Today's Opinions, Tomorrow's Reality 
Breaking the Bank
By David G. Young 

WASHINGTON, DC, April 18, 2000 --  

Being young, white and radical may not be a crime under normal circumstances, but the Washington, DC police weren't taking any chances. Frightened by the prospect of a repeat of violent protests in Seattle during the World Trade Organization meeting last fall, Washington police almost managed to outnumber protesters in a massive show of force that included National Guard troops, helicopters and armored personnel carriers. The security measures worked -- protesters failed to shut down the International Monetary Fund and World Bank conferences held this week -- but the heavy-handed tactics played into the radicals' fears of a global conspiracy.

Riot Police
Riot police block access to the World Bank and IMF.
Photo © 1999 David G. Young

To be certain, anti-capitalism was the single unifying factor for the demonstrators from countless fractured groups. Precious few of the protesters' banners, slogans and speeches made reference to the policies of the World Bank and the IMF. None of the demonstrators I spoke with expressed more than the vaguest awareness of the actions of these international organizations -- other than a general perception that they help impose U.S.-style capitalism on the world's poorer countries.

The grassroots participants shouted slogans and held banners seeking to protect worker rights, fight corporate greed, limit free trade, stop multinational corporations, save the environment from development, and, most often, stop capitalism. The World Bank and the IMF were but conveniently high-profile targets for a movement seeking to halt the spread of free markets.

Protesters mock the 19th-century capitalists they revile.
Photo © 1999 David G. Young

That the World Bank and the IMF should be targets of an anti-capitalist fight is more than a bit ironic, because neither organization has anything to do with capitalism. On the contrary, both institutions have done more to hinder global capitalism over the past 50 years than almost any organization on the face of the planet. The history of the World Bank is filled with shameful loans to some of the most brutally repressive socialist dictators in history. The bank typically gives grants and loans to government agencies -- not corporations or private individuals -- making the bank the largest financial supporter of socialism in the world. Typical loans given by the World Bank have been for government-led development projects like dams, airports, and power plants.

Only after the collapse of Communism in the late 1980s did the World Bank begin to reform its rhetoric away from socialist ideals toward free-market solutions. While this rhetoric may have changed, the bank's actions have not. Shamefully, the bank still targets its money to corrupt third world governments -- not private interests. Some of the loans approved by the World Bank in the past month include:

  • $200 million for the communist Chinese government to build a state-owned highway.1
  • $28 million to the government of Zambia to improve bureaucratic efficiency.2
  • $56 million to the government of Lebanon to improve the "Ministry of National Education, Youth and Sport."3(!)

These are hardly capitalist endeavors!

Similarly, the IMF has often found itself at odds with capitalist reformers. During the Asian financial crisis, for example, the fund consistently supported central governments' efforts to prop up their currencies using traditional means instead of replacing arbitrary monetary policy with market-oriented alternatives like currency boards.

That the Washington protesters -- many of whom boast socialist credentials -- are ignorant of the socialist pedigrees of the World Bank and IMF isn't surprising. The organizations' abysmal track records don't easily lead to bragging rights. What is surprising is that the protesters are so isolated from reality that they are blind to the power of free markets to push entire nations from poverty into prosperity. Capitalism no longer means the power of large corporations to impose their will on a poor, powerless citizenry. The modern free-market economy means empowering the individual to earn a better living by starting a business and competing in the global marketplace.

The demonstrators now leaving Washington are wrong to oppose global capitalism. But they are right about one thing. The IMF and World Bank must be eliminated -- not for supporting free markets, but for opposing them.

Related Web Column:
The Frontline of Free Trade, November 30, 1999


  1. World Bank, Daily Loan Summaries, March 28, 2000
  2. Ibid.
  3. Ibid., March 31, 2000