Thursday, May 24, 2007

US influence in International Finance Institutions; How does our history solve our future?

Brief Personal Introduction:

At the beginning of the Academic year of 2005, I visited the World Bank- attending a conference held by some of the top officials there. Following that conference, I began a program studying Globalization- a contentious and relatively new area of study. Although the limits of the title of Globalization are still almost entirely undefined- and clearly very deep-seated in a long history of international interaction- the pertinence of this field of study to that of International Finance remains uncontestable. During my studies, I followed issues of the global environment and policy implications, anthropological relations, social movements, and international political-economy as set aside by author and program innovator, Edward Goldsmith (The Case Against the Global Economy) and his many colleagues. During the year of academic pursuit we traveled to 5 different countries; Britain, Tanzania, India, New Zealand, and Mexico. In all of these countries, most particularly the “developing” nations, I saw first hand the implications of International Finance Institutions- where they have left their “development” mark very strongly over the past 60+ years. This academic tour has provided the impetus for my research; to delve thoroughly into the issues surrounding these institutions today- as debate over them has grown significantly over the past decade and a half. It is the belief of the scholars under which I studied (mostly self-described post-modernists), that the most accurate reviews of policy cross the traditional lines of departmentalization in academic institutions. To that note, the study which follows contains information from a historical nexus of sociological, economic and political vantage points- but would certainly be aided by further considerations of the cultural and environmental (science) contexts of our topic.

Abstract-

The study outlined in the following paper reviews the history of International Finance Institutions (IFIs) as an introduction to their failure in the 1940s. My hypothesis was that this historical analysis would yield an important correlation of socio-political factors to today’s political milieu/ discourse overarching International Finance Institutions. The results of a comparative analysis are robust in many ways; though analysis also renders the specific difference in the strength of developed social movements. I go further to briefly establish the current crisis of the IFI model in a variety of political agendas, and postulate a climax of factors that may lead to further dismantling the framework for international cooperation. It is important therefore, to understand what factors originally distorting of IFI purpose are still apparent at the beginning of the 21st century in American politics. These studies further our understanding of validity (or lack thereof) in political rhetoric, while establishing a complex set of power relationships in modern global and national politics. It is these power relationships which will once again provide considerable resistance to democratic reform of International Finance Institutions. I conclude with a recommendation for where to focus social pressure in order to achieve a closer semblance of democracy in international relations with particular reference to the historical and current impacts of the undemocratic financial institutions. Unfortunately- due to time limitations- the scope of this paper is limited primarily to analyses particular to the World Bank, and may not adequately cover the Second portion of the paper (leaving out significant arguments for current crisis), but instead establish a framework basis by which one could approach that study. It should still be noted that the current threats to democratic structure pose an equally disturbing trend for all IFIs (created around the same time, and evolving through similar political struggles); hence the extension of our argument to the collective political sphere of IFIs.

Part I. Conceiving Development;

Historically Contextualizing International Finance Institutions

“The moment will come…when the sun will shine only on free men on the earth, on men who recognize no master but their own reason; when tyrants and slaves, priests and their stupid or hypocritical instruments will exist only in history or on the stage; when men will study the efforts and sufferings that characterized the past only to guard vigilantly against any recurrence of superstition and tyranny.”- Marquis de Condorcet[1]

It is fundamental to recognize that there is a deep and dialectical history involved in the creation stories of International Finance Institutions. This dialectic goes back at least as far as the rise of the merchant class, and progresses through the genesis of western industrialists, and then finally reaches into the realm of today’s capital controllers (Robbins 2005)[2]. In the most contemporary perspective however, several specific conditions are cited as responsible for the impetus in crafting these institutions. This portion of the paper delineates a selected group of strong influences and factors (out of a multifarious many) in the history of American politics that had palpable effect on the agendas of IFIs. These factors are presented with special attention to a timeline of events that contribute to our conception of the policy environment[3], and include analyses of the rhetoric in the American mainstream political theatre. Following this framework provides strong reflections of hegemony in post-war American society which will help explain the failure and redirection of the international/ multi-lateral finance schemes of the 1940s.

Interwar Market-Policy Influence

The failure of policy solutions to the various impacts of World War I left considerable impression on all of the major players in international policy. These various failures were used heavily in the post-WWII era to justify new approaches to International order, in the name of hindsight. Among such failures was the Treaty of Versailles, signed in 1919. This agreement established the post-war settlement conditions; which included German reparations, to which the German Nazi/Ultranationalist forces were able to draw national support for rejecting the peace settlement. Another of these factors was the failure to fully establish the League of Nations; which was largely due to the US refusal of participation- despite the fact that the idea for the League was originally drafted by US president, Woodrow Wilson. The lack of US participation left the nations of Europe alone to face the aggressions that signaled the beginning of the Second World War (Schild 1995). In addition to the failure of international agreements and policies, the national policies of each nation were also considered as central to the failure of peace after WWI. In fact, it was in this period that it first became a popular postulation among economists that future possibilities for peace relied on economic stability. Among the earliest of the popularly considered dynamics in US history was the market crash of 1929.[4] Much to the chagrin of all policy makers at the time (as this market crash had severe impact on the international trade as well), the US public saw one of the first and possibly most-substantial declines of the US stock market, as it turned to the historical bear of the Great Depression. Not long after the initial crash, which lost something to the tune of 16 billion in investments, the Smoot-Hawley Tariff Act of 1930 (supported by President Hoover) was passed into legislation, heavily taxing the prices of international goods, and “effectively driving deeper the wedge of the Depression” (or so the argument goes by many economists; Madsen 2001, League 1945). The economic trends resulting from this act were noted, and economists interpreted this to show the negative implications of protectionist trade. In turn, this concern pressured post-war policy-makers, and came to fruition in the form of the General Agreement on Tariffs and Trade (GATT), which was partially conceived in the Bretton Woods International Conference in 1944, and eventually passed in 1948 in the Geneva Conference. This understanding of international trade policy continues in the arguments of the most neo-classical/liberal economists now involved in policy-making, as it is directly linked with the Washington Consensus and the formation of a stronger GATT- the World Trade Organization (WTO) in 1994[5]. Overall, the conditions of the inter-war period were heavily analyzed in order to avoid the repetition of policy failures that eventually led to the first failure of peace- WWII.

Contextual Freedom and Capitalizing on Opportunity

Scholarship cites the crisis of Western Colonialism as another aspect engendering of development theory and its institutions (Arrighi 1999). Traditionally, this academic work attributes the relative fall of the British-centered economy (in addition to that of other European colonial powers) as a powerful pretext on several levels. The strongest of these points was the opening of international trade that resulted as countries began liberating themselves from their colonial powers around the late 40’s (though even later in most cases). Although it may still be considered the case that ex-colonial powers continued to have some strong influence in their prior colonies (and still do, if only for linguistic “inheritance;” Shohat and Stam 1994), the breakdown of colonial trade agreements and the introduction of free-trade institutions allowed one main state actor- the US- to get in on previously exclusive trade deals and markets, as well as allowing for the cross-pollination of colonial/north/western influences. For timeline consideration, India was among the first of the colonial states to gain independence and it made the transition in 1947, though talks of decolonization had easily been going on for several years at that time. It is considered that World War II contributed greatly to the fall of Western colonialism, as colonizers found themselves over-extended militarily, and the colonized found themselves fighting in wars that did not belong to their own nation; both factors intensified reason and opportunity for resistance. Most important to our analysis however, is that (at least from a Eurocentric, and US view) the decolonization of so many states in such a short period raised the potential for instability in a rapidly globalizing market.

