A Fun Question about Poverty

[thegreekdog]

Did you guys solve poverty yet?

Did you finish arguing with PS about homophobic legislation yet?

Yes. He stopped replying to me, which is what I asked him to do if he acknowledged my win.

[BigBallinStalin]

re: bold, initially, all countries were poor, so how did wealth take off in England and Scotland?

What is your theory?

It's not mine, but I find the following to be convincing:

How the Scots Invented the Modern World
North. Institutions, Institutional Change, and Economic Performance


Mainly it's about the creation of ideas and the slow evolution of institutions founded upon private property rights, freer trade, and tolerable governance which were just right in the UK--and more deficient in Continental Europe.

Or also:
Inventing Freedom: How the English-Speaking Peoples Made the Modern World
http://www.amazon.com/Inventing-Freedom ... iel+hannan

What about the different natural resources? Does that play a role?

You've got plenty of sub-Saharan African countries rich in resources, yet they still remain poor.

If you're talking about Jarred Diamond's book Guns, Germs, and Steel, then he makes some good points, but they fail to hold after 1500AD. International trade and the complementary institutions for generating greater wealth were largely the determinants of today's outcomes.

[BigBallinStalin]

I think i agree with Max Weber there he theorizes that christianity is a very big reason to that, here in the "west" its OK to be rich to make money we encourage inventions and we are very good at capital accumulation. in countries like china they were not, africa they were not and so on. This advantage is rapidly shifting nowadays soon china and india will progress faster than us because we have become so sure of our advantage that we dont see it slipping away:)

Another intresting question is how to define poverty when are u poor...? according to my xwife (bitch) u are poor when u cant by a pizza for your kids... i tend to disagree with here (bitch) on most parts but most definitly on that poverty in the west cant really be compared to poverty in africa... not in sweden at least i dont know about the us they have a funny system.

His Puritan hypothesis is interesting, but I don't think it explains the bulk of economic growth. But, religions do play some role in maintaining stability.

These guys say Max Weber's Protestant work ethic hypothesis is incorrect.

lol about your ex-wife comments.

[BigBallinStalin]

Well calvinism were more like switzerland and scotland at the beginning sorry to say that the US didnt contribute to much in the early stages of that movement ...
I was more thinking (China) in like 17-18th century a tremendously big country that got stuck on opium and were not at all intrested in accumaulating its income...

The best example of total fiscal f*ck up might be spain... they stole a load of cash from america then they bought funny/cool/nice stuff which made all that money go to flanders and great britain ... and thoose two areas knew how to invest and accumulate and grew into super powers ....

Today we act differently and think differently but the BASE for our (the wests) wealth were founded like 3-400 years ago.... ergo christianity plays a very big role! Wonder if the increasing atehism an idont belive in god feelings will spell our down fall:)?

Another fun thing about Spain was they brought upon huge inflation in their own country by importing all that stolen gold from their colonies. They ruined their economy because of the old school belief in Bullionism. Bullionism is basically "wealth = MORE GOLD, durr."

[BigBallinStalin]

its funny, your switching from poor to wealth
youre off topic
@ Lord Arioch
i cant agree with your statement above
the first "banknotes" existed already in china before christianity, ....
this idea was brought to europe with marco polo
get familiar with the history of our moneysystem ( i give u a hint - it did not start in the usa)
then get familiar with the stocksystem and after study the currency system,
and then u will be able to put one and one together

The idea of 'banknotes' (i.e. IOUs) is as old as "I'll pay you back in deer fur by the next new moon." Debt was a familiar concept with any political organization that spent more than it earned.

However, more advanced financial banking developed in Italy with the Medici family around... 1600s? That's the kind of banking that made the breakthrough. I'm not so sure about the Marco Polo claim, but I wouldn't be surprised if more advanced ideas on banking flowed across regions.

[patches70]

re: bold, initially, all countries were poor, so how did wealth take off in England and Scotland?

What is your theory?

