Vox Nova at the Library: Confessions of an Economic Hitman
Part memoir, part polemic, Confessions of an Economic Hitman tells the story of John Perkins, a former economic forecaster for the engineering firm of Chas T. Main, Inc. As a forecaster, Perkins’ job was to provide estimates of the effect various infrastructure projects (mainly electrification) would have on economic growth in developing countries. These estimates were then used to justify loans to developing countries from international aid agencies, which would then hire Main to complete the project.
Perkins makes two claims about his work for Main. The first, that he inflated his estimates so Main could get more and bigger contracts, sounds fairly plausible. It’s true, for example, that the actual growth resulting from foreign aid has often fallen far short of projections. I’m inclined to think that this was more often the result of wild eyed optimism than crass cynicism, but I have no doubt that this sort of corruption did occur, and my only objection to Perkins’ remarks on this score would be to the idea that corruption in transfers of money from Western governments and agencies to developing world governments somehow represents an indictment of the free market.
In addition to profit-seeking, however, Perkins claims that he was in reality an agent of the NSA, and that his true mission in getting developing world governments to agree to these loans was to so saddle them with debt so that they could be forced to abide by Western economic and foreign policy interests.
Perkins denies that he is alleging a conspiracy: “It would be great if we could just blame it all on a conspiracy, but we cannot.” The substance of his story, however, belies such disclaimers. The constant talk in the book about a “corporateocracy,” “economic hitmen,” “global empire” and so forth might just be chalked up to poetic license. But if Perkins really was an NSA agent, recruited to bankrupt developing nations to bring them under the sway of “the alliance of big corporations, international banks, and [Western] governments,” then it’s hard to see how that wouldn’t meet the definition of a conspiracy.
Indeed, Perkins seems to see conspiratorial actions everywhere. When he gets his job at Main, he says that the whole thing has been arranged years in advance by a friend of his father-in-law. When people in Indonesia are reluctant to speak with him, he begins to suspect “some sort of conspiracy was directed at me.” Three pages later, the conspiracy has reversed itself: “an order to cooperate had come down from someone . . . I had no idea whether a government official, a banker, a general, or the U.S. Embassy had sent the order.” When he leaves Main and starts his own alternative energy business, he is “certain that many times someone stepped in to help, that I was being rewarded for my past service and for my commitment to silence.” Perkins describes President Reagan as “a servant of the corporatocracy . . . a man who followed orders passed down from moguls,” and suggests that the Summer Institute of Linguistics (an evangelical group translating the Bible into indigenous languages) was really a covert operation of the oil companies who hid radio transmitters among the villagers so that “[w]henever a member of the tribe was bitten by a poisonous snake or became seriously ill, an SIL representative arrived with antivenom or the proper medicine – often in oil company helicopters.” But hey, it’s not like he’s alleging a conspiracy or anything!
Perkins admits that he can’t corroborate his claims, and the NSA denies them vigorously. Further, by his own admission, Perkins knowledge about his supposed NSA mission stems entirely from conversations he had with a mysterious woman he met one day at the library, of whom no record exists. That doesn’t mean he’s not telling the truth, of course, but it is reason to approach his claims cautiously. A while back Chuck Barris, creator of the Dating Game and the Gong Show, wrote the similarly titled Confessions of a Dangerous Mind, in which he claimed to have worked as a CIA assassin. CIA assassins do, of course, exist, and if someone was a secret operative of America’s intelligence agencies, it is quite possible they would not be able to prove it. Nevertheless, most people have tended not to believe Barris’ account. To judge whether Perkins’ claims are more plausible that Barris’, one has to look both at the credibility of his story and his credibility as a speaker.
When it comes to the central claim of Perkins’ story, that he was an undercover NSA agent, I confess I’m skeptical. It’s not that I think America’s intelligence agencies are somehow above trying to bankrupt a country if they think it would further their foreign policy objectives. The CIA has done worse than that over the course of its history. But if the U.S. wanted to get developing nations to adopt different policies, I would think there would be easier ways to do it. Giving countries billions of dollars in loans in the hopes that one day they would be so debt ridden that they would have to do what the Americans wanted seems like a rather round about way of the U.S. getting its way (why not just bribe the corrupt government officials to do what you want now?) At best, you have to wait a couple decades for things to develop, and in the meantime there is always a risk that a new government could take over and repudiate the debts (or, worse, that they might pay them back).
