• Kaffe
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    4 days ago

    Weaken an economy until it’s cheap and easy to purchase labor-power and mining/farming rights

  • SadArtemis
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    3 days ago

    Personally I found Michael Hudson’s talks on “super-imperialism” and the role of the world bank as the most enlightening and eye-opening in this regard.

    https://youtu.be/K9nbj4X556A?si=15pKFZdPEqScPwBB

    The long story short is- they want countries to be insecure, to depend on the imperial cores- even if they may be “free” and “independent,” through IMF/World Bank/etc influence, the goal is to keep their economies permanently colonized.

    (Sensible) protectionist policy and state-backed development has been the formula through which every industrialized and wealthy country has gotten to where they are now- with no meaningful exceptions. Without protecting domestic production and nurturing it so that it can survive the disruptions and hostile environment that is the “free market,” a country’s independence can be destroyed even without boots on the ground- through dependence on imports of food, medicines, technologies, etc.

    Forcing a country’s markets open, while forcing austerity upon its citizenry, prevents domestic industrial subsidies/state development, agricultural subsidies, medical subsidies, and so-on. It provides a route through which international capital- imperialism, basically- can come in and destroy a nation’s natural self-sufficiency, flooding these countries with cheap goods to destroy domestic production, and then purchasing its land, labor, and infrastructure on the cheap once it has been left destitute. This applies to foodstuffs in particular, across the global south- in many parts of the world, countries are still enslaved to the same agricultural colonialism they have been for centuries- global capital usurps domestic production and focuses it on cash crops, while the nation at large is dependent on imports for their dietary staples, for instance. Effectively, at the flick of a switch the west can inflict famines upon these societies through sanctions. Through “temporary” austerity, they can inflict a permanent austerity on a society, wherein all wealth of resources, labor, and intellectual potential flows to the imperial core, and the colonized are effectively made barren and thus dependent.

    I can go further into how China (and even Russia) differs from the “cheap goods” strategy of the west (specifically around how- unlike the west, they are actually collaborating with the rest of the world to collectively move up the value chain and thus destroy the “chain” altogether). But this is the gist of it.

      • SadArtemis
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        3 days ago

        Aight, for this one I’ll have to (re)look up several things for sourcing and I’ll reply in a more extensive fashion later as a result, but the gist of it (apart from the fact both nations obviously don’t resort to regime change at the drop of a hat, or at all- and actually negotiate towards win-win results) is-

        • both of these countries (and their corporations- which while still generally a mix of capitalist and state enterprise, are actually held accountable for their behavior by both respective states) support other nations’ attempts at securing sovereignty over their own natural resources (as western capital smears it- “resource nationalism”). Examples would include Indonesia’s raw copper export ban (and many others like it) aimed at moving up the value chain by moving the refining processes (and thus the value-added profits) into their own countries- and Niger raising their uranium royalties from €0.80/kg to a more market-accurate rate of €200/kg (basically stopping France’s free ride- many other countries are demanding renegotiations of “post-colonial” royalties agreements forced on them).

        • China and Russia are actually aiding in the development of value-added industries in the global south (factories, refineries, etc- including those that meet local needs, from solar panels, cars, concrete plants, etc), in the training and education of local populations (and various technology transfer programs) and in the development of infrastructure suited to local development and needs rather than neo-colonial resource exploitation. The various projects of the BRI is probably the best example of this, interconnecting countries across Africa and Eurasia, and facilitating regional trade and integration in regions (like pretty much all of Africa/Latin America) that have been made dependent on exporting to western countries prior. All over the world you see telecom infrastructure popping up in places the west had left barren- power plants, airports, decent roads and even at times railways leading to bumfuck-nowhere towns (as someone who has lived in bumfuck-nowhere towns myself), schools, sanitation infrastructure, etc… as well as the rise of domestic agriculture that meets local needs- and it’s not the west that is aiding with that. There are so many examples I could bring up, but China’s support in building Afghanistan’s first wholly owned photovoltaic factory (solar panels, basically) comes to mind- a stark difference compared to the decades of US occupation where they left the economy to the raw resource corporate bandits and tribal opium warlords. Russia meanwhile is building a nuclear power plant in Burkina Faso, which is negotiating a federation with Mali and Niger (two countries France has been looting for Uranium for decades). I could point to all sorts of similar infrastructure projects and agreements that primarily serve to meet domestic needs- high speed passenger rail connecting Java in Indonesia, rail lines connecting Ethiopia and in the works of extending to Kenya and South Sudan, as well as similar rail intended to ultimately connect starting from Tanzania, Kenya, and Uganda and moving towards Rwanda, Burundi, and the DRC).

