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Towards the Unification of the Movement

06.19.2000 | POLITICS

One of the landmarks to emerge from the A16 D.C. protests was the recognition - even in the mass media - of the largely decentralized nature of the protest movement gathering momentum across the world to oppose the practices of international financial institutes. This was a sharp break from Seattle, after which the media seized upon Mike Dolan, who happily played the role of obligatory white male "responsible" for organization of the protest. No, this time the "leaderless" quality of the movement was embraced, but it came hand-in-hand with what has become both an accusation against and a defense of protestors: the non- or even anti-hierarchical structure of this patchwork of individuals, affinity groups, and independent organizations springs, it is said, from the vast diversity of issues and complaints that lead them into the streets.

This diversity, although it has been proclaimed by its members as a vital and empowering expression of a democratic opposition, has led critics and commentators to view the thrust of global discontent as so completely diluted and amorphous as to preclude any resolution that would largely satisfy all participants. "They could not even agree on a slogan," wrote David Montgomery for his 16 April Washington Post article, "just a vague, all-encompassing phrase: 'global justice.'"

The question that now confronts us all is this: does or will our diversity undermine our solidarity? Although we may currently gain strength from the broad range of criticisms entertained against international financial institutes - ranging from nationalist protectionist proponents to advocates of global government to anarchist calls for the withering away of oppressive government altogether - at the point at which we become effective, that is at which we begin to affect change, this diffuseness could cripple our unity. Would a tokenist response from various international organizations - agreeing to stricter environmental regulations, or protection against the use of sweatshop labor - be enough to placate large numbers of protestors? Would a move towards change in any direction at all necessarily split the movement down the middle along one of its many f(r)actional lines?

In short, it is clear that some level of broad agreement has been achieved through a negative critique of such organizations as the International Monetary Fund (IMF), the World Bank (Bank), and the Development Banks. But it remains to be seen whether all or most protestors could rally behind any positive programme of reform, reconstruction, or destruction. This essay begins with the premise that it is not enough to know what we all don't want, and attempts to locate an Archimedes Point that all parties could seize upon - without watering down their strength, focus, or diversity - with which to move the world.

The diversity of criticisms leveled at such institutions as the IMF and the Bank, as well as the powerful national governments standing just behind them and multilateral trade organizations facilitating their reforms, have arisen due to their practices - both the harm they've directly perpetrated and the improvements they've stood in the way of. The substance of these criticisms, then, have ranged the broad spectrum of sectors who feel that they've suffered at the hands of such policies: environmental groups lobbying against careless release of pollutants and destruction of natural beauty and resources, indigenous peoples whose cultures have been uprooted, organized labor forced into a wage race to the bottom competing with labor overseas, anti-capitalist and disenfranchised political ideologies of all stripes - from anarchists to the Greens, small business owners overrun by massive corporate franchises, as well as a concerned student movement that attaches itself to these and hundreds of other bodies spanning the left and the right, the top and the bottom.

Although it is precisely what these institutions have done and continue to do that mobilizes us, our goal should be not to change what decisions they make, but who makes their decisions, to change who "they" are. The practices of global capital are symptomatic of global power structures. These structures are not abstract: go to the IMF web page and look at the table of "Quotas, Governors, and Voting Power." You will there find the weighted votes of the IMF's "shareholders" - United States 17.35 percent, Japan 6.23 percent, Germany 6.08 percent, France 5.02 percent, and United Kingdom 5.02 percent. Compare these with China 2.2 percent and India 1.95 percent - where the bulk of the world's population resides. Or the "Heavily Indebted Poor Countries" (HIPCs) whom the IMF now claims to be rescuing from destitution - Angola 0.15 percent, Benin 0.04 percent, Bolivia 0.09 percent, Burkina Faso 0.04 percent, etc. Within the World Bank Group and all three Development Banks, the picture is virtually identical.

The IMF and the Bank are run in their everyday affairs by boards of Executive Directors on which the five wealthiest countries - the U.S., Japan, Germany, France, and the U.K. - enjoy permanent "appointed" seats. The remaining countries are grouped into regional constituencies (composed of as many as twenty-three neighboring countries) who periodically vote to elect a representative director to the Executive board. The most fundamental votes within the IMF and the Bank require an 85 percent majority, allowing the U.S. or any small group of wealthy countries effective veto power.

More and more, influence and control over policy-making in areas fundamental to human well-being is shifting to the international level. Policy-making at the international level, today, is controlled not by governmental, but by pseudo-corporate entities such as the IMF and the Bank. The movement of resistance needs to shift its focus from the decisions these entities have made to the balance of power which places decision-making in the hands of a small, elite group of wealthy countries and, within those countries, an even narrower spectrum of national élites tied closely to the interests of global capital.

