The new world of debt

New Left Review

Volumn , Issue 230, 1996, Pages 91-114

  Strange, Susan ^a  

^a NONE

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EID: 0041180695     PISSN: 00286060     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (56)

1. The following is an extract from Susan Strange's book Mad Money, forthcoming from Manchester University Press.
2. See Strange, Mad Money, ch. 9.
3. H. Feis, Europe the World's Banker, 1870-1914, New York 1964.
4. On this, see C. Prout, 'Finance for Developing Countries: An Essay' in S. Strange, ed., International Economic Relations of the Western World, 1959-1971, Vol. II, International Monetary Relations, Oxford 1976. Prout (now Sir Christopher and a former leader of British Conservatives in the European Parliament) commented on the totally different attitude of nations when they cease to become lenders and become creditors. 'As lenders [they] were behaving like highly speculative fringe bankers devoted entirely to profit considerations and mindless of asset security. . .As creditors they establish elaborate procedures to salvage a financial disaster which need never have happened if even a fraction of the cooperation they demonstrated ex post the insolvency had been demonstrated ex ante the insolvency' (p. 389).
5. The debate is summarised in S. Strange, Casino Capitalism, Oxford 1986, pp. 92-5.
6. Ibid., p. 181.
7. Some important contributions to this literature were S. Maxfield, Governing Capital: International Finance and Mexican Politics, Ithaca 1990; R. Bouzas, 'The Mexican Peso Crisis and Argentina's Convertibility Plan: Monetary Virtue or Monetary Impotence?', in R. Roett, ed., The Mexican Peso Crisis: International Perspectives, Boulder 1996; L. Thurow, The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World, London 1996; W. Greider, One World, Ready or Not: The Manic Logic of Global Capitalism, New York 1997; and a series of articles on the 1994-95 crisis in The Economist.
8. Some important contributions to this literature were S. Maxfield, Governing Capital: International Finance and Mexican Politics, Ithaca 1990; R. Bouzas, 'The Mexican Peso Crisis and Argentina's Convertibility Plan: Monetary Virtue or Monetary Impotence?', in R. Roett, ed., The Mexican Peso Crisis: International Perspectives, Boulder 1996; L. Thurow, The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World, London 1996; W. Greider, One World, Ready or Not: The Manic Logic of Global Capitalism, New York 1997; and a series of articles on the 1994-95 crisis in The Economist.
9. Some important contributions to this literature were S. Maxfield, Governing Capital: International Finance and Mexican Politics, Ithaca 1990; R. Bouzas, 'The Mexican Peso Crisis and Argentina's Convertibility Plan: Monetary Virtue or Monetary Impotence?', in R. Roett, ed., The Mexican Peso Crisis: International Perspectives, Boulder 1996; L. Thurow, The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World, London 1996; W. Greider, One World, Ready or Not: The Manic Logic of Global Capitalism, New York 1997; and a series of articles on the 1994-95 crisis in The Economist.
10. Some important contributions to this literature were S. Maxfield, Governing Capital: International Finance and Mexican Politics, Ithaca 1990; R. Bouzas, 'The Mexican Peso Crisis and Argentina's Convertibility Plan: Monetary Virtue or Monetary Impotence?', in R. Roett, ed., The Mexican Peso Crisis: International Perspectives, Boulder 1996; L. Thurow, The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World, London 1996; W. Greider, One World, Ready or Not: The Manic Logic of Global Capitalism, New York 1997; and a series of articles on the 1994-95 crisis in The Economist.
