Economic Hit Man

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John Perkins is not your typical global justice activist. He doesn’t organize street protests, wave placards, dress funny, or circulate fiery manifestos. Instead, he puts on a suit and hobnobs with officials at the World Bank, the World Trade Organization, and multinational corporations. He moves easily among the financial elite because he spent years as one of their most able servants. In his own words, Perkins is a former “economic hit man.”

Today, Perkins, 59, wants to shed light on the shadowy role that he and others like him played in driving American business interests into every village on the planet. His new book, aptly titled Confessions of an Economic Hit Man (Berrett-Koehler), is a conversion tale of sorts, the memoir of a Kennedy-era idealist and Peace Corps volunteer who fell into being an advance man for a new dynasty run by global bankers and CEOs. Equal parts globe-trekking economist, anthropologist, and spy, Perkins eventually came to grasp the brute reality of American financial power unleashed on other, poorer lands. He also owned up to his own role as an accomplice–the charming, youthful numbers guy who went in first and drew up the bullish predictions that were used to launch the ruinous “development” phase that followed.

In a recent interview, Perkins described his younger self as “a modern agent of Manifest Destiny,” referring to the old conceit that Americans have been chosen by God to impose their values on everyone else. Long after he’d seen through that illusion, he kept taking paychecks from those who used it as an excuse to exploit others. Ultimately, Confessions is a parable for all Americans who try to deny the heartbreaking fact that our society’s affluence often comes at the wider world’s expense. By telling the truth about the system he once served, Perkins says, he hopes he can help others break free and join him in building a new world based on human dignity and ecological respect.

The classic American conflict between entitlement and fairness haunted Perkins from an early age. He was raised in the ’50s in rural New Hampshire by parents who worked at the elite Tilton boys’ school and traced their New England roots to the likes of Thomas Paine and Ethan Allen. Though they had little money, they refused to let him socialize with the working-class “townies,” especially the girls. Perkins used athletic and academic prowess to hold his own with his classmates, the sons of senators, diplomats, and executives. But he could never quite outrun his sense of not belonging, or his resentment at being forced to adopt his parents’ misplaced snobbery.

After dropping out of Middlebury College, his father’s alma mater, he graduated from Boston University with a degree in economics, got married, and spent three years in the Peace Corps in Ecuador with his wife. During that time, he met an American who worked with a Boston-based consulting firm, Chas. T. Main, Inc., or MAIN. The company was helping its largest client, the World Bank, decide whether to lend Ecuador billions of dollars to construct hydroelectric dams and other big engineering projects. Over the next year, Perkins continued to send his new friend dispatches assessing Ecuador’s economic prospects. Unlike most economists with better credentials, Perkins proved to be a hardy traveler who dealt well with the stress of working in remote places. Impressed as much by his skills in the field as with his head for numbers, the company offered him a job, and at 26 he became its chief economist.

From 1971 to 1981, Perkins was the picture of success, traveling the world as he produced the complex economic forecasts that were used to determine the size and feasibility of major engineering projects like dams and electrical grids. He helped to pioneer a new form of econometric modeling and lectured at Harvard Business School. His marriage fell apart, but he was the youngest person ever to make partner in his firm’s 100-year history, pulling down a six-figure salary, living in a pricey downtown Boston flat, flying first class, staying in luxury hotels, and advising presidents, prime ministers, and kings.

Ostensibly, Perkins’ job was to help set Third World countries on a path toward economic security, modernization, and democracy by funneling international development loans their way. In truth, that’s not what an economic hit man did.

“Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars,” he writes. “They funnel money from the World Bank, U.S. Agency for International Development, and other foreign ‘aid’ organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.”

Here’s how it worked then–and still works now. Perkins was paid to create unrealistically rosy forecasts of economic growth, which he and his colleagues would use to lure poor countries’ leaders into accepting massive loans from the World Bank, the International Monetary Fund, and other international lenders. Most of that money never left the United States, but instead flowed from those lenders straight to engineering firms like Bechtel and Halliburton, making their shareholders and executives fabulously wealthy. While a few elite Third World families and corrupt officials made out like bandits, their countries were saddled with crushing debts that could never be repaid.

For example, Ecuador, where Perkins returned as an EHM, now spends about 50 percent of its national budget to service its foreign debt, leaving little money for health care, education, and other social programs. And like any common loan shark, the corporatocracy–as Perkins calls the class of bankers, executives, and officials who promote this insatiable form of global capitalism–always demands its pound of flesh. Payment could be anything from votes on United Nations treaties to land for U.S. military bases to privatizing state-run services and giving U.S. firms sweetheart deals on natural resources like oil and gas.

Worst of all, this rapacious model of empire building is entirely legal, thanks to trade agreements and regulatory bodies like the World Trade Organization, Perkins observes. “If somebody did to an individual what we do to Third World countries, it would be considered usurious and criminal.”