If the U.S. government did engage in this sort of strategy, it did so only selectively. The U.S. lent billions of dollars to European countries after WWII. From both a strategic and economic standpoint these countries were far more important than many countries in the developing world. Yet somehow Europe didn’t end up a bunch of debt ridden American dependents. As William Easterly notes, “strategic geopolitics explains only a small portion of the variation in aid receipts across countries; many bad governments of no strategic importance whatsoever still get a lot of aid.” Easterly also notes that there appears to be no difference in the effectiveness of aid conditioned on the use of donor country companies as contractors and aid that is not so tied, nor is aid coming from Scandinavian countries any more beneficial than aid coming from the U.S. (no doubt this only shows that the perfidious Swedes are in on the whole thing).
One possible means of corroborating Perkins’ story comes from the recounting of his work in Panama. A significant portion of the book deals with Perkins’ friendship with the Latin American dictator Omar Torrijos (Perkins saw a poster of Torrijos during his first trip to Panama that had a slogan about freedom and concluded from this that the General had the best interests of his people at heart). According to Perkins, Torrijos wasn’t corrupt like the other leaders he dealt with, and that in his own dealings in Panama he did not follow the typical EHM formula, but really tried to help Torrijos spur development. If Perkins is right, therefore, we might expect Panama under Torrijos not to fall victim to the sort of debt ridden peril that he claims was the result of EHM activity in other developing countries. Using my mad Google research skills, I soon found the following excerpt from an article from the Encyclopedia Britanica:
Torrijos, behind a facade of popular government, transformed the appearance of Panama City through spectacular public works programs. The cost of these programs, however, plunged the country into heavy debt, and by 1977 an economic crisis loomed.
So much for that.
Aside from the substance of Perkins claims, there are certain other features of the narrative that set off red flags for me. Characters in the book tend to speak in stilted prose, delivering speeches that sound more like something out of a James Bond movie than out of real life (Perkins does, in fact, mention his penchant for fantasizing about living a James Bondesque life, which in the law one might call an admission against interest). There is also a fair amount of self-aggrandizement in the book (“I was the key to the entire master plan”). As the story progresses, Perkins states that most EHM don’t even know the true nature of what they are doing. Only he and a few other people know the truth. Which begs the question of why he was told such damaging information in the first place.
And since the credibility of Perkins himself is in question, I suppose I should point out that, in addition to Hitman, Perkins is the author of such works as Pychonavigation: Techniques for Travel Beyond Time, and Shamanic Navigation: Shapeshifting Techniques. Make of that what you will.
On one level, I can certainly see the appeal of a book like this. Despite great increases in wealth and living standards over the past 200 years, there remains an incredible amount of poverty and injustice in the world, and the trillions of dollars in foreign aid given out by Western nations over the last 60 years have not lived up to expectations. It is understandable that some might see a sinister motive in all of this, assuming that if aid has left a country poor and burdened with debt, then that must have been the real intent behind the aid. This is what Robert Heinlein called the “devil theory” of sociology, attributing to villainy conditions that simply result from incompetence. The devil theory can be emotionally satisfying, but it is at best practically sterile, and can often lead good hearted people to take counter-productive actions. If you want to improve the conditions of the poor, therefore, I cannot recommend using Confessions of an Economic Hitman as any sort of guide.
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- Vox Nova at the Library: The White Man’s Burden « Vox Nova
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Aside from the substance of Perkins claims, there are certain other features of the narrative that set off red flags for me.
I found Perkins rather amusing; he struck me as a classic narcissist. He styles himself as the heroic truth-teller, ‘ignoring the threats and bribes’ not to tell his story, because of his ‘deep commitment to the American republic’. An archaelogical project must have been required to uncover this deep commitment, as it was nowhere in evidence in his self-described role as an EHM or in his behavior over the preceding forty years as he recounts it.
Perkins casts himself in the role of the victim even when he agrees to take a job bankrupting countries. He implies his dastardly Uncle Frank and the NSA used the sexual frustration identified in psychological profile to arrange for his recruitment to Main(I’m not making this up, Perkins may be, but I’m not). How was he supposed to resist the mysterious, very attractive woman who showed up at the library and mentored him on bankrupting countries (and mentored him at her apartment)?