        • China, Russia, and the rest of BRICS are actually providing financing without the strings attached that enslave countries as described in my prior comment- I’ll delve deeper into this (and all the rest) in a bit in later comments, though it might be a while from now. These loans are also with far better terms and the possibility (and a track record) of debt forgiveness where needed- incomparably superior to those provided by the west.

        Going deeper into all this will be a process, so while I’ll be working on it here and there, I might also try to call out for assistance by making a megathread and requesting other 'grad posters chime in or something. But FWIW among the primary sources that I’ve been following for a while now to educate myself on all of the above- Geopolitical Economy Report and Prof. Wolff at Democracy at Work (as well as, admittedly, r/Sino) are great; while I’ve not read much of their works also, the Tricontinental is great and I’ve listened to a fair bit of Vijay Prashad’s stuff.

  • OrnluWolfjarl
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    3 days ago
    1. They want “assurances” that the government will have enough in the budget to repay the loan at some point, so that’s how they introduce them.

    2. The loans will generate inflation, which will devalue the local currency, which means the loan’s value will decrease as well (this will happen because the value of interest rates paid back will decrease).

    3. Furthermore, they are ideologically opposed to inflation and deficit spending (like all neolibs). They believe that these 2 factors are what destablizes economies, so they demand a government avoid them like the plague.

    4. They believe that the economy does not rely on the proletariat’s economic activity (i.e. buying products and paying bills). They believe that the economy relies on the national loaning industry (i.e. the banks giving loans to people) and the rich people opening up businesses. They are very much adherents of “Reaganomics” or “trickle-down” economics. They think that inflation will damage the accumulated capitals of the rich and the banks, therefore, the economy will not be able to restart.

    5. They want other measures to benefit the capitalist class, so they can help boost the economy (according to their ideology). A big portion of the loans is always allocated to banks, and the rest is either subsidizing corporations directly or indirectly. A certain amount may be used to restructure other existing loans of the government. A major concession they demand is to lower corporate and high-income taxes. Which means the government needs to cut the budget allocated for the benefit of the proletariat to account for the lost income. They usually suggest raising low-income taxes or invent new methods of taxation that targets low-income citizens (e.g. the employer portion of social security payments is decreased, and the employee portion is increased).

    Essentially, IMF-imposed austerity means that the rich get richer and the poor get poorer. Which is just fine as far as the IMF is concerned, because that’s what they think makes for a better economy. In addition, a small class of super-rich people is easier to control and manipulate, and they in turn have an easier time influencing the government.

    Look up “shock therapy”. That’s what the IMF believes in.

    • comrade-bear
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      4 days ago

      I just wouldn’t say that they are opposed to deficit spending, they know it works and demand from undeveloped countries that they don’t do it on the basis that it’s safeguarding their ability to pay the debt, so they essentially turn the whole country into a debt paying machine which is unable to develop social infrastructure, national industrial complex, its forced to sell whatever the country has too keep the debt from spiraling out of control

      • OrnluWolfjarl
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        3 days ago

        That’s true as well, but because deficit spending raises inflation, they are also ideologically opposed to it.

        Deficit spending usually is done to maintain social welfare programs, which makes more money available to low income citizens, which raises inflation. It’s telling that the first parts of the budget they always want to be cut are government wages and benefits.

        This also acts as a signal for the private sector that it’s ok to reduce wages.

        • comrade-bear
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          3 days ago

          But they don’t hold it against the US or European countries, even with inflation but to under developed countries any amount of deficit spending is a deadly sin which gravely damages their risk indices

          • OrnluWolfjarl
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            3 days ago

            They applied the same things to the European PIICGS that went under (Portugal, Italy, Ireland, Cyprus, Greece, Spain), in coordination with the European Central Bank.

            They don’t care as long as it’s not the US, the UK, and to some extend France, Switzerland and Germany. Maybe the Scandinavians would get away with it too. Everyone else is fair game.

            • comrade-bear
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              3 days ago

              Exactly the more in center of capitalism the more okay it is deficit spending.