It's not mine, but I find the following to be convincing:

How the Scots Invented the Modern World
North. Institutions, Institutional Change, and Economic Performance


Mainly it's about the creation of ideas and the slow evolution of institutions founded upon private property rights, freer trade, and tolerable governance which were just right in the UK--and more deficient in Continental Europe.

Or also:
Inventing Freedom: How the English-Speaking Peoples Made the Modern World
http://www.amazon.com/Inventing-Freedom ... iel+hannan

What about the different natural resources? Does that play a role?

You've got plenty of sub-Saharan African countries rich in resources, yet they still remain poor.

If you're talking about Jarred Diamond's book Guns, Germs, and Steel, then he makes some good points, but they fail to hold after 1500AD. International trade and the complementary institutions for generating greater wealth were largely the determinants of today's outcomes.

Maybe you should check out "Confessions of an Economic Hitman" which goes into detail how those nations though rich in natural resources have those resources stolen lost control of to pay the interest on loans that can't be paid back and turns over a nation's public works to private (and foreign) companies.

Then again, those nations with rich resources yet still poor tend to have totalitarian governments which plunder for the benefit of a few elite rulers to purchase hookers and blow. It just might just be cases of thievery keep those nations poor.
Maybe a combination of effects, with a common thread. Interventionalism. Be it for stated noble goals or just plain extortion, thieves see a bounty and come swarming like sharks to blood in the water.

[BigBallinStalin]

I've read Perkins book. He makes some interesting points, but they're mainly based on his secret meetings with US spies in dark rooms of unknown locations. So... I don't take him too seriously. If author sources could support his claims, then I would take him more seriously, but... there aren't any.

It's just his word, and why would the NSA get involved in foreign economic development? They're in the SIG INT business... Then Perkins can say, Oh it's the CIA or some-such, but really? It sounds too far-fetched.

My biggest problem with books about government conspiracies is that governments are incompetent in planning their own economies but are somehow awesome at implementing worldwide schemes of domination--without anybody knowing, except one man... John Perkins.


The dude has a book on the Powers of Shapeshifting. Come on...

[BigBallinStalin]

Maybe you should check out "Confessions of an Economic Hitman" which goes into detail how those nations though rich in natural resources have those resources stolen lost control of to pay the interest on loans that can't be paid back and turns over a nation's public works to private (and foreign) companies.

Sure, if a country like the US or China offers a loan (which the foreign government would have difficulty in repaying), then this gives the US/China leverage over that country. Yeah, that happens, but also foreign governments repay their loans, and there is no such leverage....

Perkins goes on about some malevolent scheme of false promises through foreign aid/"poverty loans," but that's really not the angle of foreign aid and such loans. The conditions are pretty clear, foreign governments know they'll have leverage against them, but many of those loans are forgiven anyway...

He doesn't make much sense. He wants to paint a malevolent US which victimizes foreign governments. But those foreign governments are largely responsible, and the USG isn't that competent in so strongly influencing foreign countries. Sure, there's problems with neoclassical economics when it's mixed with government, but that's the problem of neoclassical economics. It's not a tool for bludgeoning foreign governments by US secret agents who willingly push knowingly bad economic advice to foreign governments.

And it's just conspiracy after conspiracy in the book.

[patches70]

Whoa now, you ask a question in the OP-

How do you make poor people richer?

You also correctly point out that these poor nations are often rich in natural resources and yet still remain poor-

You've got plenty of sub-Saharan African countries rich in resources, yet they still remain poor.

You also point out that the rich nations once used to be poor-

initially, all countries were poor, so how did wealth take off in England and Scotland?

but that they aren't any more.

Well, we know that England took off because she pretty much just plundered the rest of the world. Just like how the Romans got rich and so on. You move into somewhere and just make off with everything of value. Easy peezy.

I like the joke you made-

Yeah, if they had more money, then they wouldn't be so poor.

Which is funny because currency does not equal wealth. If that were the case we could just print up plenty of notes and everybody could be rich. Easy Peezy. But that won't work because currency isn't wealth.