Giving countries billions of dollars in loans in the hopes that one day they would be so debt ridden that they would have to do what the Americans wanted seems like a rather round about way of the U.S. getting its way (why not just bribe the corrupt government officials to do what you want now?) At best, you have to wait a couple decades for things to develop, and in the meantime there is always a risk that a new government could take over and repudiate the debts (or, worse, that they might pay them back).
Perkins was working during the height of the Cold War, and I have no doubt that the U.S. was using any means available to win the loyalty of foreign leaders. At the same time, I think Perkin’s description of this strategy is either nonsensical or missing some pieces. As you say, it would be easier, cheaper, and more efficient just to bribe the leaders – the U.S. had a significant cash advantage vis-a-vis the U.S.S.R, and it’s not difficult for the U.S. government to move money through intermediaries less visible than publicly traded countries.
Perkins claims this strategy was designed to deflect attention from the U.S. government (it would be greedy corporations making the loans); but if the loans weren’t being repaid, and the U.S. was using them to exercise control of the foreign countries, wouldn’t money be flowing to the U.S. companies to compensate them for their loss? It was never clear to me how Main was benefiting from all of this, given that the loans weren’t being repaid (unless the U.S. was giving Main money on the side to compensate them). And, if money was being laundered to Main and its competitors, why not just to the foreign governments directly? As you said, it’s certainly no indictment of capitalism, per se, if Governments make loans to other governments to gain influence.
I think there certainly is some truth in the book, and one can look at foreign aid gone wrong and assign any type of motive. But Perkins is hard to take seriously, so it’s a frustrating read. Once the witnesses credibility has been impugned, one is not sure where reality and self-aggrandizing narcissism are or are not in contact.
To clarify/correct what I said above, I mis-described the strategy as Perkins described it. The U.S. government made the loans, and the companies who did the work received payment. So, they did get paid, but the U.S. government did not. It’s still a clumsy method of gaining influence in a country (most obviously because the debt could always be repudiated and it takes a long time), but it’s not crazy and it probably happened in some cases (leaving aside the question of why.
Maybe Blackadder is right, but that book sounds like “brutal, ugly, honest truth” to me. Speaking of which, did you ever see the X-Files episode where the cigarette-smoking man revealed that he was behind the Kennedy and MLK assassinations? I can’t believe the government is keeping that from us too.
I think books of the ‘blowing the whistle on the conspiracy’ genre should be approached with a very healthy dose of skepticism. As WVO Quine has wisely said, when considering an amendment to our conceptual scheme (that is, when considering whether we should amend a long held belief) it is prudent for us to consider the effects such a revision will have on the whole system of our beliefs. For instance, if I get a phone call one evening and the person on the other line says, “Oops, sorry. Wrong number.” It is probably wiser to fall back on my firm belief that people generally tell the truth and therefore take the guy at his word than to assume he is a government operative attempting to tap my phone. Assuming the latter requires me to- at least momentarily (and why now?)- suspend my ‘people are generally truthful’ belief. What will be the consequences of this emendation of my beliefs? Well…I ought now to be very distrustful of what others say. Without this ‘trustworthiness’ belief isn’t it prudent to suspect that my wife is actually a government plant? That my house is bugged? People’s verbal assurances to me that this is not so cannot count as evidence, since such information is entirely suspect and must be confirmed by a painstaking search for more reliable evidence. It is obvious that my decision to suspend this belief will force me to abandon and rethink many other beliefs and will therefore have a wide range of effects in my practical life. At best, I will spend most of my life gathering evidence and interrogating others. At worst, I will be carted off to the closest psych ward.
We can now apply this insight to the the genre of conspiracy literature. Such literature usually targets some institution which is generally trusted or seen as reliable- at least by a great number of people. Take for instance The Awful Disclosures of Maria Monk vis a vis the Catholic Church. Such literature of the ‘insider whistle-blowing’ variety has as its main protagonist someone who was purportedly on the inside. Many verifiable but circumstantial facts about this person may speak to the truth of their story- but nevertheless most of it must be taken on faith. After all, if there is a half-way decent conspiracy going on it is going to be hard to verify certain facts, right? You cannot expect the alleged conspirators assurances to the contrary to count as evidence because it is those very assurances which are on trail in the first place. Therefore you must be persuaded by a combination of two things: a minimal fittingness and/or coherence with regard to the narrative and big heap of trust in someone who “seems to be a good and reliable person.” The problem with being persuaded in this way is that it is incoherent and arbitrary. You are being asked to suspend your belief that this person or institution which you once had faith in on the assumption that it was benign is actually malevolent- and you are being asked to believe this on the grounds that this other person should be trusted as benign and reliable. What counts as evidence in this case depends on who you decide to trust. Such arguments are more often than not fraudulent (i.e., Awful Disclosures or Jack Chick Tracts) but sometimes turn out to be reliable when further facts come in (i.e., accounts of certain clerical abuse victims).
