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A Fate Worse Than Debt
Book by George, Susan
320 pages, Paperback
First published April 5, 1988
2 people are currently reading
285 people want to read
About the author
Susan George
88 books58 followersSusan George is a well-known political scientist and writer on global social justice, Third World poverty, underdevelopment and debt. She is a fellow and president of the board of the Transnational Institute in Amsterdam. She is a fierce critic of the present policies of the IMF, World Bank, and what she calls their "maldevelopment model". She similarly criticizes the structural reform policies of the Washington Consensus on Third World development. She is of U.S. birth but now resides in France, and has dual citizenship.
In January 2007 she received an honorary doctorate from Newcastle University in the UK and in early March the International Studies Association at its congress in Chicago presented her with its first award to an Outstanding Public Scholar.
In January 2007 she received an honorary doctorate from Newcastle University in the UK and in early March the International Studies Association at its congress in Chicago presented her with its first award to an Outstanding Public Scholar.
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Displaying 1 - 10 of 10 reviews
December 22, 2010
One of Cambridge Sustainability's Top 50 Books for Sustainability, as voted for by our alumni network of over 3,000 senior leaders from around the world. To find out more, click here.
A Fate Worse Than Debt is a polemic that is unapologetically confrontational, drawing heavily on personal accounts of suffering and outrage from people living in Third World countries. George describes the numerous negative consequences of the lending boom to developing countries, especially by the World Bank and IMF, that resulted from recycled 'petro-dollars' after the oil price hikes in the 1970s.
Rather than seeing the Thirld World debt crisis as a deliberate First World conspiracy, the book emphasises the unitary world-view of the lenders 'Consortium' - the informal financial-political club of big banks, creditor-country governments and their central banks, the World Bank and the IMF.
George closes the book with a call to reject inertia, arguing that Thirld World debt is an international problem that affects us all and will impose an unacceptable burden on future generations.
A Fate Worse Than Debt is a polemic that is unapologetically confrontational, drawing heavily on personal accounts of suffering and outrage from people living in Third World countries. George describes the numerous negative consequences of the lending boom to developing countries, especially by the World Bank and IMF, that resulted from recycled 'petro-dollars' after the oil price hikes in the 1970s.
Rather than seeing the Thirld World debt crisis as a deliberate First World conspiracy, the book emphasises the unitary world-view of the lenders 'Consortium' - the informal financial-political club of big banks, creditor-country governments and their central banks, the World Bank and the IMF.
George closes the book with a call to reject inertia, arguing that Thirld World debt is an international problem that affects us all and will impose an unacceptable burden on future generations.
August 27, 2009
Despite having been published in 1988, this commentary on the perpetuation of Third World debt (now "developing world" debt) seems as pertinent today as it would have been during the debt crises and currency crashes affecting Latin America in the '80's. I think the aggressive (and quasi-socialist) tone of the author would rub a lot of readers the wrong way, and the book could definitely be more concise, but this shouldn't take away from many of the valid criticisms of how leading institutions of global capitalism - most noteably the IMF - are run.
I think the most interesting discussion points from the book are as follows:
1) Why are citizen and taxpayers of developing countries held accountable for debts accumulated by their non-democratic governments? Especially when a large portion of these loans are often funneled into private offshore bank accounts of their governors or used keep repressive military governments in power. The context in which this was written mainly involved Cold War policy during the '70's and '80's, but a more contemporary example would be Iraqi debt accrued under the Hussein regime that its current, elected government is still accountable for and its citizens must ultimately pay off.
2) The mission statements of the IMF vs World Bank. The World Bank is charged with fighting global poverty, while the IMF exists to maintain "balance of payments" across the global economy - ie: keep governments solvent. [Side note - this doesn't seem to apply to the biggest economies - look at US deficits over the last 9 years:]. What happens when these two mission statements clash? See next comment.
3) Counter-productivity of IMF prescriptions to pay back debt. To restore a country's balance of payments, there are 2 options (A) cut gov't spending. Cutting spending in many sectors (education, basic health care, infrastructure) helps pay off deficits in the short term, but to what degree do cuts in these services damage a country's long-term economic potential? (B) Increase export revenues - when the collective indebted developing world is told they ALL need to export more, they tend to ALL export the same low value-added products, ie: natural resources. Commodity prices are pushed down by large increases in supply in a global market, and many countries have found themselves strip mining and clear-cutting forests to export more of a commodity by volume, but less in $ revenue. This trend is exacerbated when a local currency is depreciating against, eg the dollar, as the same dollar then buys larger quantities of that commodity.
