Confessions of an Economic Hit Man
|September 15, 2013||Posted by Staff under Book Reviews|
Are We Living in a Corporatocracy?
John Perkins, Confessions of an Economic Hit Man. San Francisco: Berrett Koehler Publishers, 2004. 250 pages.
by Bill Batt
Conspiracy arguments are always suspect, as they typically have plausibility but no compelling proof. So it is particularly disturbing to read a first-hand account of one man’s experience and learn that what one strongly suspected is verifiably true. John Perkins’ account of his decade-long involvement in compromising and corrupting the governments of LDCs (less-developed countries), and with the tacit sanction of the US government, is compelling in its narrative and believable in its content.
But if it is not a conspiracy, it certainly is close. “Some,” he writes, “would blame our current problems on an organized conspiracy. I wish it were so simple. Members of a conspiracy can be rooted out and brought to justice. This system, however, is fueled by something far more dangerous than a conspiracy. It is driven not by a small band of men but by a concept that has become accepted as gospel: the idea that all economic growth benefits humankind and that the greater the growth, the more widespread the benefits. This belief also has a corollary: that those people who excel at stoking the fires of economic growth should be exalted and rewarded, while those born at the fringes are available for exploitation.” (p xii). He could have used the words “trickle down.”
From 1971 to 1981 Perkins was retained by a private corporation — MAIN, by name — that worked hand-in-hand with US government agencies to seduce the leaders of poor nations into accepting contracts to develop electrification programs, hydro-electric and irrigation dams, transportation infrastructure and other expensive projects. To pay for the giant American contracting companies’ work entailed making wildly optimistic projections of return on investment that put these nations in hopeless debt to the International Monetary Fund, the World Bank, and other international development agencies. However closely these private corporations worked with the US National Security Agency, the Central Intelligence Agency, and the Agency for International Development, and however outrageous their behavior, their activities were always beyond public disclosure.
Perkins knew full well that his payback projections of 15 and 20 percent per annum to GNP were fanciful at best, but his counterparts in host countries such as Indonesia, Saudi Arabia, Panama, and Iran lacked the expertise to fairly judge them. So it was that MAIN was able to procure contracts for companies like Bechtel, Brown and Root, and Halliburton among others, financed by US-controlled lending institutions — hugely lucrative arrangements that would keep these nations forever in debt and beholden to the US. The general population remained impoverished, not the elite.
Often it is assumed that the failure to reap the successes from international construction projects has been due to naïve optimism, or that intervening circumstances can be blamed which could not have been foretold. But Perkins makes perfectly clear that MAIN, the international financial community, and the US government knew perfectly well the game being played. There was a conscious strategy to mortgage such nations’ economic dependency to US policy and corporate business interests in a way that they would be hamstrung ever to raise significant challenges. The word used to describe these practices throughout the book is corporatocracy. For those who have witnessed the evolution of LDC economies over the past two generations, its successes have been overwhelming.
Whereas earlier forms of empire relied upon military power to maintain their hegemony, today the dominant tool of US government leaders is financial leverage, especially but not only in Republican administrations that have collaborated with such corporations. Both Bush administrations as well as that of Reagan had close links with the major corporate players – Caspar Weinberger, George Schultz, Dick Cheney, and of course the Bushes themselves have been major players in enterprises worldwide. Perkins makes clear that when economic pressures fail, our government agencies are not beyond recourse to assassinations to rid non-cooperating national leaders in favor of more pliant ones. So it was that Omar Torrijos from Panama and Jaime Roldos from Ecuador met their deaths in untimely plane crashes after they refused to accede to US demands. And when even this proves unfeasible, the US has resorted to the near-obsolete practices of staged uprisings patterned after the now acknowledged overthrow of Iran’s Mossadegh or the more recent deposition of Iraq’s Saddam Hussein.
Perkins concedes that he was compensated well – in money, travel, sex, and leisure — to be so willing an instrument of these larger purposes. But once he fully realized the business that he’d gotten himself into, his conscience nagged at him, a vestige perhaps of his days in the late sixties when a mentor, anticipating his later service in such a capacity, encouraged him first to join the Peace Corps and go to Ecuador. His life since has been an effort to atone for his earlier complicity, this book being one such effort. He adds early on that his childhood upbringing of sturdy New England stock gave him heroes like Tom Paine whose first concerns were economic justice. They haven’t left him.
Despite his discomfort with his past role and with the arrangements of the world financial system as it applies to LDCs, he fails as yet to understand the flaws in the economic and political systems that have allowed such exploitation. He sees that something is wrong with contemporary economics, as witnessed, for example, by the following passage:
“We prefer to believe the myth that thousands of years of human social evolution has finally perfected the ideal economic system, rather than face the fact we have merely bought into a false concept and accepted it as gospel.” — p. 216 He compares the classic British empire’s mercantile arrangements and the contemporary corporatocracy: each is based on “a lie … where the truth is that the system enrich[es] only a few at the expense of the many.” – p. 218 That’s not the worst of it:
“[M]y college professors had not understood the true nature of macroeconomics: that in many cases helping an economy grow only makes those few people who sit atop the pyramid even richer, while it does nothing for those at the bottom except to push them even lower. Indeed, promoting capitalism often results in a system that resembles medieval feudal societies. If any of my professors knew this, they had not admitted it – probably because big corporations, and the men who run them, fund colleges. Exposing the truth would undoubtedly cost those professors their jobs.” – p. 26
Would that he really knew! If he reads Mason Gaffney’s book, The Corruption of Economics, he will understand better how the discipline of economics was deliberately altered a century ago to serve those same corporate interests. Then he will learn the full nature of the conspiracy. Those earlier professors did succumb, and replaced classical economics with what we now know as neoclassical economics. Perkins’ laments the resource exploitation of his old Peace Corps country, Ecuador, but may not realize that justification for that behavior derives precisely from the economics championed by its most pre-eminent contemporary economist, Hernando deSoto, especially in his book, The Mystery of Capital. DeSoto is now the foremost accomplice and apologist for the use of land titles to leverage natural capital, resources which from time immemorial have been the birthright of all humanity, not the license of a few. Tom Paine, writing in Agrarian Justice, understood this well.
By reading Henry George’s Progress and Poverty as well as the growing body of current literature in this tradition, and by then understanding classical concepts like freehold titles and economic rent, Perkins would be in a better position to appreciate how corporate and financial interests exert their control both conceptually and practically. As it stands, he never quite decides whether the problem arises from a faulty belief system or from the instrumental power of institutions. He doesn’t really know where to point his finger. Consequently, his plea for greater economic justice and his wistful call for American citizens to reflect on their political and consumer choices is too fuzzy, and lacking any sounder programmatic direction. Still, the book serves an important purpose: it documents how control of democratic government has shifted from the electorate to the corporatocracy. My sympathies are with him; I too, six years earlier, was a Peace Corps Volunteer in Thailand. But for chance fortune, I too might have followed such a path.
Dr. William Batt is director of the Central Research Group, Inc. Albany, NY