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If the IMF leadership praised the dictatorship, insisted on austerity and advocated squeezing poor people for more taxes, what business does it have today in giving similar advice to Tunisia, or anywhere in the Middle East and North Africa, or for that matter Europe or anywhere at all? What can we learn about IMF thinking in Tunisia, Egypt and Libya, as well as Palestine?

In contrast, there was no IMF conditionality aimed at reforming the dictatorship and halting widespread corruption by Ben Ali and his wife's notorious Trabelsi family, or lessening the two families' extreme level of business concentration, or ending the regime's reliance upon murderous security forces to defend Tunisian crony capitalism, or lowering the hedonism for which Ben Ali had become famous.

In addition to expanding Public Private Partnerships (PPPs, a euphemism for services privatization and outsourcing), the IMF named its priorities: "adopting as early as possible a full-fledged VAT, complementing energy subsidy reform with better-targeted transfers to the most needy, and containing the fiscal cost of the pension and health reforms."

In 2008, Clinton denied responsibility for refusing to regulate derivatives. He changed his mind in 2010, then blaming his advisors, among whom were Treasury Secretaries Robert Rubin and Larry Summers and the Chair of his Council of Economic Advisors, Joe Stiglitz. Larry Summers went on to become President of Harvard University. Joseph Stiglitz went on to be Chief economist of the World Bank and then professor at Columbia University. Summers showed little remorse for his role in the deregulation era. Joe Stiglitz, in contrast, became the best known critic of deregulation.

at what point did Stiglitz, in his role as a senior Clinton policy advisor, become convinced of the severe damage that would result from deregulation? ... As one important example, the general tenor of the 1996 Economic Report of the President, written under Stiglit’s supervision as Chair of the Council of Economic Advisors, is unmistakably in support of lowering regulatory standards, including in telecommunications and electricity. This Report even singles out for favourable mention the deregulation of the electric power industry in California — that is, the measure that, by the summer of 2002, brought California to the brink of economic disaster, in the wake of still more Enron-guided machinations.”

Professor Stiglitz’s great contribution has been to challenge both these assumptions. As he has shown, asymmetric information is a pervasive feature of how real-world markets operate. The free market is an ideological myth. In the real world, imperfect information makes for imperfect markets.

The IMF claims to have limited its conditions to critical reforms agreed by recipient governments. However, the worrying findings of this research suggest that the IMF is going backwards – increasing the number of structural conditions that mandate policy changes per loan, and remaining heavily engaged in highly sensitive and political policy areas.

The biggest IMF facilities in terms of loan totals have the heaviest conditionality. This rise is driven by exceptionally high numbers of conditions in Cyprus, Greece and Jamaica, which together accounted for 87% of the total value of loans, with an average of 35 structural conditions per programme.

Almost all the countries were repeat borrowers from the IMF, suggesting that the IMF is propping up governments with unsustainable debt levels, not lending for temporary balance of payments problems – its true mandate.

What is very curious in the present state of affairs is that, unfortunately, no other country other than China retains those rights. No other major partner (of the G20) has fully retained those rights, although some of the emerging countries such as India and Brazil have done something to that effect. Instead, they have generally accepted the dictates of the US.

It is important to understand that this is the central problem. The problem is the global integrated monetary and financial system, ruled as it is by the dollar, that is ruled by the exclusive prerogative of the US Treasury and Federal Reserve, of the US state. This is not acceptable. That is the problem. The problem is not the exchange rate of the Yuan or that of the Rupee or any other currency. Absolutely not.

First, for those who assume that the system is not so bad, and who accept that the US dollar should continue to be effectively the major, if not absolutely the exclusive international currency, the idea would be to restore the system as it was before the 2008 financial breakdown along with, perhaps, some minor regulatory reforms (most of which are essentially more cosmetic and rhetorical than real). This is exactly what the Stieglitz Commission and the Stieglitz report aim at. It accepts that the US dollar should remain the almost exclusive international currency (with some minor concessions). But it also accepts the right of the US government to manage the currency exclusively and on its own. As for everyone else, they have to adjust to the US dictates. This is, of course, not acceptable, especially for the South. If the Europeans, the British, the Japanese accept it that is their business. But I don't see why the Asians, the Latin Americans, the Africans should accept it. And it is not accepted, certainly not by China and some of the emerging states - India and Brazil in particular. Although it is not accepted morally by African states, in practice they have completely accepted to submit to its consequences - they have done nothing to respond to the challenge. So, that is the Stieglitz style solution. And it has completely failed. Nobody pays attention to the Stieglitz report, which has been dropped in the waste-basket, and nobody really cares about it. It has not convinced the partners, especially from the South. Even the North does not give any consideration to the recommendations of Stieglitz.

