The French Revolution: The Moderate Stage, 1789-1791

In the previous entry, the urban poor of Paris had stormed the Bastille, the medieval 196px-le_serment_de_la_fayette_a_la_fete_de_la_federation_14_july_1790_french_school_18th_centuryprison fortress in the heart of the French capital. Around the same time, peasants in the countryside had started to seize feudal manors and arm themselves in preparation for predicted royalist reprisals. In July 1789, when news finally reached the royal court in Versailles about the extent of the rebellion, the upper classes clearly perceived that restoring order would require attacking the barricaded people of Paris as well as farmer militias in the provinces. King Louis XVI opted not to use force and went to the city hall of Paris to accept the tricolor cockade that had become a symbol of the Revolution. With this symbolic act, he ceded absolute political power in France to the National Assembly and accepted the challenge to his previously unquestioned authority. At this point, though, he had no cause to fear the dissolution of the monarchy. The Assembly at this early stage was dominated by moderate reformers from the bourgeois and noble classes. Most members hoped to keep the king as a ceremonial figurehead by turning France into a constitutional monarchy.

The August Decrees & the Declaration of the Rights of Man

Most Assembly members acknowledged, however, that feudalism had to be dismantled to mollify the anxious peasantry. Accordingly, they issued the August Decrees that abolished feudalism in France. The Decrees did away with many of the feudal benefits enjoyed by the nobility as well as tithes collected by the Catholic Church. It should be stressed, however, that the bourgeoisie retained payments owed to them under the previous system, such as rents. Many bourgeois landowners in fact raised their rents in line with the sum previously reserved for Church tithes, so peasants in effect saved no money. Additionally, peasants had to pay higher taxes levied on them by the Assembly. Even worse, the Assembly mandated peasants to  compensate the nobility for the loss of their monopolies. Most peasants refused to pay compensation, however, and ultimately it would be repealed once the bourgeois stage of the Revolution ended. The inconsistency between the abolition of noble benefits with the retention of bourgeois rents demonstrates that the National Assembly in 1789 prioritized middle class demands over working class grievances.

The Declaration of the Rights of Man and of the Citizen, also passed by the Assembly in August 1789, further underlines the primacy of bourgeois interests in the early Revolution. Not surprisingly, it 160px-1793_equality_anagoriawas heavily influenced by the American Revolution and the political philosophy of Thomas Jefferson.  It asserted the “natural rights” of men to “liberty, property, security and resistance to oppression.” In accordance with Enlightenment ideals, nature itself endowed men of means with the freedom to pursue wealth and prestige without forced subservience to the divine right of kings or the arbitrary rulings of a self-serving aristocracy. Men would, in theory, advance themselves by their merits rather than their bloodlines. Undoubtedly, the Declaration was a positive step for France, at least compared to what came before. It recognized that individuals had inherent value and dignity, and that they deserved more than to be servants of a state that did not afford them even basic rights. For the bourgeois class especially, it was a greatly empowering emancipation from the confining chains of feudalism.

The Declaration has a tarnished legacy, however, just as the founding documents of the U.S. do when compares their philosophy with their practice. As in the early post-revolutionary U.S., France in 1789 did not truly treat all of its citizens equally, regardless of an abundance of egalitarian rhetoric. There persisted a distinction between the “right” kind of people and those deemed inherently inferior, reflected in the Declaration’s separation of “active” and “passive” citizens. To be considered an “active citizen” able to fully participate in politics, a person had to be a property-owning adult man. Those deemed “passive citizens,” including all the women of France, could not vote or otherwise be politically engaged. This means that the political rights of the Declaration only applied to 4.3 million French citizens out of a population of almost 30 million. Rights argued to be natural, endowed in the very essence of human beings, could actually only be exercised by a minority of wealthy, well-educated men. This sort of hypocrisy in declaring all people equal, yet providing a legal basis to social inequality, would be a major source of tension both for the Revolution and for centuries of suffrage and civil rights movements in the Western world.

There were feminist voices who openly opined about the unfairness and inequality within the Declaration. Olympe de Gouges, an early feminist, campaigned mightily against the injustice of women being treated as the second sex. In 1791 148px-woman-power_emblem-svgshe published the Declaration of the Rights of Woman and the Female Citizen, in which she launched a blistering attack on marriage as a form of social control and the subordination of women in society generally. She complained that France refused to educate its women, and then used their resulting ignorance as an excuse not to afford them the same rights as men. She pointed out the enormous dissonance in at once claiming the “natural rights” of all humanity while also believing that there was a “natural inequality” between the sexes. Politically, she was closer to the moderates of the Revolution, and in the end went to the guillotine with them during the Reign of Terror on the basis of being insufficiently revolutionary. She was, however, quite militant in her views on gender egalitarianism, as well as in her views of abolishing slavery, a position shared only by radical revolutionaries.

Many within the bourgeoisie had stakes in French colonies and opposed the elimination of 163px-toussaint_louverture2c_chef_des_insurgc3a9s_de_saint-dominguethe source of their free labor: slaves. Like other imperialist nations, France relied heavily on its overseas possessions and the ruthless extraction of raw materials to feed its economy. There were early abolitionists, much as there was in the United States. These anti-slavery campaigners could not, however, prevent moneyed interests from swaying the Assembly to keep its colonial possessions in 1789. When more radical revolutionaries took over the Revolution in 1794, slavery would be abolished, albeit temporarily. Napoleon would restore it in 1802, feeling it necessary for his ambitions of creating a powerful French empire. By that time, however, the democratic values of the French Revolution and the intrinsic savagery of slavery had already inspired revolution in the colonies. Most famously, the Republic of Haiti was founded in 1804 after a successful slave uprising in Saint-Domingue. Toussaint Louverture, the most famous leader of the Haitian slave revolt, drew direct inspiration from the political philosophy advocated by the French revolutionaries, even if most revolutionaries themselves did not intend for their ideals to be extended to people outside their race and class.

Leaders of the Bourgeois Revolution

226px-honorc3a9_mirabeau_4One of the main authors of the Declaration was Honoré Mirabeau, a nobleman who had never been completely accepted by his class. An adventurer and Lothario, he became mired in scandal for running afoul of the law with numerous seductions and enormous debts that left him estranged from his father. A gifted writer and orator, he opposed absolute monarchy and favored representative government. When the crown summoned the Estates-General, he had to represent the Third Estate because the nobility, the Second Estate, would not endorse him. Mirabeau and other moderate reformers sought to compromise with the king and induce him to accept a much more limited role in the government. Those revolutionaries who wanted a true republic, with the monarchy abolished and power firmly in the hands of the peoples’ representatives, remained in the minority. Due to his extensive debts, however, Mirabeau was primed for venality after his rapid political ascendancy. He conspired with the Queen, the Austrian Marie Antoinette, to return more power to the king. Most controversially, he fought for and won power for King Louis to suspend legislation passed by the Assembly for up to four years. He even went as far as to take money directly from Holy Roman Emperor Leopold II, Marie Antoinette’s brother. It is impossible to know how much of his deeds in the early Revolution were motivated out of seeking compromise with the royal court and to what degree he was actually acting as a covert agent of counterrevolution. Mirabeau died in 1791, well before the Revolution had ended. A few years later, his backroom deals with the French and Austrian courts came to light and forever tarnished his legacy, turning him from a revolutionary hero to a villain.

Abbe Sieyès, whose pamphlet “What is the Third Estate?” inspired the bourgeois class to embrace the Revolution, hoped to use political change to create a culture “devoted to the peaceful pursuit of material comfort.” Like Mirabeau, he did not come from the bourgeois, but as an abbot was technically part of the First Estate. Unlike Mirabeau, however, he did not distance himself from the interests of his social rank. He fought against the abolition of tithes to the Church and wanted to preserve some of the clergy’s special rights under feudalism. These positions put him at odds with the liberal current of the early Revolution and rendered him virtually irrelevant in the latter stages of the Revolution. He managed to survive the Reign of Terror, primarily by opportunistically renouncing his faith. He remained a dedicated supporter of the monarchy throughout the Revolution and, like most moderates, would have settled for a constitution giving greater power to the bourgeoisie. Without his pamphlet, there could not have been a Revolution, but he soon lost any means by which he could direct the Revolution as it evolved.

Perhaps the most famous of the prominent moderate leaders of the French Revolution had already made a name for himself fighting in the American Revolution in the previous decade. Gilbert du Motier, Marquis de Lafayette, had fought on the side of the U.S. insurgents 180px-aduc_029_lafayette_28m-p-j-2c_1757-183429in their war with Britain, and for his part in that successful uprising came to be seen as a war hero for defeating the British and as a darling of liberal intellectuals who admired the U.S. republic. An anti-absolutist aristocrat like Mirabeau, Lafayette was prepared to protect the king as long as he agreed to accept democratic reforms. He became the commander of the National Guard, the popular militia based in Paris, and worked with his old friend Jefferson in the crafting of the Constitution. He never forged a lasting alliance with Mirabeau, despite their similar roots, possibly because Lafayette appeared (initially) as an incorruptible general, whereas Mirabeau was a sly, cunning politician stained by his excesses. Paradoxically, while Lafayette’s popularity cut across class lines, no class fully trusted him. To the upper classes, he was a traitor, siding with the “mob” against his own social order. Simultaneously, the working classes viewed him as an outsider, a member of the military — that institution the old repressive regime had used without remorse to stamp out any dissent.

The bourgeois leaders of the early Revolution uniformly favored a peaceful transition to a constitutional monarchy but failed to accomplish this goal. This failure did not result from any one personality but from an overall inability to address one of the core causes for the Revolution: the lack of affordable food. Riots in major cities over bread became common, with more radical revolutionaries organizing demonstrations about food insecurity. In October, the king exacerbated conditions by changing his mind about accepting reform. He rejected the abolition of feudalism and most elements of the Declaration. This incensed the revolutionaries, who directed the working poor to march on the royal court in Versailles. Popular mobilization became the main tool by which the revolutionaries could put pressure on the crown. The nucleus of the march were the women from the urban poor, whose duties included purchasing bread for their families in the marketplaces. They became the symbols of the march, now known as the Women’s March on Versailles. Lafayette and his National Guardsmen accompanied the women, much to the chagrin of Lafayette, who as a man of law and order disapproved of such disorderly protest. When the marchers reached Versailles and demanded to see the king, Lafayette intervened personally to defend Louis and the even more unpopular foreign-born Marie Antoinette. Ever fearing actual conflict, Louis backed down on his stance against the Assembly’s measures. The revolutionaries also demanded, however, that he leave Versailles and return to the royal palace in Paris, the Tuileries. The revolutionaries feared (with some justification) that from his Versailles palace, the king could better orchestrate a royalist mutiny in one of his strongholds than in the national capitol. Again, Louis acquiesced and returned to Paris. Just as with the seizure of the Bastille, the working class had, through a show of popular action and force, exposed the hollowness of the monarchy as a political power. The bourgeoisie, represented by Lafayette, only cautiously went along with it all. His intervention spared the royal couple this time, but he could not save them forever.