4) Moral hazard in "First World" commercial bank lending to developing nations. The argument here is that risky loans taken out by western banks have been treated as "too big to fail" when debtors are in danger of defaulting on them. Write-downs immediately hit banks' cash reserves and restrict the amount of credit that they can lend out to their domestic economy, causing a credit crisis. To avoid this scenario, western governments have bailed out their own banks for bad loans that never should have been made in the first place. It's the same principle as the sub-prime mortgage crisis, except in that case there would have been a lot more money lost from homeowners defaulting than there were developing governments defaulting on debts to American and European banks.
All in all, a very interesting discussion piece.
I think the most interesting discussion points from the book are as follows:
1) Why are citizen and taxpayers of developing countries held accountable for debts accumulated by their non-democratic governments? Especially when a large portion of these loans are often funneled into private offshore bank accounts of their governors or used keep repressive military governments in power. The context in which this was written mainly involved Cold War policy during the '70's and '80's, but a more contemporary example would be Iraqi debt accrued under the Hussein regime that its current, elected government is still accountable for and its citizens must ultimately pay off.
2) The mission statements of the IMF vs World Bank. The World Bank is charged with fighting global poverty, while the IMF exists to maintain "balance of payments" across the global economy - ie: keep governments solvent. [Side note - this doesn't seem to apply to the biggest economies - look at US deficits over the last 9 years:]. What happens when these two mission statements clash? See next comment.
3) Counter-productivity of IMF prescriptions to pay back debt. To restore a country's balance of payments, there are 2 options (A) cut gov't spending. Cutting spending in many sectors (education, basic health care, infrastructure) helps pay off deficits in the short term, but to what degree do cuts in these services damage a country's long-term economic potential? (B) Increase export revenues - when the collective indebted developing world is told they ALL need to export more, they tend to ALL export the same low value-added products, ie: natural resources. Commodity prices are pushed down by large increases in supply in a global market, and many countries have found themselves strip mining and clear-cutting forests to export more of a commodity by volume, but less in $ revenue. This trend is exacerbated when a local currency is depreciating against, eg the dollar, as the same dollar then buys larger quantities of that commodity.
4) Moral hazard in "First World" commercial bank lending to developing nations. The argument here is that risky loans taken out by western banks have been treated as "too big to fail" when debtors are in danger of defaulting on them. Write-downs immediately hit banks' cash reserves and restrict the amount of credit that they can lend out to their domestic economy, causing a credit crisis. To avoid this scenario, western governments have bailed out their own banks for bad loans that never should have been made in the first place. It's the same principle as the sub-prime mortgage crisis, except in that case there would have been a lot more money lost from homeowners defaulting than there were developing governments defaulting on debts to American and European banks.
All in all, a very interesting discussion piece.
February 1, 2012
Important reading for anyone interested in human rights and social justice.
February 23, 2021
I read this book long ago, while in graduate school, but I am sharing it now because it was a major influence both on my research as a graduate student and on my subsequent teaching.
George makes the case that the diminished economic and political power of many low-income countries has been caused or exacerbated by a particular history of sovereign debt. The obligation to repay loans taken by nation-states -- often from private banks -- has fallen on the shoulders of people who neither agreed to nor benefited from those loans.
George describes the origins of what has become known as the HIPC (heavily-indebted poor countries) problem. Large banks eager to move surplus cash (petrodollars) from to the "asset" side of their ledgers made loans for bogus projects to corrupt governments, abandoning the due diligence that would normally guide credit decisions. Because the loans were at floating interest rates, the crisis emerged long after the bank officials involved had received their bonuses.
The debt "relief" provided by the U.S. Treasury and others shifted the risk -- after the fact -- to public institutions. The "rescued" countries were then obliged to those institutions, resulting in a recolonization of much of the world by multilateral lenders. The World Bank and International Monetary Fund have more influence over budgets and trade practices throughout the Global South, even in nominal democracies.
Since the publication of this book, the disparities George describes have become more severe. Her work remains an important guide to how we got to the present state of geopolitical imbalance.
I was reminded of the book during a discussion of reparations related to the legacy of slavery -- HR 40 and similar efforts. Gaps in wealth and power can persist for decades or centuries following systemic injustice.