If we find ourselves presented with such arguments, the rational response is to be skeptical, especially if accusations are being made against those we assume to be benign and reliable. To the extent that we know and trust a person or institution and to the extent that disbelieving this person or institution would destabilize many other beliefs- to that extent it is rational to demand of the accuser convincing evidence whose reliability doesn’t rely on appeals to trust. From what I have seen of Mr. Perkin’s argument thus far, a lot of evidence still needs to be forthcoming before I’m going to be convinced.
The NSA (National Securty Agency) deals with codes and electronic eves dropping. Human agents is the realm of the CIA. I doubt the NSA would have much to gain by encroaching on the CIA and the backlash to the NSA if caught would be tremendous.
The plot is suggested is really too complicated to ever work.
Why not stick to the basic stuff the US government admited to in the Rockefer Report, like financing radical labor activists to stike competators of US companines forcing up thier costs and thus ability to compete with US companies, or in some cases a strike that forces the foriegn comepetor out of bussiness. Often done in cooperation with the AFL-CIO and the woprkers of the US companies were represented by the AFL-cio.
There’s also this fwiw from the NSA statement linked to above:
Perkins revealed his fondness for conspiracy theories during a January 10 presentation at a bookstore in Washington. At one point, he claimed, falsely, that the U.S. government had been involved in the assassinations of President John F. Kennedy, Senator Robert F. Kennedy, Martin Luther King Jr., former Beatle John Lennon, and several unnamed U.S. senators who had died in plane crashes.
In response to a question about the September 11, 2001, attacks, he cautioned that although he did not know much about this subject he thought that if a bank had been robbed, the police would investigate the possibility that it had been an “inside job,” implying that the U.S. government may have been involved in the 9/11 attacks. He also recommended a Web site that puts forward the false claim that no plane hit the Pentagon on September 11, 2001. (For a discussion of this issue, see “Did a Plane Hit the Pentagon?”)
He said he found it hard to believe that the September 11 attacks had been planned by a man in a cave with a walkie-talkie – a formulation frequently used by those who wish to absolve al-Qaida of responsibility for the attacks. (For discussion, see “Al Qaeda and September 11th.”)
I’m roughly half way through the book currently, having just reached the point where he quit working for Main.
One of the things that struck me reading it is that by his own account, Perkins knew next to nothing about economics. He had a BS in business administration with an emphasis in marketing, was hired and promoted (by his account) because of his willingness to write estimates which said whatever his superiors wanted them to say, and gained an appearance of respectability (again, by his own account) by hiring a bunch of real economists with Masters and PhDs do come up with real analysis he could take credit for.
So since a lot of the analysis in the book has to do with him walking out of a fancy hotel, having a beautiful woman in a colorful sarong catch his eye, and then gazing out across the slums of a third world metropolis while thinking about how capitalism is a new form of feudalism in which most living in grinding poverty while a few enjoy all the benefits — I think a fair amount of his thinking may stem from the fact that he really doesn’t know anything about the economics of development. He just sees people suffering and knows the money is flowing in and draws conclusions based on his personal feelings and biases without really having any idea whether what he says is true or not. (It’s a very thinly sourced book and involves basically no economic analysis — at least in the half I’ve read so far.)
He also seems to have a Rousseau-like romantic idea of the natural state, such that when he rails against the poor being kept poor, he also talks about how they are “forced” out of their simple farming ways or hunting and gathering tribes into cities where they work in factories. One may certainly consider those ways of making a living to be human ideals, but it’s fairly unquestionable that in many developing countries people consider themselves to be better off working in factories than living according to their “simple ways” in the country. A fact which seems lost on Perkins.
Why not stick to the basic stuff the US government admited to in the Rockefer Report, like financing radical labor activists to strike competators of US companies forcing up thier costs and thus ability to compete with US companies, or in some cases a strike that forces the foriegn competor out of bussiness. Often done in cooperation with the AFL-CIO and the workers of the US companies were represented by the AFL-CIO.
Jay Lovestone. There was a great guy.