One Size Fits None

Why is it that no matter the reasons why a given nation is struggling with its fiscal situation that the solutions pursued by the IMF and World Bank are invariably the same in pushing austerity? Are the ordinary people the benefit of the sort of crony capitalism that ruins the efficiency of government projects, whose proceeds typically benefit elites? Generally not. Are the people themselves the ones responsible for spending that fails to lead to productive growth? Generally not. And yet when things go wrong in a nation and a government needs a handout, it is not the people who are responsible for a nation’s fiscal troubles who are asked to suffer, nor those who benefit from the maladjustment of economies within struggling nation, but rather those who are often already struggling themselves. Why is this the case?

One of the most dramatic stories within the Bible relating to this sort of phenomenon is that of the patriarch Jacob, himself the father of twelve sons and one unfortunate daughter, who when he had just finished negotiating with his angry father-in-law was faced with the news that his angry brother was coming towards him with hundreds of armed servants. He resorted to several strategies to try to save himself from trouble. For one, he sought to appease the anger of his brother with bribes, skillfully given. In addition, he also divided his family in such a fashion to ensure that everyone was exactly aware of where they stood. In the most vulnerable grouping were his children by his concubines. In the middle group were the sons of the wife, Leah, he did not love as much, and closest to him and the most certain of safety was Jacob himself and his favorite son, Joseph. States are a lot like families, and the policies they enact make it clear which people in a nation are closest to their hearts and which they are willing to sacrifice when trouble comes. In general, the ordinary people of a nation are not near and dear to the hearts of governing elites, who largely care about themselves and not anyone else.

Yet it is not the governing elites of nations themselves whose behavior is the real mystery here. Why is it that the IMF consistently pushes for austerity despite the fact that it is seldom the small amount of money that goes for ordinary people in a nation’s budget that causes the economic trouble to begin with and despite the fact that ordinary people predictably rise up against the policies that are mandated by the IMF in order to get more money flowing into their nations to satisfy the burdens of creditors? There is justice in demanding austerity from those who bring massive indebtedness upon themselves, however unpopular such policies are. It is unjust, though, to demand those to suffer who never gained any of the near-sighted pleasures of profligacy, though, and why the IMF consistently makes such unjust demands is worthy of investigation. There are certainly cases to be made for situations where a nation’s economic health depends on the well-being and development of its ordinary citizens, but all the same the IMF has a consistent disregard and even hostility for the well-being of ordinary people, which requires some explanation.

When one examines the policies of the IMF that have been pushed and implemented–however reluctantly–around the world over the past few decades, one can recognize that they are not all intended at causing difficulties to ordinary people. Reorienting the expenses of governments away from direct subsidies of products towards useful expenditures in infrastructure as well as health and education can bring benefit to people. Even still, a great many countries are already pretty heavily focused on externally directed trade and it is problems with this that can result in economic crises in the absence of internal development that aids in the building of domestic markets with a more stable demand that benefit from being knitted together with other parts of a nation. One wonders why it is always the austerity that is pushed the hardest when it is often the least worthy part of any demands, and the least tied to the economic health that one wishes nations to find in the aftermath of crisis.

About nathanalbright

I'm a person with diverse interests who loves to read. If you want to know something about me, just ask.
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