The “Post-War” Policy Environment:

-Good Intentions Fail to Safeguard against New War (Again); Opposed by Elites’ Utilization of Occidentalism and the Politics of Fear-

“It is hardly an exaggeration to say that the policy of averting a third world war may depend upon the strength and effectiveness of our efforts in the field of psychological warfare” - President Harry Truman[6]

Of utmost importance to the scholars -seeking the derivatives of development theory- are the various policy consequences of World War II, of which the subsequent implementation of the Marshall Plan is primary. In the modern academic world, the causal relationship between WWII and the foundations of today’s political economy is considered relatively unanimous. An overview on the evolution of American political economy by one academic summated this:

“While professional economists advised some early twentieth century Presidents, and economic outcomes have preoccupied most modern Presidents, little relevant data with which to guide policy decisions was available until the 1940s. Official estimates of unemployment rates, for example, were not made available until the Census Bureau developed consistent definitions of the “employed” and “unemployed” in 1942. The Great Depression of the 1930s, the fear that the end of World War II would augur an economic decline similar to that which had followed World War I (from 1918-21), and the rapidly spreading influence of John Maynard Keynes -- who counseled compensatory fiscal and monetary policies as the antidote to business “cycles” in his 1936 General Theory of Employment, Interest, and Money -- made much more proximate and constant the previously arm's-length and ad hoc relationships between Presidents, professional economists, and discrete economic policy decisions. What began as an increasing reliance on social scientists in general -- during and just after World War I, and continuing with Herbert Hoover’s notable interest in data collection and business surveys while both commerce secretary and President -- coalesced after World War II around Pentagon-financed data collection and analysis and the elevation of professional economists and economic policy advice.”

(Shreve 2003)

What is implied here- the justified shift to professionalized economists[7] for establishing policy- holds value to our study of the inception of international institutions in the post-WWII American policy environment. While the macro-analysis that Shreve reports is roughly accurate, it is considerably over-simplified. Shreve’s shift to professional economists is exactly what yielded the protoplasmic framework for International Finance Institutions we see developed –though perhaps negatively- today, in a complicated narrative of idealistic struggle for international peace and democracy against the faces of power in a rising hegemonic government. In the scope of this paper, there are several integral parts of this narrative whose absence in the above passage is largely due to author’s -perhaps necessary- brevity in spanning roughly 80 years of economic policy, but nonetheless are certainly necessary when building an accurate context for IFIs. It is noteworthy that the economic thought of Keynes, conceived in the post-WWI depression, eventually led to the adoption of a preventative policy against crisis in the international theatre (that is- in addition to the cited dialogue surrounding national unemployment cycles). The analyses of “business cycles” are well established in international discourse by mid-1940. A report from the League of Nations, produced in March, 1945 (prior to Roosevelt’s death and Truman taking office in April) evidences a “business cycles” approach and a developed critique of limited-national dialogue, while arguing the need for a similar, systematized approach to employment in international policy in the context of the “modernizing”, liberalizing global economy[8]. (League 1945) However, the move to a new international consensus was a complicated process- riddled with undertones of elitist power structures (utilizing fear) - which distorted the meaning of Keynes’ policy advice.

Theoretical Foundations of IFIs:

Before World War II ended, and even before the US got militarily involved, many departments within the US government were already looking at the need for Post-War reconstruction in Europe; including the US Treasury, the Board of Economic Warfare[9], the State Department and the Export-Import Bank. (Oliver 1971). It was obvious to international observers that many of the economies of Europe were badly injured, as the infrastructures of many countries were destroyed during intense warfare- in addition to resources being largely scrapped into national war industries. Among the main ideologues pushing economic agendas around that time were the economists of the US Department of the Treasury- most specifically Harry Dexter White- and their British counterparts led by White’s economic-theory predecessor John Maynard Keynes (Boughton 1998). White was among the first to draft plans for a system of international finance that he saw as integral to establishing egalitarian, democratic trade practices- and he plays a vital role in this narrative. His unilateral appeal to his close superior Secretary of Treasury Henry Morgenthau Jr. first comes in 1942; in the form of a draft proposal for international finance which eventually went to the White House, sparking considerable attention (Oliver 1971). White, as the Chief economist in international affairs for the Treasury, (amidst directing war-time treasury expenditures- and eventually through drafting the Morgenthau Plan for Post-war Germany) preoccupied himself with continued political navigation of a plan for an international finance system; presenting a “full report” directly to President Roosevelt in 1943. This second draft, officially named the “Report on a Stabilization Fund for the United and Associated Nations and an International Bank for Reconstruction and Development," was edited in a somewhat consultative process between White and representatives from 13 other countries[10] and became the platform for the US position on an internationally popularizing issue. Keynes and White, as Treasury leaders in each of their countries, became the spokesmen for their respective countries’ plans in the Bretton Woods Conference in 1944 in which both economists’ final drafts were accorded and signed.[11]

The theoretical foundations for the White and Keynes plans were essentially three-fold. Primarily, that the world economy should be approached in cooperative competition,[12] and that this would counteract economic hegemony or autarky. Second, that the international economy should flow in a way that was most efficient for growth; and while there were postulations that opening trade barriers would produce that favorable effect, the political-economists maintained that the economy should not be given independence to become a “disruptive force.” The problematic perception of the first tiers (essentially, stability and growth) established the third tier of their plan: that a multi-lateral institution should be set up to accomplish the first two in as much of a consultative-democratic way as possible. The primary disagreement between the two featured economists, was how exactly such a system would be manifested, and the level of control that such a system would possess. The ultimate contradiction of power was seen from the start; as an IMF journal author admits, “Nonetheless, it was because of the strength of American economic and political power, not the superiority of White's intellectual powers, that the IMF was shaped primarily by the White Plan rather than the Keynes Plan.” (Boughton 1998). The results of this conference were the Articles of Agreement for two institutions: the International Monetary Fund (IMF) and International Bank for Reconstruction and Development (IBRD). These are the foundations of the institutions which we see in the controversial political manifestations of all IFIs today.

