April 22, 2005

Crime and empire

Print edition : February 06, 2015

John Perkins.

Salvador Allende, who was Chile's President. Perkins had worked with him. Photo: AP

Washington, September 1997: U.S. President Jimmy Carter and Panama's Omar Torrijos, after signing the Panama Canal treaty. Photo: THE HINDU ARCHIVES

BOOK buyers in the United States have obviously been lapping up the hardback authored by John Perkins titled Confessions of an Economic Hit Man. The book, which was published in November 2004, has found to the surprise and dismay of some, a place in The New York Times non-fiction bestseller list in seven out of 10 weeks between the weeks ending January 8 and March 12.

Perkins, who came from a middle-class background (his father was a school teacher), joined in 1971 the now-defunct but once-leading consultancy, Chas. T. Main (MAIN), which undertook studies to determine whether agencies like the World Bank should lend billions of dollars to developing countries to build hydroelectric dams and other kinds of infrastructure. Perkins quickly rose to be chief economist and head of a division, and stayed with MAIN until 1980. He later set up his own small, environmental-friendly power company, Independent Power Systems Inc. (IPS), while still maintaining a foothold in the consulting business. He subsequently sold IPS for a tidy sum and chose to enter the non-profit world, and was involved in ferrying people to the Amazon forest to learn from the nature-friendly and non-hedonistic lifestyles of the Schuar tribe. In the course of all that he turned author and writer.

While this is indeed an unusual life, it does not in itself provide the material for a bestseller. Nor can detailing such a life be termed a confession. There are, however, a number of other elements of that life—“coincidences” Perkins terms them—that trigger interest. To start with, right from the beginning Perkins makes clear that he was no ordinary consultant with an undergraduate qualification in business. Rather, he was officially an Economic Hit Man or EHM.

EHMs were specially recruited and trained and placed in private firms and consultancies to utilise “international financial organisations to foment conditions that make other nations subservient to the corporatocracy” running the biggest corporations, the governments and the banks in the developed countries, especially the U.S. They enticed developing countries into incurring large debts from multilateral and bilateral bodies like the World Bank and the USAID (United States Agency for International Development), by convincing them that this would help finance crucial investments in infrastructure.

This was done by generating inflated forecasts of the growth that would result from such investments, which provided the justification for funding by those agencies. Once these countries got indebted to an extent where they were unable to meet their debt service commitments, their governments became pawns in the hands of the governments of the developed countries, especially the U.S., whose quest for empire is insatiable in the author’s view. In the process, the EHMs were able to ensure that the large sums provided as debt to the developing countries were recycled into the coffers of the giant corporations in the U.S. and to the wallets of the elites in developing countries, fattening the profits and incomes of those who were already well endowed. The net result is poverty and misery for much of the population in the developing countries faced with the loss of their livelihoods and a collapse of the environment that supports them.

At one level, this is a ground that has been covered many times before. The idea that aid, much of which is debt, is tied to contracts for consultants and corporations from aid-giving countries and that aid-spending has little by way of linkage effects in the home country has been argued for long. That the indebtedness such aid dependence generates undermines sovereignty and affects the foreign policy and the international relationships of the countries concerned has been documented many times. And the fact that the involvement of the World Bank and the International Monetary Fund as economic policemen in poor and not-so-poor developing countries makes even dependence on non-aid flows a means of entrapping them in an unequal and damaging global compact is now well established even if ignored in mainstream circles.

What makes Perkins’ experience interesting is the argument that he was “planted” in MAIN by the National Security Agency (NSA) of the United States government. Based on a word from his first wife Ann’s uncle Frank, he was quite early a recruitment target of the NSA. Despite qualifying for the job, Perkins chose to join the Peace Corps instead and spent two years of his life in Ecuador. It was there that he met Einar Greve of MAIN (who claimed to have acted as an NSA liaison in the past) who hired him as an economist. Moreover, life begins at MAIN with a programme in which he is trained by the “beautiful and intelligent” Claudine Martin, who informs him that he is being hired as an EHM and that: “Once you’re in, you’re in for life.”

Thus, according to Perkins, in the neocolonialism of the 1970s, consultants travelling the world and persuading developing country leaders to borrow and “convincing” developed country governments and agencies to lend were chosen purposively and they were conscious of their mission—to advance the interests of the corporatocracy and extend the empire of the U.S. In return, they were rewarded with lavish lifestyles and hefty compensation packages, which made them want to justify their actions and protect their world.

In an interview by Amy Goodman of Democracy Now, Perkins had stated on November 9 last year (2004): “The first real economic hit man was back in the early 1950s, Kermit Roosevelt, the grandson of Teddy, who overthrew the government of Iran, a democratically elected government of Mossadegh who was Time magazine’s person of the year; and he was so successful at doing this without any bloodshed—well, there was a little bloodshed, but no military intervention just spending millions of dollars and replacing Mossadegh with the Shah of Iran.

“At that point, we understood that this idea of economic hit man was an extremely good one. We did not have to worry about the threat of war with Russia when we did it this way. The problem with that was that Roosevelt was a CIA [Central Intelligence Agency] agent. He was a government employee. Had he been caught, we would have been in a lot of trouble. It would have been very embarrassing. So, at that point, the decision was made to use organisations like the CIA and the NSA to recruit potential economic hit men like me and then send us to work for private consulting companies, engineering firms, construction companies, so that if we were caught, there would be no connection with the government.”

