June 18th, 1999 was to be a momentous day for global economic progress. It marked the start of the annual “G8” economic summit in Germany. The leaders of the world’s seven wealthiest industrialized countries, plus Russia, gathered to propose inventive solutions to the world’s economic problems.

Instead, they prepared dreary speeches and tiresome documents, amounting at best to hot air, and at worst to anti-capitalist policies.

Also on June 18th, a mysterious faction called “J18” organized rallies and riots in 43 cities around the world. The protests, called the “Carnival Against Capital”, coincided with the G8 summit. Various groups, united in their hatred of capitalism, came out to be heard: Diverse Women for Diversity, Food Not Bombs, Earth First, Greenpeace [??], Jubilee 2000, and a multitude of leftist associations endeavoring to dismantle wealth, technology, and human achievement.

The violence was worst in London, where demonstrators clashed with riot police, burned cars and stormed a major financial exchange. One of the city’s busiest roads was devastated when 2,000 rioters dispatched a hail of missiles at the windows and police that lined the way. Over thirty people were arrested in New York at a carnival on Wall Street, where, for nearly two hours, 500 costume-clad protesters took to the streets.

The G8 in Cologne didn’t stir up nearly as much excitement. One would think that a meeting of the world’s greatest leaders would be a source of immense inspiration to the rest of the world. Instead, the meeting produced only mealy-mouthed statements, half-truths, hidden agendas dressed up as principles, and some outright lies. Far from being paragons of world Capitalism, the “leaders” were like teenaged hippies, too small for their rented tuxedos on prom night.

The J18 assumed that the suit-clad leaders surrounding mahogany tables discussing multi-billion dollar affairs must be capitalists. They were wrong.

The summit focused on propping up failed and failing government institutions, building a “New World Order”, and advocating the “Third Way” between communism and capitalism. There was talk of increasing the role of International Labor within multi-governmental organizations, promises to rapidly enforce new anti-energy greenhouse gas rules (based on junk-science), and of tying aid and trade to environmental correctness. The most tasteless promise centered on fighting “harmful tax competition”. The implication being that some countries don’t charge enough taxes, thereby attracting global companies and causing “unfairly” high economic growth, and “harming” the attractiveness of high-tax economies. (Naturally creating envy among the high-taxing looters.)

Debt relief for “Heavily Indebted Poor Countries (HIPCs) was a hot topic which united both the G8 and the J18 gatherings. The “Jubilee 2000” group cited the Old Testament and called upon rich creditors to forgive all unpayable debts in the year 2000. To protest the existence of rich creditors, Jubilee 2000 demonstrators joined hands to form a human chain around various buildings, symbolizing their “chains of debt”. Curiously, the World Bank takes this group seriously, and cites them several times in reports on HIPCs.

Jumping at the chance to illustrate their “compassion”, G7 leaders announced a debt relief program expected to forgive about $70 billion of the $127 billion in debt owed by 33 poor and indebted countries (e.g., Bolivia, Burkina Faso, Mali, Uganda, Ghana, Honduras, Laos, Senegal and Togo). One wonders who lent so much money to these countries in the first place. The answer, of course, is our governments, the World Bank and the IMF.

So why are the loans being forgiven? Billions of dollars in loans were squandered. And, despite the enormous amount of money lent, poor nations are still poor and can’t pay it back anyway. If the loans weren’t “forgiven”, then headlines might instead read “World Bank and IMF made tens of billions of bad loans!” This would sully the undeserved “prestige” of these institutions among the largely ignorant public.

So in the end, the bad loans will be covered up and forgotten, and institutions like the World Bank and IMF will be granted an even larger role in the global economy. They will make more loans, grant more aid, and spread more anti-capitalist ideas and regulations. It’s a program designed to please members of both the G8 and the J18.

Asked what he hoped to accomplish through his rioting, one activist said, “I don’t see us bringing down global capitalism this week. But I think the action will be an important stage in the process.”

Was he referring to the J18 carnival in London or the G8 carnival in Cologne? You decide.

About Andrew West

Andrew West is a Contributing Economics Editor for Capitalism Magazine. In 1997 he received the Chartered Financial Analyst designation from the Association for Investment Management and Research.