The Failure of International Cooperation and Peace: towards the Cold War

Despite the appearance of success in 1944, economists dreaming up IFIs actually failed in their quest; where relatively unrealistic aspirations for a peaceful post-war period were dashed by the political order of the day. As the US public and government adapted through War-time operations, the rise in general Occidentalism and oppositional public sentiments hugely impacted the language and international policy environment that Keynes’ theory, and the efforts of egalitarian economists were usurped to substantiate. White’s original plan in 1992 emphasized that the Soviet Union should not be excluded for its socialist approach to economy. Although White was able to convince the Soviet Union to participate in the Bretton Woods conference, his frustrations with the oppositional politics of the US, came to fruition when a year later Joseph Stalin refused Soviet membership in the IMF. White’s continued advocacy of cooperation with the Soviet Union brought him considerable criticism, as he was eventually subpoenaed to testify in hearings in front of the Committee on Un-American Activities of the U.S. House of Representatives.[13] White died three days after his testament of support for the US state in these hearings- while his contributions to it were systematically trivialized by both the public and government for years to come.[14] (Craig 2004). This fact signals a necessity for analyzing additional historical notes which act as added elements of the IFI narrative.

Understanding of this political environment is yielded by a study of the Marshall Plan in politics in D.C. around that time. Essentially, what results from this review is exactly how the reasoning of economists which were responsible for creating IFIs were ousted by the ideologies of more powerful political icons. The protoplasmic ideological impetus behind these institutions is represented in the speech given by Secretary of State George Marshall to the graduating class of Harvard University on June 5, 1947. The main components of his speech- international cooperation, and post-war aid as a necessary condition for “free institutions” worldwide- came to be recognized as the Marshall Plan. Much like the purpose of IFIs themselves, the tenets of the Marshall Plan were distorted and misconstrued by their political environment; as the social vision took the form of an extension of the earlier Monroe Doctrine and its pre-dating corollaries (Schain 2001). Originally stating the importance of aid being a scheme largely built/conceived by its beneficiaries,

“It would be neither fitting nor efficacious for our Government to undertake to draw up unilaterally a program designed to place Europe on its feet economically. This is the business of the Europeans. The initiative, I think, must come from Europe. The role of this country should consist of friendly aid in the drafting of a European program and of later support of such a program so far as it may be practical for us to do so. The program should be a joint one, agreed to by a number, if not all, European nations.”

Marshall’s ideas were coordinated to justify the actions and extensions of US direct involvement in foreign economies and even wars (extension of the Truman Doctrine). Most specifically, the Marshall Plan became the policy of communist containment during a lasting period of fear in US society and policy that we know as the Cold War (Gibson 1998). The manifestation of Marshall’s ideas is considered to be the passing of the European Recovery Program (ERP). The significance of this ERP legislation and its national environment is quite central to the overall policy environment surrounding the genesis of IFIs. The ERP was a manifestation of similar political sentiments that gave rise to the IFIs themselves- the domestic policy “equivalent” of a plan to stabilize economies. However equated it may seem in theoretical claim, the introduction of the ERP signals a direct shift in US policy towards unilateral policy for bilateral aid, and away from the previously established, multi-lateral IFIs. Essentially, the ERP was a political move by US policy-makers that directly undermined international cooperation and the purpose of IFIs. Most specifically, the applications of the ERP represent a move away from the internationalism, goodwill and trust meant to be embodied in the creation of IFIs, and (as consistent with US history[15]) towards US interventionism. Finally, the political appeal of politicians to the elite business class in the US at the time ought to surrender a commitment to “Wilsonian-democracy;” an idealism which was established by political trends prior to that period of legislation (5, Chomsky 2003).

In depth analyses of ERP legislation/ public sentiment make clear that at the time of the Marshall Plan inception, a minority of the US public was aware of the plan; where as little as 25 percent would prove to be even somewhat informed of foreign issues at the time (51 Hitchens 1968). In fact, it should be noted that apt evidence from platform processes points to an appeal to elite structures within US society -primarily that of the moneyed business world- to spread the “popular” approval of the ERP; where similar research results suggest that the business sector of America was disproportionately in favor of the ERP legislation by a margin of nearly 20 percent to that of the general population surveys. (52 Hitchens 1968). Clearly a plan for bilateral trade and investment would prove a useful political tool for the business elites in the simultaneously booming post-war US economy[16], as much as for the politicians who cater to the lobbying elites at the time. (54 Hitchens 1968) This is the derivative of the developed military industrial complex that Eisenhower warns our nation about at the end of his presidency in 1960. The implications of this timing are quite serious; reflecting that the general US population had no significant enlightenment in the area of foreign affairs between the period of 1949 and the beginning of the Cold War, and supporting views that the move to produce fear of international conditions (the Red Scare, McCarthyism) was one of elite power struggle (519, Gibson 1988)[17]. It should also be noted when discussing the social sentiments of the period, that there was a relatively (when compared to the elected representatives today) strong, publicized resistance to this plan by elected officials of the time. This resistance, headed by Representative Robert A. Taft was deeply rooted in non-interventionist language that struck sour with the larger body of politic in comparison to the rhetoric being proposed by the Truman administration. As voting patterns indicated, this resistance took a heavy hit in the following Congressional elections (Hitchens, 1968).

Considering that the Venona project[18] (NSA) was already well underway by this point, and that Winston Churchill’s “Iron Curtain Speech” was delivered on March 5, 1946, also raises considerable question about the motive of the legislation being built in the US and reflected into international arenas. A direct manifestation of elitist and undemocratic policy can be seen in Truman’s creation of the CIA; which he was able to maneuver under the National Security Act of 1947. In 1948, Truman gave this agency “covert capabilities,” a decision which was certainly motivated by the fear of spreading Communism (as per the examples of Greece and Turkey in the ERP, and the speech initiating the Truman Doctrine on March 12 1947). Truman’s decision was influenced by top policy makers directly after the Communist coup in Czechoslovakia in February 1948,[19] under the new assumption that the ERP/ Point Four program component of the Marshall Plan was not effective alone. Recognizing the complex political atmosphere of anti-communism, Sallie Pisani’s research also concludes, “Truman’s decision [to give covert capabilities to the CIA] was nonetheless colored by his desire to retain executive control and to ensure complete secrecy by avoiding congressional involvement as much as possible.” Truman thereby aids creation of not only the doctrine of communist containment, but also that of plausible deniability- effectively adding an instrument of power to the political elites’ arsenal, while sanctioning its use for what Truman recognized as “actions that could not be taken openly in a democracy.” (59 Pisani 1991) The pressure from- and reliance on- politicians to reinforce and develop his ideas speaks to how seemingly unilateral moves by the executive are “polyarchal”[20] in origin, the result of which is multi-faceted oppression.[21]

An incredible pattern of Occidentalism, as well as direct references to western responsibility to world democracy, peace and safety (used for strong juxtaposition of resistance to political authority) is obvious in the justifying, public rhetoric being used by politicians in the Truman Era. Even Sec. of State George Marshall, who outlines the original good intentions for helping the post-war Europeans in his Marshall Plan speech, grounds his argument in language which considers a unified “Western civilization [of]… political and spiritual force.” (240, Jackson 2003) Winston Churchill’s speech on the fall of the Iron Curtain (which we consider in the theatre of American politics as it was delivered at a southern college in the US, in front of an audience including Truman) also incorporated several references to a separate Occidental civilization and a common interest in opposing the spread of Communism upon which relied the peace and safety of western civilization. This speech quotes:

“The safety of the world, ladies and gentlemen, requires a unity in Europe, from which no nation should be permanently outcast…Except in the British Commonwealth and in the United States where Communism is in its infancy, the Communist parties or fifth columns constitute a growing challenge and peril to Christian civilization…Surely we should work with conscious purpose for a grand pacification of Europe within the structure of the United Nations and in accordance with our Charter.”

