The plight of the Ghanian rice farmer

-“Rice farming was one of the successes of the post-independence economy, because it was supported by government subsidies and there was a ban on foreign imports.”
-In the 80s they wanted to improve rice production by developing irrigation systems, so they got loans from the IMF and World Bank on the condition it liberalize their markets. This meant ending the subsidies and allowing foreign imports
-Surprise! Cheap foreign rice now flooded the market, mostly from American farmers. Which is cool because guess what? America subsidizes its rice farmers.
-So now everyone buys the “cheaper, higher quality” rice from America and the Ghanian rice industry has collapsed.

Graeber’s first response to why you don’t have to repay debt

Starts specifically dealing with the Third World Debt crisis from here.
-Most of the loans were taken out by unelected dictators who put the money in their swiss bank accounts, and now the banks were trying to collect not from them/their children but “by literally taking food from the mouths of hungry children”
-They had repaid the debts many times over, but interest meant they hadn’t even touched the principal
-Banks were making major free-market economic policy demands in exchange for re-financing, and “it was a bit dishonest to insist that countries adopt democratic constitutions and then also insist that, whoever gets elected, they have no control over their country’s policies anyway”

Then he gets more general, pointing out that forcing banks to take on risk when they lend keeps them from making crazy loans knowing they can extort the borrower if he can’t repay.
“Imagine there was soem law that said they were guaranteed to get their money back no matter what happens, even if that meant, I don’t know, selling my daughter into slavery or harvesting my organs or something. Well, in that case, why not? Why bother waiting for someone to walk in who has a viable plan to set up a laundromat or some such? Basically, that’s the situation the IMF created on a global level– which is how you could have all those banks willing to fork over billions of dollars to a bunch of obvious crooks in the first place.”

pg 2-3

Graeber on the IMF

“The International Monetary Fund basically acted as the world’s debt enforcers– ‘You might say, the high-finance equivalent of the guys who come to break your legs.’ I launched into historical background, explaining how, during the ’70s oil crisis, OPEC countries ended up pouring so much of their newfound riches into Western banks that the banks couldn’t figure out where to invest the money; how Citibank and Chase therefore began sending agent around the world trying to convince Third World dictators and politicians to take out loans (at the time, this was called ‘go-go banking’); how they started out at extremely low rates of interest that almost immediately skyrocketed to 20 percent or so due to tight U.S. money policies in the early ’80s; how, during the ’80s and ’90s, this led to the Third World deb crisis; how the IMF then stepped in to insist that, in order to obtain refinancing, poor countries would be obliged to abandon price supports on basic foodstuffs, or even policies of keeping strategic food reserves, and abandon free health care and free education; how all of this had led to the collapse of all the most basic supports for some of the poorest and most vulnerable people on earth. I spoke of poverty, of the looting of public resources, the collapse of societies, endemic violence, malnutrition, hopelessness, and broken lives.”

pg 2