Calm Before the Storm

In 1790, the French Revolution appeared to be winding down. King Louis had accepted all measures passed by the Assembly, and the Assembly was working on the new constitution. In July, the Assembly passed the Civil Constitution of the Clergy, which effectively turned Catholic priests and bishops into state employees. The Pope and the Catholic Church resisted this, as it would make the church in France part of the state, rather than under the control of Rome. In the eyes of many, the church was a corrupt institution divorced from its original holy mission, serving only to prop up tyrants and keep its followers docile. Many more French people, however, remained faithful to the traditional role of the church, even if they disliked its excesses. King Louis especially disapproved of the church losing its ability to extract tithes from the population, and the Revolution’s “war on religion” would become a driving force when some of the peasantry did eventually rise up against the revolutionary government. The French clergy mostly refused to take an oath swearing loyalty to the state, the vast majority becoming “non-jurors” more loyal to the Pope than France. This would create a schism in France that would not be mended until 1801, when Napoleon made peace with the church.

177px-14_juillet_1790July 1790 also witnessed the Fête de la Fédération, a massive celebration of the previous year and all the progress made since the Revolution started. Although the constitution had not yet been finished, public figures — including the royal family — took public oaths pledging themselves to the powers and limitations granted to them by the coming legal framework for what was still widely expected to be a constitutional monarchy. Ordinary people attended mass and then got lost in drinking and dancing. It was to be a fleeting moment of seeming reconciliation in deeply divided France. It would soon be shown that King Louis had no intention of accepting constitutional checks on his power. Many moderate political figures would meet their downfall attempting to keep the peace between scheming royalists and the working class, most of whom were skeptical of the king’s motives and worried the National Assembly would also betray their support.

Since the Revolution started, many aristocrats had emigrated to neighboring countries in Europe, and even the United States. These émigrés included the aunts of King Louis, and many suspected that Louis, his wife and children would also go abroad, where other European monarchs would join him in his desire to regain absolute power. This was a key reason in why the French people had demanded that Louis and his family live in Paris. Many royalists, however, resented the king being a prisoner in his own palace, and in February 1791, royalists went to the Tuileries Palace with concealed weapons after Lafayette had led the National Guard out of the city to put down riots. The royalists said they feared for the safety of the king, while the Guardsmen at the palace who confronted them worried the royalists had come to lead a counterrevolution. Lafayette returned to Paris and induced the king to order the royalists disarmed and sent away. This event, known as the “Day of Daggers,” further damaged the monarchy among its supporters and its critics. Supporters believed Louis had spurned a chance to retake power, while those hostile to the crown claimed it proved counterrevolutionary forces were stirring.

The Flight of Varennes & the Champ de Mars Massacre

In June 1791 Louis made a mistake that would cost him his life. In disguise, the royal family set off for the fortress town of Montmédy in the east, where they hoped to start a 140px-le_peuple_ayant_lavis_que_monsieur_vouloit_sc3a9loignercounterrevolution. They were recognized in their travels, however, and in the town of Varennes, the local postmaster had them arrested. As in October 1789, the royal family returned to Paris, but this time the public would not forgive them. Louis had been given multiple chances to recognize and respect the Revolution, but had shown himself to be unreliable in this regard. Those politicians who wanted a republic rather than a constitutional monarchy gained credibility. Most of these politicians belonged to a political organization informally known as the Cordeliers Club (the Jacobin Club would become much more famous and powerful later on, but at this time they were fairly moderate). The Cordeliers petitioned for Louis to be removed from the throne, or at least that there be a public referendum on whether to keep the monarchy at all. In July, a group of protestors gathered in the Champ de Mars to demonstrate against the king. Lafayette and his National Guard arrived and found stones and insults hurtling in their direction. The National Guard opened fire, killing dozens of people. Lafayette, his reputation already tarnished by his permitting the king to flee Paris, never recovered from the Champ de Mars massacre. The Revolution lost one of its foremost moderating figures.

In the aftermath of the slaughter, the revolutionary government sought to mitigate the damage by suppressing radical politicians and publications as seditious. Two prominent members of the Cordeliers Club, Georges Danton and Camille Desmoulins, had been present at the Champ de Mars protest and now went underground. So did a physician-turned-revolutionary named Jean-Paul Marat. Marat had started his own newspaper, L’Ami du peuple (“The People’s friend”), in which he praised the urban poor (the sans-culottes) and launched increasingly blistering polemics against the monarchists and moderates in the Assembly. He suffered from a painful skin condition, and his decision to flee into the Paris sewers whenever he upset the authorities did him no dermatological 20071214215733indissolubricitefavors. Another newspaper, Le Père Duchesne, appealed to the masses because it was written from a first person point of view, that of the titular Old Man Duchesne, a grumpy working class man with a pipe. The rants of Duchesne were laden with profanity to help give them the common touch. The man behind Duchesne was Jacques Hébert, who like many revolutionaries initially endorsed the idea of a constitutional monarchy, but then sharply turned his ire against the monarchy following the flight to Varennes.

In September 1791 the new constitution finally went into effect. Most power remained with the representative Assembly members, but the king retained veto power over legislation and could appoint and remove ministers. After the constitution’s passage, the National Constituent Assembly was dissolved and a new Legislative Assembly formed (in the interests of hindering careerism, members of the former could not be members of the latter). The new Assembly soon ran into trouble after its first meeting in October. From the outset, the king did not shy away from using his veto power to protect noble émigrés plotting counterrevolution abroad as well as clergy members who continued to refuse to take a loyalty oath to the government. Still, the Assembly mostly remained loyal to the king. Members of the monarchist Feuillant Club held the reigns of government and considered the Revolution completed. The second-largest group, the Jacobin Club, remained a broad tent that favored an overall centrist position.

As we shall see in the next entry, the Revolution was not over. The ordinary hard-working people of France, especially the sans-culottes in the cities, continued to demand reasonable prices and chafed at the huge property inequality between themselves and the “big bourgeoisie.” Also, even with the king in Paris, the possibility of counterrevolution continued to grow, with foreign kings and domestic royalists threatening to put the Revolution under siege. War was imminent, and naturally the people took on a more patriotic and radical mentality. The moderate bourgeois stage of the Revolution was ending, soon to be replaced by the more halcyon days of the radical period.


Andress, David. The French Revolution and the People. A&C Black, 2004.

Censer, Jack R. Liberty, Equality, Fraternity: Exploring the French Revolution. Penn State Press, 2001.

Doyle, William. The Oxford History of the French Revolution. Oxford Paperbacks, 1989.

Gottschalk, Louis Reichenthal. Jean Paul Marat. University of Chicago Press, 1967.

Hibbert, Christopher. The Days of the French Revolution. William Morrow & Company, 1981.

Hobsbawm, Eric. Age of Revolution: 1789-1848. Hachette UK, 2010.

James, Cyril Lionel Robert. The Black Jacobins: Toussaint L’Ouverture and the San Domingo Revolution. Penguin UK, 2001.

Landes, Joan B. Women and the Public Sphere in the Age of the French Revolution. Cornell University Press, 1988.

Lefebvre, Georges. The French Revolution. Vol. 2. Columbia University Press, 1964.

Luttrell, Barbara. Mirabeau. Southern Illinois University Press, 1990.

McGarr, Paul. “The Great French Revolution.” International Socialism 43 (1989): 15-110.

Schama, Simon. Citizens: A Chronicle of the French Revolution. Penguin UK, 2004.

Tackett, Timothy. When the King took Flight. Harvard University Press, 2009.

Unger, Harlow Giles. Lafayette. John Wiley & Sons, 2002.

Wallerstein, Immanuel. “Citizens All? Citizens Some! The Making of the Citizen.” Comparative Studies in Society and History 45.04 (2003): 650-679.

The French Revolution: Interpretations & Causes

We are not supposed to like the French Revolution too much. We acknowledge the virtues of its founding principles, liberal notions that persist to this day: liberty, equality and 320px-octobre_17932c_supplice_de_9_c3a9migrc3a9sfraternity. When it comes to the public killing of aristocrats and royalist sympathizers, however, we condemn the Reign of Terror as an early form of totalitarianism, where the state decides who lives and who dies, who serves the common good and who threatens it. Liberalism praises the slow, organic process of evolution, of gradual reform reached through negotiation and compromise. It opposes the bloody and righteous severing of a new order from the status quo. Such a righteousness crusade, it is claimed, leads to the ends outweighing the means, inevitably resulting in purges and deliberate famines — or even outright genocide. In the popular imagination, the guillotine represents not just the specific time of the Terror, but also an early form of state-sanctioned terrorism. It is the epitome of the state using political violence to quash dissenters and silence critics. In a liberal and pluralistic society such as ours, where freedom of thought and speech are valued, the Terror stands as an aberration, a warning to us that the French Revolution ultimately betrayed its noble goals of bringing France from feudalism to modernity.

The problem with this perspective is that it presumes peaceful pacts toward progress are the norm. The reality is that harsh departures from the past are sometimes necessary. In the context of the French Revolution, the victory of liberal republicanism was not assured; on the contrary, it was under constant and continuous assault by an array of reactionary forces. Noble émigrés, religious peasants, and foreign invaders all desired a return to the traditional feudal system. Moreover, the revolutionaries themselves competed to shape the final product of their social upheaval. Constitutional monarchists, moderate liberals and radical utopians from the middle class shifted between allegiances with aristocratic reformers, the urban poor and starving peasants as they sought to steer the revolutionary state through uncharted waters to the unknown shore of a more just and prosperous society. Unlike “the Party” in George Orwell’s 1984 that desires only power for its own sake, even the most despotic figures in the latter stages of the Revolution believed they were imposing order to lay the foundation for a better world. They wanted to wreck any chance of the old order restoring itself, and while in the short-term they failed, in the long-run they succeeded. They showed that society arranged according to the feudal era was in essence antagonistic to the class relations created by the socioeconomic and cultural changes witnessed in the 19th century. The Industrial Revolution made the French Revolution unavoidable. The French Revolution in turn has undermined the ability of tyrants and oligarchs worldwide to rule, their very regimes constantly called into question.

