Loony Lending

The International Monetary Fund, which held its annual meeting in Washington last week, is one of those bureaucracies whose institutional purposes were overtaken by the very events that they were supposed to be controlling. But instead of going out of business, the IMF rewrote its charter, and today it’s a mess. It has been seeking to expand its pool of lendable funds by tapping into the U.S. Treasury, and, as a result, it is justifiably under fire from a Left/ Right coalition of populists, including Ralph Nader and Howard Phillips. At the same time, the organization is supported by consensus-minded centrists, by international bankers, and by those who believe the U.S. should continue to underwrite Third World experiments in socialism.

Like the United Nations with which it is affiliated, the IMF was set up at the end of World War II, a time when certain intellectuals had exceptional influence in the political arena. The prevailing wisdom of the time was that because world problems were national in origin, they would need constant supervision by supra-national organizations. National governments had caused the problems (war, deflation, etc.), so obviously they could not solve them. The international institutions would work wonderfully because they would be staffed by experts who would plan the future. If an international problem arose, why, there would be a conference to deal with it. There would be an exchange of views, and differences of opinion would melt away once exposed to friendly “dialogue.”

TB

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Tom Bethell

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The International Monetary Fund, which held its annual meeting in Washington last week, is one of those bureaucracies whose institutional purposes were overtaken by the very events that they were supposed to be controlling. But instead of going out of business, the IMF rewrote its charter, and today it’s a mess. It has been seeking to expand its pool of lendable funds by tapping into the U.S. Treasury, and, as a result, it is justifiably under fire from a Left/ Right coalition of populists, including Ralph Nader and Howard Phillips. At the same time, the organization is supported by consensus-minded centrists, by international bankers, and by those who believe the U.S. should continue to underwrite Third World experiments in socialism.

Like the United Nations with which it is affiliated, the IMF was set up at the end of World War II, a time when certain intellectuals had exceptional influence in the political arena. The prevailing wisdom of the time was that because world problems were national in origin, they would need constant supervision by supra-national organizations. National governments had caused the problems (war, deflation, etc.), so obviously they could not solve them. The international institutions would work wonderfully because they would be staffed by experts who would plan the future. If an international problem arose, why, there would be a conference to deal with it. There would be an exchange of views, and differences of opinion would melt away once exposed to friendly “dialogue.”