So I offer up the reason why countries rich in natural resource are still poor when we can see from history that if you have a bunch of natural resources you can get pretty darn rich, be it refining those resources yourself or just simply stealing or looting those resources from someone else.

But you dismiss that as conspiracy theory.

So it has to come down to the exploitation of those resources. These countries are still poor because they can't exploit those resources. What good is it to have a ton of oil under the ground if you can't get it to the surface to be sold and used? Right?
So these countries don't have the technical ability or money to invest to exploit those resources.

And that's where the World Bank and it's ilk come in. Under the guise of "economic development" they come in selling a story to these poor nations that the WB will provide the funds to build the infrastructure need to exploit those resources. All good right?

The poor nation agrees because they've been told about how this will improve the plight of the poor nation and make her rich. Except the WB doesn't give the money to that nation, why would they? The nation doesn't have the technical expertise to build that infrastructure even if they had all the money in the world. The WB instead gives that money to corporations who do have the expertise to develop the means to exploit those resources. But guess who actually has to pay back those loans the WB gave? Not the corporations who actually got the money that's for sure!

Those corporations were simply hired to do a job. Of which the money they charged is the money the WB loaned to the poor nation.

In addition the WB sets certain standards for the poor nation. For instance, let's imagine a nation where there is a lot of diamonds in the ground, diamonds that can be used for not just jewelry but also industrial grade diamonds which are probably more important to industry anyway. And in large quantities if the proper infrastructure exists.
Part of the deal the poor nation would have to agree to is that the about to be built diamond mining industry must be privately owned. If the nation says it wants the industry to be nationalized then the WB won't give the money "Good luck with that then, your nationalized non-existent industry" and the poor nation is right back in the old boat, lots of resources but no way to get to them.

So the poor nation agrees. But they don't have any money! The WB didn't loan them money to actually purchase the companies that will be doing the mining. Those are purchased by others, foreigners. Because they have money. And the foreigners don't even have to invest any money in building the infrastructure to support that industry because the poor nation got saddled with those costs!

So the economic development schemes by the WB, IMF and others of their ilk, simply remove all the barriers that keep the carpet baggers out.

The companies who extract those resources sell them around the world, paying some taxes to the poor nation but because of the agreements that the poor nation had to make just to get the loans to create the industry that was supposed to make them rich, those companies don't have to pay very much in taxes to the poor nation. Certainly not enough to cover the loans the WB made to them.

So when the poor nation inevitably finds itself unable to pay the loans even though tons of industrial diamonds are being mined and shipped all over the world, the WB "Ok, we understand, here is a new deal" which just further entrenches the thieves who are plundering the natural resources that would make other nations rich.

So I suppose to those who think to end the plight of the poor who think redistribution is the key, it does matter who is doing the redistributing. In the case of these poor countries, it's the WB doing the distributing with plenty of kickbacks to certain key figures within the poor nation who will keep the population from getting to ornery when they see that all the promises were bullshit. Usually by means of excessive force and repressive government.
And with their bold face shown for the all the world to see the WB will claim with a straight face that it's "helping" this nation to develop, to come into modern times and have economic progress. In fact all the big corporations will indeed be doing plenty of work in that nation, except that all the profits are protected from confiscation by the poor nation as those rich natural resources are being stripped.

This is the standard MO that's been going on for a long time but the dynamic is changing, and not for the better. I should show you who has been doing all the real investing in the African continent this last decade using nice interesting graphics. But suffice it to say I'm not really feeling like looking it all up. But it's China. Head and shoulders above all else China has been heavily investing in Africa for her multitude of resources. And they are playing a different game than what the IMF, WB and western powers were doing.

The westerners where just out to make a quick buck and toss some scraps to the indigenous people and call it "charity" when it wasn't anything of the sort. China is doing something else all together, but that's for a different thread.