Over time, Perkins argues, however, the need for the self-conscious EHM disappears. “Managers” trained in the best schools imbibe the philosophy of empire and stick by it since it suits them personally, because of the pay-offs involved. What was a conspiracy then becomes the normal state of things now.

The second reason why the book could be attracting the attention of U.S. readers is that it argues that the EHM or his more socialised modern-day counterpart is the most benign of the different agents in the chain aiming to extend empire. If these agents fail to entangle developing country governments into deals that result in indebtedness or other forms of dependence which ensure support for the global policies of the U.S. and the profit-hunger of developed country corporations, then the jackals are sent in. These are assassins aiming to get rid of political leaders and governments that cannot be seduced into compliance with these requirements. Instances of such leaders and governments abound. Examples referred to by Perkins include Mossadegh in Iran, Jacobo Arbenz in Guatemala, Salvador Allende in Chile and two other leaders and their governments with whom Perkins personally worked: Omar Torrijos, President of Panama, and Jaime Roldos, President of Ecuador. Both had died in fiery air crashes that were not accidental.

Both leaders were eliminated because they challenged the corporatocracy. In 1968, Omar Torrijos emerged as the head of state in a coup-wracked Panama. In Perkins’ view, he stood up to Washington while being outside the realm of Communist ideology. He objected to the School of the Americas, to the U.S. Southern Command’s tropical warfare training centre and to the lack of Panamanian control over the Canal Zone. In 1977, he successfully negotiated treaties with President Jimmy Carter of the U.S. that transferred the Canal Zone and the Canal itself to Panamanian control.

Similarly, Jaime Roldos, who was democratically elected President in Ecuador in 1979 after a long line of dictators, presented a new hydrocarbon law to the Ecuadorian congress that would reduce the power of the oil companies, Texaco in particular. His hydrocarbon policy was accompanied by an effort to curb the activities of U.S. front organisations like the Summer Institute of Linguistics, which was ostensibly committed to studying, recording and translating indigenous languages that had an uncanny affinity to target tribes located in areas with a high probability of being home to oil resources.

In November 1980, Carter lost the U.S. presidential election to Ronald Reagan. In Perkins’ view, Reagan “was most definitely a global empire builder, a servant of the corporatocracy”. It was fitting “that he was a Hollywood actor, a man who followed orders passed down from the moguls, who knew how to take direction. That would be his signature. He would cater to the men who shuttled back and forth from corporate CEO offices to bank boards and into halls of government. He would serve the men who appeared to serve him but who in fact ran the government—men like Vice-President George H.W. Bush, Secretary of State George Schultz, Secretary of Defence Casper Weinberger, Richard Cheney, Richard Helms and Robert MacNamara. He would advocate what those men wanted: an America that controlled the world and all its resources, a world that answered to the commands of America.” Coincidentally, on May 24, 1981, Jaime Roldos died in a helicopter crash. Omar Torrijos died in a plane crash on July 31, 1981.

These are of course instances of the “failures” of the EHMs that necessitated the jackals. Perkins also deals with instances of success that he was involved in. The most spectacular of this was the Saudi Arabian Money-Laundering Affair (SAMA) in which “Saudi money was used to hire American firms to build up Saudi Arabia”. And since no U.S. funding was involved, Congress had no authority in the matter. He details how this process muddied the West Asian scenario for the future, till this day.

The third feature of the Perkins book that appeals is its view that the answer to the problem lies in the U.S. itself, in the hands of the individual American. Perkins was at the centre of American power. He repeatedly felt the need to opt out and tell all, but was bullied or bribed into silence. But he finally confesses, and hopefully exonerates himself, because he believes in creating a future for his daughter (which he partially destroyed) and because he feels that that conspiracy is one of the silence of all. In doing so, he is appealing to the heart of the ordinary American.

Confessions of this kind answer the American unease, which comes from the post-September 11, 2001, revelation that there is a part of the world that deeply distrusts America. Perkins’ book, which uses his life as the principle to organise developments as distant as the fall of Mossadegh, the massacre of the Communists in Indonesia, the death of Torrijos and Roldos and the wars in Iraq and Afghanistan, provides an explanation. It does so by blaming the situation on the corporatocracy, which has defiled the principles on which American society is based.

But when making his confession, Perkins distances himself from conventional radicalism. Even if his life reflects a deep conspiracy, the real world, he argues, is not one of conspiracy. “The empire depends on the efficacy of big banks, corporations and governments—the corporatocracy—but it is not a conspiracy. This corporatocracy is ourselves—we make it happen —which, of course, is why most of us find it difficult to stand up and oppose it.” It is only when Americans stop needing and believing in the corporatocracy can matters change. The message is clear. It tells Americans they must change themselves to change the world. It is the fact that Perkins’ confession does not demand that the reader challenge the system that generates the corporatocracy but makes a case for individual reform as the basis for social reform that possibly attracts those who are thronging the bookshops to buy the Perkins book.

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