This document discusses the World Bank, IMF, WTO, and farm subsidies. It argues that these institutions were created to benefit wealthy nations like those in Europe and America, rather than to help developing countries. It claims they operate with little transparency and are controlled by powerful special interests from Europe and America. The institutions are said to push policies that primarily aid creditors from wealthy nations rather than focus on eradicating poverty in weaker economies.

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2. WORLD BANK, IMF, WTO, AND FARM SUBISDIES
Copyright © 2009 by Shivaprasad Srikantia. All rights reserved.
Contains extracts from the book titled AMERICAN CAPITALISM,
AMERICANOMICS, & MULTINATIONAL CORPORATIONS - The concealed
economic and political secrets of capitalism that made America
a superpower in less than one century, by Shiv Srikantia.
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The World Bank was founded in 1945. It is officially known as International Bank for Reconstruction
and Development. With headquarters in Washington D.C. it has loaned money to member nations and
profited enormously from such activity. The International Monetary Fund (IMF) was also established
in 1945. After World war II, for a brief period of time, the IMF wished to eradicate pockets of dire
poverty in weak economies to prevent an opportunistic takeover by communist powers. After the
collapse of Soviet communism, communist threats began to wane. Thereafter, the IMF had no reason
to be eradicating poverty or bailing out derailed economies.
After the dismantling of colonial regimes, the European economies were unable to maintain a high
standard of living based on fair trade. Therefore, the WTO was founded in Geneva in 1995. It was
spearheaded by European nations who had a history of colonizing. The WTO does not, in reality, have
a serious reason to be genuinely interested in offering a level playing field for global trade with the
developing economies. Perhaps, the WTO was conceived to covertly help expand international trade
in a manner that would primarily benefit the G-7 nations, and restore economic prosperity to the old
colonial levels.
The WTO is an institution that could help the G-7 nations legitimize trade practices that would
normally be considered unethical, illegal, immoral, imperialistic, or discriminatory. It is likely that
the WTO executives wish to clandestinely help special interest groups in Europe. Institutions such
as the CIA, World Bank, IMF and WTO operate under a cloak of secrecy and the omerta code of
silence.
Manipulative special interest groups can safely hide behind the closed doors of the IMF and World
Bank. The middle class voters in G-7 nations are generally not aware of these issues. However, in
recent years, young people in Western nations who have been troubled by the attitude of their
governments have voiced their protest at venues where WTO officials have congregated to hatch free
trade conspiracies. The WTO executives, however, have continued to remain extremely stubborn and
secretive. The WTO is controlled by powerful capitalists and politicians from Europe. America and
Japan carry a lot of clout in the World Bank setup. The IMF and World Bank can intimidate and
persuade senior politicians in Asian, African, and South American countries to align with the G-7
nations.
In the world of international banking, a vast network of American and European capitalists exists. It
is conceivable that this Euro-American network does not see boundaries in matters of trade and
finance. Perhaps, it also sees no serious compulsion to follow democratic conventions. This Euro-
American network, which holds considerable political clout, might have secretly agreed that the
World Bank and IMF give special status to America. In such an arrangement of reciprocity, the
European nations would have special status within the WTO.
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3. It is known that America’s military power and economic clout can be leveraged over Asian nations,
and countries in the Middle East. Perhaps, many Western capitalists feel that for the good of the
American and European economies, the World Bank, IMF, WTO need to be run in a manner that will
allow special interests groups and big businesses in America and Europe to frame critical policies.
This suggests that the IMF must ensure that the United States Treasury is able to exert force on other
Asian nations and be able to protect American or European banks operating in Asian nations. Nobel
Laureate Joseph Stiglitz, a professor of economics at Columbia University, has been examining issues
connected with the World Bank, IMF, and WTO.
The IMF also offers a mechanism for quickly bailing out creditors from the G-7 nations. During the
financial crisis that gripped Asian nations, most of the creditors from European nations were safely
bailed out by the IMF. Many economists argue that the IMF was primarily created to keep the
communists off the poorer nations. Perhaps, the IMF was never seriously interested in helping nations
which had no visible communistic threat lurking in the corner. We note that IMF guidance has often
caused serious shortages in the supply of food and lead to starvation in developing nations that were
not exposed to communist threats. It would be wise to infer that the IMF will be willing to make huge
sums of money to bail out European creditors, but will be unwilling to make money available to
arrange food subsidies in poor countries facing a financial crisis.