The point is, for a nation to get rich it must control it's own resources and destiny. When you put middlemen in, like the IMF, World Bank or such organizations and try to call it "helping" and economic development, it adds an unnecessary level of costs. Which is why when things like a nation going and nationalizing an industry within their nation is met with such derision and sometimes violence. Just ask Egypt with their little spat with England back in the day.

And where such violence isn't used, other methods are used, such as in Venezuela today (though to be fair Venezuela had plenty of problems beyond just not being able to pay back it's economic development loans, namely government).

It's a great system for the rich western nations, but virtually in every case it always ends in tears for the people they claim they are helping.

It's a Corportacracy and it's as bad as it sounds.
So that's why poor nations stay poor despite having plenty of actual wealth in the form of resources. And it's how the rich nations keep getting richer.

What is needed is actual investing and not this sham of investment which is no different than going to the local loan shark who ends up breaking your knees latter. And even after the son of a bitch has broken both your kneecaps, you still owe him the money!.
Doesn't seem fair to me but it is what it is. Ya find a juicy mark who has wealth they didn't realize they had and milk the bastard for everything they got and when there is nothing left you burn the place down and collect the insurance money. It's a favorite tactic of the Mob and it's a favorite tactic of government.
At least the Mob is honest about what it is, government does the same thing and calls it "helping".
It's hilarious when you think about it, in a "he tripped and fell down the stairs" kind of way.

So have fun with your trolling thread BBS. It's a real hoot.

[BigBallinStalin]

Whoa now, you ask a question in the OP-

How do you make poor people richer?

You also correctly point out that these poor nations are often rich in natural resources and yet still remain poor-

You've got plenty of sub-Saharan African countries rich in resources, yet they still remain poor.

You also point out that the rich nations once used to be poor-

initially, all countries were poor, so how did wealth take off in England and Scotland?

but that they aren't any more.

Well, we know that England took off because she pretty much just plundered the rest of the world. Just like how the Romans got rich and so on. You move into somewhere and just make off with everything of value. Easy peezy.

If that was true, then the Spanish, French and Germans should've been pulling through the Industrial Revolution before England did. But they didn't. Why?

It's not just colonialism/imperial expansion. If it was, then China and the Ottoman Empire should've been the first to break through.

If the Roman Empire became wealthy because it conquered people, then the Mongols, thus Mongolia should've been pretty well enough.

What's the problem with this kind of thinking? Wars = destruction of wealth. At the very best, it's a transfer of wealth, but war has deadweight costs, so it's the destruction of wealth.

Economic development is more than just stealing other people's stuff.

[BigBallinStalin]

So I offer up the reason why countries rich in natural resource are still poor when we can see from history that if you have a bunch of natural resources you can get pretty darn rich, be it refining those resources yourself or just simply stealing or looting those resources from someone else.

But you dismiss that as conspiracy theory.

No... John Perkins is batshit crazy, and that's what I responding to. That's why I kept mentioning "John Perkins" and not "patches."

The point of John Perkins is that geopolitical control is maintained by Super Secret Agencies of the USG under the guise of economic development as World Bank and IMF projects.

His point is not "the reason why countries rich in natural resource are still poor when we can see from history that if you have a bunch of natural resources you can get pretty darn rich."



Here's the conspiracy:

And that's where the World Bank and it's ilk come in. Under the guise of "economic development" they come in selling a story to these poor nations that the WB will provide the funds to build the infrastructure need to exploit those resources. All good right?

Big Bad World Bank is going to trick those poor helpless people.

It doesn't work that way. The WB sincerely believes in the validity of its economic projects, but the WB and such planners suffer from knowledge and incentive problems--not some malevolence or ulterior motives presumed by the conspiracy theorists.


Regarding the rest of your summary of John Perkins the Shapeshifter's stance, I've already addressed it. Sure, there are instances of USG meddling, but there are many instances where his story doesn't add up. I'm not going to repeat myself, and you didn't address my points.



Also, your exploitation story is total bullshit. What works for the conspiracy theorist/or moral philosopher is to assume bad intentions on part of the bad guys. It's a misleading assumption, and it totally ignores (a) actual benefits to poor people and poor countries--even through allegedly evil loans and (b) the unintended consequences of the well-intended planners.