11. Some important contributions to this literature were S. Maxfield, Governing Capital: International Finance and Mexican Politics, Ithaca 1990; R. Bouzas, 'The Mexican Peso Crisis and Argentina's Convertibility Plan: Monetary Virtue or Monetary Impotence?', in R. Roett, ed., The Mexican Peso Crisis: International Perspectives, Boulder 1996; L. Thurow, The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World, London 1996; W. Greider, One World, Ready or Not: The Manic Logic of Global Capitalism, New York 1997; and a series of articles on the 1994-95 crisis in The Economist.
12. M. Bowe and J.W. Dean, Has the Market Solved the Sovereign Debt Crisis?, Princeton Studies in International Finance, Princeton 1997, p. 13.
13. Ibid., p. 53.
14. M. Aglietta, Financial Market Failures and Systemic Risk, Centre d'Etudes Prospectives et d'Information Internationales Working Paper 96-101, Paris 1996, p. 13.
15. M. Mayer, The Bankers: The Next Generation, New York 1997, p. 446.
16. J. D'Arista, The Evolution of US Finance, Vol. II. Restructuring Institutions and Markets, New York 1994, p. 16.
17. Grieder, One World, Ready or Not, p. 259.
18. Ibid.,p. 263.
19. There is an interesting comparison to be made here with Taiwan, whose central bank, in 1987, imposed ceilings on banks' foreign liabilities after a surge of hot money flooded into Taiwan from abroad. These were successively eased and finally abolished ten years later, see Free China Journal, 30 May 1997.
20. The Exchange Stabilization Fund was the result of a 1936 tripartite agreement between the United States, Britain and France to give mutual support to each other's currencies. Though not wholly successful, it is seen by historians as the forerunner of the Bretton Woods fixed exchange rate system. See S. Clarke, The Reconstruction of the International Monetary System: The Attempts of 1922 and 1933, Princeton Studies in International Finance, no. 33, Princeton 1973.
21. P. Erdman, Tug of War: Today's Global Currency Crisis, New York 1996, p. 13;
22. L. Pauly, Who Elected the Bankers? Surveillance and Control in the World Economy, Ithaca 1997, p. 124.
23. Aglietta, Financial Market Failures, pp. 12-14.
24. See S. Strange, 'International Monetary Relations', in A. Shonfield, ed., International Economic Relations in the Western World, 1959-1971, Vol. II, Oxford 1976, pp. 105-16.
25. Grieder, One World, Ready Or Not, p. 263.
26. Martone, 'Recent Economic Policy in Brazil Before and After the Mexican Peso Crisis' in Roett, ed., The Mexican Peso Crisis, p. 61.
27. Bouzas, 'The Mexican Peso Crisis and Argentina's Convertibility Plan', p. 71.
28. Maxfield, Governing Capital.
29. Ibid.,p. 192.
30. J. Frieden, 'Invested Interests: The Politics of National Economic Policies in a World of Global Finance', International Organization, vol. 45, no. 4, 1991, pp. 425-51.
31. See also an updated summary in his article, 'Lessons from the Thais', The Financial Times, 30 July 1997.
32. IMF press summary, 6 March 1997.
33. Korea's trade deficit in 1997 was the highest at $19 billion, Thailand's next at $10 billion, followed by Indonesia at $8 billion.
34. IMF Survey, 24 March 1997.
35. G. Milesi-Ferretti and A. Razin, Current Account Sustainability: Selected East Asian and Latin American Experiences, IMF Working Paper 96/110, Washington, DC 1997.
36. J. Stopford and S. Strange, Rival States, Rival Firms, Cambridge 1991, pp. 45-7.
37. Oxfam, Multilateral Debt: The Human Costs, Oxford 1996.
38. International Monetary Fund, International Capital Markets: Developments, Prospects, and Key Policy Issues, Washington, DC 1996; T. Killick, IMF Programmes in Developing Countries: Design and Impact, London 1995; P. Mistry, Resolving Africa's Multilateral Debt Problem: A Response to the IMF, The Hague 1996.
39. International Monetary Fund, International Capital Markets: Developments, Prospects, and Key Policy Issues, Washington, DC 1996; T. Killick, IMF Programmes in Developing Countries: Design and Impact, London 1995; P. Mistry, Resolving Africa's Multilateral Debt Problem: A Response to the IMF, The Hague 1996.