The World Bank, IMF, and WTO do not strictly observe the rules of democracy in international
governance. At present, the G-7 member nations can exercise almost 50 percent of the power in
voting. Furthermore, America has a special veto status. In addition, America gets to choose the head
of the World Bank. The unwritten rule is that the American President has the freedom to select the
chief of the World Bank. However, as a formality, the selection of the chief is done by a secret voting
procedure involving 24 members. For instance, the George Bush administration ignored mild protests
from European members, and had Paul Wolfowitz installed as the chief of the World Bank. Surely,
these were not democratic initiatives. Under ordinary circumstances, at least the European countries
could have raised objection. However, the banking, trading, and financial systems in Europe are
managed by a complex web of bankers and capitalists having a cordial link of brotherhood with
bankers and capitalists in America. Most of the member nations that seek money from the World Bank
are developing countries without sufficient political clout. In total, the World Bank and the IMF have
enlisted 185 member nations.
Many economists and experts feel that individuals working for the IMF and World Bank are
inadequately qualified to the point of being grossly ill prepared to handle the responsibilities in a
competent manner. In the elite economic circles, it is believed that economists making policies at the
World Bank do not have the intellectual finesse to be able to understand the nuances of financial
markets in the third world. They appear to be puppet economists hired to carry out the hidden agendas
of special interest groups within the G-7 nations. It is also believed, that these pawn economists work
with economic models that are too simplistic to reflect the real world situation in third world
countries. At times of economic crisis, third world countries that have declined the guidance of the
IMF have done very well in recovering from a serious downturn. Those that have followed the
guidance of IMF have landed themselves in deeper trouble.
European and American economists of the current generation do not seem to understand the aberrant
economic problems of the developing nations in Africa, Asia, and South America. Incidentally, many
eminent economists and scholars have noticed that the Federal government in America is reluctant
to follow the advise from the IMF. However, officials of the World Bank insist on developing nations
seeking approval from the experts at IMF. When nations in Asia face an economic downturn, the IMF
advises them to practice austerity and establish higher interest rates. However, when the American
economy faces a downturn IMF recommends lowering interest rates and increased government
spending to stimulate the American economy. Though camouflaged as a benevolent organization, the
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4. IMF has all the characteristics of an organization with ambitious political agendas.
Not only have the policy makers at the IMF managed to make callous errors of judgement, they have
also shown an unwillingness to learn from their mistakes. Countries such as China, India, and South
Korea have lost confidence in the IMF. Political leaders in China and South Korea probably see the
IMF as an organization with dishonorable agendas. The current belief in Asian bureaucratic circles
is that the new wave of regulations created by the WTO, IMF, and World Bank are in place to help
the G-7 nations tackle the emerging economic and political clout of Asian nations. At present,
America is becoming overly dependent on Asian nations to manage trade deficits. In fact, a
prestigious American bank recently sought financial help from wealthy banks in the Middle East and
the Far East. The total bailout package ran into several billion dollars. Emerging economic powers
in Asia have now become wiser. They are now declining assistance from the World Bank and the
IMF.
Currently, the G-7 nations are threatened by lower labor costs in Asia. Labor saving technologies
installed by G-7 capitalists have resulted in high unemployment levels. About 20 percent of
manufactured goods have to be imported from emerging economies into the G-7 nations.
If American policy makers encourage simpler service jobs, manufacturing industries in America might
have to close down. Soon after the North American Free Trade Agreement (NAFTA) was executed,
nearly half a million manufacturing jobs in America vanished. In addition, the trade deficits with
Canada and Mexico tripled. Typically, trade deficits seem to originate from products not generally
manufactured in America. For instance, the American appetite for clothing merchandise and toys
generate considerable trade deficits with China. Large quantities of toys and clothing are imported
into America from China where the average wage hovers around $ 3 per hour. In America, the wages
for the same category of jobs hover around $ 15 per hour. While factory workers in China are
underpaid, factory workers in America are overpaid. However, the most interesting fact is that the
Chinese people are being underpaid by American companies engaging in trade with Chinese
companies.
Capitalists, politicians, and bureaucrats who aggressively endorse free trade are also likely to endorse
warfare and military posturing when trade barriers are put in place by developing nations. Many poor
nations in Asia practice protectionism to encourage local industry. Developing nations that are trying
hard to become self sufficient in industrial capability have to erect trade barriers. At one time in
industrial history, even America had erected trade barriers. However, many capitalists in America and
Europe do not want developing nations in Asia and Africa to obstruct free trade with barriers and high
tariffs.