[BigBallinStalin]

The point is, for a nation to get rich it must control it's own resources and destiny. When you put middlemen in, like the IMF, World Bank or such organizations and try to call it "helping" and economic development, it adds an unnecessary level of costs. Which is why when things like a nation going and nationalizing an industry within their nation is met with such derision and sometimes violence. Just ask Egypt with their little spat with England back in the day.

Wrong. Constant control over one's resources isn't necessary. Of course, private property rights should be respected in order for the gains of trade to be realized.

For example, in order for you to be wealthy, you must control your labor services at all times. No boss can tell you what to do. Obviously, that's incorrect. You exchange your labor services for an income. You partly lose your autonomy in exchange for a less risky and more steady stream of income.

If you own a plot of oil, you would want "middlemen" to help you extract it. Of course, you can always drill the oil yourself, right? No, you need certain human capital (which Egypt lacked). If you agree to a contract and then f*ck over your lenders by confiscating their stuff (a la nationalization), then sure, you'll getsome extra capital, but good luck encouraging future investment and human capital. Egypt gained a few dollars by significantly reducing its possible future streams of income. That's called bad politics, which is a major determinant of failure for loans and WB-esque projects.

It just doesn't follow that "for a nation to get rich it must control it's own resources and destiny." The nation has to respect property rights--even of the foreigners, as long as such claims to goods were legitimate. Cuba nationalized its tourism industry and controlled its own resources. Did it a lot of good too. Many countries have done that, so it obviously isn't the formula of success.

[patches70]

BBS, Answer if this is true or false-

If a country has abundance of natural resources then that nation can become rich by exploiting those resources. True or false?



If it's true then how come nations rich in natural resources aren't rich in wealth?

If it's false then what is wealth?



The WB, IMF, a banker, money changer, whatever, they are all middlemen. They produce nothing, they siphon off portions of actual wealth.

It's not conspiracy, it's just how the system is. How any system is when you are forced to inject a middleman into any process. If you can do without the middleman you are immensely better off. You have lower costs and you keep greater profits.

I didn't address your points because those are irrelevant. The point is that these rich in resource yet still poor countries are still poor because of middlemen between the exploitation of their resources and the profit derived from the market place. Often times those countries are entirely removed from the market place, proctors move the resources instead cutting out the poor nation.
Thus, the nation remains poor.

The IMF, WB are just examples of those middlemen.
Where is the conspiracy in that, BBS?



Let's look at an actual real world example of the World Bank's MO. Let's go with Ghana. The World Bank and the IMF view Ghana as the "star pupil" in their system of structural adjustment in 1983 (yes, that's what it's a called, structural adjustment).

Ghana was required to privatized more than 130 state enterprises including her mining sector which is her primary export. She had to remove trade barriers, tariffs, exchange regulations and end all subsidies for health and education. This was ordered and Ghana forced to comply by the World Bank and IMF. She had to do these things to receive assistance.

As a result her GDP per capita in 1998 was $390, down from $411 in 1975. 78% of Ghanaians live on $1 a day and 40% are below the poverty thresh hold.
75% have no access to health services, and 68% have no access to sanitation services. 20% are unemployed.

The World Bank and IMF emphasized on trade expansion for Ghana to reduce her debt. Ghana's external debt in 1980 was $1.4 billion (which soon was enough for her to seek help from the IMF/World Bank, much to her dismay). In 1990 her external debt hadn't lowered, it had risen to $7 billion.

This increased debt put Ghana into the IMF's Highly Indebted Poor Countries (HIPC) initiative.

Pre 1983 Ghana was self sufficient in rice. She could feed herself. But the World Bank and IMF required her to end subsidies and open her rice production to markets. In Ghana's Katanga valley, where she used to produce her own rice, is now fallow. Ghana now imports US rice instead of feeding herself. And US rice is subsidized. HAHAHAHA!!!!!! and thus cheaper than Ghana could grow her own rice.
If US rice wasn't subsidized then it would be profitable for Ghana to grow her own rice.