40. International Monetary Fund, International Capital Markets: Developments, Prospects, and Key Policy Issues, Washington, DC 1996; T. Killick, IMF Programmes in Developing Countries: Design and Impact, London 1995; P. Mistry, Resolving Africa's Multilateral Debt Problem: A Response to the IMF, The Hague 1996.
41. The phrase 'debt trap' was first coined by Cheryl Payer, a radical American critic who wrote a rather hysterical book with that name in the mid-1970s (C. Payer, The Debt Trap: The IMF and the Third World, New York 1974). Payer argued fervently that 'The IMF has been the chosen instrument for imposing imperialist financial discipline upon poor countries under a facade of multilateralism and technical competence.' Substitute 'system-preserving' for 'imperialist' and the charge is more sustainable. See also D. Delamaide, Debt Shock, London 1984; and for the argument that the IMF was partly to blame, see S. George, A Fate Worse Than Debt: A Radical New Analysis of the Third World Debt Crisis, London 1988.
42. The phrase 'debt trap' was first coined by Cheryl Payer, a radical American critic who wrote a rather hysterical book with that name in the mid-1970s (C. Payer, The Debt Trap: The IMF and the Third World, New York 1974). Payer argued fervently that 'The IMF has been the chosen instrument for imposing imperialist financial discipline upon poor countries under a facade of multilateralism and technical competence.' Substitute 'system-preserving' for 'imperialist' and the charge is more sustainable. See also D. Delamaide, Debt Shock, London 1984; and for the argument that the IMF was partly to blame, see S. George, A Fate Worse Than Debt: A Radical New Analysis of the Third World Debt Crisis, London 1988.
43. The phrase 'debt trap' was first coined by Cheryl Payer, a radical American critic who wrote a rather hysterical book with that name in the mid-1970s (C. Payer, The Debt Trap: The IMF and the Third World, New York 1974). Payer argued fervently that 'The IMF has been the chosen instrument for imposing imperialist financial discipline upon poor countries under a facade of multilateralism and technical competence.' Substitute 'system-preserving' for 'imperialist' and the charge is more sustainable. See also D. Delamaide, Debt Shock, London 1984; and for the argument that the IMF was partly to blame, see S. George, A Fate Worse Than Debt: A Radical New Analysis of the Third World Debt Crisis, London 1988.
44. 'Not Much Sign of Relief, The Financial Times, 16 April 1997.
45. P. Mistry, Multilateral Debt: An Emerging Crisis, The Hague 1994, p. 15.
46. B. Fischer and H. Reisen, eds., Financial Opening: Policy Issues and Experiences in Developing Countries, Paris 1993; J. Williamson, The Failure of World Monetary Reform, 1971-74, Sunbury-on-Thames 1977.
47. B. Fischer and H. Reisen, eds., Financial Opening: Policy Issues and Experiences in Developing Countries, Paris 1993; J. Williamson, The Failure of World Monetary Reform, 1971-74, Sunbury-on-Thames 1977.
48. Mistry, Multilateral Debt, p. 48.
49. Ibid., and
50. Mistry, Resolving Africa's Multilateral Debt Problem.
51. P. Mistry, Multilateral Development Banks: An Assessment of their Financial Structures, Policies and Practices, The Hague 1995.
52. Mistry, Resolving Africa's Multilateral Debt Problem, p. 71.
53. A.S. Milward, The Reconstruction of Western Europe, 1945-51, London 1984.
54. F. Block, The Origins of International Economic Disorder, Berkeley 1977.
55. The title of an upbeat article by Michael Mussa and Graham Hacche, the IMF'S Chief Economist and its Assistant Director of Economic Studies, respectively (International Herald Tribune, 17-18 January 1998).
56. Paul Krugman, Lester Thurow and others profoundly disagreed (ibid.). Thurow likened the situation to the risk of earthquakes on California's San Andreas geological fault line; there was no doubt that catastrophe would strike. The only question was when - and where.