Free trade, as desired by American and European capitalists might threaten world peace. For an
American politician, it is very hard to fight multinational corporations or special interest groups.
Therefore, most American politicians quickly come to realize that the best thing to do is tow the line
of special interest groups and global corporations. In other words, politicians who wish to remain in
office would have to abandon their social responsibilities and join the special interest groups.
America needs a new breed of politicians who can maintain high ethical standards, challenge
capitalistic avarice, and allow some elbow room for third world nations to reorganize themselves and
attain self sufficiency. While capitalists are not overly concerned about the plight of poor nations,
responsible politicians in America and Europe must show concern. Politicians must learn to see
themselves as citizens of the world and discourage the plunder of third world economies through free
trade.
Japan had the opportunity to form important trade connections with her neighboring nations and help
South East Asia build a strong economy. Instead, Japanese politicians aligned the nation with America
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5. and exhibited a self centered approach to trade and commerce. Japan began fostering a rival business
relationship with her poor trade neighbors. The Japanese also destroyed their own social fabric when
they began embracing Americanism. Many Asian and African cultures fail to instill social
consciousness in their citizens. Therefore, wealthy Asians and Africans are unwilling to invest in civil
projects required to build a nation.
The European nations decided to come together and form an European Union to gently counterbalance
the influence of America and Asia in global politics and trade. This put Great Britain in a tight spot.
She did not want to give up her allegiance to America and join a group of nations with many of whom
she had a history of military and cultural hostilities. Therefore, Tony Blain wanted to build new
alliances with America. Middle East politics provided a window of opportunity to Tony Blair.
Rice is not an important part of American diet. However, American farmers with mechanized
harvesters grow rice for export. Farmers and agro businesses have their government assist them in
exporting grains to Asia and Africa. The poor farmers in Asia and Africa face grinding poverty when
American and European agro products are dumped in their local markets. The political leaders of the
third world nations representing the famished farmers are unable to stand up and effectively confront
the stubborn political club of the G-7 nations.
In America’s industrial economy during the first half of the twentieth century, American business
executives were culturally insular. They did not attempt to aggressively explore markets in Asia and
Africa. Though America was an industrialized nation, it was not exporting industrial goods in
sufficient quantities. Instead, America began exporting large quantities of agricultural products for
balancing trade. This has caused great hardship to developing countries in Africa and Asia whose
forte is agricultural produce.
The powerful supermarket chains in America were able to bargain aggressively with the American
farmers and push them to the brink of bankruptcy. Also, the American farmers were not practicing
crop rotation like their counterparts in Europe and Asia. The government had to intervene and
establish a practice of providing subsidies to farmers. Therefore, the American subsidies to farmers
were indirectly subsidizing the wealthy supermarket capitalists. These capitalists could also devise
ways to dump agro-products in third world nations. Incidentally, supermarket chains often hired
citizens at nearly minimum wage. Over a period of three decades, the supermarkets have wiped out
the corner grocery stores and small retail businesses in the neighborhood.
American agro-businesses want developing nations to remove trade barriers to facilitate export of
genetically modified (GM) agricultural products. As European laws do not allow the introduction of
GM agro-products, many American companies want to dump these products in the poor Asian nations.
American agro-business companies are lobbying hard to have laws in Asian nations changed. Big
businesses often resort to high pressure tactics and intimidation to make Asian governments change
policies. These new policies will squash the rights of Asian farmers. Hundreds of Asian farmers who
have been denied fair trade and driven to bankruptcy have committed suicide. Incidentally, this
explains why the Soviets and Chinese had developed a dislike for Western capitalists.
The G-7 once represented the seven most industrialized nations of the world. The G-7 included
America, Canada, Germany, Italy, France, United Kingdom, and Japan. In the twenty first century,
these nations may not accurately represent the greatest economies in the world, but their historical
status has granted them high status in international commerce. Governments of G-7 nations are often
compelled by big businesses and capitalists to allow the skillful exploitation of poor nations. When
developing nations disagree on terms relating to imports from the Western nations, they are slapped
with economic sanctions. Therefore, the cycle of exploitation of the developing economies by the
industrialized nations continue. Sometimes, incompetent political leaders in third world nations allow
such exploitation to continue.
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6. Most citizens of the G-7 nations are not aware of the designs of their capitalists and big businesses.