Monarchs wielded political power after the Revolution (and inexplicably still do in many countries), but never in the same way again. Common laborers, though failing to achieve many of their demands, came away realizing the potential of people power. Most importantly, power in France shifted irreversibly to the bourgeoisie. Although many would become supporters of imperialism (under Bonaparte) or the monarchy (the Legitimists and Orléanists), they believed such regimes would be the best for France, not because they desired to exclude themselves from politics. The French Revolution taught its contemporaries and continues to teach future generations about their ability to affect incredible political and social transformations when adequately organized.

Interpreting the French Revolution

In academia, debate rages over two rival interpretations of the French Revolution. The classic Marxist interpretation, associated with historians Georges Lefebvre and Albert Soboul, describes the Revolution as a bourgeois uprising against feudalism to obtain the economic freedom to develop early capitalism. Revisionist historians like Albert Cobban and François Furet argue that the Revolution did not advance the development of France into a capitalist state, and rather than a equalizing event, regard it as a precursor to totalitarianism. In their view, the Revolution was more about barbarism than progress.

It is rather comforting to find parallels between the killings of the Terror and, say, the 172px-cruikshank_-_the_radicals_armskilling fields of Cambodia. It is easy to lump the two together and condemn them both. This knee-jerk judgement rests on the fallacious presumption that, historically, liberal democracy has relatively little blood on its hands. Truthfully, liberalism was just as violent as fascism and communism in remaking the social fabric, especially in its promotion of capitalism. Marx never wrote about the French Revolution, but he wrote extensively about the blossoming of capitalism. He makes it clear that capitalism and classical liberal views about free trade and individualism did not grow peacefully out of feudalism; they destroyed it and replaced it. We remain ignorant of this fact because textbooks recount the killing of kings and nobles, but are largely silent on the main victims of early capitalism: the peasants and craftsmen who once enjoyed secure places under feudalism.  The turn to commercial agriculture and industrialization that defined the Industrial Revolution uprooted these people and removed their very livelihoods. They could either cling to the old ways or become workers in the new proletariat class. Marx writes eloquently not just about their exploitation under capitalism, but also about their alienation and creation of a false consciousness. People who had at least been connected to their labor under feudalism became unskilled wage-earners. The whole of their economic activity fell under the control of the developing bourgeoisie.

Even in places where the liberal replacement of feudalism went mostly unopposed, such as England and the nascent United States, regular people suffered in the name of capitalist progress. The major difference between those cases and France is that the bourgeois revolutionaries of the French Revolution attempted to create a new society in a matter of years, not decades or centuries. As we shall see, vested interests fought intensely to deny that. In 1800, it was possible for Jeffersonian republicans to lead a political revolution in the U.S., but in 2016, it is easier to imagine an end to the world than a major change to the political or economic system. Similarly, in 1789, the idea of challenging a feudal system that had ruled France for over 600 years was considered extremist and dangerous. That is, however, what the Revolution sought to do, and in so doing, inspired generations of people to question the present order and struggle to create a better world.

We should also consider the path France could have taken had it undergone peaceful reform rather than violent revolution. There is no assurance it would have become a liberal democracy. Barrington Moore touches on this in his seminal work on dictatorship and democracies. In Germany and Russia, the nobility allied with the bourgeoisie to organize industrialization through state-directed initiatives. When those countries underwent revolutions circa World War I, the republics that emerged were too weak to rule, leading to states of alternative ideologies. These states attempted to impose their own systems and principles as the liberal order they opposed, but with the swiftness and audacity of the French Revolution. Many observers take this to mean the French Revolution inspired fascism and Bolshevism. It is more apt to say Bolshevism and fascism were inspired by liberalism and how it forged new views of seeing the world. We often take for granted that the default ideas and systems of today were once considered radical and revolutionary.

The Absolute Monarchy

In order to understand the causes of the 1789 Revolution, it is necessary to consider both long-standing structural problems as well as more short-term crises that prompted a complete social collapse. To start, France was (ostensibly) an absolute monarchy in 1789, with power primarily centralized in the throne. While we might think feudalism is inherently dictatorial, in fact the opposite is true. The cornerstone of feudalism is vassalage: regional counts and barons ruling at the local level, but swearing their fealty to a higher lord. The king (or queen) was at the very top of the social pyramid, but his (or her) rule depended on the continued obedience of the vassals. To keep those vassals mollified, it was common practice for monarchs to extend their nobles special rights. The most infamous of these was the droit du seigneur (or jus primae noctis) that permitted nobles to have sexual relations with their female subjects on their wedding nights. There is no actual proof French lords (or any European nobles) invoked this right. French nobles did, however, exercise rights to rents from those who worked on their estates or domains, as well as a percentage of the crops harvested by peasants on the nobles’ lands.

It was not until the 17th century that the French monarchy began to erode the liberties vassals enjoyed under feudalism. These, of course, were the freedoms that protected nobles from the power of the monarchy. For example, French nobles had been able to take complaints on royal overreach to appellate courts called parlements (not to be confused with English parliaments) that would invalidate regal pronouncements if they infringed on convention. (Compare this to the unwritten constitution that still perseveres in British politics to this day.) The 16th century had closed with wars of religion across Europe, as the Protestant Reformation ruptured the glue that held the feudal order together: Catholicism. Cardinal 290px-richelieu2c_por_philippe_de_champaigne_28detalle29Richelieu, the de facto head of the French government and well-known nemesis to the Three Musketeers in Dumas’ novel, sought to keep France in a strong position on the Continent and to profit from the disorder caused by the Thirty Years’ War (1618-1648). Local lords were brought to heel and the religious tolerance of Protestants was revoked. Richelieu’s successor, Cardinal Mazarin, furthered these policies until the nobility tried in vain to reassert its power independent from the crown in a series of civil wars that finally ended in 1653. In the meantime, Louis XIV of France, the so-called “Sun King,” grew up as a child king, accustomed to unrivaled power. Under his reign, from 1643 to 1715, France was perpetually involved in wars over succession disputes, expansionism and counter-expansionism. France had become the hegemonic power of early modern Europe and behaved as such, diplomatically and militarily.

The Aristocracy & Bourgeoisie

The French nobility, although having lost some of its autonomy, remained quite powerful. The upper ranks of the military and the clergy, the pillars of absolutism supporting the crown, included only nobles. The most affluent attended the royal court at Versailles, engaged in intrigues and entertainment, living off the taxes and duties leveled on the peasants who worked their land. (Some hereditary peers living in rural areas, however, fared little better than the peasants they lived beside.) For those outside the noble class, it 197px-charles-alexandre_de_calonne_-_vigc3a9e-lebrun_1784was possible to become ennobled through the sale of judicial and administrative offices. In the 17th century, the sale of offices was so common in order to fund constant warfare that, in the 18th century, access to the nobility became much more restrictive. The hereditary nobility had contempt for the bourgeoisie “diluting” their class through the purchase of a savonette à vilain (the commoners’ soap). The bourgeoisie who had already bought their way into the nobility also had incentive to block others from reaching their level, as they wanted their titles to become hereditary as well, securing fortunes for future generations. By 1789, social climbing was still possible, but much more daunting for members of the bourgeoisie. They were paying for the operation of the state, but were excluded from participation: a form of taxation without representation. This was a huge motivation for revolution.

The very nature of the French economy also discriminated against the bourgeoisie. Jean-Baptiste Colbert, finance minister to the Sun King, had implemented a mercantilist system that featured heavy protectionist policies meant to develop French industries by promoting exports and depressing the demand for imports. Although France never equaled the English or the Dutch in foreign trade, the French state became incredibly powerful in terms of state-led production. The early bourgeoisie were thus merged into the existing feudal structure, overseen by a powerful bureaucracy. As a result, legal defenses of property rights and private economic competition did not blossom; on the contrary, the state reigned supreme in economic matters, just as it did politically.

As discussed, members of the bourgeoisie that wanted greater power exchanged trade and 472px-new-france1750commerce for titles and fiefdoms. For example, a financial counselor to Louis XIV, Antoine Crozat, rose from peasant stock to become a wealthy merchant before purchasing the barony of Thiers in 1714. Like many other bourgeoisie of his time, Crozat was heavily involved in France’s overseas colonies. In 1712, he received a royal charter granting him dominion over all trading and moneymaking licenses in Louisiana for 15 years. Sadly for Crozat and other bourgeois colonial overlords like him, the once profitable fur trade in North America had diminished, and colonialism on the new continent never prospered for the French empire the way it would for the United Kingdom. Crozat lost around $1 million even with his trade monopoly in Louisiana. When France lost the Seven Years’ War (1756-1763) with Great Britain, the peace agreement stipulated that France turn over control of its North American colonies to the British. (It would later regain Louisiana from Spain, only to sell that territory to the U.S. in the Napoleonic era.) France was humiliated, leaving the feudal system in debt and in doubt. Absolutism and mercantilism had made France the strongest country in the world, but perpetual conflict and divergent class interests had taken their toll. The government could no longer take the “commoners” for granted. Importantly, this materialistic conflict also coincided with an intellectual movement that supplied an impetus to bourgeois reformers to challenge the very character of the feudal regime.

The Enlightenment & Rousseau

Political change in the late 18th century was synonymous with the Enlightenment, a philosophical revolution that sought to bring the rigor and dispassion of scientific analysis to human behavior, including theories of government. Direct experience and concrete evidence became privileged over blind faith and static doctrines. Operating according to reason and rationality, Enlightenment philosophers argued, educated men could rule themselves rather than be ruled by feudal lords or organized religion. The French philosophes included 299px-voltairecandidfrontis2bchap01-1762Voltaire, Montesquieu, and Diderot, the primary editor of the famous secular Encyclopédie, the most famous Enlightenment publication. It embodied the desire to provide general information to the public (or, more accurately, the literate classes.) On political issues, the philosophes opposed arbitrary power or rule through fear and superstition, but fell short of unanimously endorsing participatory democracy and universal suffrage. As men of letters, they believed in their own intelligence and judiciousness, but did not extend this faith to the illiterate, “unenlightened” masses. (It should be noted that U.S. revolutionaries like James Madison, influenced by Enlightenment ideals, argued for the “protection of the minority of the opulent from the tyranny of the minority.”) Most philosophers wanted to remove the obstacles that hindered them from realizing their skills and talents as intellectuals; this was their definition of “freedom.” In terms of enabling the impoverished, uneducated working classes to obtain the same advantages and resources they possessed, the leading lights of the Enlightenment were silent. Still, their strident atheism and devotion to reason pervades all stages of the French Revolution.