Van der Pijl’s exceptionally rich study of Bilderberg and subsequent US-European geopolitical maneuvres, The Making of an Atlantic Ruling Class (which thankfully Verso Press is about to reissue), provides the theoretical underpinning that I feel Jones’ passionately conspiratorialist followers desperately need, if they ever aim to properly judge the world’s complex combinations of structure and agency.

ut religion, Freemasonry, Rotary, Jews, etc., can be subsumed into the social category of ‘intellectuals’, whose function, on an international scale, is that of mediating the extremes, of ‘socializing’ the technical discoveries which provide the impetus for all activities of leadership, of devising compromises between, and ways out of, extreme solutions.”

But they were nervous, too, of a coming political storm, remarked van der Pijl. Representing both BP and Goldman Sachs in 2007, Peter Sutherland (former WTO director) “was quoted as saying that it had been a mistake to have referenda on the EU constitution. ‘You knew there was a rise in nationalism; you should have let your parliaments ratify the treaty, and it should be done with.’ Kissinger said words to the same effect concerning unification of the Americas, stressing the need to mobilise the enlightened media behind its propagation.”

The one big institutional difference this time around seems to be the role of the central banks, with the Federal Reserve of the United States playing a leading if not domineering role on the world stage. But ever since the inception of central banks (back in 1694 in the British case), their role has been to protect and bail out the bankers and not to take care of the well-being of the people.

But if everyone tries to live off rents and nobody invests in making anything, then plainly capitalism is headed towards a crisis of an entirely different sort.

What remains of the radical left now operates largely outside of any institutional or organised oppositional channels, in the hope that small-scale actions and local activism can ultimately add up to some kind of satisfactory macro alternative. This left, which strangely echoes a libertarian and even neoliberal ethic of anti-statism, is nurtured intellectually by thinkers such as Michel Foucault and all those who have reassembled postmodern fragmentations under the banner of a largely incomprehensible post-structuralism that favours identity politics and eschews class analysis.

Parts of our economies, societies, and states in Europe are being stripped bare by an extreme form of predatory capitalism.[1] And this stripping can coexist with growth in much of our economies. The majority of workers and economic operations keep functioning, even if at reduced levels.

The unemployed who lose everything—jobs, homes, medical insurance—easily fall off the edge of what is defined as 'the economy' and counted as such. So do small shop and factory owners who lose everything and commit suicide. And so do the weakened and ill newly poor who can no longer access basic medical services. All are stripped from what gets measured as 'the economy.'

The reality at ground level is more akin to an economic version of ‘ethnic cleansing’ in which specific kinds of negatives are dealt with by simply eliminating them from view. Thus in early January 2013, the European Central Bank announced that Greece’s economy was on the path back to growth, and Moody’s upgraded Greek debt by a point; the country’s rating is still low, but such shifts matter to investors, always desperate to find destinations for their capital. It meant that Greece was again becoming safe territory, and largely meant the buying up at very cheap prices of what had been valuable parts of the national economy. We saw a similar process in South Korea and Thailand during the so-called Asian financial crisis.[2] Greece’s 30% of workers who had lost their jobs, countless broken firms and neighbourhoods were left out of the picture. This economic cleansing works, but it does so on the backs of all those who have been expelled.

As the Cyprus crisis was unfolding last week we also got to see the report of the Senate Permanent Subcommittee on Investigations on JP Morgan’s losses at its “London Whale” trading division. The report chronicles a series of bad bets on derivatives that were compounded by traders doubling down their stakes. They concealed the size of their losses both to bank officers and regulators. The end result was a $6 billion loss.