A particularly disheartening problem in modern times is that the voters and citizens in industrial
nations are ignorant of the unfair trade practices encouraged by their politicians and capitalists. The
newspapers and the TV media do not report news in this category. When the British were colonizing
India, the British capitalists forcibly bought raw cotton from Indian farmers, while the British
government prevented Indian factories from weaving cloth. Instead, cloth from Indian cotton was
produced in Manchester and shipped back to India. The ordinary citizens of Britain were probably
unaware of the unethical conduct of their capitalists.
Franklin Delano Roosevelt believed that free trade between countries would eventually lead to peace.
He was of the view that trade barriers erected during and after the industrial revolution had resulted
in wars which had endangered the lives of millions of innocent people. According to Roosevelt, trade
barriers could eventually lead to hostilities and warfare. Roosevelt conveniently disregarded the
popular economic hypothesis that free trade could only function well between equally developed or
equally under-developed nations.
American and European trade diplomats also managed to create an impression that free trade is
defined as transfer of goods under the rules conceived by capitalists from America and Europe. In
recent decades, European nations have been plagued with high unemployment and under-employment.
We must further acknowledge that most of the industrially advanced nations of the world seem to be
facing a new generation of social and economic problems. These industrialized nations are exhibiting
an inadequate growth rate of about 2 percent. Germany and France have been coping with the
problems of unemployed youth engaging in systematic rioting. Under such circumstances, it would
be outlandish for industrial nations to be willing to allow liberal imports of textiles, electronic goods,
hardware, automobiles, and agro-products from the developing countries. Without serious
consequences, America and Europe can no longer welcome unlimited imports from Asian countries.
For hundreds of years, racketeering, swindling, and deception have been a part of international trade.
Incidentally, in earlier decades, colonist governments had engaged in state sponsored swindling. In
the twentieth century, swindling had to be legitimized. It seems as if modern institutions such as the
World Bank, International Monetary Fund (IMF), U.S. Treasury, and the World Trade Organization
have borrowed many ingenious ideas and ideologies from traders of the nineteenth century. In those
days, trade occurred between less civilized societies. In the nineteenth century, there were no systems
in place to ensure ethical business practices. History repeats itself. The murky methods of trade of the
nineteenth century have now been refined, perfected, and put in practice for controlling international
money markets, regional politics, trade, and commerce.
The IMF, WTO, and World Bank are multi-layered organizations where the top layer has a vital
hidden agenda which the bottom layer is completely unaware of. Many economists working in the
second layer for the IMF might naively believe that the organization has been set up to offer assistance
to stabilize economies of developing nations. On the other hand, the top layer bureaucrats at IMF
know that their primary goal is to assist the financial communities in America, Canada, France,
Germany, Italy, and the United Kingdom in maintaining supremacy.
The World Bank appears to be an organization with sophisticated political agendas. The World Bank
was also interested in encouraging the developed countries to move their toxic waste producing
industries to the least developed economies. Any organization claiming to be for the benefit of the
world community would not be suggesting that pollution be moved to third world countries.
Incidentally, the World Bank wants water distribution in developing countries to be privatized. This
is another odd agenda, as there is big money to be made in the water distribution business. Many
European countries want the water distribution in developing countries to be privatized. The Western
companies want to bid for the water distribution projects in third world nations.
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7. The integrative role of the WTO, World Bank, and the IMF maybe to protect American and European
economies by putting them on a new path of growth by stimulating exports. We notice that the IMF
prefers to give the top executive power to European citizens. The World Bank prefers to give top
executive powers to American citizens. Perhaps, as an organization largely controlled by Western
interests, even the WTO could covertly provide a legitimate facade to carefully mislead the
developing nations into believing that a level playing field for free trade can be created. Then, the
objective of the WTO could be to rope in the poor nations into a net and force them to cut tariffs,
remove trade barriers, and increase their imports from the G-7 nations. This would help the G-7
nations temporarily combat unemployment and poor growth rates until better economic structures are
put in place. In the meantime, the free trade might end up generating enormous inequalities and
disparities between the developed and developing economies. The developing nations could get
locked in a downward spiral. Mexico and Argentina experimented with free trade and ran into serious
economic problems.
Most usually, the concept of free trade works well between nations whose industrial development is
at the same level. Therefore, when the concept of free trade is applied across nations with different
levels of industrial development, the less developed nations could get pushed further into
impoverishment. It is conceivable that artful economists at the WTO or World Bank are in a position
to easily concoct new theories and steer their economic analysis to suit the economic agenda of the
G-7 nations. Using the faulty analysis they could even try to produce a document that looks credible
enough to direct a new policy. In other words, economists in these organizations run the risk of being
bought by European and American special interest groups. Furthermore, the skillful economists could
try to make their analysis complex enough to be beyond the comprehending ability of political leaders
of the developing nations. Many nations in Africa and Asia are run by political leaders who have close
connections with opportunists.
