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Two Lafayette professors debated the policies and actions of the International Monetary Fund and World Bank last week.
In a forum sponsored by Students for Social Justice on Friday, John McCartney, associate professor and head of government and law, critiqued the organizations while James DeVault, associate professor of economics and business, defended them.
Formed in the aftermath of World War II, the IMF was originally designed to support a new exchange rate system, while the World Bank aimed to help rebuild war-torn Europe. With the disappearance of the IMF-supported exchange system in the 1970s, the IMF took on its current mission to provide technical and financial assistance to countries in need. The World Bank likewise shifted its focus from Europe to developing countries.
DeVault spoke first, giving a historical overview of the two organizations and summarizing his position. He focused on the IMF, because he believed that it was the more controversial organization of the two. He pointed out that the countries helped by the IMF are in the midst of major crises, such as bankruptcy and foreign exchange exhaustion (which results in inability to import crucial products such as medicine). Although many are unhappy with the state of particular countries after the IMF loans money to them, DeVault argued that the situation is still better than what it would have been without the financial assistance. He conceded that the organization often fails to consider the impact of its policies on different constituencies, which can result in injustice. DeVault also raised the question of how much responsibility the IMF and World Bank bear for the economic and political success of the countries they help. Some of it must come from within the countries themselves, he argued.
McCartney began his rebuttal by pointing out that “when we talk about IMF, we must also talk about the global system in which we find ourselves.” The capitalist model, he said, is the only economic model left, and organizations such as the IMF and World Bank regulate it. In turn, leaders of these organizations make the decisions, which means a small group decides for everyone. Incidentally, the president of the IMF is always American, and the leadership of the World Bank is European. Thus, McCartney argued, the actions of the IMF and World Bank are naturally a mere extension of Western policies. He cited some effects of these policies, including a monopoly of force, in which nations have sovereignty on paper but cannot fashion programs unless blessed by the IMF/WB, economic decision making by the unseen, and the distortion and destruction of local cultures. We must ask ourselves, said McCartney, “How do we establish a global economy while at the same time respecting sovereignty?” McCartney also said that the organizations prefer dictatorship over democracy, often praising one-party nations such as Singapore, South Korea, and Taiwan.
After both DeVault and McCartney expressed their viewpoints, they opened the floor to questions and discussion. McCartney offered a solution rooted in IMF/World Bank programs structured with safety nets, including access to food, clothing, and education for the masses, and the addition of a developmental, social aspect into the IMF/World Bank focus.
Formed in fall 2001, Students for Social Justice has approximately 20 members who have remained active throughout the semester.
“The purpose of SSJ is to promote awareness concerning human rights and social justice issues in order to create and help facilitate positive social change. In short, we would like to change the world for the better,” says co-founder Peter Erin ’05 of Beaver, Pa., who intends to major in mathematics and economics. The two other founders are Jennifer Roberts ’03, a religion major from Royersford, Pa., and Fidel Maltez ’05, of Hialeah, Fla., who intends to major in civil engineering.
In addition to the debate, SSJ organized a group to participate in the protest against war on Iraq in Washington, D.C. earlier in the semester. After the trip, the students organized a brown bag event to share their experiences and discuss related issues with the rest of the Lafayette community. SSJ also held a workshop on environmental racism and environmental justice and helped organize Muhlenberg’s anti-war protest in mid-November, in which several Lafayette performers/speakers participated. The group is also an active member of the Lehigh Valley Peace Coalition. Erin and about seven other SSJ members plan to attend the National Conference on Organized Resistance Jan. 26-28 in Washington, D.C. Although it has not finalized its schedule for next semester, SSJ plans to hold an anti-war protest similar to the one at Muhlenberg.
The October issue of Northampton News, the newsletter of Northampton County Community College, cited McCartney’s role as keynote speaker at the NCCC Martin Luther King, Jr. program, “Celebration of Unity,” in February. He spoke on “Martin Luther King, Jr. and the Question of Peace.” McCartney also was a member of the planning committee for the program, which received the Bronze Medallion from the National Council for Marketing and Public Relations in Philadelphia.
In the past year, McCartney also has served as a panelist for the National Science Foundation in the selection of its graduate student awards, an external reader on student theses for Moravian College, and a panelist at a conference on the geopolitical impact of the New York terrorist attacks at Moravian College. He is a reviewer for various journals, including The American Historical Review.
McCartney earned a Ph.D. from University of Iowa. His academic interests include black politics and political thought, Latin America and the Caribbean, and African politics. He has received the Jones Lecture and Marquis Distinguished Teaching Awards.
DeVault has published many articles in peer-reviewed journals, including “Congressional Dominance and the International Trade Commission” in Public Choice this year. He also has made professional presentations at annual meetings of Western, Eastern, Southern, and Korea-America Economic Associations. He is a journal referee for Applied Economics, Eastern Economic Journal, Economica, Journal of Economic Education, Journal of Economic Integration, Review of International Economics, and Southern Economic Journal.
DeVault has a Ph.D. in economics from University of Wisconsin. His main areas of expertise are international trade and finance, macroeconomic theory, and environmental economics.