World Bank: lesser of two evils?

Posted: Oct 01, 2002 12:00 AM
When one sees two of one's enemies fighting, there is often a temptation to cheer for both sides. But the reality is that our enemies are seldom equal in their power or loathsomeness. In most cases, one of the two is far more dangerous. Thus, we must choose sides and aid the lesser evil. As they say, the enemy of my enemy is my friend. Last week, anti-globalist demonstrators shut down much of Washington to protest the policies of the World Bank and International Monetary Fund. As a longtime critic of both institutions, I should be tempted to at least sympathize with the demonstrators. But I cannot. It is not that I have changed my mind about the Bank and the Fund. They still make a lot of mistakes, in my opinion, such as bailing out private banks that don't deserve it, pushing devaluations and tax increases that undermine growth, fostering dependency on foreign aid in developing countries, propping up dictators like Robert Mugabe of Zimbabwe, financing "white elephant" projects that foster corruption and various other sins. However, at the end of the day, the Bank and the Fund are rational institutions that are at least trying to do the right thing. Where they err, it is often because the conventional wisdom among economists in general is wrong. Also, the governments of the major industrial countries, which control both institutions, often impose unwise policies on them for political reasons. Consequently, the Bank and Fund are often forced to follow policies that they know are wrong but have no power to change. As much as I criticize the Bank and the Fund, I should say -- more often than I do -- that they are also forces for good in the world. For the most part, they promote market-oriented policies and provide a measure of discipline to wayward governments that would not otherwise exist. They have many first-rate economists who produce vast quantities of research and data that are essential reading for anyone studying international economic development. Moreover, historically, both institutions have been largely open to their critics. Recently, for example, the World Bank allowed economist William Easterly to write a book highly critical of its policies as part of his regular duties. The websites of both organizations are filled with papers and reports that are often critical of their past actions and policies. In short, both the Bank and the Fund try as best they can to learn from their mistakes. The same cannot be said of the anti-globalists. They are utterly irrational, as well as being wrong. It is a waste of time to argue with them, because they are incapable of making or even comprehending a rational argument. There is no research, no data, nor any academic literature supporting their position. It is based solely on emotion. But one cannot make policy on such a basis. Even communism, which turned out to be a monumental disaster in every country in which it was imposed, had a more rational basis than the rants and tirades of the anti-globalists. At least the communists tried to justify their policies on the basis of serious -- if deeply flawed -- argument, backed by logic and analysis. The anti-globalists don't even bother to do as much as the communists did to support their position. The truth is that anti-globalization is simply an umbrella under which every nut group in America, both on the right and left, has gravitated. Most of the protestors probably don't even care much about international trade, the World Bank, IMF, the World Trade Organization or any of the other things they profess to oppose. They just enjoy protesting. It's like a reunion of all the people who used to follow the Grateful Dead on their concert tours. Since the Dead don't tour any more, coming to Washington to rant and rave about globalization is the next best thing. I have no respect whatsoever for the anti-globalists. And I fear them as nihilists, who would destroy the institutions of civilization simply for the fun of it. Most of them probably belong in mental institutions for their own good. Faced with nihilists incapable of rational thought, on the one hand, and organizations like the Bank and Fund that are attempting to make the world a better place by utilizing the best analysis and research they can find, my choice is clear. I have to side with the latter and oppose the former with whatever resources are at my disposal. I will not stop criticizing the World Bank and IMF when I think they are mistaken, but if it comes down to them or the crazies, I have stand with the Bank and the Fund -- and for rationality against nihilism.