Quite often, free trade has been observed to result in job losses in nations that participate. However,
the rich capitalists are never overly concerned about jobless growth and wage less growth. Industrial
nations are generally satisfied at keeping the unemployment rate at about 4 percent. This scheme
ensures that the pathetically indolent and incompetent citizens of a nation, who fall in the bottom 4
percent, are eliminated from the industrial workforce. However, in mature industrial economies,
under-employment hovers around 25 percent. As a classic case of under-employment, a college degree
is now required to earn a high school graduate's salary. In industrialized economies, when women
entered the nations workforce in large numbers, the wage levels fell significantly.
At a great economic and social cost, the American nation has stationed battle ready aircraft carriers,
submarines, and aircrafts at strategic locations on the globe. To defend weak nations from communist
threats, the American policing scheme with dependable European alliances has a fairly extensive
footprint. The Soviet Union might have been dismantled, but there are many nations in Latin America
and Asia which continue to have faith in communism. While China is experimenting with free market
economics and communism, Cuba is experimenting with socialism.
As private policing does not come for free, many nations in the world have chosen to ignore the issue
of America’s economic and political agendas. American policing brings enormous benefits to poor
countries with untapped mineral resources. Impoverished nations that sign up for American policing
services need not invest heavily in military infrastructure. In the event of a sudden crisis, just a ten
dollar phone call to the White House administration will bring American aircraft carriers and
submarines into attack position. Like an insurance policy with a modest premium, this certainly is a
great military luxury for impoverished nations whose political leaders have faith in American
capitalism.
While eagerly volunteering to organize policing activities, American politicians and capitalists are
willing to sacrifice the lives of able bodied men and women in uniform. They are also willing to take
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8. flak for their decisions. This in itself is very honorable. Incidentally, it may be hard to place an exact
economic value on human lives of the soldiers in the front lines, and incorporate this value into the
social cost of protection. As America has a relatively small contingent of infantrymen, the world
policing job might drive America into a situation of conscription if wars have to be fought
simultaneously in several theaters.
It costs a lot of money to maintain space satellites, aircraft carriers, missile defense systems, and
nuclear submarines for worldwide policing. Perhaps, the nations in the world have an obligation to
foot the bill required for the policing infrastructure. Within an international monetary system, the cost
of global policing could have been recovered elegantly through a global police protection tax.
However, the brazen unconventionality of collecting protection money for American world policing
might have invited harsh criticism from nations in Europe. In fact, the French intelligentsia would
have equated this practice to the Sicilian Mafia’s scheme of extorting protection money.
America is in a position to recover a modest amount of protection money in a camouflaged way
through unfair trade practices. For instance, unfair trade through farm subsidies is a good way of
covertly recovering the costs of policing. Unfair trade with wealthier European nations could help
fund the policing costs incurred on poorer Asian nations. To America, it would not matter where the
money came from, as long as policing expenses were covered. Incidentally, the European nations
might feel morally justified in establishing unfair trade practices with Asian nations. Later, concealed
profits through unfair trade can be diverted into the American treasury for police expenditure.
The WTO is an organization that can legitimize unfair trade to help Europe and America raise money
for protecting Asian nations from communistic threats. Perhaps, the secret agenda of the WTO
extends beyond dealing with simple trade issues and commerce. At the WTO, the leaders of the G-7
nations probably have to work out the financing methods that support international policing. These
plans might constitute classified information, that cannot be made public. For instance, these plans
might require the close scrutiny of geopolitical objectives of Chinese communists.
A culture of compulsive consumerism makes America the biggest consumer of merchandise. America
buys cars from Japan and toys from China. Consumer spending in America drives the Asian economy.
At present, emerging economies of the world account for nearly 40 percent of world business in terms
of exports. The leaders of Asian nations feel that emerging economies should have a greater level of
participation in official domains of the WTO, IMF, and the World Bank.
India, China, and Brazil are seeking organizational changes to attract greater attention. Perhaps, the
changes are not forthcoming because of a second agenda involving international policing. Because
of the potential role of the WTO in indirectly funding policing operations of the future, the top
executive positions in these organizations have to be held by Americans and Europeans. It would be
imprudent to allow executives from South America and Asia into the planning domain. It is a well
known fact that several socialist and communist groups are active in South America and Asia.
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