Any analysis of the political rhetoric of the 1940’s would be entirely incomplete without the quintessential rhetoric of the powerful US executive, Harry Truman. With the invention and premier use of atomic warfare technology, the responsibility for literal preservation of humanity (in the power to destroy massive parts of that fabric) now rested in the sole hands of one world leader. That military power was added to other results of war, including the increased economic capacity and thereby inherent economic-political influence of the US (Milward 1977). This focused power was utilized, as the US reverted to its roots of “God-sanctioned warfare” and political manipulation by other means. Truman, as the original inheritor of this immense power, was the first to set a framework for its use- meanwhile opposition to US international policy faced an undeniably huge threat- which eventually materialized military, but originated in economic terms (standardizing economic warfare). Truman’s unilateral declarations of policy represented a classic case of the cliché, “absolute power corrupts absolutely.”

Observing the “evolution” of Truman’s executive rhetoric displays a derivation in reinforcing the policy of Unconditional Surrender at the end of WWII in 1945, and an ultimatum which led to the first and only physical- military use of atomic weaponry in our world history.[22] The subsequent executive speeches connote a continuation of absolute power, most specifically in March, 1947. On the 3rd of that month, Truman delivers an address in Mexico City, which both recognized the established “Good-Neighbor” policy of non-intervention; “The good-neighbor policy, which guides the course of our inter-American relations, is equally simple. It is the application of democracy to international affairs. It is the application of the Golden Rule,” as well as single-handedly redefining the limits to that policy to the extent that: “Nonintervention does not and cannot mean indifference to what goes on beyond our own borders. Events in one country may have a profound effect in other countries. The community of nations feels concern at the violation of accepted principles of national behavior by any one of its members. The lawlessness of one nation may threaten the very existence of the law on which all nations depend. This statement essentially undermined the pre-existing international agreements between the US and its southern (newly dependant) neighbors, leaving the policy choice of intervention completely open to interpretation- in a system where power was obviously unbalanced. On March 12th, 9 days later, Truman delivered an address before Congress which is cited as having established the Truman Doctrine. This speech called for the special distribution of ERP funds to countries Turkey and Greece, as a counteractive measure against the Communist “terrorism,” and a way of preserving the investment in global peace that the US made in actions in the European theatre in WWII. This speech directly follows Truman’s pattern of appeal to world safety, and is one of the first instances of using the polarizing rhetoric of terrorism in popular political theatre; a pattern which continued thoroughly in McCarthy’s politics of fear, and reconvenes in executive regimes from Reagan (who first coined “War on Terror”) through Bush II. Following that speech, in his 1949 Inaugural Address, Truman delivers the public summation of his international policy stance, which he intended to justify and pursue until the end of his presidency in 1953. Truman starts his address with an appeal to the serendipitous, altruistic position of power of the US and his justification for peace. From this, Truman moves on to juxtapose the “philosophy of Communism” with that of “Western Democracy,” effectively adding the elements of Occidentalism and appealing to vestiges of war-time mentality of opposition. Truman continued his speech to delineate the famous 4 point approach to international relations, whereby he restates his theory that, “Economic recovery and peace itself depend on increased world trade.” In point four of that speech Truman uses the phrase “under-development,” which thereby makes its premier appearance in modern, international political diction. This widely publicized speech effectively began the era of development theory. (Sachs 1991)

Reinterpretation of the IFI role

It is impossible to prove causality from Truman’s speech to the initial shift in World Bank funding due to chronology; however, this paper argues that Truman’s speech was a confirmation of the already shifted role of the World Bank, as a result of being undermined by the more powerful, bilateral ERP (just as much as it was a restatement of the other in-progress programs of the Truman administration). The policy change mentioned is observable by a direct shift in the Bank’s focus from Europe to “under-developed” countries, which was aided by the predominant power of Europe and the US within these institutions. The first loan given by the International Bank for Reconstruction and Development (IBRD; which later expanded functions to become the World Bank) was to France on May 9th, 1947. Among other things, these funds went to rebuild ports and modernize railways in France- following the classical economic paradigm of governmental facilitation of trade via infrastructure. Similar loans, with similar purpose were also given to the Netherlands, Denmark, and Luxembourg in August of that same year.[23] As the Plan and policy environment in Washington D.C. also morphs around the politicization of international security issues, the IBRD refocuses to aid in “under-developed” areas of the world. So, shortly before Truman’s speech on underdevelopment, the bank gave its first loan to a “third world” country, Chile in 1948. This action was followed by a slew of new loans for “Third World” nations- as it was obviously sanctioned by the US executive, who oversaw the appointing process for the relatively problematic beginnings of the World Bank (IBRD) administration. The Bank, as a multi-lateral institution, was able to design financial projects for “under-developed” regions of the world and easily maneuver them politically- in a structure that blatantly biased (and still does) western nations.

PART II: Structure and Governance:

Reflections of Hegemony and Foreshadowing Crisis

Analyzing this established history provides the social, political and economic contexts to the inception of our development values and is imperative for an accurate understanding of today’s International Finance system. This analysis however, does not speak to exactly how the organizations were structured, or what the direct implications have been. Therefore, the exact structures of these institutions are going to help explain another part of exactly how inequalities of (designing) power and interventionism engendered less than egalitarian manifestations of political doctrine that were completely contradictory to the original justification of IFI architects and policy advocates.

The rhetoric of US expansion of democracy did not carry over in IFIs; which although agreed upon in 1944 did not take form until well after their role for reconstruction was undermined by US domestic policy. Democracy, from its Greek root, means most literally rule by the people. In the common parlance of our day, this word has taken on several ideological meanings which have caused it to be used by people in power (see for instance, any speech by Bush) as much as the powerless to incite causal support. Its most cited applications in academic political science are found in discussions over form. To avoid confusion: with reference to IFI’s, we will be looking for any significant democracy at all, which even at it’s best would be a second-hand one (because representatives in these institutions are not voted upon, but appointed by country leaders).