The World Bank and IMF also forced Ghana to change how she ran her health care. Ghana was forced to implement user fees in 1985 which combined with falling wages, poverty and increased prices reduced outpatient services in hospitals by one third. This was done for what the World Bank and IMF call "full cost recovery".

Those who used health services and couldn't pay were jailed. Yes, that's right debtors prisons.
These same user fees also were implemented in education resulting in a 40% primary school drop out rate. The increased fees of education now means only 1 in 400 Ghanaians being enrolled in post secondary and institutions.

The SAP (Structural Adjustment Period) was particularly damaging to Ghana's mining sector, her bread and butter.

[quote="Impoverishing a Continent: The World Bank/IMF in Africa"[/quote]SAP, beginning in 1986, there has been massive
privatization of the mining sector accompanied by
generous incentives for companies which include
the repatriation of up to 95% of their profits into
foreign accounts and the ending of income tax and
duties.[/quote]

A sweet deal! Ghana's state run mining sector became private at World Bank and IMF orders, were purchased by foreign investors and they don't have to pay income taxes to Ghana! And they are allowed to remove 95% of their profits from Ghana. That's sick, man, and that's how the IMF and World Bank operate.

It's called "a favorable investment climate". For Ghana to attract investors they had to eliminate their income taxes on those investors and allow to the remove almost all their profits from Ghana. Now tell me, under those conditions how is Ghana going to be able to ever pay back the loans?
She no longer has control of her resources.

Mining production increased over 45% under privatization, that's a good thing. Except that the profits from that mining which would have done a lot of good for Ghana (it was her gold after all) instead is removed from the country completely.


This is not conspiracy theory. This is fucking fact. You can go look it all up yourself. There's a lot more that the World Bank and IMF did to Ghana, but it would go on and on, environmental issues, social issues.
Ghana wasn't all that rich to begin with but after the IMF got done with her, she was positively destitute. And it's note worthy to remember, that when all this started Ghana was under military rule. The IMF didn't even care if it was a deomocratic government. Didn't give a crap about social rights, civilian rule or all that other jazz.
The IMF only cared about Ghana's resources. Instead of helping to reduce her debt she became even more in debt.

Where is the conspiracy, BBS?

[mrswdk]

Did you guys solve poverty yet?

Did you finish arguing with PS about homophobic legislation yet?

Yes. He stopped replying to me, which is what I asked him to do if he acknowledged my win.

Classic.

[patches70]

You can hold your fingers in your ear and cry out "LA LALALALALA CONSPIRACY THEORY" all you want BBS. You're talking theoretical and I'm giving you actual real world examples.

The World Bank and IMF go into poor countries with rich natural resources, exploit those resources and leave the poor country even poorer.

The actual results are seen since these things actually happen right in front of your eyeballs. I guess you oughta close your eyes as well so you don't see.

[mrswdk]

I have a Ghanaian friend who works in their government. I'll take him out for dinner some time and see what he thinks.

[BigBallinStalin]

BBS, Answer if this is true or false-

If a country has abundance of natural resources then that nation can become rich by exploiting those resources. True or false?

If it's true then how come nations rich in natural resources aren't rich in wealth?

If it's false then what is wealth?

Wealth is merely the means for attaining greater satisfaction. Present wealth is the value of your present goods and the present value of future goods.

If you have a bunch of natural resources, you can become richer. How? By applying your currently available resources (capital and labor)--e.g. cutting down trees to build a cabin in the woods. Previously, you only had an axe and a bunch of trees. Now you have a cabin, a somewhat depreciated axe, and 10 less trees (wealth has increased--assuming your goal was to build a cabin).