George makes the case that the diminished economic and political power of many low-income countries has been caused or exacerbated by a particular history of sovereign debt. The obligation to repay loans taken by nation-states -- often from private banks -- has fallen on the shoulders of people who neither agreed to nor benefited from those loans.
George describes the origins of what has become known as the HIPC (heavily-indebted poor countries) problem. Large banks eager to move surplus cash (petrodollars) from to the "asset" side of their ledgers made loans for bogus projects to corrupt governments, abandoning the due diligence that would normally guide credit decisions. Because the loans were at floating interest rates, the crisis emerged long after the bank officials involved had received their bonuses.
The debt "relief" provided by the U.S. Treasury and others shifted the risk -- after the fact -- to public institutions. The "rescued" countries were then obliged to those institutions, resulting in a recolonization of much of the world by multilateral lenders. The World Bank and International Monetary Fund have more influence over budgets and trade practices throughout the Global South, even in nominal democracies.
Since the publication of this book, the disparities George describes have become more severe. Her work remains an important guide to how we got to the present state of geopolitical imbalance.
I was reminded of the book during a discussion of reparations related to the legacy of slavery -- HR 40 and similar efforts. Gaps in wealth and power can persist for decades or centuries following systemic injustice.
August 21, 2018
A well researched and referenced narrative of the part we ( you and I through our governments and corporations) play in keeping the poor at the bottom of the ladder. Yes, things have got better since Susan wrote this book, but there's a massive task still ahead of us if we are to see a world that works for everyone.
Read her latest book: Shadow Sovereigns: How Global Corporations Are Seizing Power 2015 (Polity) ISBN 978-0-7456-9782-6
I'm not connected with the author, book, publisher in any way. I am a citizen advocate for the ending of global hunger and poverty, and Susan's research is an amazing tool.
Read her latest book: Shadow Sovereigns: How Global Corporations Are Seizing Power 2015 (Polity) ISBN 978-0-7456-9782-6
I'm not connected with the author, book, publisher in any way. I am a citizen advocate for the ending of global hunger and poverty, and Susan's research is an amazing tool.
August 23, 2025
"They have set corpses to banquet, at the behest of usura". Ezra Pound
A perfect companion to Naomi Klein's THE SHOCK DOCTRINE: THE RISE OF DISASTER CAPITALISM. Susan George writes of Third World countries which have lost their sovereignty, future of their children and standing among nations by having their economies taken over by the World Bank, IMF, and private American banks, above all CITI CORPS. Since the Caribbean is so small and vulnerable Jamaica and Haiti became the first test cases for the new imperialism that requires no boats, armies or invasions. Their economies are now hostage to American interest rates and the whims of Wall Street stock houses.
A perfect companion to Naomi Klein's THE SHOCK DOCTRINE: THE RISE OF DISASTER CAPITALISM. Susan George writes of Third World countries which have lost their sovereignty, future of their children and standing among nations by having their economies taken over by the World Bank, IMF, and private American banks, above all CITI CORPS. Since the Caribbean is so small and vulnerable Jamaica and Haiti became the first test cases for the new imperialism that requires no boats, armies or invasions. Their economies are now hostage to American interest rates and the whims of Wall Street stock houses.
August 7, 2020
A great old book with old data for those who are interested in development issues. The author stated that how the 'Third country' trapped into debt through IMF and other banks in US and North development projects. Even though case studies of Latin American countries debt in the 1980s are discussed throughout the book, the author strongly criticised the capitalist development model which increased the gap between poor and rich and the periphery countries fate made worse by the core countries (North called them).
October 23, 2023
Brilliant work on the structure of the modern financial system. While Susan George is always brilliant, it is startling how much of her analysis from 1988 is still relevant in our modern context. Some of the anecdotes are absolutely gripping, especially as to the material conditions of many on our planet.
May 7, 2018
I looked for the fate worse than debt. I have only found emotional talk about debt. So a fate worst than debt is still debt. Weird. Only intellect is George's weak point. And emotion is the strong point.
August 26, 2018
Early critique of development loans.
However, now pretty irrelevant: e.g. relies on the notion of altruistic Soviet replacement for imperialist aid / balancing out of two imperialist aids.
However, now pretty irrelevant: e.g. relies on the notion of altruistic Soviet replacement for imperialist aid / balancing out of two imperialist aids.
Displaying 1 - 10 of 10 reviews