Protesting Madame Lagarde (what is the IMF doing now?)
by Joseph Joyce
Protesting Madame Lagarde
The protests at Smith College that led to the withdrawal of Christine Lagarde, Managing Director of the International Monetary Fund, as this year’s commencement speaker have been widely denounced as a manifestation of intolerance. They also demonstrate a lack of understanding of the IMF and the many changes that have taken place at that institution in the last decade, as well as Ms. Lagarde’s own record. The IMF adjusted its policies in response to the criticisms it received after the crises of the 1990s, but apparently its critics are mired in the past.
A petition signed by several hundred Smith students and faculty (but not supported by many Smith faculty, including members of the Economics Department) explains the grounds for their opposition to Lagarde’s appearance on their campus:
“By having her speak at our commencement, we would be publicly supporting and acknowledging her, and thus the IMF. Even if we give Ms. Lagarde the benefit of the doubt, and recognize that she is just a good person working in a corrupt system, we should not by any means promote or encourage the values and ideals that the IMF fosters. The IMF has been a primary culprit in the failed developmental policies implanted in some of the world’s poorest countries. This has led directly to the strengthening of imperialist and patriarchal systems that oppress and abuse women worldwide.”
This statement exhibits the “vagueness and sheer incompetence” that George Orwell cited as characteristics of modern English prose, particularly political writing. In addition, the assignment of responsibility to the IMF for the “imperialist and patriarchal systems” is a contemporary example of the “staleness of imagery” that Orwell deplored. Holding the IMF responsible for global poverty reveals a lack of knowledge about the decline in global poverty in recent decades as well as a gross misunderstanding of the IMF’s role. The IMF long ago retreated from the structural adjustment policies that were criticized as inappropriate, and ceded the lead role in addressing poverty to the World Bank. More recently, the IMF was active in responding to the global financial crisis. The Fund in 2008-09 provided large amounts of credit relatively quickly with limited conditionality, and the IMF’s programs contributed to the recovery of global economic activity (see here for more detail).
Blaming Lagarde for global poverty is particularly unjustified in view of her acknowledgement of this issue. She has spoken eloquently about the combined impact of the economic crisis, the environmental crisis and the social crisis that reflects a widening gap in income distribution. To tackle the latter, she has supported more spending on health and education, and the development of social safety nets. Lagarde has also been a strong spokeswoman for gender equality (see also here). The change in the IMF’s position on the use of capital controls predates Lagarde’s tenure, but she has encouraged the continuing intellectual evolution of its Research Department under Olivier Blanchard.
And then there is the irony of students at a prestigious women’s college protesting the invitation extended to a woman who has been a pioneer in raising the professional profile of women. In the male-dominated world of international finance she was the first female finance minister of a member country of the Group of 8, and is the first female head of the IMF. The top position at the IMF became available when her predecessor at the IMF, Dominique Strauss-Kahn, resigned after being charged with sexual assault at a New York hotel. Ironically, the controversy over Lagarde arose as a movie about Strauss-Kahn was being shown at Cannes.
If protestors want to do something to improve the position of the world’s poorest countries, they should aim their ire at those members of the U.S. Congress who are blocking reform at the IMF. The politicians have been stalling passage of the required authorization of changes at the IMF, which would increase the representation of emerging market countries at the Fund. In a rare act of (muted) public criticism, the government of Great Britain has publicly urged the U.S. Congress to ratify the required measures. Reforming the IMF would be a more effective response to global inequality than protesting against someone who has sought to lessen that inequality.
cross posted with <a href=”https://blogs.wellesley.edu/jjoyce/2014/05/26/protesting-madame-lagarde/”>Capital Ebbs and Flows</a>
And which recovery might that be??
The smith students commit a much graver sin. They swim proudly in the torrent of runaway ego that bedevils the western left. As if the IMF can cause all those things. I am always reminded of the double insult at the heart of the tarzan series, where the hero was an anglo AND the villain. One of the joys of the breaking bad series was to see an intelligent black villain. It seems beyond the intellectual construct of these smith college girls to accept the idea that patriarchal societies and institutional poverty are endemic to developing countries. For them, only their kind can be both villain (IMF/WB/WTO..etc..etc.) and only their kind (Smith college students) can be good and righteous. It is as if these ladies have never been educated in world affairs or economics.
Joseph:
Considering the alternatives to Madame Lagarde, I believe the IMF has come a great distance. I had met one of the IMF’s economists at Kenyon College while touring the campus with my youngest son. Interesting conversation considering the global economy in 2000. Unfortunately to what we associate lends the appearance of agreeing with past actions.
The lady broke a glass- ceiling, well and good, very laudable. Meanwhile, impoverished children underneath her are crawling in broken glass.
http://economistsview.typepad.com/economistsview/2014/05/links-for-5-28-14.html