Column on Forgiving Third World debt

Forgiving Third World Debt

Tibor R. Machan

Gordon Brown, the most likely to succeed (in a few more years) Tony Blair
as Prime Minister in England, has been a bit quiet on his foreign policy
leanings except for one thing. He has been urging that the World Bank and
International Monetary Fund?and whoever else has a say?fight Third World
poverty by forgiving Third World debt. And this sounds like a
compassionate, decent sentiment on his part and on the part of all those
around the world who join him on this matter, except for one important
thing. The debt he wants to be forgiven isn?t really owed to him or even
the World Bank or IMF, not even to the governments funding these outfits.

Yes, Virginia, Third World countries and others receive loans but the
money lent to them doesn?t belong to those who do the lending. The World
Bank has no money of its own, except for a few bucks it may have earned in
interest. It gets its funds from governments, mostly those of developed
countries, and those governments get it from extorting it from their
citizens. They are the ones who should be asked whether they want to make
the generous gesture of forgiving the debt owed.

Now there are those clever apologists for all this government financial
chicanery who claim that taxes actually belong to the taxing
governments?indeed, that all wealth in a country belongs to the
government. What you and I own, the money in our various accounts and in
our wallets, is but what government graciously permits us to keep and
spend as we deem fit. Like an allowance given by parents to children. But
it all belongs to government, say these reactionary folks. In various
extremely well published academic books?mainly by presses themselves
receiving funds from the government to publish these works?it has been
argued that we have no property rights, that nothing we own is ours,
actually. (See, e.g., Liam Murphy and Thomas Nagel, The Myth of Ownership
[Oxford, 2004].)

If you know a bit of history and political economy, you will also know
that this is the theory of the divine rights of kings transmogrified to
accommodate 21st century statist needs. The king had been deemed?by his
own apologists in the academy he supported?the owner and keeper of the
realm. Which is to say, kings were seen as owning their countries. That?s
why there were serfs who belonged to the land owned by kings who, though
unlike slaves could own some property, nonetheless were bound to the land.

So in order to justify massive government taxation and spending,
including on loans for Third World countries as well as many others, these
intellectuals have returned to the old mercantilist political economy
which substantially denies the right to private property, to individual
sovereignty, and other components of the classical liberal tradition that
had fueled the American Revolution?s philosophy. (Not that the Founders
were all of one mind?Benjamin Franklin, in particular, shared this statist
view of property and Alexander Hamilton wasn?t far from it either!)

In any case, the idea of forgiving Third World Debt isn?t some
compassionate, generous or kind gesture at all since Gordon Brown, the
World Bank, the IMF and all those involved in sending those loans around
the globe did not own what they were lending and are being urged to
forgive.

No doubt, there are many citizens around the world who would probably be
willing to part with some of their resources in order to ease the dire
straits of those in Third World countries, although probably not unless
their political regimes changed drastically. You see, much of the money
lent to these countries finds its way into the Swiss bank accounts of the
rulers and bureaucrats who run those countries, mostly brutally, and thus
do hardly any good to the general population, those who are in dire
straits!

But, of course, the revolutionary ideas of the bulk of the American
Founders?all that stuff about our unalienable rights and government being
instituted to secure them?are so darn revolutionary that it will probably
take a few more years for them to take root in the good old U.S.A., let
alone around the globe. So probably Gordon Brown and his ilk will continue
for a while to get away with posturing as generous politicians with other
people?s money.