The Unholy Trinity:  The IMF, World Bank, and WTO

This is an excerpt from “The Unholy Trinity:  The IMF, World Bank, and WTO,” Chapter 12 of Shaking the Gates of Hell:  Faith-Led Resistance to Corporate Globalization.


You would think that governments and multilateral institutions such as the IMF, World Bank, and WTO, would be moving in a more constructive direction, but many people both within and outside of these institutions believe that the current course is already set and is inevitable. Why, for instance, is the United States government not using its vast financial resources to create a better life for the majority of its people or for people around the world? Why does it support policies that trap people in generations of debt? Why does it allow domestic laws that protect people and the environment to be overturned?

Clearly, the United States and other nations see their interests as tied to corporate interests. As corporate power increases, however, the power of governments decreases, until governments, the lucky ones, end up riding on corporate coattails. But corporations, once they are truly globalized, have no loyalty at all, except to the bottom line. They are not even loyal to their “home” governments. They can even change nationalities at will.

Though the rhetoric of the IMF and World Bank has been about development and raising the standard of living, the actual effects of these multilateral bureaucracies has been to integrate poor nations into a world economy dominated by global corporations and powerful nations. They have used structural adjustment policies (SAPS) to “pry open” the economies of developing nations, creating complete dependency.

How can global corporations further pry open the U.S. economy and the economies of other industrialized nations? How can they finish what they started during the Reagan Revolution in the 1980s? How can they bypass the messiness of the democratic process altogether while gutting regulatory agencies and eliminating troublesome laws that interfere with corporate profits? How can they perpetuate the “smoke and mirrors” illusion that nation-states have power, while eliminating the very laws that governments use to protect the rights and well-being of their people? How can they privatize the potentially lucrative public-services sector, including publicly funded hospitals, schools, libraries, prisons, utilities, water services, and social services, and offer these and all other services up for sale to the lowest bidder? How can they ensure that wealthy, industrialized nations will ultimately be as dependent upon the global system that they dominate as are poor and indebted nations? How can they bring structural adjustment policies home? How can global corporations extend their power and consolidate their dominance over people, their governments, and the earth itself? The answer: they create trade agreements and global bureaucracies that convince governments to do this for them, institutions like NAFTA and the WTO, which essentially take the matter out of government hands.

Why should local government, states, or national governments be restricted in their ability to set standards for the common good of their people? As we consider principles that can provide a basis for a more hopeful future, the principle of subsidiarity must be mentioned here. Subsidiarity reverses the present top-down approach to governance that is exhibited by global bureaucracies like the IMF, World Bank, and WTO, which dictate and restrict what governments can or cannot do. The principle of subsidiarity is based on the idea that participatory democracy is more easily expressed at the local level where people can directly affect governing institutions. With subsidiarity the primary locus of decision making would be local, with communities networking regionally, nationally, and even globally in a “bottoms-up” approach. Decision making would move up to the next level of government only when necessary to meet social and ecological goals that cannot be met at a local or regional level or when human rights are being violated.

The principle of food safety and food security is another basic principle for a future where people will be able to sustain themselves and their families. Local, regional, state, and national governments must have the right to protect the food local food production and the safety of the food supply. Global bureaucracies must not interfere with the rights of governments to limit food imports, set and enforce safety standards, and restrict the sale of foods based on the precautionary principle.

Governments, trade agreements, and global institutions must honor the right of independent trade unions to organize and must restrict child labor and forced labor. People have a right to a job with dignity and those who are unemployed, underemployed, or who work in the non-money economy have the right to sustenance. Policies that force subsistence dwellers and small farmers off the land must be reversed.

The IMF, World Bank, and WTO have lost all legitimacy and have caused more poverty, inequity, and environmental damage than they have prevented. For this reason, all further trade liberalization and economic restructuring through these existing institutions should be immediately halted. They should be decommissioned and replaced with new democratically accountable trade, development, and finance institutions that function under the authority of a reformed United Nations. Such institutions must ensure the rights of federal, state, and local governments to enact and enforce laws that protect the common good, and should create a bottom line for participating nations that would protect human rights, including workers’ rights, the environment, and should require full disclosure of corporate standards and behavior. Nations that refuse to abide by just and sustainable standards would not be allowed to participate.

All “odious,” unjust, and unpayable debt of poor nations must be forgiven. Noreena Hertz in The Debt Threat puts forth a comprehensive plan for ending the debt crisis through a system of National Regeneration Trusts that channel debt savings towards meeting human needs. Such trusts would include democratic oversight by civil society.

We still have two chapters to go before we continue this hopeful discussion of alternatives, before we consider how we can find our way out of this interlocking network of institutional Powers that would squeeze the life out of us all and of all that we hold precious in the world. It may feel like a maze, like a complex web that we will never find our way through, but that is not the case. For once we have seen what is at the heart of this global system our lives will never be the same. Simply put, we can resist corporate domination and buy out of the system. We can take a new direction. We can heed the warning: “Don’t buy corporate rule.”

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