The International Monetary Fund, an inconvenient institution

As is publicly known, among other characteristics of recent long times, our governments stand out for their attachment to default and for the monotony in their statist policies over and over again unsuccessful but rehearsed with renewed enthusiasm.

In the first round they beg for loans to finance an elephantine state apparatus that eats away all vestige of productivity in the context of unbearable tax burdens, chronic deficits, astronomical inflation, suffocating regulations, closed economy and anti-work labor market, and here we are that in a second round they boast that there is no “paying with the hunger of the people” (That the rulers themselves provoke) without realizing that the creditors do not intend to collect with famines but with dollars.

I have written about the IMF before, but given the current circumstances it is appropriate to reiterate part of what has been said. Henry Hazlitt, the star economist of Newsweek for decades and the celebrated author of The economy in a lesson and the detailed and voluminous analysis of Keynesian theory entitled The mistakes of the new economy, wrote a column on November 11, 1963 that seems prepared for the instances that run. It was titled “Undo the IMF”; There he explains that this institution was established as a replacement for the monetary discipline established by the classical gold standard, to the effect, instead, of giving free rein to inflationary processes. Once the Genoa and Brussels Agreements of the 1920s were established, which allowed the inflation taps to be turned on through the central banks, this “central bank of central banks” was installed, which later became a lender to failed governments. Hazlitt recalls: “The parents of the entity were Harry Dexter White for the United States and Lord Keynes for England. White served as executive director of the IMF, who in 1945 was denounced by the FBI as a Russian spy, which was ratified by the Justice in the United States […] And Keynes – the greatest apostle of inflation of all time – in the British Parliament on May 23, 1944 assured: ‘If I have any authority to say what is and what is not the essence of the gold standard, I would say that this plan is its exact opposite ‘, that is, the collapse of the currency independent of political power ”.

In this line of argument, it is pertinent to remember that in his prologue to the German edition of the General theory of occupation, interest and moneyIn 1936, at the height of the Nazi era, Keynes wrote: “The theory of global production, which is the goal of this book, can be applied much more easily to the conditions of a totalitarian state than to the production and distribution of a given volume. of goods obtained under conditions of free competition ”.

In this context Hazlitt concludes: “The real solution is to dismantle the International Monetary Fund […] since it is a gigantic world inflation machine “and later he emphasizes:” It is really amazing that this system manufactured in Breton Woods in 1944 is not only tolerated but considered sacrosanct. “

For its part, the four-time US presidential candidate and Congressman Ron Paul in the Ron Paul Institute, on March 24, 2015, in a column entitled “Eliminate, do not reform the IMF”, reiterates that this institution is coercively financed by taxpayers from different countries to support corrupt and bankrupt governments as a result of apply statist measures, and when they are about to give up or acknowledge their failures, they receive loads of dollars at interest rates lower than those of the market and with repeated refinancing periods and forgiveness of various sizes. As an example, it shows the financing that Saddam Hussein received from the IMF and the latest scandalous support for Greece.

When saying of economists of the stature of Peter Bauer, Doug Bandow, Robert Barro, Karl Brunner, Ronald Vauvel and Raymond Mickesell, this institution serves to finance inept rulers driven by the reality of their mistakes; Instead of allowing their failed statist policies to be reversed, they receive substantial resources from the Fund. These professionals maintain that this has been the case repeatedly in Argentina, Mexico, Bolivia, the Dominican Republic, Haiti, Indonesia, Iraq, Pakistan, Tanzania, the former Cambodia, the Philippines, Ghana, Nigeria, Sri Lanka, Zambia, Uganda, Turkey , El Salvador, Egypt and Ethiopia.

In his visit to Buenos Aires, Yuri Yarim Agaev, sent by Vladimir Bukouvsky –One of the most prominent dissidents of the former Soviet Union together with Aleksandr Solzhenitsyn– reported that after the collapse of the Wall of Shame, Russian liberals were on the verge of acceding to the government “if it were not for the hasty irruption of the IMF, which endowed millions of dollars to members of the nomenclature from which the current government finally emerged ”.

The case of General Mobutu Sese Seko, who usurped power in Zaire, was widely publicized., which was the largest recipient of aid from the IMF relative to its population. Mobutu’s power was absolute, condemning people to the most gruesome ordeals in a context of permanent looting that allowed that satrap to accumulate a fortune of eight billion dollars from that time.

To what is consigned must be added the juicy essay by Anna Schwartz (the co-author with the Nobel Prize in Economics Milton Friedman from the widely publicized American monetary history) titled “It’s Time to End the IMF and the Department of Treasury Stabilization” and the book by Dambisa Moyo, Ph.D. in economics from Oxford University, When aid is the problem, where countless pathetic cases of countries that receive large resources amid alarming corruption and economic absurdities fostered by aid that comes coercively from outside pockets are detailed.

In the context of external public debtIt is interesting to remember that when Thomas Jefferson, being ambassador in Paris, received the brand new North American Constitution, he wrote: “If he had been able to add an additional clause, it would specify it in the prohibition of the government from contracting debt”, which, as another Nobel Prize winner in Economics put it , James M. Buchanan, “means coercively compromising the assets of future generations that have not even participated in the electoral process to elect the government that contracted the debt.”

In summary, the International Monetary Fund feeds bureaucrats who are paid colossal fees at the expense of taxpayers to ultimately encourage waste and, therefore, the impoverishment of all but especially of the most vulnerable, whose wages are reduced by growing statism.

In this stage, governments that are in serious difficulties due to their major mistakes They will have two options: rectify their mistakes by opening the market and strengthening civilized institutional frameworks or, otherwise, continue with the follies but financed by North Korea, Cuba or the like … if they find dollars there, but not from Washington and your allies. So, the bottom line of the Fund is to end as soon as possible with this entity that has caused so much damage and continues to do so.

The author completed two doctorates, is a professor and a member of two National Academies

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The International Monetary Fund, an inconvenient institution