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Published on Saturday, April 15,2000 in the Boston Globe
Will The World Be Ruled By Money Or Human Rights?
by Charles Derber
Only a few months after the Battle of Seattle, huge legions of workers, students, environmentalists, and other protesters are massing on the streets of Washington. Their targets are the International Monetary Fund and the World Bank, the sister institutions of the World Trade Organization. The concerns are not US jobs, sweatshops, and soveregnity but the well-being of 3 billion people in the world who lack enough food or access to basic sanitation. The outcome of the 10-day siege of Washington will help determine the future of globalization and whether the world will be ruled by money or human rights.

The IMF and World Bank provide credit and aid to poor nations through structural adjustment programs - SAPs - designed to correct trade imbalances, pay down debt, and promote transparency and modernization.

SAPs, which some critics dub the ''cold bath,'' require open markets, privatization, deregulation, reduced wages and social programs, and currency devaluation. Such strategies free up funds to repay massive debts to Western banks and governments and increase exports over imports, but they erode the living standards of millions of desperately poor people, triggering bread riots from Caracas to Jakarta.

Two key factors explain why the IMF and the World Bank have helped escalate inequality and poverty in Africa and Latin America. First, the terms of SAPs are dictated by Washington and Western lenders. Harvard economist Jeffery Sachs calls the IMF a ''neocolonial'' government permanently ensconced inside the governments of scores of Third World nations.

Second, despite encouraging humanitarian rhetoric about targeting poverty, IMF policy is crafted on corporate rather than human terms. Debt repayment still bleeds money from rickety schools without textbooks in Uganda and unstocked health clinics in Port-au-Prince. Market liberalization comes at the expense of domestic industry throughout the Third World, and freer capital flows overwhelm African and Latin governments' ability to create jobs and food security.

This represents a perversion of the 1944 Bretton Woods Agreement that created the IMF and World Bank. The architects of Bretton Woods - the economist John Maynard Keynes and FDR's aide Harry Dexter White - championed a world of freer but still highly regulated trade to help governments pursue full employment and social development. The protesters in Washington are the true inheritors of Keynes and White when they support a globalization based on labor rights and social democracy.

The WTO and the IMF have served the original Bretton Woods connection between expanded trade and human rights. More-open markets and fiscal discipline are liberating, as Keynes wrote, only when linked to global regulation of capital flows that protects public investment and national social welfare policy.

Current liberalization policies sabotage the socially protective state - the United States and in Europe as well as in the developing world - which explains why the IMF and World Bank are losing credibility globally.

The Seattle and Washington protests signal an unpredictable new popular movement that is anticorporate, proglobalist, and unites workers in rich and poor nations. Communicating by Internet, it seeks new global institutions and rules of corporate conduct anchored in a higher morality than money.

The IMF and the World Bank are technically UN agencies; their successor institutions must embrace and enforce the 1948 UN Declaration on Human Rights and the International Labor Organization's Conventions on labor rights. When these have teeth and new terms of trade help erode debt and redistribute resources to poor nations, a new global consensus will support freer trade and global investment.

But until the world economy is governed in the spirit of Keynes and White and the UN founders, every major trade meeting will be under siege, and corporations will correctly fear that their global investments are threatened.

Thomas Jefferson refused to sign on to the US Constitution until it was anchored in a Bill of Rights. Only when the new global constitutional order now being shaped by the WTO, the IMF, and global financial markets links worldwide property protection to human rights will globalization gain the consent of the world's people.

Charles Derber is professor of sociology at Boston College and author of ''Corporation Nation.''

Copyright 1999 Globe Newspaper Company


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