During his 10 years as an EHM, Perkins did his dark work in Indonesia, Ecuador, Panama, Colombia, Saudi Arabia, and Iran, among other places. And when the EHMs failed to bring a land to heel, things got even uglier, Perkins says. Plan B involved another type of hit men, the CIA-sanctioned “jackals” who foment political unrest, violent coups, and assassinations–as happened in Chile in 1973, Ecuador in 1982, and unsuccessfully in Venezuela in 2002. If the jackals fail and a foreign leader continues to defy the United States, Perkins says, the job falls to the U.S. military–think Manuel Noriega in Panama in 1989, Saddam Hussein in both 1991 and 2003, and Jean-Bertrand Aristide in Haiti in 2004.

Perkins is not the only mainstream economist to turn on his own kind. In recent years, Nobel Prize winners Jeffrey Sachs and Joseph Stiglitz, former economists at the World Bank, have published books harshly critical of the neoliberal model of globalization they had spent years promoting. Billionaire investor George Soros, who has profited tremendously from the current order, has warned that the “bubble of American power” is coming to an end.

But Perkins differs in important ways. Sachs and Stiglitz were true believers, highly trained academics who trusted their mathematical models until they were faced with massive evidence that the models didn’t work. With his backpacker’s approach to research, moving among the local people, Perkins saw those policies fail from the ground up, as measured in human pain. That only deepened the conflicts that had gnawed at him all along.

In nearly every country he was sent to assess, someone would step out of the crowd to show him the actual effects of global economic policy, which starkly clashed with what the bureaucrats were saying back home.

On his first assignment at MAIN, he traveled to Indonesia in 1971 to make plans for a new power grid on the island of Java. One night he was taken to see a traditional Javanese shaman and puppet master known as a dalang. The puppets depicted President Richard Nixon and a henchman eating up small countries one by one and spitting them into a bucket. As they were laying waste to Indonesia, another puppet representing a popular local politician tried to stop them, only to be dramatically slain. Several days later, the real politician was killed in a hit-and-run car accident.

In Panama in 1972, the popular president Omar Torrijos befriended Perkins and privately struck a deal with him: In return for an accurate economic analysis that would keep Panama from taking on too much debt, MAIN would get a steady flow of construction contracts. Both men kept their word. Five years later, Perkins met the British novelist Graham Greene in a Panama City café. A skeptical observer of American power himself, Greene was among the first to encourage Perkins to turn his insider’s experience into a book. With a prescience rivaling the puppeteer’s, Greene also foresaw the fate awaiting Torrijos, a charismatic advocate of social justice who continued to defy the will of his would-be masters.

In Iran in 1978, shortly before the shah’s fall, a young Islamic revolutionary leader warned Perkins that his company should pull out of the country or face huge losses. Perkins wondered why they had approached him. “You are a man between two worlds,” he was told, “a man in the middle”–someone who was at least open to the truth.

But knowing the truth was not enough. “I often found myself questioning what I was doing, sometimes feeling guilty about it,” Perkins writes, “yet I always discovered a way to rationalize staying in the system.”

Perkins finally broke free after another chance encounter–this time with a Colombian woman he met while he was working in that country in 1977. Encouraged by her to look more deeply into what he had become, he began to see his ethical fall from grace as akin to the American republic’s–a former refuge for the world’s downtrodden, a beacon of principles and hope that over the decades had become an empire that exploited the poor everywhere. (It’s fitting that a woman led him out of a life that another had introduced him to as his first mentor at MAIN. Not all EHMs are men.)

He stepped away in 1981, remarried, and tried to keep quiet about what he knew. “I would not be a crusader; instead, I would just be a person, concentrate on enjoying life, travel for pleasure, perhaps even start a family.” Then Panama’s Torrijos died in a fiery plane crash, the victim of what many presumed to be a CIA assassination triggered by a bomb. A devastated Perkins had no doubt. The jackals had struck again.

Perkins soon began his book, only to put it down. Over the next two decades he tried to finish it four times, and each time he was bribed or intimidated into stopping. Two events hardened his resolve: his teenage daughter’s coming of age and the 9/11 terrorist attacks, which he describes as humanity’s wake-up call to change course or die. He says he feels partly responsible for creating the global inequities that feed terrorism.

“Three thousand people died needlessly that day,” he says, “but 24,000 die from hunger every day. That’s unacceptable.”

In recent years, the graying former Peace Corps worker and EHM has returned again to Ecuador. This time, the only natural resource he hopes to exploit is the local wisdom about how American society might heal itself. A shaman with the Shuar people of the Amazon put it this way: “The world is as you dream it. But your dream has become a nightmare. What you need is a new dream.”

“I have absolute confidence that this is going to happen,” he tells me. It won’t be easy, he admits, but the corporate stranglehold on American culture has been broken before. “It was certainly difficult in the late 1800s, too, when John D. Rockefeller and Andrew Carnegie and others had incredible corporate control.” But social reformers succeeded in curbing their power, and the same thing can happen again. Perkins takes heart in the explosion of grassroots groups like and the global justice and antiwar movements.

Despite his harsh criticisms, Perkins does not advocate tearing down the institutions of today’s global financial system. Given their vast resources and infrastructure, they could do good–like ending hunger or protecting the environment–if they wanted to. The trouble is, they’re like the playground bully, he says. “He may seem very threatening, but ultimately, you’ve got to just step up to the bully and kick him in the shins.” Many people in corporations would like to reform their companies, “but they don’t dare and they don’t exactly know how.” Now one of their own has made it his mission to help them do the right thing.

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