The later, more radical Revolutionary period is more accurately tied to the works of Jean-Jacques Rousseau. He was a contemporary of the Enlightenment philosophes, but 190px-rousseau_in_later_lifephilosophically their opposite. In his Discourse on Inequality (1754), he argued that people are innately decent, but that institutions corrupt and degrade them. He admired the “noble savage,” primeval man innocent of education and the sciences, and his ability to live in harmony with the natural world. This looking backward with rose-tinted glasses was anathema to the philosophes. In his commentary on the work, Voltaire wrote: “One longs, in reading your book, to walk on all fours.” Whereas Voltaire and other Enlightenment thinkers saw higher learning as separating man from beasts, Rousseau believed that human morality in the raw state of nature was rough but organic. “Civilized” society brought with it private property, and by extension, inequality and disillusionment. People come into the world without distinctions or obligations; it is society that confers upon them different backgrounds and statuses, dividing them and driving them into competition with each other.

This viewpoint would become the foundation for Rousseau’s chief political work, The Social Contract (1762), which would have an immense impact on the French Revolution. He argued against an elective representative system, calling such a system “elective aristocracy,” and supported democratic rights for everyone, including women. Like Hobbes’ Leviathan, the sovereign for Rousseau is the sum of all individuals coming together and forming the “general will” – the conceptual manifestation of what is in the common interest. Each individual, motivated by virtue, willingly pledges himself or herself to the shared general will, as it comprises rudiments of each person’s desire. If there are incongruities about what should be the general will, these conflicting opinions annul each other, leaving the general will to arise naturally. This spontaneous direct democracy may sound utopian, but Rousseau was a romantic. His emphasis on emotion and virtue expressed an extensive estrangement with the world as it was. Rousseau craved dynamism and change, repressed in a cold and conservative feudal culture, and he yearned to restore the suppressed springs of life. Many shared his restive spirit, and it can be perceived in the sentimental novels and poems of Goethe, Pushkin, Shelley, Byron, Wordsworth and other Romantic artists. As we shall see, many of the most radical leaders of the Revolution (especially the members of the Jacobin Club) regarded Rousseau as their philosophical guide. His political theory was incompatible with the old order; it had to be overturned and destroyed, with a more virtuous popular democracy created in its place.

The role of ideology in social revolution is vital. It is important to consider how a new ruling class attempts to convince other classes to assent to its ethical, political and social values. It was not enough for the bourgeoisie to affirm their economic power in their historical moment; they had to transmit their mindsets through cultural power. As the educated class, 18th century intellectuals made a case for “rule by experts” that is still deployed in modern politics. It is the language of meritocracy: rule by talent, not birth. This argument omits that some people are born with more advantages than others. The thinkers who influenced the leaders of the Revolution articulated a negative liberty that suits the bourgeoisie: freedom from government regulation, censorship, and social immobility. This libertarian mentality is still the one most often deployed in our current politics, where government is constantly criticized for its invasion of our private lives, rather than as a democratic system of empowerment for the people.

Rousseau, however, was a deviation from the norm. He railed against inequality and argued for a positive freedom that would level the playing field in a sort of primitive 135px-rousseau_pirated_editioncommunism. It would be erroneous to draw parallels between Rousseau and Marx’s scientific socialism, as science and Rousseau’s romanticism are integrally conflicting. It is more accurate to compare Rousseau with the utopian socialists that preceded Marx: Henri de Saint-Simon, Charles Fourier, and Robert Owen. Like Rousseau, these thinkers sought to spread a “new social Gospel” (as Marx and Engels call it in the Communist Manifesto) without paying due diligence to class antagonisms or revolutionary potential. In the manner of other philosophers, Rousseau plucked his idealized republic from his own imagination, more as an intellectual exercise than a program for action. Therefore, it should not be surprising that the social aspect of the French Revolution ran into great difficulty when philosophy was put into practice. The theoretical strength of Rousseau’s work did, however, form a union of bourgeois and working class interests that would take the Revolution in its final decisive direction.

The Petite Bourgeoisie & Peasantry

Minor property holders made up the bulk of the lowest stratum of the 18th century French social hierarchy. The vast majority were peasants, emancipated serfs who owned or rented land and made up the backbone of the agrarian economy. They had to pay noble lords for the “right” to use mills and wine presses required for agricultural production. In the main, they were more concerned with the concrete duties of the state — namely, to provide them with bread and security — than the changing of their social existence. As Marx observed, peasants tended to be conservative, prone to protecting their minor holdings and not putting it at risk. It is an underappreciated fact that the French peasantry were instrumental in moderating the Revolution and bringing the Terror period to an end.

In the cities and towns, factories were still a relatively new development, and the proletarian class was small. There were, however, artisans and craftspeople that produced basic consumer goods. There were also traders and shopkeepers that sold them. Marx referred to this class as the “little” or “petite” bourgeoisie. In the context of the French Revolution, 176px-sans-culottethey are known as the sans-culottes, so called because they wore trousers rather than the knee breeches of the upper classes. In 1789, the bourgeoisie had been so squeezed by war and economic crisis that the “little bourgeoisie” was essentially indistinguishable from common urban laborers. Like peasants, their priority for joining the Revolution was greater economic security and the provision of food at fair prices. The sans-culottes saw the benefits of the philosophical principles espoused by the “big bourgeois,” but their continued support for the revolutionary government depended on whether their more immediate basic needs were met. They were willing to give their support to any government that would intervene in the economy to ensure an affordable price for food, whatever its philosophical principles. If the bourgeois members of the Revolution hungered for freedom, the sans-culottes simply hungered for bread.

Bread and Taxes

In 1774, newly crowned King Louis XVI appointed the economically liberal finance minister Anne Robert Jacques Turgot. Turgot sought to improve France’s economic situation by liberalizing commerce, subscribing to a “laissez faire” philosophy. This included deregulating the grain industry, which was significantly monitored and policed by the state. Grain merchants tended to hoard their grain rather than sell it, inflating the price and raising their profits. They would also dilute flour with other material, including chalk and grinded-up bone. This caused the working classes to riot in 1775, in the “Flour War.” The riots were put down by force. Although the riots indicated the precariousness of the feudal regime, the negative impact of economic freedom on affordable food was a working class grievance, not a bourgeois one. As such, bread alone fell short of cutting across class differences and inducing revolution. The bourgeoisie would not be motivated to commit to insurrection until the monarchy attempted to do the most vile sin in the eyes of bourgeoisie anywhere, everywhere: the government tried to raise its taxes.

France had joined the American Revolution around the same time as the Flour War, 320px-surrender_of_general_burgoyneseeking revenge for the embarrassment England had inflicted on the French by taking France’s North American colonies. The American Revolution succeeded and humbled the English, but it cost France 520 million livres in loans, issued at incredible interest rates. A series of finance ministers all wanted to raise taxes, but French appellate courts all feared higher taxes would place more of a burden on the nobility (especially the bourgeoisie who had bought their way into the nobility precisely to escape taxation). These courts, once rendered irrelevant to royal diktat, reasserted their influence and blocked the increasingly vulnerable crown in its desperate attempt to raise more funds.

To break the impasse, the king assembled the Estates-General, an assembly made up of representatives from the three estates of the realm: those who prayed (the clergy), those who fought (the nobility) and those who worked (the commoners). It had not been summoned for over a century, and it in no way mirrored the complex and multilayered reality of 18th century French society. It did, however, provide an avenue by which the monarchy could, with the help of the old nobility, impose a greater tax burden on the bourgeoisie. The calling of the Estates-General, however, had a major unintended consequence: it gathered the bourgeoisie together and gave them a platform by which they could express their dissatisfaction with the regime. The concerns of the poor masses went unheeded; the delegates of the Third Estate were uniformly called from the “big” and “little” bourgeoisie. As such, the Estates-General was primed for a bourgeois hijacking.

A political pamphlet entitled What Is the Third Estate? by Abbé Sieyès became the unofficial bourgeois manifesto. He called for double representation of the Third Estate – 320px-estatesgeneralthat is, the Third Estate having twice as many members as the other two estates combined. He also asserted that all three estates should meet together instead of separately, as was custom. With votes counted numerically rather than by status, the Third Estate would essentially control the political agenda. The nobility and clergy would essentially have token representation but little influence. Most of the representatives from the Second Estate, parish priests rather than bishops and archbishops, sympathized with the Third Estate. This was because many low-ranking priests were the second or third sons of the bourgeoisie. A handful of nobles also defected to the Third Estate, the most famous being Louis Philippe Joseph, Duke of Orleans. He belonged to a cadet branch of the ruling Bourbon dynasty and supported a constitutional monarchy. When the Third Estate finally met in Versailles, in June 1789, it proclaimed itself a National Assembly. Far from semantics, the bourgeois delegates consciously distanced themselves from the Estates-General and thereby all the trappings of the feudal past. The crown was not amused. Barred from their meeting hall, the Assembly met in a nearby tennis court, and swore the Tennis Court Oath: a pledge to not convene until they had drafted a new constitution for France. Public support swung to the National Assembly, especially in the cities.

Like the 320px-le_serment_du_jeu_de_paumeAmerican Revolution, the French Revolution was posed to be bourgeois revolution. The old system depended on the fruit of capitalism but shunned capitalists. Encouraged by Enlightenment philosophy, the bourgeoisie made a case for society being constituted around them. Despite their conviction, they preferred reform to violence. The Revolution, however, would not proceed as the bourgeoisie alone wanted; they could not impose themselves on the other classes. The monarchy especially would resist the abandonment of feudalism. The nobility, with some exceptions, wanted to retain their feudal privileges and opposed modifying France’s economic orientation, as they were its main beneficiaries, along with the crown. Most nobles feared what would happen if their minor commercial investments had to compete in a more liberal economy. Some open-minded aristocrats favored a constitution to give certain bourgeois freedoms legal backing, but they did not want to be made a secondary or even symbolic element of society. They were “superior” to the “common” people by their very nature, and did not want to be subordinated to them – especially when some noble families had spent decades clawing their way up from peasant or merchant stock into the upper classes. Those nobles that did defect to the bourgeoisie envisioned some form of advisory role for themselves in the new system, similar to the oversight function of the House of Lords in Great Britain.

