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96 THE CREATURE FROM JEKYLL ISLAND NEARER TO THE HEART'S DESIRE 97
This hidden agenda becomes crystal clear in the nature of what
the Bank calls Sectoral Loans and Structural-Adjustment Loans. In
the first category, only part of the money is to be used for the costs
of specific projects while the rest goes to support policy changes in
the economic sector. In the second group, all of the money is for
policy changes and none of it is for projects. In recent years, almost
half of the loans to underdeveloped countries have been in that
category. What are the policy changes that are the object of these
loans? They add up to one thing: the building ofworld socialism.
As the Fabians had planned it, the word socialism is not to be
used. Instead, the loans are issued for government hydro-electric
projects, government oil refineries, government lumber mills, government
mining companies, and government steel plants. It is
delivered from the hands of politicians and bureaucrats into the
hands of other politicians and bureaucrats. When the money comes
from government, goes to government, and is administered by
government, the result will be the expansion of government.
Here is an example. One of the policy changes often required by
the World Bank as a condition of granting a loan is that the
recipient country must hold down its
wages. The assumption is
that the government has the power—and rightfully should have the
power—to set wages! In other words, one of the conditions of its
loan is that the state must be omnipotent.
Paul Roberts holds the William E. Simon Chair of Political
Economy at the Center for Strategic and International Studies in
Washington. Writing in Business Week, he says:
The entire "development process 7 '
has been guided by the belief
that reliance on private enterprise and equity investment is
incompatible with economic and social progress. In place of such
proven avenues of success, development planning substituted loans
and foreign aid so that governments of the LDCs [Less Developed
Countries] could control economic activity in keeping with plans
drawn up by experts.
Consequently, economic life in the LDCs was politicized from the
start. By endowing governments with extensive control over their
economies, the U.S. set up conditions exactly opposite to those
required for economic growth.
Ken Ewert explains further that the conditions imposed by the
fund are seldom free-market oriented. He says:
The Fund concentrates on "macro-policies/' such as fiscal and
monetary policies or exchange rates, and pays little attention to
fundamental issues like private property rights and freedom of
enterprise. Implicit ... is the belief that with proper "macromanagement"
any economic system is viable....
Even more important, it has allowed governments the world over
to expropriate the wealth of their citizens more efficiently (through the
hidden tax of inflation) while at the same time aggrandizing their own
r?ower. There is little doubt that the IMF is an influence for world-wide
socialism.
An important feature of the Structural-Adjustment Loans is that
the money need not be applied to any specific development project.
It can be spent for anything the recipient wishes. That includes
interest payments on overdue bank loans. Thus, the World Bank
becomes yet one more conduit from the pockets of taxpayers to the
assets of commercial banks which have made risky loans to
Third-World countries.
AUSTERITY MEASURES AND SCAPEGOATS
Not every measure advocated by the IMF and World Bank is
socialistic. Some of them even appear to be in support of the private
sector, such as the reduction of government subsidies and welfare.
They may include tax increases to reduce budget deficits. These
policy changes are often described in the press as "austerity
measures/ 7
and they are seen as hard-nosed business decisions to
salvage the failing economies of underdeveloped countries. But, as
the wolf (in sheep's clothing) said to Little Red-Riding-Hood, "All
the better to fool you with, my dear." These austerity measures are
mostly rhetoric. The borrowing nations usually ignore the conditions
with impunity, and the World Bank keeps the money coming
anyway. It's all part of the game.
Nevertheless, the "structural-adjustment" conditions provide a
scapegoat for local
politicians who can now place the blame for
their nation's misery on big, bad "capitalists" from America and the
*MF. People who have been taught that it is government's role to
provide for their welfare, their health care, their food and housing,
1. "How 'Experts' Caused the Third World Debt Crisis/' by Paul Craig Roberts,
Business Week, November 2, 1987.
b "The International Monetary Fund/' by Ken S. Ewert, The Freeman, April, 1989,
PP* 157, 158.