If the big banks are too big to regulate and, according to Attorney General Holder, too big to prosecute, then the only sensible course is to break them up. There have been some promising developments in this area. At the top of the list is Elizabeth Warren’s election to the Senate. Senator Warren has already made it clear that she will use her seat on the Banking Committee to try to hold the banks and bank regulators accountable. The other important development is that Warren seems to have an ally in Louisiana Senator David Vitter.

If there is ever going to be enough political force to break up the big banks it will have to come from this sort of left-right coalition that moves in toward the center.

First, and possibly the most well-known: the attack on organised labour and the resulting drastic reduction in workers’ bargaining power. This occurred not just through the instrument of unemployment (or fear of it) used to discipline workers, but through regulation and legal changes as well as changing institutions. This is now an almost universal feature, except in societies such as in Latin America where recent political changes have generated some reversal.

Second, financial deregulation and significant increases in the lobbying and political power of financial agents. This has led to the massive expansion and then implosion of deregulated finance, with the crisis affecting the real economy in terrible ways. It has also contributed to deindustrialisation and the rentier economy.

Third, the triumph of private gain over social good and the aggressive delegitimisation of public provision. Quite apart from the adverse effects on the long term (in terms of inadequate public investment for the future or for meeting current social needs) this has terrible effects on society, creating not just injustice but small-minded and petty individualism as a dominant social characteristic.

The first is that, beyond a point export-driven growth has a way of running into internally generated constraints.  Second, that among the factors that can undermine a country’s growth prospects, even at relatively higher income levels, is excessive liberalisation, especially financial liberalisation. Possibly most countries, whether poor, rich or in some ‘middle income’ range, find their growth has stalled for reasons such as these.

The IMF’s latest regional outlook on Asia for example suggests that these economies need to pay attention to “institutions” and infrastructure and exploit the “ample room for easing stringent regulations in product and, in some cases, labor markets.” Institutional strength is seen as reflected in higher political stability, better bureaucratic capability, fewer conflicts and less corruption. Whether weakness in this are is the result of underdevelopment or a cause of it is open to discussion.

Under the gold standard, and largely because of the gold standard, the capitalist world endured eight different deflationary slumps severe enough to be called “depressions.” Since the gold standard was abolished, there have been none – and, as we shall see, this is anything but coincidental.

The essential insight of Modern Monetary Theory (or “MMT”) is that sovereign, currency-issuing countries are only constrained by real limits. They are not constrained, and cannot be constrained, by purely financial limits because, as issuers of their respective fiat-currencies, they can never “run out of money.” This doesn’t mean that governments can spend without limit, or overspend without causing inflation, or that government should spend any sum unwisely. What it emphatically does mean is that no such sovereign government can be forced to tolerate mass unemployment because of the state of its finances – no matter what that state happens to be.

what had really happened was epoch-making and paradigm-shattering. It was also, for the rest of the 1970s, polymorphously destabilizing. Because no one had a plan for, or knew, what all of this was going to mean for the reserve currency status of the U.S. dollar. Certainly not Richard Nixon, who was by then embroiled in the early stages of the Watergate scandal. But no one else was in charge of this either. In the moment, other countries and their central banks followed Washington’s line. They wanted to forestall any kind of panic too. But, inevitably, as the real consequences of the new monetary regime kicked in, and as unforeseen and unintended knock-on effects began to be felt, this changed.

Will we, then, see a reversal of policy? A sea of mea culpas from politicians who have spent the last few years telling disabled pensioners to give up their bus passes and poor students to forgo college, all on the basis of a mistake? It seems unlikely. After all, as I and many others have long argued, austerity was never really an economic policy: ultimately, it was always about morality.

We are talking about a politics of crime and punishment, sin and atonement.

But in a larger sense, the message was that we were guilty of having dreamed of social security, humane working conditions, pensions, social and economic democracy.