Storming the Bastille

In July 1789, Louis XVI sacked Jacques Necker, his reformist finance minister. Necker had not respected the Estates-General as anything other than a means toward changing the tax system. It was rumored, however, that he supported political reform if it meant coming closer to resolving France’s major economic problems. The royal dismissal of Necker indicated to the bourgeoisie that the monarchy refused to brook any challenge to its authority. For the working classes, this meant that a suppression of dissent would not be long in coming. They had experienced the pattern over numerous uprisings, including the recent Flour War. The entire Third Estate, bourgeois and laborers alike, realized that the monarchy would use its most powerful extension, the military, to quell any rebellion.

Both groups sought weapons, and it made sense that arms could be found at the Bastille, a medieval fortress prison that stood in the center of Paris. Its presence represented the antiquated, passé ideas of the Middle Ages. In function, it served a state that operated according to dictatorial measures that afforded no respect to the average person. Bourgeois 320px-prise_de_la_bastilleleaders sought to negotiate with the soldiers holding the Bastille, and even accepted an invitation to breakfast with the fortresses’ governor. Apprehension gripped the sans-culottes that were present, however, as time was not on their side. They were acutely aware that the army would start massacring residents in the poorer Paris districts at any moment. The masses fought their way forward, raging through the prison, releasing inmates and seizing gunpowder. Fighting erupted, but the Bastille governor surrendered when the rebels fixed cannon on his men. The raiders killed the governor and placed his head on the bike. Other members of the garrison also died. The Republic rewarded the original Bastille insurgents with medals, and mostly, they were sans-culottes. They had the most to lose if there was a counterrevolution, and thus were the most proactive in wanting to neutralize a potential reprisal by the state. The “big bourgeoisie” may have dominated the Assembly, but it was the “little bourgeoisie” and the urban poor who directed the Revolution from below.

In the countryside, the collapse of central authority throughout July 1789 resulted in the “Great Fear,” major peasant revolts that featured improvised farmer self-defense leagues commandeering manor houses. Peasants feared that, with all the unrest in the capital, they would continue to be ignored unless they took matters into their own hands. They also knew that by taking control of noble estates that they would be massacred if the Revolution failed. In the meantime, bandits would exploit the lawlessness of a divided France to prey on the vulnerable peasantry. All this chaos led to the hysterical hoarding of weapons and property. Bit by bit, the regular people of France were dismantling the old regime and throwing their support behind the National Assembly. The slate had been cleared; the question became what new system should be created in place of the old one.


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On Shifting Sands: The Evolution of the IMF

When delegates from 44 countries met at the Mount Washington Hotel in Bretton Woods, 320px-gold_room_bretton_woods_5New Hampshire in the summer of 1944, they resolved to establish an institution that would lend money to countries facing mounting balance-of-payments deficits so they could avoid debt defaults and continue to participate in international trade. Almost 70 years later, the International Monetary Fund (IMF) remains the world’s “lender of last resort,” but now primarily offers its funds to developing countries with substantial conditions attached – ranging from the cutting of deficits to deep, structural changes centered on market liberalization. How did the IMF change so much from its original mandate as neutral overseer of economic cooperation to supreme crisis manager, qualifying access to its resources on major overhauls to borrowers’ economic architecture? This paper utilizes the gradual change framework proposed by Mahoney and Thelen (2010) and argues that at least three shifts have taken place within the IMF: a conversion toward conditionality, a layering of the neoliberal agenda onto its mission and, most recently, a drift caused by a reassessment of its function and prescriptions, as the IMF deals with a series of major economic crises – and a crisis concerning its own role in the international economy.

Since its foundation, the IMF has been one of the leading multilateral institutions in the world. From the end of World War II to the 1970s, it presided over an era of high economic growth worldwide, the so-called “Golden Age of Capitalism,” that witnessed an average global growth rate of 4.8% and very low rates of unemployment (Skidelsky 2010). The IMF ensured that exchange rates remained fixed between countries, keeping trade arrangements smooth and reliable. Member countries pooled funding via a quota system that enabled the IMF to extend loans to countries to rebuild after the war as well as establish substantial welfare states. When the fiscal fiascos of the 1970s brought this status quo to an end, the IMF increased its profile as a major stabilizer in the world economy, supplying emergency funding to countries on course to bankruptcy or suffering serious debt liabilities. By adding conditions to its credit, the IMF accumulated incredible influence by essentially making policy for countries that borrowed from it. As globalization has linked more and more countries into a interconnected global marketplace, the IMF wields more authority than ever as a financial meltdown in one country or region can now rapidly ripple outward, requiring immediate intervention before crisis becomes calamity.

Yet, as the power and prominence of the IMF has grown, so has the controversy 320px-international_monetry_fund_building-name_shieldsurrounding it. Some critics have accused the IMF of being an impervious, bloated bureaucracy whose solutions to economic stagnation or imminent collapse after often worse than the problems they seek to address. More severe censures indict the IMF as a blunt instrument wielded by members of a vast neoliberal conspiracy that purposefully destroys emerging countries in the interests of the worldwide capitalist class. While there is widespread consensus that the IMF has indeed deviated from the functions intended in 1944, explanations for this change are widely divergent as well as worryingly one-dimensional. Rather than giving close attention to the myriad actors, ideologies and events that have shaped and continue to affect the IMF, many scholars who study the institution focus either exclusively on one aspect or another, typically focusing only on what the IMF does rather than why and how it has changed.

There are fundamentally two different approaches to the IMF and the change it has undergone to be found in the political, sociological and even popular literature. The first approach is that of “mission creep,” most commonly associated with the work of Joseph 180px-joseph_e-_stiglitz_-_croppedStiglitz, a former chief economist at the World Bank. The “mission creep” approach posits that the IMF has taken on additional undertakings beyond its constitutive mandate, specifically in regards to its attaching conditions to its loans. “Mission creep” scholars argue that “free market fundamentalists” used conditionality to not just stabilize the world economy but to build a new one based on precepts found in economic textbooks, regardless of the unique needs and risks of borrowing countries (Stiglitz 2002, 2008). Similarly, scholars associated with public choice theory also fault bureaucratic pathologies for the IMF inflating its authority, although for these scholars the responsible force for this expansion is not free market zealotry, but instead the rent-seeking behavior of profit-maximizing IMF staff members. For example, Roland Vaubel (1994) has asserted that the IMF tends to quickly approve loans during quota review years so as to bring about quota increases that will ensure more funds will be available for future IMF lending. These hasty approvals lead to a swelling of the IMF budget, enabling the IMF to issue more loans along with extensive conditions that maximize IMF control over countries that borrow from it.

In contrast to the “mission creep” approach is what has been called the “mission push” explanation. This approach holds that the United States, the primary shareholder of the IMF, has directed the IMF toward lending practices and harsh conditions that coincide with the interests of the U.S., its allies and major multinational corporations (Vreeland 2003, Stone 2004, Babb and Buira 2005). Such theories generally cite the fact that the IMF relies on quotas from its member countries, and since wealthy countries contribute the most, they are entitled to the most voting shares within the IMF. Consequently, “mission push” theories argue, policies favored by these wealthy countries become the policies of the IMF. “Mission push” theorists often refer to the “Baker initiative,” when U.S. Treasury Secretary James Baker called upon the IMF and other international financial institutions to promote the liberalizing of markets and private sector investments. The 160px-naomi_klein_c3a0_mouans-sartoux2c_france_2008Shock Doctrine (2007) by the activist Naomi Klein offers perhaps the most extreme variation of this argument, as it presents the dramatic structural reforms of IMF loans as intentional “shock therapy” designed to destroy existing economies (as well as societies) so a union of neoliberal economists and neoconservative imperialists could construct free market systems among the ruins. Whereas “mission creep” theories stress the role of internal decision-makers within the IMF in the progression of the institution over time, “mission push” theories concentrate on the influence of the U.S. (and sometimes other wealthy shareholder countries).

There are problems with both these approaches. The “mission creep” approach reduces IMF economists to doctrinaire “fundamentalists” or rent-seeking opportunists who all act according to a neoliberal hive mind or to appease their base selfishness. While there is sometimes a theoretical necessity to generalize, it seems dubious that the entire IMF staff might be uniformly motivated. Secondly, “mission creep” theories fail to describe under what conditions these “fundamentalists” or “opportunists” are able to carry out their “creep.” Shareholder countries, from the wealthiest to the poorest, are unlikely to approve of IMF thinking or behavior that wastes their resources or undermines their interests. Surely an official in the treasury of a shareholder country would notice and report repeated rent-seeking activity designed to bolster IMF resources at the expense of shareholders. The IMF does not operate in a vacuum; indeed, as it has no economic resources of its own, it is highly reliant on its relations with its member countries. By failing to factor the identity and interests of member countries into its formulations, “mission creep” theories tend to omit a critical element from their frameworks.

“Mission push” theories usually commit the same sin, but inverted: the U.S. and other wealthy countries are assigned sole agency over what the IMF does, while IMF economists are rendered impotent as Washington, D.C. and Wall Street dictate policy. If “mission creep” theories reduce the IMF staff to free market fanatics or freebooters, “mission push” theories depict them as unwitting henchmen taking orders from pseudo-fascists 320px-calling_card3fthat micromanage every decision that the IMF (and all other international financial institutions) make. Institutional change in the IMF, therefore, comes down solely to external pressures, without any deliberation on the part of the internal staff. This is rather unconvincing, as IMF economists have been called many things the world over, but “unwitting” is usually not one of them. It is entirely possible that major decision-makers within the IMF (if not rank-and-file members) might find themselves at odds with market liberals in shareholder countries. Indeed, recent events have shown direct evidence of this. In April 2013, the IMF criticized the strict austerity measures employed by George Osborne, the Conservative Chancellor of the United Kingdom, as harmful for future growth. Not only did the IMF single out one of the G7 nations for reproach, it condemned the tight fiscal adjustment policies most commonly associated with neoliberal economics.

