Debt Peonage: the Highest Form of Imperialism?

Abstract

The swelling debt owed by Third World nations has begun to frighten some sectors of international finance capital. Their own press paints scenes rivaling the latest horror movies from Hollywood. For example, the British banking journal International Currency Review warns of "a world-wide financial catastrophe"; "In plain English, the Third World faces a massive financing gap in 1981 (and beyond) which, if not met from official sources, must result in multiple defaults and a collapse of the West's banking system." Spokespersons for the biggest lending banks publish reassurances, arguing that "such fears are…rooted in misconceptions about how the existing system works," for the giant banks are merely performing on a global scale what "the bank branch on the corner does…every day." This controversy within the ranks of finance capitalism provides some unexpectedly candid revelations about Third World debt, showing how it has been moving steadily toward the center of the latest mode of imperialism.

This article can also be found at the Monthly Review website, where most recent articles are published in full.

Click here to purchase a PDF version of this article at the Monthly Review website.