There is certainly a current lack of “democracy” in International Finance Institutions (IFIs) which is due to systems of power that are latent in the backgrounds(i.e.: historical and conceptual foundations) and structures of IFIs like the World Bank and IMF. When we consider specifically, the World Bank, there are several structural inequities that allow considerable and unfair US control over capital. First off the list, the US owns approximately 17 percent of the vote in consulted World Bank decisions, allowing them the only effective veto of any country within that framework, and voting power well over twice that of its closest second (See Tables 3.1 & 3.2). Secondly, the World Bank President is (and always has been; via the gentleman’s agreement with the IMF) a US political leader, and one who has relatively little experience in development (See Table 2). Thirdly, certain branches of US government have historical influence in the bank, like that continued influence of the US treasury, and the congress, which must approve all funds going to the Bank. This process of approval allows the US to impose directions for use along with its contributions, a privilege which is not awarded to any other member country. These points do not cover the certain cultural bias of the Bank. The Banks location in Washington DC acts in several ways as a filter for the lenses through which economists that work at the Bank’s headquarters see the world. Claims against that cultural bias should also incorporate the fact that despite the international nature of the Bank, proceedings and documentation are only conducted in English. From these points we can discern that the World Bank is essentially a case of certain US hegemony. (Wade 2002) Therefore, it can be postulated that US policy directly affects the policies and sovereignties of other nations, while undermining the concept of democracy that it purportedly seeks to extend. It is not at all irrelevant to note that the result of this well known and controversial fact has been dissent on many levels, which as we will analyze shortly, threatens the very existence of multi-lateral financial cooperation in international politics.

Contemporary Manifestations of Undemocratic Structure: A Stronger Social Resistance to Hegemony?

Research reflects critical academic literature dating to the late 1970’s and gaining frequency in popularizing discourse in the 1980’s. This is commonly cited as a reflection of the first large Debt Crisis involved in the International Finance system’s response to the Oil Shock (Kojm 1984). Ever since those years, which were well situated in the scope of the Cold War, the academic and social responses have been growing significantly in size and number. However, in the “developed world” popular dissent against IFI’s has been obvious only recently, as demonstrations are getting increasingly more violent since their appearance in 1999 via the riots in Seattle against the WTO (Stiglitz 2003). In a December 5, 1999 article in the Seattle Times, Michele Flores comments, “The WTO talks broke down, which gave comfort to those who hold grave concerns about human rights and environmental abuses around the world; Demonstrators grabbed the attention of a nation that, a week ago, didn't know what the WTO was,” which is significant of the pivotal role of these social movements. Most recently however, in September of 2006, the WTO and World Bank scheduled its meeting in Singapore, a country where critics claim the IFIs knew it would be difficult for dissenters, and yet they proceeded. The Singapore government shut down the event to foreigners, and did not admit representatives from 20 NGO’s with formal invitations from the World Bank to enter. The IFI’s involved formally denounced the actions of the Singapore government, despite the ability they had to foresee the actions of an oppressive government not to mention that the proceedings continued without the voice of social movements. The result of this was essentially the forced silence of alternative viewpoints and dissent in even the most formal ways.[24]

New Opposition to IFI’s, Same old Approach; The Bush II Administration

Strangely, the conservative agenda of the Bush II administration has involved the discussion of dismantling the bank for financial reasoning. Due to its contemporary nature the response to this agenda has risen in a few pieces of literature only recently. At the head of this movement, is the political-economist Allan Meltzer, whose most recent entry in the sphere of policy was chairing the Meltzer Commission starting in 2000, also named the International Finance Institution Advisory Commission (IFIAC). In 2000, the Meltzer commission compiled many of the critiques of the left and right to establish a relative consensus on the failure of IFIs. Prior to joining the IFIAC, Meltzer writes the recommendation for:

“Development lending through capital markets. Experience has shown that capital comes to a country that opens its markets, controls spending and budget deficits, reduces inflation, and deregulates and privatizes. International financial institutions are no longer needed for development lending. A modest role for redistributive lending to reduce poverty would remain.”- (Meltzer 1999)

By this qualification, Meltzer proves to be a top candidate for a regime looking to develop the rules of development by the standards of its own elite. Clearly the policies of Bush have shown trust in the financial elite through Tax-cuts for the rich which follow the well disproved economic policies of the Reagan era. Accordingly, the results of this commission’s research were consistent when compared to Meltzer’s past economic advice. (Meltzer 2000) These economists proposed an obvious shift to unilaterally or bilaterally drafted (from multi-lateral) trade agreements and debt management. A new institution from this group would place emphasis on merit-based (neo-SAP) aid capital. This proposal suggested reliance on conservative statistics provided by the think-tank Heritage Foundation- which would go as far as defining positive development policies in the deregulation of trade (by the rules of Comparative Advantage). This compares dangerously to the elitist movements of the Truman administration, where there was reliance on business elites from the Ford and Rockefeller Foundations (Pissani 1991). There may be valid foresight on the evolving nature of US international business elite to the study polyarchichal structure of US society that is certainly worth further investigation.

The Bush administration has also been developing alternatives to the multi-lateral scheme which mirrors in essence the movements made by the Truman administration in the 1940s. The outcome of a review of this policy shift does not shed positive light on the administration’s agenda. The specific changes made by the administration are several. The charge of USAID was most recently given to the State Department, so now perhaps politicians can get some training in development before they move to top positions at the World Bank. Actually, the implications of this are rather serious; the movement of one of the US’s premier aid organizations under the control of the Executive administration is an obvious centralization of power which speaks to how aid could be conceivably used as a political leverage tool. This same argument for the centralization of power is found in the structures of all conservative, neo-liberal arguments that place emphasis on the good that comes from privatization and the most-efficient distribution of power and wealth (of which- in common political parlance- has been engendered by the now out-dated Thatcherite /Reganite assumptions of the “Trickle-Down Theory”). Lack of democracy may in fact be inherent to the approaches of neo-liberalism.

The argument for the intent of the US hegemony reflected in the current conservative agenda also draws heavily from the examples of US political behavior in abandoning the WTO (fostering a relationship much like Bush pioneered with the UN, one where like Truman, agreements are open to whimsical interpretation). The US shows greatest resistance to the international organization which is not only significantly financial, but most democratic in structure (1 country, 1 vote). This is to paint for us the gradual shift in US policy towards liberalization and bilateralism, but not without recognizing that the US will occasionally (and has historically) utilized these organizations to manipulate International Policy in its own interest. The Bank and the Fund, come second on this list of annoying controls on direct US “development” (or hindrances to the centralization of capital). Being that the US has an effective Veto on all decisions made in these institutions (the US owns 17 percent, while an 85 percent vote is required for all major decisions in these IFI’s), they are more acceptable because they also offer- to a degree- US control over non-US capital expenditures (i.e. from Europe). Despite the schizophrenic character manifestation of this capital controlling elite, the obvious move towards state-sponsored, laissez faire capitalism is evident in those political maneuvers of our executive and correspondingly right-slanted legislature (at least until very recently). (Engler 2006). This argument ties the history of IFIs into the World Systems Theory, in that it describes the capitalist appeal to state structures for control in the battle to become the chief locus in the international draw of capital. As these states compete to become the major loci of capital- both via evidenced policy manipulation of elites within those nations, as well as manifest external extensions of power- now as much as ever is obvious to cite the centralization of control and capital resources in what has become an international class war.

