. Compared to their rivals, they were strengthened. The financial meltdown had been checked. The U.S. market was credited as being the importer of last resort, strong enough to take in exports from a world slipping into recession and, however temporarily, to pull the world out of a spiraling slump.

The vast quantities of capital that only the IMF could muster made the world banking system aware of its dependence on U.S. imperialism. In the era of globalization, the IMF has begun acting as an international central bank under U.S. control. This is an important new role for the IMF. However poorly the IMF may have handled the crisis, there was no alternative other than free market crack-up. While this has been horrific for millions, it has been as rewarding for a few as the lushest days of early imperialism. The IMF has done more harm to more people than any invading army could have done. “Peaceful” imperialism, despite the humanitarian gloss that liberals love to cover it with, is as deadly as its other face of war. It has been such a resounding success for U.S. imperialism – its corporations and banks – that now the IMF, the World Bank and the WTO are charged with repeating their policies in more developed, and richer, countries.

The awakening awareness of – and the movement against – these institutions’ outrageous labor and environmental policies were on display in Seattle in November and December 1999. It is a welcome new development that they are perceived as tied to the greed of transnational corporations. The struggle against them will be even more successful when it ties together the horror of the effects of these policies with the recognition that they are the economic arms of U.S. imperialism. The international solidarity required for victory will be a part of the working-class struggle for international socialism.

* * *


1. David Sanger, As Economies Fail, the IMF is Rife with Recriminations, New York Times, October 2, 1998.

2. Quoted in David C. Korten, When Corporations Rule the World (West Hartford: Kumarian Press, 1995), p. 135.

3. Fred L. Block, The Origins of International Economic Disorder (Berkeley: University of California Press, 1977), pp. 32–69.

4. A.G. Kenwood and A.L. Lougheed, The Growth of the International Economy 1820–1990 (London: Routledge, 1992), pp. 235–38.

5. Daniel Singer, Whose Millennium? (New York: Monthly Review Press, 1999), pp. 189–90.

6. For the collapse of the Bretton Woods system, see Block, pp. 140–225, and Kenwood and Lougheed, pp. 261–70.

7. Quoted in Catherine Caulfield, Masters of Illusion: The World Bank and the Poverty of Nations (New York: Henry Holt, 1996), p. 205.

8. Ricardo Parboni, The Dollar and Its Rivals (London: Verso, 1981), pp. 114–16.

9. Caulfield, pp. 200–01.

10. Caulfield, pp. 145–65, and 50 Years is Enough: The Case Against the World Bank and the International Monetary Fund, Kevin Danaher, ed. (Boston: South End Press, 1994).

11. The International Monetary Fund, Financial Medic to the World, Lawrence J. McQuillan and Peter C. Montgomery, eds. (Stanford: Hoover Institution Press, 1999), pp. 61–90.

12. Mark O’Brien, Debt Crisis: Who Pays, Socialist Review No. 233, September 1999: p. 15.

13. Korten, p. 164, and Caulfield, p. 137 and p. 153.

14. Korten, pp. 164–65.

15. Joyce Kolko, Restructuring the World Economy (New York: Pantheon, 1988) p. 266, and Caulfield, p. 161.

16. The Economist, December 13, 1997: p. 65.

17. Quoted in McQuillan and Montgomery, p. 23.

18. McQuillan and Montgomery, pp. 115–37.

19. David Wessel and Bob David, How Global Crisis Grew Despite Efforts of a Crack U.S. Team, Wall Street Journal, September 24, 1998. See also the account in Robin Hahnel, Panic Rules (Cambridge: South End Press, 1999), p. 53, and in The Economist, September 27, 1997.

20. The Economist, December 13, 1997.

21. See the debate in McQuillan and Montgomery, pp. 196–229.

22. McQuillan and Montgomery, pp. 138–58.

23. See my Can the U.S. Escape the Global Crisis? International Socialist Review No. 6, Spring 1999, pp. 35–38.

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