Technology is root of all evil - bankers are good guys says IMF

From The Register:

The International Monetary Fund (IMF) has this month brought out its World Economic Outlook for 2007, and the various heavyweights of financial news have all had their bash at reporting on it. Normally, no vulture would stir on his/her perch over this type of thing - unless, perhaps, Paris Hilton had been implicated in some kind of major economic upthrust - but in this case, the economists make some rather startling pronouncements about technology.

In essence, according to the IMF, technological innovation is what causes economic inequality among the human race. Yes, you read that right: technology - and not just the machinery, but people with tech skills - are to blame for the fact that some people are dirt poor and others disgustingly rich.

"Technological progress alone explains almost all of the increase in inequality from the early 1980s," according (pdf - page 2) to the IMF

You Wot?

As the Register notes, most of the mainstream financial press have chosen to ignore this dazzling suggestion from the "world globalisation bureau" that globalisation - and inflicting (subsidised) rich financial markets on uncompetitive poor countries - is great and if something has gone wrong it must be someone else's fault.

That this hypothesis is provably untrue is not the issue, its that an organisation with this amount of power is so blatantly pushing its own agenda by seeking to cast aspersions elsewhere is what is so worrying.

So whats going on? Maybe its this - sadly, some do not feel the IMF is exactly in a good position to define financial strategy anymore - from Wikipedia:

While it was created to help stabilize the global economy, since 1980 critics claim over 100 countries (or reputedly most of the Fund's membership) have experienced a banking collapse that they claim have reduced GDP by four percent or more, far more than at any time in Post-Depression history. The considerable delay in the IMF's response to any crisis, and the fact that it tends to only respond to rather than prevent them, has led many economists to argue for reform. In 2006, an IMF reform agenda called the Medium Term Strategy was widely endorsed by the institution's member countries.

If this is the medium term strategy output.....

We are in a changing world, behavioural economics has shown that much of the NeoClassical economics the IMF lives is less relevant today (even the Random Walk isn't in many markets) , and new comms technology is driving a lot of this change now - in fact if ever there was a force for equalisation it's the open internet.

The IMF is a structure from a bygone era and needs to adapt, rather than try to play King Canute.