Essentially, what the trends of our current executive administration and policy-making-elites show, is that we should be very circumspect in our efforts to shut the Bank down. Without multi-lateral controls, the power-void opens the door for direct, unilateral or bilateral trade deals (as consistent with the ERP and other Cold-War policies, this becomes a political weapon). Dropping controls would also foreshadow the furthering of our powerful state economic interest over those of less “developed” or financially and historically-super nationally disempowered states (Dreher and Egbert 2006). Rhetorical logic argues in the name of democratic principle for the need of a forum for discussing the inequities of the current system, not further dividing international structures and releasing the controls on self-interested, elite led governments.

Foreign Trends that Threaten US-led Banking Schemes:

In addition to the domestic threats that the World Bank is now facing, most recent international policy trends are beginning to show that the countries who feel most disenfranchised with the international finance system are beginning to realize their collective power over the system of debt that has historically challenged both sovereignty and local democratic processes (Wiesman 2006- see note29-, Stallings and Kaufman 1989). The rising trends of the most advanced “developing” countries to become creditors are one of these threats to the US political power which rests in IFI’s. Countries with much experience in the failure of IFI policy have also moved away from the US-led multi-lateral schemes towards accepting and generating more friendly -however bilateral- financial agreements. The most prominent example of this can be found in the case of China. While still receiving some funds from the Bank for development (by consideration of still having the largest population of poor in the world today), China has come to compete with the West for an increasingly large role as an international creditor. Utilizing both political and economic ties in most of the key developing areas of the World (Asia, Africa, and to a lesser extent Latin America), the Chinese government has come to be seen as a threat for its “soft-financing.” Soft financing is a term that incorporates several important distinctions of the credit scheme that China is posing as an alternative to the IFI. “Soft financing” historically incorporates debt schemes with low rates and liability or donated industry projects often given with cooperative policy in mind. For instance, the growth of Chinese influence in African oil for instance has generated alarm among Western competitors.[25] In the economically vital trade of oil, China’s generous financing has allowed for countries to deny heavily structured funding from the western-led international finance system. This financing can be seen welcomed in the countries of Angola, Sudan, and Nigeria among others (though for Sudan there are more controversial trade tactics used). For China however, the impetus is obvious; the growing economic superpower blatantly seeks raw materials and resources. Yet still, to get the competitive edge over the west, Chinese policy has followed more closely the rhetoric of a “human based” development that is driven not only by the ideology that economic gains are mutually beneficial but also that aid should be given at lower interest in addition to incorporating a stronger dialogical process. This dialogical process is evidenced in the increased attention of Chinese politicians to African and more local Asian markets. Direct manifestations of this can be seen not only in heightened aid to these areas[26], but also in the increased cooperation as seen in the Forum on China-Africa Cooperation.

Other threats to western multi-lateral development include the generation of reserves by governments with intent to manage their own financial crises and international cooperation in the form of the politically linked resource agreements. Proponents for the generation of national reserves hold the exemplars of Argentina and Nigeria as promising to the rising trend. Argentina gained local political confidence in its disenfranchisement of debt management in IFIs from its debt crisis, which is seen as exacerbated by its close adherence to Fund and Bank advice.[27] Taking from this experience and the political support that it engendered against the Bank and Fund, the Argentinean government moved to quickly pay off its impending debts and start a foreign federal reserve. Nigeria, which has had an unprecedented history of extractive development debt, has also bartered with the Paris Club to resolve its debt completely, and is currently building their reserve to avoid future reliance on the Bank and Fund for crisis relief.[28] These trends show again, strangely derived consensus on the failure of the current IFI system.

Standing at a Busy Intersection: Whither the IFIs?

Given the current crisis facing IFIs (Wade and Veneroso 1998:2) the global finance system stands in prime position for a complete overhaul. It is clear that, despite the continuing role of IFIs in the international debt scheme and the complex entanglement of that system with global trade, there are moving positions of power in that system. Whereas the effects of IFIs continue to play a role in the narrative of widening the gaps between rich and poor, the role of trans-national corporations and national trade policies will again play a much larger role in that story than ever before. What is argued by several scholars on the edge of financial development, is the need to refocus or increase pressure on those trans-national corporations and governments that now have increased evidence and opportunity to rethink the Washington Consensus, and move for new policies that protect weaker economies from stronger ones (Chomsky 2003, Wade 2006). This argument is augmented by recognition that the need for international cooperation exists as much as ever, in addition to realizing the need to increase international liability through super-national structures and the trade market itself- while perhaps increasing the autonomy of the poor from structures of the upper-class. This is clearly as much a battle over culture (Gramsci), as it is over competing economic paradigms. In addition, the current rising concerns with global pollution and feasibly impending climate change should also be considered as important elements in safeguarding the earth and its peoples against the attack of corporate greed. In order to do so, support international structures of power in their regulation of trade (though it is much more complicated than that), and advocate increasing the penalties for lack of involvement of all countries by creating a significantly more democratic semblance, while placing pressure on governments to shifts to better include social voice - meanwhile pressure for this move is already in motion.[29] While this conclusion is relatively simple the actual effective approaches to these claims are very difficult; as the current structure of IFIs prove very resistant to change. (Einhorn 2006). Nonetheless, there is significant evidence that points to an impending environment for change. The years ahead will prove or disprove the hopeful macro-analyses of scholars like Wallerstein, who seek to add -to the overarching struggle for capital- hypotheses for aggrandized revolution and disenfranchisement. Or, the imminent results may show, that localized resistance, taking from a Gramscian analysis of hegemony (political and cultural), will be the only effective format of resistance; spreading multifariously as it is already in many parts of the world today (though perhaps more rapidly as resistance usurps the technology that traditionally led to further imbalance). We are as a global people, standing at a very busy intersection; which way will we go?

BIBLIOGRAPHY:

Alexander, Nancy and Jenkins, Bruce. 2005. Who Rules the World (Bank)?. Bank Information Center(BIC) IFI Info Brief, No. 1 (September).

Arrighi, Giovanni. 1999. The Global Market. The Journal of World-Systems Research Vol. 2, pp217-251

Bailey, Michael and Braybrooke, David. 2003. Robert A. Dahl’s philosophy of democracy, exhibited in his essays. Annual Review of Political Science no. 6 pp 99-118.

Best, Steven. 1995. The Politics of Historical Vision: Marx, Foucault, Habermas. New York; The Guilford Press.

Boughton, James M. 1998. Harry Dexter White and the International Monetary Fund. Finance & Development; a quarterly magazine of the IMF. v35, no. 3. http://www.imf.org (accessed November 10, 2006)

              
Chomsky, Noam. 2003. Hegemony or survival; America’s quest for global dominance. New York; Metropolitan Books.
 
Corbridge, Stuart. 1998. ‘Beneath the pavement only soil:’ the poverty of post-development. The Journal of Development Studies. Vol 34 no. 6 (Aug) pp 138-148.
 
Craig, R. Bruce. 2004. Treasonable doubt: the Harry Dexter White spy case. University Press of Kansas.
 
