What motivated you to write the book "Pillaging the World. The
History and Politics of the IMF"?
Well I was born in 1950, so in 1968 when the student revolution
began I was 18 years old and I got interested in economics.
course I read Karl Marx like everybody else then, and this interest
in economics has always stayed with me for 40 years. I have worked
in different jobs: I have been a script writer, I have been a
teacher but this interest has always stayed with me.
And then about
10 years or 8 years ago I found out that there was no book on the
history of the IMF and I always thought the IMF was a very important
So I started to do some research on this and I decided
to write a book on the IMF.
I never that it would be that difficult
because the material was so abundant but the outcome was actually
the book and actually it kind of made me feel that my suspicion that
the IMF was a very rotten organization was absolutely.
Under what context was the International Monetary Fund (IMF)
The origins of the IMF dates back to the conference of Bretton
From our point of view nowadays the conference of Bretton
Woods has to been seen as the most important conference of the 20th
Century because the result of the conference of Bretton Woods affect
the lives of more than 7 million people in this world today.
conference of Bretton Woods in 1944 took place in a very special
historical situation - the British Empire had come to an end and a
new superpower had emerge - The United States. The United States had
the biggest industry at that time, every second commodity or every
second that was produced in 1944 was produced in the United States.
They held two thirds of the world's gold reserves and they had the
strong army. They were the only nation that had the atomic bomb at
So they were the number one superpower but they had one problem:
They needed markets.
Their industry produced more goods
than their own markets could absorb. So they had to look for new
markets - so in order to conquer these new markets they established
the system of Bretton Woods, which did something that had never
existed in the world before.
They made their own currency the lead
currency of the world. They made the dollar the world's lead
currency. The dollar was pegged to gold at 35 dollars an ounce and
every other currency in the world was pegged to the dollar.
established the domination of the dollar that exists until this day.
Why was the International Monetary Fund founded? What can you tell
us about its history?
The idea of the IMF was conceived at the Conference of Bretton Woods
and the IMF was actually founded one or two years later.
task was to oversee the implementation of the new world global
financial system and that is the role of the US dollar as the lead
currency - and that is what the IMF actually did in the 1940's and
in the 1950's.
It became sort of a watchdog for the implementation
of the US dollar as the world's lead currency. And then in the
1960's the role of the IMF actually changed.
In the 1960's a lot of African countries became independent and
these countries of course had fought for their independence and most
of the new governments were kind of left-wing governments that had
strong ties to the Soviet Union.
So in order to find their place in
the world markets these countries [they] needed money and they had
to take out loans but the Western banks were not willing to give
them loans so that is when the IMF stepped in as the lender of last
The IMF stepped in and gave out loans to these countries but
they gave them out at very harsh conditions and that's where
"conditionality", which is one of the most important aspects of IMF
lending - where that has its origin.
That is the IMF gave out loans
to African countries under the condition that they would like cut
back their spending, that they would cut back expenses for
education, for healthcare, for old age pension and that they would
implement certain people in the jobs of the central bankers for
example - so they exercised a lot of influence in these countries
and they took away a part of these countries sovereignty.
What effects do the IMF's policies have on the social and cultural
fabric of a country?
Well I can tell you exactly how it effects that because in the late
70's the IMF set up its structural adjustment programs.
There are 4
pillars to these structural adjustment programs:
And take for example
Liberalization means that the flow of commodities
and capital should be liberalized, that is these countries should
open up their markets for big companies from the US and from Europe.
As soon as you open up these markets these big companies become
competitive to the small farmers in these countries so the small
farmers cannot survive. It is impossible for a small farmer who
raises like about 500 chickens to compete with an American food
company. It is absolutely impossible.
So liberalization has had a
really dreadful effect on these small farmers. They all lost their
basis for their livelihood.
That's one thing. Deregulation means that the small banks in these
countries were kicked out of business and the big banks of the
United States and Europe took over.
Privatization means that these
countries in order to pay back their loans had to privatize all
their public utilities - that is like their water supply, the
electricity supply and so on went to Western companies and that
meant that prices went up so people had to pay more, some people
couldn't pay for water anymore so their human right to access water
was taken away from them and the consequence was that a lot of
people actually died of hunger and starvation.
What terminology does the IMF employ and is there Orwellianism at
play here which cloaks its actual practices?
Yeah Labour flexibility sounds very good at the surface but what
does it mean?
It means that somebody who works for 8 hours a day has
to be able to work for 24 hours a day because if his employer calls
him and tells him you can work for 4 hours today but we need you to
work for 4 hours tomorrow night, he has to do that. That is the
meaning of flexibility.
I mean George Orwell was a very wise man and
double speak is one of the most important aspects of the IMF - those
rescue packages were no rescue packages, those were loans for which
those countries have to pay interests.
So that doesn't have anything
to do with a rescue package, because to me a rescue package would be
given them money in order to survive and not demanding any interest
on this money. So double speak is like a very very important thing
and all the leaders of the IMF, which are all corrupt people, are
very good at double speak.
I mean just take a look at the last three
leaders of the IMF they are all very corrupt people, it's Rodrigo Rato, it's Dominique Strauss-Kahn and It's Christine Lagarde - and
all three of them are facing trials because of embezzlement and
So I mean the head of this organization kind of
representatives its ethics and its moral which are absolutely non-