If you have a resource which requires a greater intensity of capital (e.g. oil), then you are wealthy, but there's a problem. Most of your wealth is 'locked up' in the future, so you can't immediately use the future goods (e.g. oil in the ground), but you can trade the future goods for present goods. For example, if you sign a contract with Big Bad Oil Company, they'll pay you a percentage of their profits (and/or maybe a lump-sum). That future value of income from the oil is being transformed into present income, thus present goods. You are wealthier now.

This assumes that you have exchange opportunities. Many poor countries lack reliable market institutions for conducting such long-term exchanges (e.g. the government might nationalize your land and the company's capital).

Another historic problem is that governments rich in oil didn't give a shit about the future (they heavily discounted the future value of their oil), so they agreed to pretty crappy deals with Western oil companies. Eventually, later politicians didn't like the earlier politician's short-sightedness, so they confiscated the Western oil companies' capital. The people may have rejoiced, but again that's short-sighted because such an act increases the risk of dealing with such countries (interest rates go up, i.e. exchanges with that country are more costly, thus that country has less opportunities to increase wealth).


These are a few reasons why "countries rich in natural resources aren't rich in wealth." They need the capital and labor (including human capital like skills) to extract the resource and sell it or refine it then sell it. But, they need to find a willing partner to extract the oil for them--so that they can reap some immediate reward.

[patches70]

I have a Ghanaian friend who works in their government. I'll take him out for dinner some time and see what he thinks.

Things have changed recently in Ghana. So much money flowed out of Ghana that back in May of 2013 all the banks in Ghana had to keep their deposits in Cedi (Ghana currency) at the Central Bank instead of a mix of currencies.
Ghana has been of late trying to protect their currency without much success.

but yeah, ask your friend how it was when the IMG came in to help back in the 80's and if he remembers what it was like before that all went down.

[patches70]

Shit BBS, there is your answer to your question staring you right in the face! Staring everyone in the face.

Wealth is merely the means for attaining greater satisfaction

Just convince poor people to be content with what they have then then Whammy! No more poor people!

[BigBallinStalin]

You can hold your fingers in your ear and cry out "LA LALALALALA CONSPIRACY THEORY" all you want BBS. You're talking theoretical and I'm giving you actual real world examples.

The World Bank and IMF go into poor countries with rich natural resources, exploit those resources and leave the poor country even poorer.

The actual results are seen since these things actually happen right in front of your eyeballs. I guess you oughta close your eyes as well so you don't see.

Read something useful like Easterly's White Man's Burden.

[BigBallinStalin]

I have a Ghanaian friend who works in their government. I'll take him out for dinner some time and see what he thinks.

That'd be awesome!

[BigBallinStalin]

The WB, IMF, a banker, money changer, whatever, they are all middlemen. They produce nothing, they siphon off portions of actual wealth.

It's not conspiracy, it's just how the system is. How any system is when you are forced to inject a middleman into any process. If you can do without the middleman you are immensely better off. You have lower costs and you keep greater profits.

Okay. Say you want to get a loan for college. You need $40,000 over four years. Your family is poor, and you don't earn high income.

So, what do you do? You can borrow from the Evil Banker who charges a 10% interest rate. If your post-college future stream of income yields greater than 10% per year, then this exchange is mutually beneficial. No one has been exploited or made worse off.

So, you're wrong about loans themselves being exploitative and blah blah blah.

What has the Evil Banker provided? A service. Banks organize loans and information. That's costly. You could avoid the bank's loan by running around town borrowing small amounts at various interests rates and risk not getting enough funds. Or you could borrow from the bank. The bank reduces transaction costs. That's what middle men do. They increase the gains from trade by reducing deadweight losses (e.g. transaction costs).

So, you're wrong about "having lower costs" (unless you can outcompete a bank, good luck) and that "they produce nothing, they siphon off portions of actual wealth." If you couldn't get a loan, you wouldn't get the post-college streams of income, so you'd likely be poor (unless you've got great entrepreneurial potential, or by becoming a plumber instead of something useless like a Major in Sociology--or even Economics). Wealth would have increased had you taken the loan--and assuming your post-college income stream yields more than the 10% per year interest.