Dahl, Robert A. 1971. Polyarchy. New Haven CT; Yale University Press.
Gibson, James L. 2006. Enigmas of Intolerance: Fifty years after Stouffer’s Communism Conformity and Civil Liberties. Perspectives on Politics v4, no 1 (March) pp. 21-34.
______,1992. The political consequences of intolerance: Cultural conformity and political freedom. American Political Science Review v86, no 2: pp. 338-56.
______,1988. Political intolerance and political repression during the McCarthy Red Scare. The American Political Science Review v82, no. 2. (June), pp. 511-529.
 
Dreher, Axel and Sturm, Jan-Egbert. 2006. Do IMF and World Bank influence voting in the UN General Assembly? (April). Online at: http://www.princeton.edu/~pcglobal/conferences/IPES/papers/dreher_sturm_F400_1.pdf (accessed November 26, 2006)
 

Einhorn, Jessica 2006. Reforming the World Bank. Foreign Affairs (Jan/Feb) Vol.85 Is. 1; pg. 17

 

Engler, Mark. 2006. Abandoning the World Bank, Pitfalls When Right and Left Agree. DISSENT (fall) p57-63.

 
Grote, Manfred. 1985. Review of International Studies and Academic Enterprise: A Chapter in the Enclosure of American Learning. The American Political Science Review. Vol 79 no. 3 (Sept) pp900-901
 
Harrison, Mark (ed). 1998. The economics of World War II: six great powers in international comparison. Cambridge, UK; Cambridge University Press.
 
Hitchens, Harold. 1968. Influences on the Congressional Decision to Pass the Marshall Plan. The Western Political Quarterly, v21 no. 1. (March), pp. 51-68. University of Utah.
 
Huddy, Leonie, Nadia Khatib and Theresa Capelos. 2002. The polls-trends: Reactions to the terrorist attacks of Sept 11, 2001. Public Opinion Quarterly v66 no. 3, pp418-50.
 
Jackson, Patrick T. 2003. Defending the West; Occidentalism and the formation of NATO. The Journal of Political Philosophy v11 no. 3, pp223-252. American University
 
Kojm, Christopher A. 1984. The Problem of International Debt; the reference shelf Vol. 56 no. 1.  New York; The H.W. Wilson Company.
 

Korten, David C. 2001. When corporations rule the world. San Francisco; Berrett-Koehler Publishers

Kuhn, Thomas. 1970. The structure of scientific revolutions. Chicago; University of Chicago Press

League of Nations. 1945. Economic stability in the post-war world; the conditions of prosperity after the transition from war to peace. Report of the Delegation on Economic Depressions, part II. (March). Princeton, N.J.; Princeton University Press.

 
Madsen, Jakob B. 2001. Trade barriers and the collapse of world trade during the Great Depression. Southern Economic Journal Vol. 67. Is. 4. pp 848+.
 
McCaughey, Robert A. 1984. International Studies and Academic Enterprise: A Chapter in the Enclosure of American Learning. New York; Columbia University Press.
 
Meltzer, Allan. 2000.  The Report of the International Finance Advisory Commission. (available online at:  ).
_______. 1999. What’s wrong with the IMF, What would be better? Independent Review. (Fall) vol. 4 no. 2  pp201-215
 
Milward, Alan S. 1977. War, Economy and Society; 1939-1945. Los Angeles, University of California Press
 
National Security Agency (cited in text as NSA), ONLINE: Overview and Chronology of the Venona Project. http://www.nsa.gov/venona  (accessed November, 10, 2006)
 
Oliver, Robert W. 1971. Early Plans for a World Bank. Princeton Studies in International Finance, no. 29. Princeton, New Jersey; Princeton University Dept of Economics.
 

Peters, Gerhard and Woolley, John. Online Archives: The American Presidency Project.

              http://www.presidency.ucsb.edu (University of California Santa Barbara).
 
Pisani, Sallie. 1991. The CIA and the Marshall Plan. University Press of Kansas.
 
Rahmena, Majid and Bawtree, Victoria (eds) 1997. The Post-Development Reader. London; Zed Books.
 
Sachs, Wolfgang. 1991. The Development Dictionary; a guide to knowledge as power. London, Zed Books.
 
Schain, Martin A. 2001. The Marshall Plan: fifty years after. New York: Palgrave Publishers.
 
Schild, Georg. 1995. Bretton Woods and Dumbarton Oaks; American economic and political postwar planning in the summer of 1994. New York; St. Martin’s Press.
 

Schrader, Peter J. 2002. “Exporting Democracy: rhetoric vs. reality” London UK; Lynne Rienner Publishers, INC

 
Shohat, Ella and Stam, Robert. 1994. Unthinking Eurocentrism; multiculturalism in the media. London; Routeledge

Shreve, David. 2003. Presidency in Action; Economic Policy. Miller Center of Public Affairs, University of Virginia. ONLINE: (accessed November 10, 2006). http://www.americanpresident.org/action/economic_policy

Stallings, Barbara, and Kaufman, Robert. 1989. Debt and Democracy in Latin America. San Francisco; Westview Press.

Stiglitz, Joseph. 2003. Globalization and its Discontents. New York; W.W. Norton and Company

Stouffer, Samuel C. 1955. Communism, conformity and civil liberties. New York; Doubleday.

Wade, Robert H. 2002. US hegemony and the World Bank: the fight over people and ideas. Review of International Political Economy. Vol. 9 no. 2 (Summer) pp. 215-243

_______. 2001. Showdown at the World Bank (Culling the World Bank). The New Left Review. Second series no. 7 (January/February) pp 124-137

_______.2006. Choking the South. The New Left Review. Second series no 38. pp 115-127.

Wade, Robert H. and Veneroso, Frank. 1998: 1. The East Asian Crash and the Wall Street- IMF complex. The New Left Review. No. 228. (March/ April). pp. 3-23

_________. 1998: 2. The gathering world slump and the battle over capital controls. The New Left Review no. 231 (September/October) pp. 13-42.

Waters, Neil L. 2000. Beyond the area studies wars; towards a new international studies. Lebanon N.H.; University Press of New England.

Williamson, John. 2000. What should the World Bank think about the Washington Consensus? The World Bank Research Observer vol.15, no. 2 (August) pp.251-264 Washington DC; IBRD

 


[1] This is quoted in Best’s The Politics of Historical Vision which provides the framework and impetus for a post-modern approach on historical analysis which is followed in this paper. Despite his accuracy in the rising importance of history in politics, clearly Condorcet had a very romantic vision for the future.

[2] For a deeper historical overview of this topic, see chapter 3 of Richard H. Robbins’, “Global Problems and the Culture of Capitalism” Allyn & Bacon, Copyright 2005.

[3] See Table 1 for a visual of this timeline.

[4] Although I establish the research background for these dynamics and have found resonance in most readings, my first introduction to them was in a lecture late September, 2005 given by Eric Holt Gimenez, PhD.; a visiting professor and representative for the Bank Information Center (BIC), a World Bank watch group.

[5] The “Washington Consensus” is a term coined by John Williamson of the World Bank research team in 1990. This term delineates a 10 point, “academic/ professional consensus” of reforms that ought to be pursued by policy-makers in Washington. Among these points were liberalization of trade, deregulation, and privatization. These points have been highly contested, where ex-bank officials like Joseph Stiglitz have targeted the ‘Consensus,” as promoting the fallacies of International Trade (Williamson 2000).

