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had more than doubled, to $160 billions—in short, almost exactly the sum which these countries would have earned at a stable export price level. It begins to appear that a very different process was occurring than what the average citizen in a west European or American city was reading daily in the newspapers regarding the reality of this debt. Powerful British and U.S. multinationals followed the banks during the 1980s to set up child-labor sweatshops in places such as along the Mexican border with the United States. These maquiladores, as the low-skill assembly plants were named, employed desperate Mexican children aged 14 or 15 for wages of 50 cents an hour, to produce goods for General Motors or Ford Motor Company or various U.S. electrical companies. They were allowed by the Mexican government, because they ‘earned’ dollars needed to service the debt. REAGAN’S CHICKENS COME HOME TO ROOST One of the most destructive consequences of the First World War and the Versailles war reparations aftermath, with the 1920s Dawes Plan of the London and New York banks, was the relative collapse of global long-term investment. More and more, owing to the absolute decline of world trade in the 1920s compared with prewar levels and the general economic and political instability which prevailed in Europe, money could be borrowed generally for only a short term, typically less than one year. This produced a situation in which shortest-term speculative gains became the central criterion of all investment. This in turn fueled the great frenzy of the 1920s stock market boom in New York, a boom fueled by inflows of foreign funds from London and the Continent, seeking to make unheard-of gains on the ever rising New York bourse. All this came crashing down in October of 1929. The aftermath of the oil shocks and the high interest rate monetary shocks of the 1970s, sometimes referred to as the ‘great inflation,’ was all too similar to the 1920s. In place of the Versailles reparations burden on world productive investment, the world had the onerous burden of the IMF Third World debt ‘restructuring’ process. The incredible rates of inflation during the early part of the 1980s, typically 12–17 per cent, dictated the conditions of investment returns. A fast and huge gain was needed. Into this situation came the Reagan administration’s bizarre collection of ‘free market’ economic conundrums, called by their
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