Every emancipatory movement begins with a substantive critique of oppressive practices. Every successful emancipatory movement ends with a structural critique of the distribution of power enabling the continuation of those oppressive practices. What was needed in apartheid South Africa was not a more benevolent white ruling class, but rather a non-exclusive and representative government that was responsible to its people by empowering them democratically. What was needed in antebellum U.S. was not an exclusively white male voting populace which opposed slavery, but rather racial suffrage. In short, what is needed is not a "correction of policy" but DEMOCRACY. International financial institutions are not guilty because they are making the "wrong" decisions. They are guilty because they facilitate a vicious circle of disempowerment among the global poor, whose interests are not represented due to their poverty (making them poor "shareholders"), and who remain poor since their interests are not represented in decision-making processes.

Over the decades since the creation of the IMF and the Bank at Bretton Woods in 1944, and the subsequent establishment of the Development Banks who were gradually dominated by wealthy countries, they have justified their existences with a number of different rhetorical logics which today scarcely resemble those of their inception.

The IMF was initially conceived as an institution responsible for the stabilization of a new exchange rate regime revolving around a dollar-based gold-reserve standard. Although the Fund's purpose - to correct Balance of Payment (BOP) deficits that might endanger the stability of a country's currency exchange rate - was uncontroversial, it pursued this task as a short-term lender due only to the economic clout of the U.S. John Maynard Keynes, renowned economist who represented the U.K. at the conference, had pushed for a Fund that would include a Clearing Union for the redistribution of reserves from BOP surplus countries to stabilize the reserves of BOP deficit countries. The U.S., however, expecting to run a large BOP surplus in the near future, refused this arrangement and chose instead to structure the IMF as a pseudo-lending institution, responsible for the extraction of profits from those countries experiencing crises.

In September of 1974, after the Bretton Woods exchange rate regime had collapsed under the Nixon administration, the IMF set up the "Extended Fund Facility." Long- and medium-term loans had previously fallen under the province of the Bank, and the IMF justified this expansion of policy based on the connection between BOP instability and "structural problems." The new longer-term loans, then, were to facilitate development (which comes, of course, from restructuring the economic, political, and social spheres to accommodate foreign capital investments).

The final and most recent face adopted by the Janus-like IMF was taken hand-in-hand with the World Bank. In September of 1996, the two institutions launched the Debt Initiative for the Heavily Indebted Poor Countries (HIPCs). The target of the initiative was those countries who suffered from both extremely low per capita incomes and extremely high external debt. Forty countries meet the qualifications for HIPC status. The conditions attached to these debt relief programs are practically identical to those attached to loans, though. Wherever such "relief" has been offered, massive popular protest has railed against IMF or World Bank conditionalities.

Three logics have piled up upon one another, sounding more and more appealing to appease wide-spread apprehension about the existence of institutions whose conditions of inception have all but evaporated: stability, development, and poverty reduction.

The first logic has, in practice, retained only its name. The fear in the Post-war market was that there would simply not be enough investment to support the reconstruction of war-torn Western Europe (the initial focus of both institutions). The IMF, then, was to reassure foreign investors by providing a monetary safety net for potential monetary crises. Today the threat to currency stability is precisely the opposite: an excess of investment frequently sustains speculative bubbles that pop with horrendous consequences for conditions of life and basic human rights. And yet the IMF's logic of correction has, in general remained the same: throw open the borders for foreign capital and prove that you're willing to let your economy (and your people) suffer to protect that capital when crisis strikes.

The goal of development, as opposed to reconstruction, was needed to justify the Fund's existence after the Bretton Woods exchange rate regime had collapsed. Much like NATO after the dissolution of the Warsaw Pact, the IMF had to give itself a new, more appealing face once its initial conditions of existence would have demanded its dismantling. It pursued the promotion of development in LDCs (Lesser Developed Countries - the prettification of "Underdeveloped Countries") via the logic of the "free" market. Unfortunately, with perhaps the sole exception of the former city-state Hong Kong, there is not a single case example of a country successfully developing via neoliberal policies. All advanced industrial nations have grown to maturity under modest to stringent protectionist policies and reduced these restrictions once they had secured a stable place in the global market. All countries achieving hegemonic positions in the international economy, acting as nerve centers for global capital, have miraculously become great proponents of free market ideology, forgetting their history for long enough to tout the reduction of trade and finance barriers as the road to development.

In this light, the not terribly surprising failure of IMF conditionalities to bring about development for those who have lacked it has required a renewed plea for legitimacy in the promise of poverty reduction goals. The poverty initiatives represent an important move in delinking development - as an indicator of the conditions of living and the satisfaction of basic human needs and rights - from growth as measured by Gross Product, either Domestic or National. The heart of these most recent reforms is in the right place, but the head is still missing.