What is needed is a balanced approach to institutional change in the IMF that pulls together the identity, ideologies and interests of all relevant parties, from the economists who make up the institution to the shareholders that provide it with the stature and the assets it requires to perform its function. Instead of making a normative assessment on what the IMF does today and then inferring whose interests its behavior serves, it would be useful to chart the historical development of the IMF and search for an instance or instances of change, with consideration given to precise contexts and forms of contestation occurring at the time. To do this, a theoretical framework for understanding and explaining institutional change is useful.

Regrettably, such theories are sparse in comparative politics. For many years, scholars only analyzed how institutions differed across countries and how these differences impacted various outcomes, such as economic growth, inflation and unemployment. These scholars argued that conflicting national outcomes could be traced back to national institutions (Katzenstein 1978, Gourevitch 1986), and eventually the field was consumed in Cold War debates about which institutions would lead to the “best” outcomes. Modernization theorists such as Rostow (1960) proposed that the adoption of capitalist institutions in the Western mold would lead to “take-off” for developing countries hoping to catch up with their more advanced counterparts, while neo-Marxists like Poulantzas (1974) argued that such institutions primarily served to protect the interests of the dominating capitalist classes, presenting the illusion of class equality while in fact splintering the working class into disorganization and squabbling. Despite the scrutiny given to institutional disparity and alteration between various political systems, very little was said about those phenomena within those political systems.

The 1980s brought about a major change in this regard. It had become apparent that, even in countries with similar political processes and economic structures, the preponderance of stagnant economic growth, high inflation and the rise of neoliberalism had forced capitalismlogoinstitutions to change. It was clear that institutions varied according to changing historical conditions and scholars started to investigate what these conditions were and what changes they produced (Campbell et al. 1991, Thelen and Steinmo 1992). Meanwhile, sociologists were also beginning to study what they considered an international political culture that had led to almost identical institutional behavior across countries (for example, the resemblance of democratic institutions and educational systems) and how institutions adapted to shared cultural values (Thomas et al. 1987). Social scientists turned their attention from institutional outcomes to institutional change.

The early contributions to the institutional change literature argued that such change was infrequent and that transformations only occurred according to the principles of “path dependence.” In other words, contingent decisions or events placed institutions on set “paths,” moving them in one direction and limiting the choices offered to future institutional actors. Institutional change or attempts to create such change are therefore highly dependent on decisions and actions in the past (Nelson 1994, North 1990). These scholars drew on the work of economists like W. Brian Arthur (1994) who argue that patterns of economic development hinge on a variety of factors, such as familiarity with an institutional arrangement and the incentive of beneficiaries of that arrangement to defend continued institutional behavior that favors them. Additionally, some scholars have argued that, since institutions usually exist alongside other related institutions, change must be rare in order the preserve the complementarity of these corresponding institutions (Aoki 2001). The common theme throughout this approach is that institutional change should be intermittent and incremental when and if it occurs.

The clear problem with the path dependence approach, however, is that it only focuses on the incentives and forces centered on blocking institutional change; it does not explain the320px-zugunglc3bcck_bei_ummendorf2c_landesarchiv_bawc3bc_n_1-68_nr-_1596 means or motivations by institutions that “go off the rails,” so to speak, finally deviating from their paths. Path dependence scholars tended to fall back on major exogenous shocks or “critical junctures,” such as wars or natural disasters, which overturned the traditional situation and necessitated reforms or revolutions to institutions (Thelen 1999). Critical junctures, however, say nothing about how flaws within the pre-existing institutional status quo might trigger movements for change or how actors within and external to institutions arrive at the reforms or revolutionary ideas that are appropriate to replace the old order. The critical juncture explanation for institutional change does not solve the stability bias inherent in the path dependence approach.

There are alternatives to the path dependence approach that discuss the driving impetuses for institutional change. These approaches can be classified according to arguments of efficiency, fitness and power relations. The efficiency approach also drew from the work of economists, specifically that of Ronald Coase (1960) and Oliver Williamson (1985), who argued that the reasons economies featured organized firms rather than individuals using contractors was because hierarchies minimized transaction costs as they better manage the numerous inputs and outputs required to operate efficiently. Essentially, institutions respond to their environment and alter their behavior according to what makes the most economic sense. The shortcoming of this approach is that it assumes institutional actors operate with efficiency first in their mind or are at least immune from other considerations; social norms and beliefs affect such considerations as well. Since institutions are “embedded” in the societies with which they operate, an actor in a society that emphasizes trust and reputation may be more engaged in contracting behavior than an actor from a relatively more cynical, individual-oriented society (Granovetter 1985). If we accept that ideologies and values matter in motivating, the efficiency approach is too limited.

The second approach as to why institutional change occurs is the fitness approach. According to this perspective, institutional change emerges from a need for institutions to “fit” the prevalent norms and ideas in a society. Institutions either discern what their 232px-organizational-unit-svgideal practices should be and strive toward them or, through a process of learning, study similar institutions that have proven successful and imitate them (DiMaggio and Powell 1983). The flaw here is that it puts a premium on the similarity between institutions and measuring the degree of such similarity without fully delving into how the process of how institutional actors learn what the ideal practices of their institution should be or how to imitate other institutions. Additionally, it is evident that, even when there is a predominant normative stance toward institutional operation, there will be variation among institutional actors. For example, the United States government has made no move to ratify the tenets of the Kyoto Protocol, despite the pervasive normative strength afforded to reducing emissions of greenhouse gases and combating climate change. In addition, the fitness approach does not engage with how actors external to an institution might influence or pressure an institution to conform to certain principles or practices rather than the institution arriving at those determinations independently. Due to these oversights, the fitness approach also has substantial limitations in seeking to explain institutional change.

For scholars grouped into the third approach, institutional change depends on power relations. In short, individuals and groups that hold political power in an institutional context dictate what sort of institutional change occurs. For example, Mark Roe (2003) demonstrated that interest groups wary of financial monopolies used political allies to implement laws in the U.S. that prevented insurance companies and investment banks from possessing large portions of stock in a business, benefiting corporate managers who are not accountable to large, powerful shareholders. In countries where there was no similar political alliance, no such laws emerged and managers tend to be less independent in controlling their business operations. Other scholars have stated that contestation over resource distribution is also what makes and shapes institutional change (Knight 1992). Like the other approaches, however, the power relations approach leaves out meaningful considerations. First, it robs agency from regular institutional actors who may lack official power capabilities but can unofficially be quite important in clamoring for change by utilizing mobilization and communication strategies. Second, like the efficiency approach, it assumes power-holders act only according toward instrumental goals that align with their material interests. While the power relations approach tells us that power-holders create the institutions they want, it does not elaborate on their motivations for doing so.

Seeking to chart and understand historical change in the IMF requires a theoretical approach that combines the complexity and nuance that the above approaches neglect. Such research necessitates an analysis that transcends deterministic conclusions that trace all institutional change from one source or consider all forms of change to be the same. Mahoney and Thelen (2010) have thankfully developed an approach that stresses the relevance of conditions to institutional change and distinguishes between different modes of change. This approach poses two general questions: Does the political setting allow actors preserving the status quo strong or weak veto possibilities? Does the institution enable actors the freedom to debate and interpret the implementation and enforcement of institutional rules?



In a slight deviation from the power relations approach, Mahoney and Thelen consider power-holders in the extent to which they seek to uphold the institutional status quo. Rather than constantly crafting and modifying institutions to their whim, power-holders in Mahoney and Thelen are important to the extent that they will intervene to hinder agents of institutional change. In instances where power-holders protecting the status quo are strong, they will preserve the old rules and their current interpretation and enforcement, but may allow new rules to be added to the institutional mission (layering) or permit there to be some argument within the institution as how the present patterns of institutional behavior should be tweaked (drift). In instances where status quo defenders lack the power to stop institutional change, the institution might be terminated or replaced (displacement) or have its mission changed in full (conversion).

What decides the difference between the two outcomes in each case? The sort of change that transpires is contingent on the degree of discretion granted to institutional actors in construing and imposing the purpose and procedures of the institution. When the discretion level is low, strong status quo defenders will permit layering while weak status quo defenders will be unable to stop outright displacement. When the discretion level is high, strong status quo defenders can block formal change but, unofficially, drift creates a large amount of latitude in how the rules are applied. If the status quo defenders cannot stop formal change, then high discretion will facilitate the institution being converted to a new task with new processes. Of course, simply because the conditions exist for a particular type of change to occur does not mean it will; the interaction between veto possibilities and rule discretion only set the boundaries for the sort of change we would expect to see. This model is not a deterministic one.

Whereas previous treatments of the IMF in the existing literature have considered only the 184px-international_monetary_fund_buildinginternal dynamics of the organization or the influence of its power-holders separately, this paper utilizes the Mahoney and Thelen model to navigate the history of the IMF, searching for the conditions Mahoney and Thelen argue are most conducive to the modes of change listed in their framework. Obviously, since the IMF continues to exist and does not seem likely to be supplanted anytime soon, we should not expect to see displacement as a form of change the IMF has undergone. However, if the “mission creep” theorists are correct, we should anticipate encountering examples of layering or drift in the IMF’s history, with the IMF adding layers of additional power onto its original mission or drifting toward emphasizing its interventionist, crisis manager powers over others. If the “mission push” theorists are correct, however, we should expect to see conditions for conversion, with the IMF being pushed to abandon its initial duty as nonaligned, technocratic economic supervisor to a political tool of the United States.

Before proceeding with the analysis proper, the institutional actors of interest in this paper should be properly defined and their place in the analytical model clarified. The shareholders who subsidize the IMF make up one group, with those shareholder nations that allocate the most (and therefore have the most voting shares within the group) being especially noteworthy. While we should expect these countries to be involved in every facet of every decision that has been made regarding the IMF, it is appropriate to appreciate that such shareholders have extraordinary authority within the IMF, as the institution cannot operate without their contributions. Nevertheless, it is reasonable to assume that the IMF staff members are not automatons. From the high-ranking directors and managers to the lower level economists in the organization, IMF staff members should be expected to have much involvement in the IMF’s regular activities and how the institution sees itself and its part in the global economy.