In the era of the Enlightenment, during the lifetimes of Francis Bacon, Descartes or even Hegel, in no place of Earth the standard of living was more than twice as high as in its poorest region. Today, the richest country, Qatar, boasts an income per head 428 times higher than the poorest, Zimbabwe. And these are, let’s never forget, comparisons between averages – and so akin to the facetious recipe for the hare-and-horsemeat paté: take one hare and one horse…

As the authors of the quoted article warn, the prime victim of deepening inequality will be democracy – as increasingly scarce, rare and inaccessible paraphernalia of survival and acceptable life become the object of a cut-throat rivalry (and perhaps wars) between the provided-for and the left-unaided needy.

And he adds: “Growing income inequality, though obviously undesirable from a social perspective, doesn’t necessarily matter if everyone is getting richer together. But when most of the rewards of economic progress are going to a comparatively small number of already high income earners, which is what’s been happening in practice, there’s plainly going to be a problem.” [ii]

What is new about this phase of capitalism? Its global interconnectedness, driven in part by new technologies, and the dominance of a new kind of finance capitalism mean that, while a crisis of this system has effects everywhere, these effects are uneven. So far the Bric countries seem relatively unscathed, while the impact of economic devastation has spread from Asia and Africa into Europe.

The breakdown of old forms of social solidarity is accompanied by the dramatic growth of inequality and a widening gap between those who run the system or are well paid as its agents, and the working poor, unemployed, under-employed or unwell.

Neoliberalism's victory has depended on the boldness and ambition of global capital, on its confidence that it can now govern not just the economy but the whole of social life. On the back of a revamped liberal political and economic theory, its champions have constructed a vision and a new common sense that have permeated society. Market forces have begun to model institutional life and press deeply into our private lives, as well as dominating political discourse. They have shaped a popular culture that extols celebrity and success and promotes values of private gain and possessive individualism. They have thoroughly undermined the redistributive egalitarian consensus that underpinned the welfare state, with painful consequences for socially vulnerable groups such as women, old people, the young and ethnic minorities.

Consider what is happening in the most dynamic countries of developing Asia, where the increase in bank lending has been most evident since 2008. It turns out that a large part of the expansion in domestic credit has actually been directed to households, for consumption purposes. And the businesses that have gained from that (such as construction and real estate as well as some consumer durables) are the ones that have been disproportionately getting bank loans for their own productive activity.

The result has been an explosion in heavily leveraged consumption as well as in residential real estate activity,. And the impact has been most strongly felt in the housing market. So house prices increased rapidly between 2007 and 2011 – by around 70 per cent in China and Hong Kong China, and by 30-50 per cent in Taiwan China and Malaysia. Even economies where wage incomes barely increased, like South Korea, witnessed big increases in house prices.

There have been even larger increases in household debt than corporate debt in most of Asia – for automobiles, for student debt, for credit cards purchases, for other consumption based on EMIs.

While the International Monetary Fund (IMF), the World Bank, the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO) and others adhere to a rigid “neoliberal” ideology that favors deregulation, privatization, and the interests of the global North and the private sector over the poor, UNCTAD has a rich history of favoring people-centered development, promoting interests of the global South, and being a voice of the poor majority in international forums.

It is despicable that in a conference focused on trade and development, rich countries successfully prevented UNCTAD from calling for changes to the WTO, to allow more flexibility for development in poor countries. They even successfully blocked a call for a resolution to trade-distorting subsidies in agriculture that damage developing countries every day.

The EU and US even opposed inclusion of “Special and Differential Treatment” — the simple historical recognition of the fact that rich and poor countries have different economic capacities and need different rules to promote prosperity — although this was finally included.

In fact, in a private meeting between U.S. civil society and Robert Gerber, the Deputy Head of the U.S. delegation, he told us that he thought that analyzing “the global economic crisis” itself was outside of UNCTAD’s mandate, which was to focus on trade and development. I’m not sure how to make an argument that these things are not related, but I guess when you’re the United States at the United Nations, you don’t have to have a logical argument.

He also said the language in the text that was most important to the United States was on UNCTAD’s efficiency, effectiveness, transparency and accountability; we’re looking forward to seeing the U.S. push hard for similar issues regarding the International Monetary Fund (IMF) and U.S. aid in Haiti, among other places.

the non-EU bloc of developed countries) was asked directly at one point during the negotiations why he did not want this language included, the representative responded gruffly, “we don’t want any competition in intellectual thinking!”