There is now an opportunity for those of us on the streets - in Seattle, in D.C., and soon in Prague - to set ourselves apart from benevolent-minded reformers in the halls of finance. Although there is a growing critical movement within the mainstream to cast jaundiced eye towards the standard-form policies of the IMF, as well as its amorphous character which has expanded far beyond its initial goals of simply stabilizing a global currency regime, there is no cry for the democratic restructuring of international financial organizations; there is no demand that policies not "trickle down" from the elite to the disenfranchised, as wealth has never done; there is no outrage at the hierarchy which equates wealth with power; and, as happens in all cases of effective domination, the questions that would rescue these issues from silence, from transparency, are simply never raised - it is "not done."

The oft-quoted Meltzer Commission Report is an ideal case in point. The International Financial Institution Advisory Commission, headed by economist Allan Meltzer, was created by the U.S. Congress upon the occasion of an $18 billion grant to the IMF in November 1998. The Commission was charged with reviewing the performance of the seven major international financial institutions and recommending appropriate reforms as deemed necessary by their research. The indictments of the Commission have become common currency among activist intellectuals. The IMF's "system of short term crisis management is too costly, its responses too slow, its advice often incorrect, and its efforts to influence policy and practice too intrusive." (p. 6) The Bank "claims to focus its lending on the countries most in need of official assistance because of poverty and lack of access to private sector resources.

Not so. "Seventy percent of the World Bank non-aid resources flow to 11 countries that enjoy substantial access to private resource flows." (p. 9) The Report accuses all of the lending institutions with poorly defined, overlapping goals and abysmal track records. "The World Bank's evaluation of its own performance in Africa found a 73% failure rate. Only one of four programs, on average, achieved satisfactory, sustainable results." (p. 6) And yet, the Meltzer Commission's recommendations never once address the invisible power structure of these institutions, urging instead a clarification and correction of their policies within narrower areas of operation. The Commission, in short, calls for the international elite to use their power differently, since the massive destruction of life and well-being their careless "errors" have produced may unsettle the hierarchy upon which they are perched. Indeed, it is precisely this hierarchy that we must shake until it tumbles.

The most common response to such demands for the democritization of global policy is that such a move would simply lead to the end of foreign support. Without the ability to control lending, aid, and debt cancellation conditionalities, it is claimed, none of the wealthy countries would be willing to contribute the funds that developing countries need to grow. In short, neoliberalism repeats its old mantra: There Is No Alternative. This argument has old roots. It was the same exact claim employed in countless countries urging the restriction of voting rights to propertied males: the government has discretion over the expenditure of income from taxes; since it is the propertied class - the wealthy - who are required to pay the bulk of any country's taxes, it is impossible for the landless to have an equal say in governmental affairs. Such a move towards democracy ("leveling" - as the pernicious concept was known) would result in an unwillingness of the rich to pay their taxes and a loss of legitimacy for the government.

This logic was false and elitist when it was first made, and it remains false and elitist today. We have the utmost obligation to defend the equal rights of today's equivalents of the "propertyless" - the global poor. So long as vital decision-making that affects everybody's lives is made by a small power elite, that system of global totalitarianism will continue to rebuild itself in its own image. Currently, the IMF, World Bank, and Development Banks have absolutely no direct responsibility to those whom they claim to be helping.

A movement united around a structural critique and a demand for global democracy would largely render moot the frequent debate over whether to "fix or nix" the IMF and World Bank: to democratize them would be both to demolish them as they currently exist, and to fix them in the only way that will treat the source, not the symptom, of global injustice. What name they are given is a matter of aesthetics. We can now recognize exactly what it is in the growing global movement that so disturbs its critics and what leads them to label it as too "amorphous," "diluted," and "unorganized": it is democracy. This is exactly what democracy means: not privileging a single voice above all others. To democratize is to nurture plurality. And with this comes, as it always has wherever democracy shows its face, the problematic of democracy.

The problematic consists of this: how can we tolerate a wide diversity of views while sustaining solidarity and unity between the members of a democracy? This is not a problem to be overcome, it is the very substance of democracy, and its answer is politics. The politics of democracy is the domain in which equally empowered members of a society, who are united by their very commitment to the process of democracy, work together to mitigate their various desires and coordinate their diffuse ideologies.

As our movement grows, so too should democracy and its basic, inner tension. Our goal should be not to overcome this tension, bringing about unity by the creation of a monoculture in which all agree upon which policies and actions to pursue (this is what the Jacobins attempted), but to nurture it as a positive accomplishment and a basis for civil society. The road to this goal leads directly through such elitist global institutions, and it is their silence, not their voice, that must be pierced by the demands for global democracy.

About the Author
Ben Day is a student of political economics at the University of Massachusetts at Boston, and a member of the Boston Direct Action Network.
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