An insistence here that we really must rebuild the IMF and the World Bank to, well, to do something. The something being that the current system is all just too free market. It leverages private money, doesn’t pay due care and attention to how it all ought to work, producing investment and cash flows for and from governments:
But like every crisis of the Trump era, this sordid affair is an excellent opportunity to mobilize around an entirely new vision for the Bretton Woods institutions – to push for radical reforms that would put the resources of the World Bank and the IMF in the service of the many, rather than lubricating the wheels of global finance in the interest of the very few.
Well, if it is the few benefiting from the current system then sure, we’d want to change that.
Rather than supporting governments and prosperity, the World Bank and the IMF led the so-called Washington consensus: an orchestrated campaign of mass privatization, austerity and financial deregulation. “There are virtually no limits on what can be privatized,” wrote Mary Shirley, the chief of the public sector management and private sector development division, in 1992.
There’s the assumption being made. That supporting governments and supporting prosperity are the same thing. They aren’t but they could be correlated, certainly. That’s an empirical question, not a result we can assume.
Here’s an idea: build a new Bretton Woods and fund the International Green New Deal by simply mobilizing idle savings via a linkup between the revamped World Bank and the new IMF.
The IMF can become the issuer of a digital currency unit in which all international payments are denominated, countries can retain their currencies (that will float freely against the IMF’s unit), and a wealth fund can be built by depositing in it currency units in proportion to every country’s trade deficits and surpluses.
Meanwhile, backed by the IMF’s capacity to issue the world currency unit, the World Bank can crowd idle savings from across the world into green investments, reclaiming its soul after decades of investing in environmental destruction and human displacement.
Rebuild that system as it was and should have been before that dreadful irruption of neoliberalism in the 80s and 90s. Back to government to government and state led development through the official channels.
But the question is, would this work? The answer being no, for it is to fail to ask why we stopped doing this in the first place. The answer to that being that this private sector neoliberalism has led to the greatest reduction in absolute poverty in the history of our species. The Washington Consensus, that list of stupid things you shouldn’t do to an economy, it worked.
Why would we want to reject what works in order to go back to what didn’t?