It should noted that, among these actors, all of them are relevant in terms of veto possibilities as well as rule interpretation and enforcement. Shareholder countries can use their funds and their votes to permit or prevent potential institutional change, but representatives of those shareholder countries can also argue for or against the IMF acting in certain ways. Similarly, the internal IMF staff can debate the details of what they do and agitate internally for reform, but they can also push back against pressure, from within or without, to adjust their attitudes or behavior. All the actors listed above can be strong or weak veto players as well as prospective reformers operating with high or low levels of discretion. The historical analysis that follows will explicitly state which roles these actors play in the historical stages of the IMF.

The IMF had its intellectual origins with the United States and the United Kingdom, the two countries that were taking the lead in determining what the post-World War II world would look like. As previously stated, the IMF was designed in such a way as that those countries with the most significant financial commitments were also granted the greatest share of votes in the institution, with the U.S., as the IMF’s largest shareholder, receiving the largest bloc of votes in addition to a veto in policy-making (Dell 1981, Mikesell 1994). While the balance of influence over policy decisions was unevenly distributed, the initial IMF polices themselves were benign. Member countries were expected to peg their currencies to the U.S. dollar and permit those currencies to be traded freely. This arrangement, however, would only last for half a decade.

In the 1950s, the U.S. government began pushing for the adoption of monetary conditions as a prerequisite for access to the IMF’s resources based on the belief that domestic credit expansion would always lead to currency crises. According to the reasoning, if the government of a member country were permitted to enlarge its credit in order to procure imports or to make debt repayments, a balance of payments deficit would soon occur, with the member country unable to meet its financial obligations. Not only would this mean the devaluation of the member country’s currency, but also the devaluation of the currency of the country’s trading partners, as they do would also experience a balance of payments crisis (de Vries 1987). To prevent this from happening, the U.S. government used its disproportionate influence in the IMF to impose lending conditions necessitating borrowing countries restrict their money supply. It did this by using its veto power to block loans until the IMF agreed to do so (James 1996). In light of this enormous pressure, it was unsurprising that the IMF had little choice but to abide by U.S. demands.

By the end of the decade, the conditions sought by the U.S. were in full effect. Countries wanting to borrow from the IMF had to sign Standby Agreements that ensured their governments kept government spending below certain targets. If a country violated the agreement and went over the limit, lending disbursements would be ceased and access to IMF resources ended (Babb 2007). The rules of the IMF had indisputably changed. In less than five years after its inception, the IMF had been transformed from an institution keeping international trade smooth to an institution that preemptively extinguished crises by intervening in the policies of borrowers.

Operating from the Mahoney and Thelen framework, I argue that this was an instance of institutional change that serves as an example of the conversion change type. This might seem counterintuitive operating on the conditions outlined in the theoretical model, given that the U.S. clearly had strong veto power in the early development of the IMF. Yet the model holds that conversion is unlikely when a status quo defender can veto institutional change. The U.S. was no such defender, having fought ardently against proposals like 190px-whiteandkeynesthose of John Maynard Keynes, who had represented the United Kingdom at Bretton Woods. Keynes hoped the IMF would first and foremost be used to facilitate economic growth around the globe, and if balance of payments crises did occur in a borrowing country, other countries would come to the rescue by increasing imports from the afflicted country, providing it with the capital needed to pay its debt. The U.S. representatives, on the other hand, wanted the burden to be entirely on countries running deficits to slash their spending and control inflation (Mikesell 1994, Boughton 2002). Since it was essential to compromise at the conference, the U.S. did not build conditionality into the IMF at its foundation, but through the quota system and its special veto, safeguarded the chance for it to change the mission of the IMF as soon as possible. The U.S. government, therefore, acted as a powerful change agent virtually at the outset, seizing the opportunity to convert the IMF so as to conform to the plans it had had for the institution from the very beginning. Given that they were not anticipating dependence on IMF loans given the abundance of private capital available to them, the other wealthy industrialized countries did not step in to play the role of status quo defender, and besides, they had more to gain by remaining steadfast allies of the U.S., the sole superpower of the capitalist “free world,” than by alienating it by trying to thwart it.

The other institutional condition amenable to conversion is a high level of discretion in rules interpretation and enforcement. As the IMF had just been created and its staff was still deciding how to put into practice the responsibilities it had been charged with, it is relatively safe to believe that such a high level of discretion existed in the IMF’s early years. The institution had been tasked with accelerating the flow of free trade, and as securing price stability through macroeconomic policy prescriptions was a means to that end, it was an easy fit for that monetary approach to be grafted onto the IMF’s operating procedures. Additionally, such conditions were familiar to Western economists at the time, having been employed by bankers and the League of Nations in the time of the gold standard (Eichengreen 1996). The government spending limits that made up the lending conditions provided the nascent IMF with a regular set of rules to guide their processes going forward, putting at least a temporary stop to confusion about how to perform its function. Of course, the fact that its largest shareholder and powerbroker was demanding their adoption must not be forgotten either.

The consequences of this early conversion were threefold. First, the IMF now had a very powerful veto player guarding the status quo, as the U.S. had established it would be the final authorizing force in IMF policy. This was the beginning of what has been called an “outer structural constraint” to the IMF (Woods 2006), in which staff members are bounded to pursuing polices the U.S. and other major shareholders are willing to support. Second, on an internal level, the conversion also changed the degree of discretion in regards to the IMF and its rules, as conditionality entailed precise spending thresholds, exact deficit figures, and set price levels – leaving very little room for exceptions or special treatment for borrowing countries. The IMF staff was on its way to becoming a proper bureaucracy, with established protocols and practices that would become routine. Lastly, conditionality meant that the IMF would cater almost entirely to developing countries, as countries with advanced economies could secure private investors with no conditions. Developing countries, by contrast, tended to feature persistent balance of payments crises, high inflation and intricate capital controls that repelled private capital. By the 1960s, the IMF was doing less than 10% of its lending with countries with advanced economies, and from the 1980s to the 2008 financial crisis, no wealthy industrialized country sought an IMF lending agreement (Chorev and Babb 2009). During this period, the IMF exclusively catered its services to the developing world, although this had not been the original intent of the institution.

In August 1971, the United States effectively terminated the Bretton Woods system of fixed 203px-richard_m-_nixon2c_ca-_1935_-_1982_-_nara_-_530679exchange rates in response to the worldwide economic stagnation that characterized the decade. This meant the IMF was no longer responsible for maintaining the par value system, removing one of the reasons that it had been brought into existence. In response, the IMF added greater emphasis toward its lending and conditionality operations, deepening its ties to private banks. By the end of the 1970s, lending agreements bound borrowing countries to paying off their private creditors and set limits on the amount of additional external debt they could take on. These new conditions, combined with the overall moribund state of the global economy, helped to usher in a major debt crisis in the developing world in the early 1980s (Polak 1991). This event would become the first instance of the IMF acting as a true crisis manager and would also result in the next significant institutional change that the organization would be subjected to.

As the developing world debt crisis progressed, the IMF became the principal director of claims on the part of private banks, negotiating on their behalf with the developing 182px-jamesbakercountries that had borrowed from them. In so doing, the IMF found itself acting not just as the caretaker of its own resources but also as the gatekeeper to privately held resources too. Additionally, in 1985 the U.S. Treasury Secretary James Baker launched the “Baker Plan,” which dramatically altered international finance institutions like the IMF so that access to resources became contingent on agreeing to neoliberal policy reforms aimed at privatizing public enterprises, the removal of capital controls, and steps toward attracting and maintaining foreign investment (Chorev and Babb 2009). This was the start of “structural reforms” in IMF conditions that surpassed the short-term macroeconomic changes of past decades; borrowing countries were now expected to change their economies to abide by a policy paradigm based on neoliberal economics.

In the meantime, the decline of the post-war Keynesianism in the economics field also played an important role in the internal processes of the IMF. Since its beginnings, the IMF has recruited economists from Anglo-American institutions, and as such, developments within the economist profession led to a “battle of ideas” within the IMF as well. Throughout the 1970s, there emerged internal debates about whether controls on capital were ideal or if removing the fetters from capital mobility would be a better tactic. By the 1980s, neoliberalism had replaced Keynesianism as the dominant economic ideology of the Western world, and the major decision-makers in the IMF had also come to embrace the norm of capital freedom (Chwieroth 2008). Internally as well as externally, the IMF evolved so as to take on the mantle of debt enforcer and free market reformer in addition to a promoter and sponsor of fiscal austerity measures.

I argue that through the 1970s and the 1980s the IMF underwent a layering change according to the Mahoney and Thelen framework. Due to the outer structural constraint now surrounding the IMF and limiting the avenues of change that were possible, the U.S. and its allies (but the U.S. especially) were in a position to reject any changes to the IMF mission that would set it against the conditionality status quo the U.S. had helped orchestrate. Internally, the IMF staff no longer had the high discretion in regards to institutional rules it had once enjoyed, shackled as it were to the setting of targets, limits and standards for borrowing countries to follow. The institutional environment of the IMF, then, was simply not conducive to renovations of the rules already in place. The window for new rules to be applied, however, was open, and there was an alignment in this period both in what the U.S. wanted the IMF to do in reaction to the developing world’s debt crisis and the ideological shift taking place among economists.

This alignment is essential to note as it overturns the theoretical position that the IMF was forcefully “pushed” into adding structural reforms to its conditions. This was not an overnight sea change in which the IMF suddenly took up the banner of neoliberalism, be it because of U.S. intimidation or through a sudden epiphany. Rather, it was a combination of pressure from outside and the neoliberal revolution that had been building through the 1970s and that reached a crescendo in the 1980s in politics as well as economics. To be sure, there had been an “old guard” within the IMF that had sought to preserve the original Articles of Agreement and had actively resisted the layering of a neoliberal agenda onto the institution (Babb and Buira 2005). A particularly thorny issue had been the neoliberal proposal to make the stripping of capital controls a part of structural adjustment packages given that the Articles of Agreement clearly advised the use of such controls by governments to stultify speculative capital flows into and out of countries (Boughton 1997). It cannot therefore be credibly claimed that the IMF staff had no part in the turn toward neoliberalism that characterized the IMF in this era, nor can it also be argued that this was an abrupt change brought on by a nebulous neoliberal conspiracy.

