Corporations Are Not Human Not Even Close ---Episode 29

                           ELIMINATING THE PUBLIC INTEREST 

   In the flurry of global institution building that followed World War II, the spotlight of public attention was focused on the United Nations (UN), which was to include all countries, each with an equal voice --- at least in its General Assembly. Delegates to the UN are public figures, and debates are open to public view and often heated. Yet the General Assembly has little real power. The real ability to act is vested in the Security Council, in which each of the major powers maintains the right of veto. Judging from its governance structures, it must be concluded that the UN was created primarily to function as a forum for debate. 
   In contrast, three other multilateral institutions were created with relatively little fanfare to operate outside the public eye --- the International Bank for Reconstruction and Development (commonly known as the World Bank), the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT) ---now the World Trade Organization (WTO).  These three agencies are commonly referred to as the Bretton Woods institutions, in tribute to a meeting of representatives of forty-four nations who gathered in Bretton Woods, New Hampshire, July 1--22, 1944, to reach agreement on an institutional framework for the post-World War II global economy. The public purpose of what became known as the Bretton Woods system was to unite the world in a web of economic prosperity and interdependence that would preclude nations' taking up arms. Another purpose in the eyes of its architects was to create an open world economy unified under U.S. leadership that would ensure unchallenged U.S. access to the world's markets and raw materials. Two of the Bretton Woods institutions ---the IMF and the World Bank ---were actually created at the Bretton Woods meeting. The GATT was created at a subsequent international meeting.

   Although formally designated as "special agencies" of the U.N. , the Bretton Woods institutions function autonomously from it. Their governance and administrative processes are secret,  carefully shielded from public scrutiny and are so secretive that access to many of its most important documents relating to country plans, strategies, and priorities is denied to even its own governing executive directors. In the World Bank and the IMF, the big national powers have both veto power over certain decisions and voting shares in proportion to their shares of the subscribed capital---ensuring their ability to set and control the agenda. 

   It is critical that we examine how, in playing out their roles, the World Bank and the IMF have worked in concert to deepen the dependence of low-income countries on the global system and then to open their economies to corporate colonization. We later will look at how the GATT and its successor, the World Trade Organization(WTO), are being used by the world's largest corporations to consolidate their power and place themselves beyond public accountability. 

                 CREATING A DEMAND FOR DEBT

   The primary original purpose of the World Bank was to finance European reconstruction. However, there was very little demand from the European countries for World Bank loans. What Europe needed was rapidly dispersing grants or concessional loans for balance-of-payment support and imports to temporarily meet basic needs while its own economies were being rebuilt. The U. S. Marshall Plan provided this type of assistance ; the World Bank did not. By 1953---nine years after its establishment---total Bank lending was only $1.75 billion, of which only $497 million was for European reconstruction. That amount paled in comparison to the $41.3 billion transferred to Europe under the Marshall Plan. 
   The Bank's annual report for 1947-48 acknowledged that lack of demand for its loans was not limited to Europe. As the Bank began to look to the low-income countries for customers, it ran into a similar problem. Countries were not presenting the Bank with acceptable projects. 
   THE BANK'S CLAIM THAT IT SIMPLY RESPONDS TO THE NEEDS AND REQUESTS OF BORROWING COUNTRIES IS AS FALSE AS THE CLAIM BY CORPORATE LIBERTARIANS THAT THE MARKET SIMPLY RESPONDS TO CONSUMER DEMAND. The Bank did what the big retail outlets did in the late 1800s when faced with a frugal culture that failed to produce sufficient customers. It set about to reshape values and institutions in ways that would create customers for its products. And much like the corporations that choose this course, the Bank gave scant attention to the larger consequences of actions taken primarily to meet its own needs.