The Misguided, Self-Defeating War on the IMF, Essay Example

The International Monetary Fund (IMF) has been in the mainstream news in May 2014, not for any specific actions the organization has taken, but for the circumstances surrounding a planned commencement address by IMF managing director Christine Lagarde. Lagarde had been scheduled to speak at Smith College in Massachusetts until coordinated protests from students and faculty prompted her to cancel her appearance. In the article entitled “The Misguided, Self-Defeating War on the IMF,” author Charles Kenny asserts that attacks on the IMF from both the left and right wings of the U.S. political sphere are unfair and predicated on bad or outdated information.

Kenny, writing for Business Week, begins by addressing the specific complaints made by students at Smith, quoting a petition that included the assertion that “(IMF policies have) led directly to the strengthening of imperialist and patriarchal systems that oppress and abuse women worldwide” (Kenny, 2014). Kenny counters this argument by insisting that “after 10 years of strong economic growth, low inflation, and declining debt across the developing world, this line of argument is a lot less persuasive than it used to be.” (Kenny, 2014).  Kenny cites one economist, Bill Easterly, to bolster his position. Kenny goes on to make a case for the notion that the IMF is actually a far more forward-leaning organization than the Smith students give it credit for, citing several quotes about environmental and economic policy from IMF reports and claiming that such quotes give pause to the U.S. right wing.

Kenny’s underlying premise is that the “howls of campus leftists” (Kenny, 2014) may garner greater media attention, but the policies of the IMF are in fact moving in a direction that should please the left while raising concerns on the right. While Kenny makes some interesting points about the political motivations of those who attack the IMF from either its left or right flank, his assertion that the IMF is a largely benign and benevolent organization are not well-supported. By cherry-picking a few quotes and data points, Kenny offers readers the tip of the rhetorical iceberg while ignoring decades of IMF policies and overlooking the fundamental realties of how such policies have shaped the economies of the developing world.

The IMF functions primarily as a lender to countries in the developing world; it is ostensibly serving their interests, though critics assert that its core mission is to serve the interests of the developed world by providing markets for goods, sources of materials, and other expansionary support. While Kenny argues that the economies of the developing world have seen “10 years of strong economic growth, low inflation, and declining debt,” this assertion ignores the larger context in which this presumptive “growth” has occurred. The IMF has traditionally imposed so-called “austerity” measures on the economies of those nations to which it offers its services; in the wake of the global recession of 2008, similar austerity measures were imposed in the developed world as well. Critics of such austerity measures argue that growth was actually hindered, rather than helped, by policies and programs that cut spending. If in fact there has been some measure of economic growth in the developing world, it is not necessarily the direct result of IMF policies; it could be in spite of them, rather than because of them.

Kenny’s article asserts that the IMF has begun to promote policies that should –and so- raise concerns on the right. Among these policies are those that promote economic stimulus packages, embrace the reality of climate change, and acknowledge the threat of rising economic inequality. Such policies and positions may appear to run counter to IMF tradition, but they must be examined in the larger historical context of IMF actions and policies. Traditionally, the IMF has operated by bringing tremendous influence to bear on the economies of individual nations, typically insisting in strict economic austerity measures in exchange; the issues Kenny raise in his article in no way undermine such traditions.

Reference

Kenny, C. (2014). The Misguided, Self-Defeating War On the IMF. Businessweek.com. Retrieved 24 May 2014, from http://www.businessweek.com/articles/2014-05-19/senate-republican-and-smith-college-criticism-of-the-imf-is-misguided#p1