Notes and Ideas on Susan George - A Fate Worse than Debt
Penguin: London - 1984
 
foreward 

 she states that "third world debt is flourishing" and that the book is "more relevant than ever"
 ID-what is the contemporary situation; how does is affect the understanding of the books ideas?

	"millions of people who have recieved now benefit from the loads to their countries have continued to make enormous sacrifices in order to ensure [repayments], yet the debt burden...has grown" (foreward ix)

	"structural adjustment policies, supposedly designed to rescue the debtors, have wrought social and ecological havoc and have forced wrenching economic and political change on an unprecedented scale.It is now clear...that structural adjustments real goal is to squeeze a 'surplus' out of ailing economies" (foreward ix)

uses statistics, but favours general recogniton of worsening, huge North-South inbalance over precisie statistical measurement; causal link between structual adjustment structural adjustment and social decay rapdily established
social decay - often not a bad thing for third world leaders; allows easier exploitation of workers

media attention often - ethnocentric - how does it affect us/the banks

because of its relatively small nature, "Afican debt should...be particularly amenable to a politcal solution"

"debt indeed provides the ideal tool for obtaining the advantages that classical warfare once afforded" (foreward xiv) - allows the West to undermine states
- she now asserts that debt is also "a formidable instrument for enforcing the new economic logic"
- she highlights how the 'good governance' that the IMF touts is "derisory" and "hypocritical" as [elected] leaders have "little room for manoeurve and few options but to follow [World Bank/IMF]  the programmes"

the debt crisis "is in no ones interest except for a tiny minority in the North and the South"

introduction

she is attempting "to speak on behalf of the victims of hunger and underdevelopment" (note use of Marxist(?) terminology) - using friends/contacts - a local 'bottom-up' perspective? - while acknowleging local variations, she asserts that the effects of the debt crisis have sufficient similarity for us to refer to them collectively

- argues that economic policies are not neutral and that the current era is the first where the elite (IMF etc) are in direct contact with the poorest, without need for intermeadiaries (p.6)
- recognises that theory is sometimes "wobbly" but also that "those who reap the benefits should also pay the costs": "a simple ethical principal". She contrasts this with "the Consortium"'s desire to mantain the status quo.

goals of the book: "explain and denounce the activities of the Consortium and encourage remedial action on the part of the creditors and unity of the part of the debtors ...[and]... above all, promote greater welfare for ordinary people" - "Ideally, the debt crisis can be turned inside out and can serve the cause of true development and democracy"

PART 1: THE PLAYERS AND THE PROBLEM

chapter 1 - how much is $1 trillion

asserts that credit is essential to modern capitalism (p.11) and that "in many cases debt democratizes" - allows social mobility, but argues that beyond the personal/houshold level, it is a permenant, deliberate state

key question - "how could a normal economic phenomenon like national debt turn into such and intractable problem" p.11

she describes dominant model of development as being geared towards growth for its own sake, and placing industrialization ahead of agriculture, creating food security problems - ignoring that most Western states grew on the base of a strong agricultural economy
- this model intends to mimic Western states, but in doing so it ignores the interests of all but a small elite in developing states
- is an outward-looking, results in militariization and hunger

where does the money go?

-loan cash also often spent on badly costed, badly planned, corrupt construction projects, 
-also capital flight - money invested outside the destination country
- links with militarization - vast purchases of arms

says the United States has the worst balance of payments problem, but as the world's largest economy, lacks the need to cut spending/raise taxes as it can just print more dollars - means third world countries have to pay an even heavier price
oil prices and interest rates - two uncontrolable factors (p.27) meant the third world would be in debt whatever.

chapter two - the money-mongers

to an extend she defends third world leaders; and the actual bankers are victims of the 'competitors dilemma' -if i don't, somebody else will
- regional banks lend large amounts of money, as well as the Money-centre ones - the large MCBs developed the International Institue of Finance to offer guidance to smaller banks on where is safe to loan money

arguments about free-market capitalism not valid, as US administration protects banks, not just from insolvency, but also their profitability
- blame rests on shoulders of both governments and banks

down mexico way - the crisis in Mexico, where the president nationalised the banks etc to resist the IMF created organisation from a previously disparate group of financial institutions

chapter three - the international monetary fund: let them eat special drawing rights

"the role of the fund is important...but it cannot be understood without reference to the crisis as a whole and to the other actors" - it influences countries/peoples through its programmes, but the motivations for these interventions come from other actors - the IMF is a messenger, a watchdog

she asserts that the IMF is not apolitical, as it claims "the IMF could have an enormous influence on the economic (which is to say, political) choices of its heavily indebted clients if it chose to do so...if the fund believed, which it patently does not, that economic growth can also result from greater social equality, access to educatin, heath care and other basic services...it could perfectly well make such objectives part of its programmes" - "it has chosn to disregard social equality as a critereon for its programmes"

chapter four - condemned to debt? the trade trap and the dangers of default

neo-liberal defence of IMF is that it defends free trade - against protectionism - but it does not apply this with the same rigour

PART 2 - THE PEOPLE AND THE PLANET

key point - debt is "built-in feature" of the IMF model (p.77); no plan to return to parity
- third world countries forced to participate in international trade, over which they have little or no control - does not influence market, lacks diversity/flexibility to compete

Africa insignificant in global financial terms; Latin America is richer, relatively, but has massive inequality
journalistic style - "this is not very African behaviour" (p.92)

- other issues

- she questions whether economic growth the only way of improving the lot of the poor

- she highlights 'capital flight' as particularly harmful (citing the example of Mexico) (p.144-5)

- notes that environmental considerations are often ignored

- she says that the debt crisis is not one problem, but TWO PROBLEMS; paying off existing debt, but also satisfying need for FRESH CAPITAL

- a solution needs to address both 1st and 3rd world issues

-EVAL:- she is scornful about free market capitalism's potential for prosperity, but does the bailing out of the banks constitute a restriction or enablement of FMC?

- discusses how debt is POLITICAL as well as financial

George's 3-D solution - a "united and determined South with help from the North" (p.228) could turn the problem inside out; use the crisis to encourage development and democracy, 

discusses how the debt-crisis is closely analogous to a war, a 'low intensity conflict'; a way of subjugating people without attracting dissent in the North (255)

- talks about reimbursement in kind - EVAL: boondoggles? (251)