I was watching this interview with Michael Hudson and Richard Wolff, and Hudson said something that I completely accepted at first, but mulling it over now it seems contradictory. He says that the IMF and World Bank, as neo-colonial powers, arrest the development of capitalism within the colonized countries, by enforcing austerity and making them privatize everything. He says that the purpose of doing this is to prevent the saturation that happens naturally as local finance capital develops and begins to deindustrialize the economy, which grinds industrial development to a halt as finance capitalists only exist as leeches that make their money by creating rents.
Now, where I take issue with this analysis, is that a great deal of what the IMF and World Bank do is steer countries into privatizing public healthcare, education, and other natural monopolies. When these services are public, they don’t hold industry back from booming because they take care of a significant social cost, so if the state takes care of them the state is subsidizing industry to keep developing. Yet when they’re private, they hold a monopoly position and exploit it to charge rent on everyone else because of the obvious necessity for these services. This keeps industry from developing.
If imperialists need the industrial capacity of the periphery, why kneecap it with privatization?
Privatization is the only way for foreign capital to control the industrial assets of the peripheral countries.
Otherwise these sovereign countries would own all the production and resources and would refuse being exploited by Western imperialism!
Even today, 40% of China’s export earnings go to foreign owners. That’s the deal you make with the Devil. And the reason why nobody in China thought the US would start a trade war with China, until Trump actually did in 2018.
How does foreign capital benefit from private healthcare? I can see why they obviously want private ownership of productive industries, but what interest do they have in privatizing reproduction?
Many Global South countries have better nationalized, cheap and affordable healthcare and education than the US.
Right, but when they go to the IMF for assistance, the IMF usually asks them to start privatizing these things if they want any help. In my own country, the Americans’ financial supervision board, that functions as a personalized IMF, twisted our government into privatizing our electric grid. They sold it off to an American energy company because we’re literally an American colony. This case is not too hard to figure out, that’s just plain old corruption.
Yet there’s similar cases all over the Global South, where the institution that gets privatized is not sold off to a multinational, and instead remains in local hands (but private). The IMF’s privatization programs aim to privatize just about anything the state owns; extraction companies, manufacturing, finance, etc.
You might be interested in the following lectures about the financialization of healthcare through the International Finance Corporation (IFC) which is an arm of the World Bank:
The short version is that you’re dealing with finance capitalists who have a lot of profit to make by financializing the healthcare sector of peripheral countries, whereas Michael Hudson was talking about industrial capitalists who wanted to maximize profit through industrial labor. These two are diametrically opposed to one another and their oppositions can manifest in the Global South as well.
I found YouTube links in your comment. Here are links to the same videos on alternative frontends that protect your privacy:
Link 1:
Link 2:
Link 3:
Link 4:
- Gotta bleed that stone to the very last drop.
- Capitalism isn’t a single brain, it’s a bunch of vampires in competition with each other.
- Neoliberalism can’t abide public services, they ideologically need to strip mine every government/country they can get their hand on.
- Public services give people a safety net. People with a safety net don’t feel like they have to work or starve/die.
- Capitalism can’t have a competing structure out there giving people ideas.
- The cruelty is the point.
I probably missed some but I’d say that’s the core.
- But this explicitly just leads to less profit for the multinationals. The private healthcare insurers, utilities, etc that can profit off the privatization are generally local companies that belong to the national bourgeoisies of the colonized countries.
- Monopoly capitalism is definitionally the most centralized capital has ever been. The IMF and World Bank are single, centralized institutions that (from my perspective right now) are making an unforced error.
- True
- The safety net in question still results in more productive labor as a whole, though? This point is just a rejection of materialism. Private monopolies increase socially necessary labor, it’s additional economic rent and it just holds back productivity. How is a materialist to dismiss that fact just because the safety net makes people lose hope?
- and 6 see point 4
The IMF and World Bank are single, centralized institutions that (from my perspective right now) are making an unforced error.
As much as neoliberals can be cynical, calculated, and cruel, it’s easy to forget that their economic system is a dogmatic cult that’s irrational, flawed, and built on materially false tenets. They’re not magic robots doing paperclip optimization, they’re cruel people dogmatically following an earnest belief in a deeply flawed school of economic thought written by cranks with ulterior motives.
- Social services improve workers’ position on labour market, leading to higher wages, so it is profitable for capitalists to destroy them.
I mean, not all capitalists are marxists, my dude.🤷 Austerity has been proven to be bunk; They’re still doing it. While a bunch of those ghouls (Clinton, Obama, that one general guy spring to mind) are familiar with Marxist theory, plenty of them are not and are doing what they think will increase profits purely based on vibes. Someone in another post recently mentioned 48 Laws of Power, it is a book of sociopathic behaviour, based on vibes that many rich people use as a Bible. All your points (which I totally agree with) could easily be turned back on the global north. I mean, don’t we regularly joke around here that Marxists would do capitalism better except we give a shit about people?
Yeah, I suppose you’re right. In the same interview I linked Hudson throws his hands up and exclaims basically the same thing, his job as an economist is impossible because the ruling class has blinded itself about its own interests and has now repeatedly failed to act in its own basic material interest. But it just seems like a critical failure of materialism as an analytic framework that you have to just accept that these people care more about ideas than facts.
They need profits not capacity
When these services are public, they don’t hold industry back from booming
on a national level. they do this is in the imperial core where their firms are based for an important political reason, but in the third world nations are only good for international capital in that they give a name to an army and police force they can use to discipline third world labor. if you own a tin mine there is no interest in providing roads or health care to anyone that isn’t directly involved in your enterprise, at worst it’s helping your competition and class enemies. privatization is in no sense a rejection of the infrastructure for production and extraction, but the exclusion of everything else from that arithmetic. if the IMF privatizes a country’s railroads the people who are going to own that are the foreign capitalists who need it for their business, not some third party waltzing in to extract rent and infringe on their profits
