professor Jeffrey Sachs was furious. The Warsaw telephone system
was overloaded and he couldn't set up Paul Volcker's next appointment
with Polish government officials. It was no wonder he couldn't get
through: Keynesian Sachs and ex-Fed chairman Volcker are just two
of the gurus now swarming over Eastern Europe like locusts on a
they disdain capitalism and national sovereignty, global agencies
like the International Monetary Fund (IMF) and the World Bank sponsor
experts like this, who seek to replace Leninism with the welfare
Eastern Europe. Oppressed by the Nazis, tyrannized by the Soviets,
and now, with its first chance at freedom and prosperity in more
than 50 years, fooled by central bankers and Harvard economists.
Poland's Solidarity Movement was schooled in economics by the AFL-CIO,
courtesy of the U.S. National Endowment for Democracy (and the American
taxpayer). So misguided Warsaw politicians want to replace communism
with Western-style big government.
international bureaucrats have talked the Poles into imposing "austerity"
through much higher food, housing, and fuel prices. (Why, by the
way, is austerity never imposed on the government?) But are these
new prices which have caused great popular unrest the correct
ones? IMF computers are no better at this than Soviet central planners.
True prices can only be established with private property and a
free market, as Ludwig von Mises demonstrated 70 years ago.
But instead of a free market and private property, these agencies
want continued, if decentralized, government planning. They also
call for credit rationing to hold down "aggregate demand" and raise
government revenue, a discredited Keynesian tactic that discriminates
against new businesses.
international agencies want a Polish central bank (part of the reason
for Volcker's visit) and "more efficient tax collection" (just in
case the Poles miss the KGB). They have also talked the Poles into
enacting regulations that hamper new businesses and promote unionization.
Mises's student Ludwig Erhard freed the war-sacked West German economy over the opposition of Harry Truman's bureaucrats an economic
miracle took place. The international agencies, which hunger for
a world state, want no such example for Eastern Europe. In a world
of freedom, they would be out of a job.
international bureaucrats say the Pole? first priority is to pay
off all loans to big Western banks. But why? It is hardly moral
or economic to tax the down-and-out Polish people to repay Communist
loans. The money was stolen, wasted, or used to oppress them. Why
should the Polish people reward the bankers who financed their tyrants?
Let the bankers learn a lesson about subsidizing evil. (Such a repudiation
would also make it almost impossible for the Polish government to
borrow in the future-another benefit to the Polish people.)
needs, above all, a real-life documentary coed: "Honey, I Shrunk
the State." That means tossing out not just the Soviets, but also
Sachs, Volcker, the IMF, the World Bank, and every other advocate
of big government.
IMF and the World Bank are creatures of John Maynard Keynes. Established
at the post-World War II Bretton Woods conference, they were to
"stabilize" the global monetary and economic system through government
power an ambiguous, unachievable, and undesirable goal. It was
for Keynes, however, a milestone on the road to world government,
another of his delusions.
institutions were also to promote "socialized investment" (Keynes's
term) that would make the world safe for state-favored bankers and
corporations. This means, wrote Henry Hazlitt at the time, that
private investors "would not have to exercise any care or discrimination
on their own account." In case of trouble, the U.S. taxpayer would
pick up the check.
Establishment, particularly the Rockefeller family, was in control
from the outset. The World Bank's first president was Eugene Meyer,
one time Wall Street financier, former Federal Reserve official,
and controlling stockholder in The Washington Post. After
a dispute, he was replaced by John J. McCloy, former wartime official
and lawyer to the Rockefeller family and Chase National Bank. McCloy
was also a board member of the Rockefeller Foundation. Today the
Bank president is Barber Conable, a long-time associate of David
Rockefeller's, who has just promised to loan $350 million to Poland
so it can pay off its debts to Chase Manhattan and other big banks.
this a conspiratorial observation? No, merely the recognition that
government institutions are today set up to advance the self-interest
of those who control them, at a high price to the rest of us. Along
with exacerbating world inflation, the World Bank and the IMF have
subsidized tyranny, poverty, and mass murder, as Jim Bovard and
Doug Bandow point out elsewhere in this issue.
fight is far from over in Poland, of course. After so many years
of oppression, most people want liberty, not a "guided economy"
courtesy of Western liberals. Our job is to support them, which
the Mises Institute does. And in Czechoslovakia, the new free-market
finance minister Vaclav Klaus says that Austrian economics "may
be dead in Vienna, but it is alive in Prague."
the freedom fighters of former socialist countries succeed in beating
the IMF and the World Bank, not to speak of the Communists, maybe
we can ask for their help I wonder if they can spare any free-market
missionaries for Washington, D.C.?