Henhouse asylum

There was a certain coherency in [John Maynard] Keynes’s (the intellectual godfather of the IMF) conception of the [International Monetary] Fund and its role. Keynes identified a market failure—a reason why markets could not be left to themselves—that might benefit from collective action. He was concerned that markets might generate persistent unemployment. He went further. He showed why there was a need for global collective action, because the actions of one country spilled over to others. One country’s imports are another country’s exports. Cutbacks in imports by one country, for whatever reason, hurt other countries’ economies.

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Today, however, market fundamentalists dominate the IMF; they believe that markets by and large work well and that governments by and large work badly. We have an obvious problem: a public institution created to address certain failures in the market but currently run by economists who have both a high level of confidence in markets and little confidence in public institutions. The inconsistencies at the IMF appear particularly troubling when viewed from the perspective of the advances in economic theory in the last three decades.

—Joseph E. Stiglitz, Globalization and Its Discontents (2002), ch. 8, p. 196