The 1990s saw a continuation of this trend. The landmark event of this decade in reference to the IMF was the 1997 Asian financial crisis, in which foreign capital flowed into an array 320px-jakarta_riot_14_may_1998of so-called Asian tigers – Thailand, Indonesia, South Korea, Malaysia, the Philippines – and then just as quickly absconded. As it had during the 1980s debt crisis, the U.S. directed the IMF to intervene, but as these countries had obeyed the neoliberal formulas for sustained economic performance, this time conditions were focused on “governance reforms.” Nepotism, corruption and “crony capitalism” were blamed for the crisis. Instead of another institutional change, this purely represented another degree of layering as the IMF became even more involved in generating deep, long-lasting changes in national economic structures, departing even further from the more fleeting, temporary conditions of previous arrangements (Kapur and Webb 2000). Unfortunately for the IMF, this persistent layering meant that soon the institution would be sunk by its seemingly ever-increasing license to directly add the ingredients of growth.

The 1980s debt crisis and the 1997 Asian financial crisis were soon followed by the 1998 Russian ruble crisis and the 1999 Argentine economic crisis. By the turn of the 21st century, countries seeking arrangements with the IMFs started to seriously question if the politically detrimental and social fabric-straining structural reforms it promoted really did lead to the promised long-term economic growth – or to boom and bust. The so-called “Washington Consensus,” the term applied to the neoliberal model endorsed by the U.S. in this period, seemed to be being disconfirmed around the world (Stiglitz 2008). Exasperated with the intractable and arduous lender that the IMF had become, a growing number of developing countries began to wash their hands of involvement with the organization in the 2000s. These countries, primarily of middle-income status in the political economy, took up their reserves and bilateral credit as alternatives to dependency on institutions like the IMF and paid off any outstanding loans they had remaining. The level of its credit left unpaid fell so low that the IMF had to sell some of its gold reserves in 2012, and then invest the proceeds to support its substantial operating costs (T. Jones 2012). Reviews were also undertaken to assess whether the conditions attached to loans had become overly broad and needlessly harsh, and while initial reports suggested that this had been the case and recommended more parsimonious approaches to lending practices, this did not lead to any actual changes in the use of these conditions. Among the IMF member countries, opinion remained divided, with upper-income countries tending to support further use of the structural reforms while middle- and lower-income countries demanded reform. The IMF staff, for their part, took advantage of this disagreement to preserve the degree of conditionality it felt was necessary (Martin 2006). These factors led the IMF into a state of stagnation as it risked irrelevance in an age of relative stability and hostility from regular borrowers, scholars and the media. At a time when the IMF most needed to change, the powerful veto players that made up the outer structural constraint ensured that no such change would be forthcoming.

With the onset of the 2008 financial crisis, however, the IMF received a much-need shot in the arm that brought it once more to the fore on the global stage. While the institution had failed to predict the crisis, having kept its surveillance on vulnerabilities in emerging countries (the “weak links” of international finance), it rapidly resumed its position as a crisis manager and “lender of last resort” (Joyce 2013). It quickly deployed large amounts of credit to European nations affected by the fallout of the “Great Recession” and when the 2010 Eurozone crisis followed soon thereafter, Ireland, Portugal and Greece found 392px-long-term_interest_rates_28eurozone29themselves borrowing funds from the IMF (with Spain currently attempting to avoid the same by slashing spending). Although the momentous amount of credit offered in these cases might be justified on the grounds of the capital flow reversals that would be caused if these countries were allowed to go bankrupt, it is hard to dispute that the IMF showed favorability in the speed and size of the loans it was prepared to offer those nations that could argued to be some of its historical benefactors. Indeed, some observers were quick to point out these facts in the wake of the crises and refer to the IMF once more as the “handmaiden of advanced economies” (C. Jones 2012). Yet it soon became plain that, again, the IMF would be more than just a plaything for its powerful shareholders.

In a series of very public positions taken since the most recent crises, the IMF staff has made it clear that it questions the neoliberal orthodoxy it once so vigorously championed. In 2010, it admitted that capital controls had sheltered some countries from financial weakness and admitted that the use of such controls in certain conditions was advisable, a “stunning reversal” from decades of supporting unregulated capital flows (Rodrik 2010). Even more recently, the director of the IMF, Christine Lagarde, has come to censure the 206px-lagarde2c_christine_28official_portrait_201129_28cropped29United Kingdom for its severe deficit reduction strategy (a strategy she had once supported) and, in April 2013, she lambasted the U.S. for “abrupt” budget cuts that would “lower the U.S. economy’s growth rate” (Sterling 2013). This led to the IMF, once considered the West’s caretaker of choice for financial implosions, being raked across the coals in the financial press of the industrialized nations for its “dangerous” deviation from the pieties of neoliberal dogma. The old “Washington Consensus” model had given way to a new epoch of “Washington Confusion.”

I argue that these last several years find the IMF going through a third institutional change, this time characterized by drift. The outer structural constraint established by the institution’s most influential shareholders remains in place, so just as during the layering era, the U.S. and its allies stand ready to strike down any drastic divergence that threatens their interests. Indeed, in practice the IMF has acted with partial generosity toward the Western nations it has had to rescue recently, without the profound, durable structural reforms developing nations have had to endure. In thought and words, however, the IMF staff has noticeably departed from towing the line in accordance with what its mightiest shareholders want to hear. This is no doubt because the internal staff cannot ignore how the “Washington Consensus” failed to live up to its assurances and that the experiments the IMF had been so involved in around the world did not go according to plan. By no means is the IMF stepping away from neoliberal economics entirely; its economists are, however, engaged in the process of “adaptation,” where the ends they were trained to work toward remain the same but the means they believe will get them there need to be modified. After all, it is atypical for people in a profession to abandon a worldview they have been indoctrinated to accept, even when it is shown repeatedly to be wrong (Chwieroth 2008). As scholars, this gravitation toward revision in the face of incorrect predictions puts them at odds with politicians, who for reasons both ideological and practical, cannot afford to make turnarounds on policy the way the unelected technocrats of the IMF can and do. The IMF’s imperfect record and this “adaptation” tendency among the staff has meant growing discretion on the part of staff members, and this combined with the strong veto power of shareholders made this drift toward criticizing rather than cheerleading neoliberal austerity possible.

What is next for the IMF? It does not seem likely that the U.S.-supported outer structural constraint that has characterized the institution since the will dissipate anytime soon. Despite heeding clamor for reforms to its quota system and distribution of vote shares, the IMF remains lopsided in favor of advanced economies. After the most recent round of reforms, the G7 countries (the U.S., U.K., France, Germany, Italy, Canada and Japan) still make up 43% of the voting shares in the IMF, with 17% belonging to the United States alone. Developing middle-income countries, by contrast, only make up 34% of the voting shares (IMF 2012). While a coalition of these countries, the BRICS (comprised of Brazil, Russia, India, China and South Africa), has advertised itself as something of a challenger to Western hegemony over institutions like the IMF, the failure of the BRICS to put aside national interests and coalesce around a joint candidate in 2011 to replace outgoing IMF director Dominique Strauss-Kahn (Laïdi 2012), for example, suggests that pinning hopes on a BRICS-led repositioning of the traditional world finance organizations may be somewhat dim (although the BRICS did set up their own development bank in April 2013, although whether it will end up truly challenging the IMF remains to be seen). For the time being, it seems like that the U.S. and the other leading shareholders at the IMF – and the strong veto power they wield – are not going anywhere.

If there is hope for change, it lies with the IMF staff, which continues to retain a fair amount of discretion in how they construe and act on their present directive as crisis manager extraordinaire. If they are to be change agents once more, however, they must not merely pursue drift in the form of further adaption and navel-gazing examinations of their policies and practices. Change in this very limited form produces the war of words one sees in blogs and news articles, but other than conferring a degree of legitimacy on countries that have, for example, used capital controls to a limited extent in the past, there is not much potential for change there. IMF decision-makers can and should use their positions to push for quicker, more intensive reforms to the IMF power structure so as to give greater voice to developing countries and thus enfeeble the outer structural constraint that has been such a check on possibilities for change. Doing so could likely lead to the IMF becoming not just relevant to the interests of the West but also becoming once more regarded as a useful international institution to interact with by developing countries that have, as of late, made it a rule to spurn IMF involvement.

As we have seen, the Mahoney and Thelen approach to gradual institutional change sheds important light on the historical progress of the IMF and its route from the Bretton Woods Conference to the modern day. As a multidimensional model that considers both actors operating within as well as setting limits for an institution, the framework reveals that the IMF is neither a simple hostage to its prime patrons or just another bloated bureaucracy gone out of control. Looking at its history through this lens, it is evident that the IMF has been defined by the interplay between shareholders and staff, the financial interests of the former and the intellectual evolution of the latter. Though these factors have changed at a slow pace through the decades, the impact they have had on the IMF and the progression of its mission and powers has been considerable. Hopefully this paper has shown that there is high value in using this approach.

Still, there are a number of issues that should give us pause. First, the Mahoney and Thelen framework may seem overly robust due to case selection. As Mahoney and Thelen stress the importance of veto players and internal debate and discussion, it fits nicely with a study of the IMF precisely because its veto players (shareholders) and internal decision-makers (IMF staff) are so well-defined. If applied to cases where these actors and their roles are less spelled out, it is probable that the framework may not be as useful. Second, it is clear from the above analysis that ideas are a vital element in institutional change, and this is missing from the framework. It is likely no coincidence that the 1970s and 1980s saw neoliberalism surge in the realm of economics as well as political platforms, begging the question of why this happened and whose interests did it served. While the “level of discretion” aspect of the Mahoney and Thelen model leaves room for exploration of internal debates, it does not really equip us with how to investigate how such debates shaped, bounded and ultimately decided. This is unfortunate, considering how instrumental neoliberalism as an ideology was in both driving one of the change periods of the IMF as well as posing a status quo barrier it is in the process of overcoming.

The IMF is more complex than the popular imagination often gives it credit for. It is easy to dismiss it as a cog in a global machine, just another apparatus by which advanced nations control developing ones. This monolithic view obscures the intense negotiation going on inside the institution as well as the emergence and variations in its outer limits. In its history, the IMF has seen major conversion from lending without real limits to the creation of conditionality, the layering of a neoliberal agenda and penetrating powers of structural reform, and currently finds itself drifting away from and even into opposition with its historical supporters and resource suppliers. As displacement for the IMF does not seem to be approaching on the horizon, it seems more decades lie ahead for this eminent, somewhat notorious international institution.

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