[6] Quoted on page 58, Pisani 1991; originates in a letter from Truman to University of North Carolina President Gordon Gray.

[7] The specialization of economic advice may be interestingly compared to the enclosures of academic field of International Studies; and is subsequently subject to the analyses of education critics like Neil Waters (Waters 2000) and Thomas Kuhn (Kuhn 1970). Traditional interpretations might consider this pertinent to today for recognizing roots to the construction of a service-oriented-economy, to absorb the growth in the boosted war-time economy. Yet, one could also consider this trend as an enclosing of the policy arena, evidencing an obviously elite-led (“almost religious”) approach to financial policy (75, Korten 2001).

[8] It is interesting to note that: This report (i) is supporting of the evidence already provided [to the causes of policy change] as it makes an appeal to the analysis of Great Depression-oriented, protectionist-trade policy failures [see page 18, League 1945] and (ii) recommends utilizing free-trade to battle the possibilities of “domino-market-failure,” [page 17] an argument that mirrors the Truman Doctrine.

[9] The Board of Economic Warfare was established by Roosevelt, their purpose was obvious by their name, to make military advances through trade. Members like William Diamond eventually became part of the Bank’s leadership structure- a telling note to the composition and political disposition of Bank officials. For futher information on the leaders of the Bank see the attached index of Table 2 from Alexander and Jenkins 2005.

[10] Note: (i) “somewhat;” because it is hard to say exactly how much say these countries had in the planning process. (ii) This includes some countries that would eventually send early request to the Bank for “development loans” entirely unlinked to Post-war reconstruction in all but the resulting ideology; i.e.: Mexico and several other Latin American constituents.

[11] US Secretary of the Treasury, Morgenthau was the appointed arbiter at this conference.

[12] Interestingly, this is the same logic that ran behind the Berlin Conference of 1885; in which European countries gathered to set the rules for splitting/colonizing the “Great African Cake.”

[13] This period is rendered as political witch-hunting by the social commentary of Arthur Miller’s book, “the Crucible.”

[14] Senator McCarthy eventually alleged that Truman was responsible for appointing White with the knowledge of his intent to retrieve information and push agendas for the Communists. Truman shut the subpoena down without having to testify- where Eisenhower was the President at that time, and eventually Nixon also used this in his political campaigns.

[15] Pisani (1991) traces the roots of American Interventionism as far back as the puritans, linking its manifestations by political entities to scholarship dating as early as Thomas Paines’ Common Sense, and the reference therein to world-wide cases of oppression fighting against some implied force of freedom embodied in American ideals (10, Pisani 1991).

[16] For specifics on how War boosted the US economy; effectively putting it in a position of power in trade talks see Harrison 1998, specifically chapter 3 by Hugh Rockoff, “The United States: from ploughshares to swords.”

[17] Interestingly, Gibson’s (Gibson 1988, 1992, 2006) research on this time period, sparked from an interest in political tolerance in Liberal-democratic theory (1992, 2006), and drawing from the work of Samuel Stouffer (Stouffer 1955), explores the all-important nexus of causal relationships to intolerance from elite structures, perceived threats to security, groupthink, and dogmatism… and sets up a framework for the similarities of the period of McCarthyism and the Post-9/11 world by applying more recent public opinion data (from Huddy, Khatib and Capelos 2002; cited in Gibson 2006).

[18] This is a project initiated secretly by the US Army’s Signal Intelligence Service (Precursor to the NSA), meant to “examine and exploit Soviet communications.” Later this project substantiated claims against H. D. White for being a soviet coordinator- and is the same project that was used to espouse the espionage of Julius and Ethel Rosenberg.

[19] Note: (i) This is after the Soviet walk-out of the Paris conference on the Marshall Plan in July of 1947, where Poland and Czechoslovakia followed the soviet lead- a reaction which suits the oppositional language of the First/Second world leaders. (ii) The “top” policy-makers Pisani lists and later substantiates in her chapter on “Coordinated Intervention” (about the use of the CIA in the Marshall Plan): James Forrestal, George Marshall, George Kennan, Allen Dulles and Averall Harriman…etc, of which several were members of the Ford Foundation. (pages 62, and 59/52 respectively, Pisani 1991).

[20] Polyarchy serves as a theoretical base that reflects positively on Chomsky’s view of “Wilsonian-Democracy,” (Chomsky 2005) which establishes that elite groupings control political power. This theory comes from Robert Dahl’s work (Dahl 1971). In research, it was also interesting to note that a similar cord struck between Dahl’s conceptions of progress and that of Post-development authors (Rahnema and Bawtree 1997) derived from a Gramscian foundation (Corbridge 1998) which directly contradict Toqueville’s (in addition to the work of Marx and Wallerstein) conception of inevitable democracy/progress (Bailey and Braybrooke 2003).

[21] The study of polyarchy carries over into an analysis of post-war education; it was during that period of heightened international insecurity that the political-economic elites represented in the Carnegie Corporation and Ford and Rockefeller foundations began pouring money into creating International Studies departments in top academic institutions, a relationship which is scrutinized for accelerating academic enclosure and leads to frustrations with academia as an enterprise while begging classical questions of educational ethos. (Pisani 1991, McCaughey 1984, Grote 1985).

[22] The result of which was the US occupation of Japan, a premier case in cultural, political hegemony- to which it is important to note that a coinciding result was that no Asian influence would help direct post-war policy.

[23] For information about the firsts of the World Bank, see their online archives, web.worldbank.org.

[24] Many analysts will regard the influence of NGO’s central to the few positive reforms recently occurring within the structure of the World Bank, for instance- the rise in Environmental Investments. However, even this fact is deceptively hopeful, for the environmentally sustainable office of the Bank holds about $5 million out of the overall $25 billion in new investments each year, or to put in differently about 0.00025 percent of the overall figure. Clearly the Bank has a long way to go in promoting sustainability.

[25] For an extended analysis of this see the Reuters article “China’s Africa oil power bugs Western rivals” published in the Sudan Tribune November, 18 2006.

[26] This analysis is well presented by the New York Times article, “China Competes with West in Aid to Its Neighbors” published September 18, 2006, by Jane Perlez.

[27] An argument provided by the 2003 Educational Broadcasting Corporation (PBS) film “The Empty ATM.” Another, more popular presentation of the failed IFI management of monetary crises can be found in the 2001 film on Jamaica, “Life and Debt,” by Stephanie Black.

[28] For the inside take on this developing trend see “Can Nigeria be the China of Africa?” by Professor Chukwuma C. Soludo (Governor, Central Bank of Nigeria) posted December 01, 2006. Available online at http://www.vanguardngr.com.

[29] This is evidenced in a recent NY Times article about the most recent reunion of the Bank and Fund; September 18, 2006 “Emerging States Seek Clout At World Bank and I.M.F,” by Steven R. Weisman.

No comments: