The Collusion of Capitalism and Government in U.S. Foreign Policy:
The IMF and CIA At Work

Article by Snokel in Daily Kos

By snokej 
Monday Jan 11, 2016 · 1:18 AM PST


(Responses to my 2 previous blogs have been mixed, and I appreciate the time each of you has taken to give sometimes lengthy critiques of my views, points, and perhaps my knowledge or the lack thereof.  As a 72-year-old man, a college teacher of 42 years, and a life-long critic of our government and what I see as the death-grip of capitalism here at home and around the world, I have fought many battles, supported many causes, protested in civil rights and labor events, campaigned door-to-door for and against political candidates, participated in sit-ins, and even found my way onto Nixon’s Enemies List.    Through all of this, the only, overarching belief I have held is that talk is cheap, and action is what really counts.  At the end of the day, all of the blogging in the universe only serves to do 3 things:  Either the blog allows 2 or more people to show each other how much each knows about a topic;  or the blog simply preaches to a vague choir of like-minded thinkers;  or the blog actually enlists some of these like-minded people — motivating them to join in a take overt action for or against an issue.  For my part, I am interested only in the last of these alternatives.  If you look at one of my Web sites,, you will see the rationale for the newsletter that I publish monthly, and it follows what I have just said.  I am interested in the views of others, but not in debate.  I have spent my life debating students, faculty, politicians, labor leaders, and a raft of capitalists, and at the end of the day — after the debate is over — nothing has been accomplished.  I believe that we need to stop trying to impress each other and start appreciating the fact that if we are going to help to create a better world, we had better begin to talk with each other — not at each other.  And, most importantly, we need to join together and take action.  Many of you already get that, and for those who do — let’s get together.)

*Here are some of my reasons for the contempt I hold against capitalism and our government’s actions in other countries.  Much of it comes from my anthropological background, but a great deal of it comes from my years of research into our economic and foreign policies.  I am currently tracking more than 100 IMF loans in Africa, and the data are, frankly, astonishing.



 Many of my colleagues in the anthropological profession have been outspoken critics of U.S. foreign policy as it applies to our neighbors in this hemisphere and abroad.  As the current data from Guatemala become more transparent, it should be remembered that many of our enlightened citizens and authors have documented CIA atrocities from 1953 in Iran to the present day, and for those of us who have bothered to look, the data are clear and irrefutable.  If we look closely at the actions of our own government in Central and South America, we also see the International Monetary Fund, a capitalist arm of the United States, directly involved as a front door or a back door for activities sponsored by our government in sovereign nations to the south.  Modern historians and others, I believe, have been deliberately myopic with regard to the detrimental effects of the policies and practices of the IMF and the World Bank as they have evolved into major vectors of U.S. foreign policy in the late 20th and early 21st centuries.  What little information does filter down to the U.S. electorate comes in the form of mild complaints about “U.S. businesses shipping jobs overseas”, and the uninformed electorate becomes incensed at the notion that indigenous populations in other countries are “enjoying a higher standard of living at the expense of workers here”.

In fact, however, the reverse is true:  our electorate is now able to enjoy a higher standard of living, and have access to cheaper goods than they would cost if produced here, because the United States and its capitalist enterprises have literally enslaved local indigenous populations to work to pay off debts incurred from loans given to the political economy of those countries – loans that cannot be used to alleviate the poverty, substandard living conditions, and economic plight of the indigenous poor.


Here is how it works:

  1. The government of a needy, developing or underdeveloped nation goes to the IMF for a loan.
  2. The IMF loans them money – say 50 million dollars – in a short-term loan format.  This means that the interest rate is high – perhaps as high as 18%.
  3. The borrower nation is told by the IMF that none of that money is allowed to go to the indigenous people, or the loan is recalled and the credit of the borrower is ruined.
  4. The IMF then institutes policies that cause the future economic demise of the borrower:
  1. Their currency is devalued, often by as much as 40%.
  2. Money can be spent on certain, limited infrastructural problems, but that is all.
  3. The borrower must agree to drop all tariffs and must agree not to subsidize their crops or their farmers.
  4. Local resources, both natural and labor, are “signed over” to the United States.
  5. Local populations are enslaved, working in factories established by our capitalists for wages that are between 1 and 2 dollars per day.
  6. Produce is shipped to the borrower country from the United States – where our crops are subsidized – and the local citizens of the borrower nation can only afford to buy U.S. produce.
  7. Farmers are put out of work, and the farms are then aggregated into huge, monocropped agribusinesses run by the United States, and instead of feeding the poor with the production, the crops are used for export only – thereby making money for the borrower country to use to repay the loans.  If the borrower country decides to loan its farmers money, the terms must be at least 23% interest.
  8. The ranks of the poor swell and out of work farmers move to the cities to join them, turning the cities into vast, urban slums where poverty-stricken people comb the garbage dumps in search of scraps of food.
  9. Crime, ethically associated with poverty wherever it is found, increases rapidly until the poor eventually uprise against the government they believe is responsible for their misery.
  10. If the countries object or rebel against enslavement, or attempt to default on the IMF loan(s), our CIA steps in using Death Squads run by para- and actual military personnel from the countries in question who have been trained at what is today known as the Western Hemisphere Institute for Security Cooperation (formerly known as the U.S. Army School of the Americas).

Actually, then, the “jobs that are being shipped overseas” are not being shipped anywhere.  The enslavement of indigenous populations enables our corporate oligopolies to make huge profits from the 30 to 60 dollars per month that the local “workers” are paid.  Moreover, they are paid in the local currency – not in U.S. dollars – even though they work directly for U.S. corporations in such places as the Kingston Free Zone in Jamaica – and the local currency, remember, has been devalued.

All of this has been done by the United States of America – completely without the knowledge of its citizens who accept the doctrinal view. Moreover, the United States citizenry becomes incensed, rather than curious, at any attempt to bring a shred of enlightenment with regard to the foreign policy activities of our government – regardless of the data.  The data, nonetheless, speak for themselves.

Decimation of Indigenous Populations in Central and South America

The doctrinal view of countries like El Salvador in the early 1980’s is that of a peaceful country with a moderate government that is having difficulty instituting social, political, and economic reforms due to the violence of insurgent left-wing revolutionaries aided by the Soviet Union through its Western Hemisphere emissary – Cuba.  According to U.S. Ambassador Robert White, who served under Presidents Carter and Reagan, the leftists included Salvadoran labor unions, guerillas, peasants, and church-based groups that were trying to topple the government.

In contrast to White’s view, and in direct contradiction to the administrations of Carter and Reagan, however, the foreign press and the Council on Hemispheric Affairs – in their 1980 Annual Human Rights Report – as well as Amnesty International and Human Rights Watch, have gone on record as declaring that El Salvador had the worst record of human rights abuses in all of Latin America.  Here is a direct quote from the Annual Report:

          “More people have died in El Salvador during the past year (1980), largely as the result of government-condoned right-wing ‘death squad’ killings, than in all other nations in Latin America combined….The death toll reached almost 10,000, with the vast majority of the victims falling prey to the right-wing terrorism sanctioned by key government officials.  These countless killings have gone unpunished and even uninvestigated as the government’s own military and police forces are almost always involved in them”.

It is tempting to leap, at the outset of this discussion, to the doctrinal view and think that this statement – if true – does not involve the United States, even if our assessment of the El Salvadoran government was riddled with error.  A closer look at the etics of the involvement of the United States government and military, however, sheds a different light on the above quotation.

From 1946 through the final decade of the 20th century, the United States military, under the guidance and direction of the CIA, has trained more than 56,000 Latin American soldiers at WHINSEC – run by the U.S. Army at Fort Benning, Georgia.    This training center has taught some of the most despicable military strongmen in the entire region, including 19 of the 27 Salvadoran officers implicated in 6 Jesuit murders, and nearly 75% of the Salvadoran officers accused in 7 other massacres.  Some of the more prominent graduates of the University of the Americas include Roberto D’Aubuisson – mastermind of the Bishop Romero assassination, Alberto Medrano, Colonel Roberto Mauricio Staben, Jose Castillo, Colonel Nicholas Carranza, General Suarez, a brutal dictator of Bolivia; General Callejas Ycallejas, chief of Guatemalan intelligence in late 1970s and early 1980s, when thousands political opponents were assassinated; Honduran General Garcia, and General Hernandez, armed forces chief of Colombia suspected of aiding Colombian drug traffickers (Newsweek, 8/9/1993, pp. 36-7).  The Washington Post, in direct contradiction to a complaint on the part of Professor Jeane Kirkpatrick of Georgetown University – later Ambassador to the United Nations – that reports maligning the government and military of El Salvador were “terribly unjust”, responded that “there is no real argument that most of the estimated 10,000 political fatalities in El Salvador in 1980 were victims of government forces or irregulars associated with them.”

As a result of the U.S. policies and practices in El Salvador, 35,000 Salvadoran refugees – mostly women and children – have fled to the Honduran border to refugee camps where they have had to live in misery, poverty, and fear of attack by the Salvadoran army and ORDEN, the National Democratic Organization that was created under the auspices of the CIA to direct all Death Squad activities from 1970 through 1979.  During that time, Medrano was chosen by the CIA to lead ORDEN and coordinate the brutal attacks on civilians.  In response to the attempt to escape by the refugees, the Salvadoran military – with assistance by the Honduran army and the United States – bombed the refugees with exploding shells, napalm, destroyed villages, massacred refugees in brutal machete attacks, strafed them using helicopter gunships, beat them to death with rifle butts, and committed brutal acts of rape, torture, and murder after capturing them.  Just a few days before this brutal action by the two armies, 798 people were killed – 681 of whom were peasants – in equally brutal helicopter attacks.

The New York Times – never a citadel of independent journalistic responsibility – reported that “assassinations by government forces appear to be declining”, and on the day of the massacre the Times reported that “for Salvadoran peasants fruits of change seem good”.  In spite of this kind of rhetoric, the government of El Salvador – supported, armed, trained, and advised by the United States – continued to wage a brutal war on the indigenous people of the countryside.  The U.S. Government’s State Department waged a propaganda campaign in 1981 with the release of its infamous “white paper”, in which it attempted to convince the electorate and the world that the Soviet Union and Cuba were responsible for the deaths throughout 1980.

