Three economists with the International Monetary Fund just released an article (PDF) citing that Austerity and Privatization, two aspects of the neoliberal agenda, are really bad things for economies. This is not all that shocking, as the data has supported this conclusion for the last 30 years. What is shocking are two things: first is how narrowly constrained the research was, which led to the same conclusions, and second was that the IMF has no intention of reversing its market-sponsored violence against people policy (also known as austerity).
The article reduces the neoliberal agenda to two main items (there are arguably more in real life): open competition, primarily through deregulation of financial markets that allow international capital to flow, and austerity. The report concludes that these policies will increase inequality, lower employment levels, decimate human capital, and all kinds of other “social costs.”
Without getting into the nuts & bolts of how the IMF operates, their main (stated) goal is global economic stability through “helping” countries that are in trouble, with loans (this is obviously a watered down version of the IMF mission). The idea of the IMF loans is this: lower debt-to-GDP so that global investors can be confident to invest in those countries, loosen regulation, get “big government” out of the way, and let the “free market” do the rest.
Yet when we look at the IMF bailouts of the main players since 2008, not only have none of them actually reduced their debt, they have exponentially increased due to IMF loans.
It makes sense that a country that is taking on loans takes on debt, but if the IMF’s stated purpose is to make debt less, then no country that has taken IMF loans has actually reduced their debt. Ireland is a significant example, because while Ireland has “recovered” for the most part, they have not been paying down, or haven’t been able to pay down, their debt to the IMF.
Here’s the catch of the article: the IMF analysis only applies to healthy countries. What’s good for the healthy goose, in their view, is not good for the starving goose.
The result is that the IMF, as a condition of the loan, gets to circumvent democracy, and make demands on countries that assure that the beatings will continue until investor confidence improves. It is not so much a Foucauldian Governmentally, where the subject is beaten for crimes against the Sovereign market – it’s about the Invisible Hand Jive that turns into an invisible fist.