[patches70]

You can hold your fingers in your ear and cry out "LA LALALALALA CONSPIRACY THEORY" all you want BBS. You're talking theoretical and I'm giving you actual real world examples.

The World Bank and IMF go into poor countries with rich natural resources, exploit those resources and leave the poor country even poorer.

The actual results are seen since these things actually happen right in front of your eyeballs. I guess you oughta close your eyes as well so you don't see.

Read something useful like Easterly's White Man's Burden.

Yeah, that's a good overview of how badly the IMF stinks things up and how wrong they are. But they are helping!

I don't know if it's the IMF's goal to be thieves, I don't know if that's their secret mission. I only look at the actual effects of their interventions and it's plain old thievery in all it's glory. Is that what they were going for? I have no idea nor do I care. By accident or design, the end result is the same. A nation's resources get sucked up and the fruits of that bounty never reach the indigenous people.

It's the same story everywhere they go, even in Europe in the times they get their claws into someone <cough cough> Greece <cough> though Greece kind of brought it on themselves and it's merely amusing the debacle. In the third world it's just disgusting.
Cheating a con man makes one chuckle.
Cheating a poor man makes one sick.

So comment on Ghana then, it's matter of fact that the World bank and IMF went in for structural adjustment in 1983.
It's matter of fact that the supposed debt relief instead resulted in ever greater debt.
It's matter of fact that the newly privatized mining industry became more efficient but at the same time the proceeds from that greater efficiency evaporated under the terms of the IMF's debt relief. Ghana would have been better off just keeping their mining industry the same and modest profits instead of meager scraps.
It's matter of fact that Ghana fed herself until they were forced to end subsidies and instead buy imported and subsidized food.

If these things are matter of fact, then how could Ghana be so stupid to agree to them?

You should probably look into how actually benefited. hint for ya, it wasn't the average Ghanaian......

[patches70]

The WB, IMF, a banker, money changer, whatever, they are all middlemen. They produce nothing, they siphon off portions of actual wealth.

It's not conspiracy, it's just how the system is. How any system is when you are forced to inject a middleman into any process. If you can do without the middleman you are immensely better off. You have lower costs and you keep greater profits.

Okay. Say you want to get a loan for college. You need $40,000 over four years. Your family is poor, and you don't earn high income.

So, what do you do? You can borrow from the Evil Banker who charges a 10% interest rate. If your post-college future stream of income yields greater than 10% per year, then this exchange is mutually beneficial. No one has been exploited or made worse off.

So, you're wrong about loans themselves being exploitative and blah blah blah.

Whoa now, that's in no way illustrative of the terms of IMF loans. The IMF is on par with the local loan shark down the street.

If you have an issue with the IMF terms who decides the matter? An independent court branch? No.

If I have a problem meeting the terms of my school loan then I get sued. To be on par with the IMF then the judge in that case would have to be the people who gave me the loan in the first place. Which isn't the case in your example.

And as a condition of getting the loan was I obligated to follow the bank's menu on what to eat? Where to go? With whom to associate? With whom I could purchase goods or sell goods? No.

This isn't at all the case when the IMF comes to town, not by a long shot.

So if you are going to compare things, at least compare apples to apples, not apples to rocks.

[patches70]

Okay. Say you want to get a loan for college. You need $40,000 over four years. Your family is poor, and you don't earn high income.

So, what do you do? You can borrow from the Evil Banker who charges a 10% interest rate. If your post-college future stream of income yields greater than 10% per year, then this exchange is mutually beneficial. No one has been exploited or made worse off.

And besides, being debt free is the new status symbol in the neighborhood. Something plenty of the college kids are going to learn the hard way.

It's a bad idea to get a loan to go to college. There are other options. Like working through school, saving for school, doing well and getting scholarships.
Getting a loan is not the only option.


But in the case of sovereign debt, what options are there when the creditors come knocking and you happen to be a dinky little country like Ghana with the likes of the EU, US and ANIC come knocking at your door?

Ha! You get a offer you can't refuse.