The world press was not only unconvinced; it openly rejected the white paper’s assertions.  In the United States, however, the press generally adopted the claims in the white paper, and paid little or no attention to those who spoke out against it.  Business Week said that “the decision in late February to send additional U.S. military advisors to El Salvador to help the junta repulse external aggression is likely to be only the first step in an escalation unless Washington persuades Fidel Castro and his Soviet sponsors to back off”.  Thus the doctrinal view trumps a mountain of data to the contrary.  In all, at least 200,000 Salvadoran civilians were killed in the U.S. supported actions.

Nicaragua and the CIA Campaign against Indigenous People

Even more disastrous than the El Salvador massacres of indigenous people is the savage and brutal attacks on the civilians of Nicaragua – also during the administrations of Carter and Reagan.  Most Americans are at least vaguely aware of activities during the Reagan presidency because of the Senate hearings on the Iran-Contra scandal.  Few Americans, however, understood the true nature and background of the activity.  Congress chose to focus solely on the covert sale of arms to the “contras” who allegedly were “fighting for freedom” – arms that the Reagan administration had “laundered” through a circuitous path from Israel, to whom we “sold” the arms, then to Iran, who received the arms shipments from Israel – thus making it seem as if Israel was the supplier of origin – and from there to the contras, partly through Saudi Arabian funding.  The profits from the sales were laundered through Swiss banks, along with millions of dollars that were contributed by China, Taiwan, Saudi Arabia, and the Sultan of Brunei.  Once in place, a CIA led group was funded, staffed, armed, and led by U.S. military advisors in a successful effort to overthrow the Sandinista government who had recently defaulted on an IMF loan, and who – like Nicaragua – had begun to nationalize the industries that had been established by U.S. corporations, on the heels of the loans, and who were extracting natural resources that rightfully belonged to the Nicaraguans.

In advance of this, the Reagan Administration had taken over the World Anti-Communist League, which was not much more than a collection of former Nazis, anti-Semites, death-squad assassins, torturers, and killers from around the world (Chomsky 1988: 40).  This organization, put into the field by the CIA, became the instrument of regime overthrow in Latin America in general, and Nicaragua in particular.

In addition, the Sandinistas were beginning to make populist, democracy-like statements about raising the standard of living for the indigenous people and increasing their access to fundamental human rights guarantees and protections.  While this action – if taken – would empower the indigenous people, it would also be in direct conflict with the capitalist aims of the United States, which has been interested only in fostering the most favorable conditions for private, overseas investments.  As Noam Chomsky reports, the main problem with the Allende government is that the reforms that they began to make had actually begun to work – production increased, wages improved, agrarian reforms were instituted that benefited indigenous people’s nutrition – reforms such as the milk distribution effort for children.  It is interesting to note here that both workers and industries gained under the Allende plan, and so did democracy.  This was an anathema to the Nixon administration, and by the time Carter took office after the brief Ford tenure, the die was cast for the demise of the Allende government (Chomsky 1987).

If Congressional interest had extended to the human rights violations of the military and the U.S.-supported, right-wing death squads, as well as the economic entanglements of the World Bank, International Monetary Fund, the Inter-American Development Bank, and a host of U.S. corporations, those less myopic members might have had an interest in sifting through the causes of political unrest.  Despite the rhetoric about socialist and communist insurgencies into Nicaragua, the actual reason for the onset of CIA covert activities leading to the clandestine overthrow of a democratically-elected regime, was that Nicaragua had defaulted on an IMF loan.

The Reagan administration, outraged at the act and knowing that eventually Nicaragua would have to turn toward the left for aid, blockaded the country so that no local aid of any kind from sympathetic neighboring countries could reach Nicaragua.  In desperation, Nicaragua turned to Cuba – as the Reagan administration had hoped in their strategy sessions – at which time the Reagan administration leaped in with anti-communist epithets and justified the unprecedented attack on the people of Nicaragua by invoking the Monroe Doctrine and the newly-offered “Reagan Doctrine”.

In fact, Nicaragua had defaulted on the IMF loan, as countries in Africa and throughout the world have done – and continue to do – because of the economic repressiveness of the terms of the loans regarding interest, repayment schedule, use of the money locally, and the cross-conditionality of loan qualification, debt load, and terms of re-qualification when the term of the loan has expired.  As has happened in countries like Jamaica, the IMF loan is not designed to alleviate poverty, for example, but rather to “find out to whom Jamaica owes money and ‘fix’ the problem of that indebtedness”.  Wherever the IMF has loaned money, and always with the threat of CIA reprisal, – in Africa, Asia, Latin America, the Caribbean, India, Russia, and China, the methods used by the IMF include forced currency devaluation, giving up of natural resources, obliterating all tariff restrictions on foreign goods entering the country, disallowance of any subsidy for locally-grown crops, and enslavement of local workforces with the proviso that loan repayment be made solely from income generated by indigenous workers who provide the labor to produce “U.S.-made products” without being paid more than $2.00 per day.