The Washington Consensus

Refocused mission of Bretton Woods institutions

In the 1980s, under pressure from Thatcher and Reagan, the World Bank joined the IMF in adopting a missionary zeal in pursuing neo-liberal policies, purging heretics from its staff, and installing a free market ideology called neo-liberalism. The World Bank integrated its operations with the IMF, but as a junior partner.

Consequences of Bretton Woods Under the regime of Neo-liberalism

Critics of the Washington Consensus recognize that Neo-Liberalism transformed the Bretton Wood accords from nationalism to globalism, weakining national sovereignty and providing a de facto regime of globalization that was neither transparent not democratic. This secured the ascendancy of economic globalization at the expense of national independence. Thus, corporatism trumps citizenship.

The controversy surrounding Neo-liberalism and economic globalization

Neo-liberalism projects that its policies will provide widely shared prosperity by inducing accelerated economic growth. The record says otherwise: global economic expansion was far higher, 3.2%, from 1961-1980, before neo-liberalism, than since the Thatcher- and Reagan-led initiatives were installed, 0.7% from 1981-1999 (Pollin 131). Further, global ecological deterioration has intensified and inequalities in income and wealth have sharpened. Half of humanity, three billion people, subsists on under $2 per day and the richest 20% consume 86% of the earth's resources (Shah 7). The number of people living in poverty actually increased in the 1990s (Stiglitz 5). The East Asian financial collapse of 1997-1998 -- the Asian Flu -- shook faith in the international monetary regime. South America has rejected structural adjustment programs. Africa has been largely excluded from economic globalization, contributing only about 4% to world trade, and poses special problems of AIDS, a colonial legacy, and race. The Islamic world resists the materialistic trappings of westernization. Oil, the foundational resource of modernization, exhibits chronic and irreversible scarcity -- Peak Oil. The global environment continues to deteriorate while global warming intensifies. (References in Hayes, Economic Strategies for Sustainability)