Your Money or Your Life!

THE TWO PHASES OF STRUCTURAL ADJUSTMENT/163

grave social protection - and therefore saw no need for free and

independent trade unions. (World Bank, 1995)

Need we point out that it is sheer demagogy for the World Bank to
mention the absence of free trade unions, given that it has supported
(and continues to support) any number of dictatorships, be it Chile
under Pinochet or Romania under Ceaucescu, just to name two
examples?
Clearly, the World Bank's main priority is eliminating state inter-
ventionism and attempts at autonomous development and planning.
Yet, as a general rule, countries in the periphery that have scored
successes have done so largely by relying on the active role of the
state. This is particularly true of countries not long ago seen as models
of success: South Korea, Taiwan, Malaysia, Thailand, Brazil and
Mexico. Whether run by the national bourgeoisie, sections of the
petty bourgeoisie or a dictatorial bureaucracy in the countries of the
so-called Socialist Bloc, the state played a key role in spurring real-if-
deformed development. The 'overdevelopment' of the state in the
countries of the periphery (leaving aside the Socialist Bloc) is a
function of the weakness of the local capitalist class. The state was a
crutch for a local bourgeoisie handicapped by long years of colonial
exploitation.

By shrinking the role of the state in the periphery, the World Bank
seeks to heighten these countries' dependence on big capital at the
centre.
For those seeking a progressive answer to this challenge, there are
a number of pitfalls to be avoided. It is wrong, for example, to defend
the state per se, as if its social content were neutral and its role globally
positive. In the capitalist countries of the South, the state is a force for
domination in the hands of the local exploiting classes. This state
organises the repression of people's movements and enables the
capitalist class to amass profits in peace. The neo-liberals should not
have a monopoly on criticism of the state.
Indeed, Karl Marx was not the only one to decry the exploitative
character of the capitalist state. The classical economist Adam Smith
wrote, 'Civil government, so far as it is instituted for the security of
property, is in reality instituted for the defence of the rich against the
poor, or of those who have some property against those who have
none at all' (Smith, 1776). The World Bank and the neo-liberals
might even be able to claim this passage as their own, on condition