December 27, 2004
Confessions of an Economic Hit Man is a memoir of the life of someone recruited by the highly secretive National Security Agency (NSA) that has a multi-billion dollar budget and known responsibility for electronic intelligence at the very least. As in many other CIA/NSA operations, Perkins ended up working in other organizations with original premises established by secretive u.$. agencies. Perkins says that the start of his life was very much James Bondish.
The meat-and-potatoes of Perkins's career centered on government contracts for U.$. engineering and consulting companies such as Bechtel or Halliburton. The role of Perkins at his company called MAIN was to do economic studies in areas he freely admits he did not have expertise in; although, many in his profession concerning Third World infrastructure projects had even less knowledge.
The point of each economic study was to justify huge loans by predicting impossible growth rates. Professionals such as Perkins who did not predict outlandish success lost their jobs in private companies. Those who did invent stories to justify energy or other infrastructure projects received promotions and large payments and perks. In essence, such "economists" are really sales people. The U.$. contractor companies have the greatest self-interest in predicting smashing capitalist success, because that encourages customers and banks. In each Third World country, lower and mid-level government officials resisted his predictions as did some private bank analysts. It was the job of Perkins to put on a brave face and politically persuade elites who needed to back the loans.
After World War II, and until his death in 1963, according to his autobiography, W.E.B. Du Bois advised African countries to take no loans from the West and if loans were necessary, then the interest should be 2 or 3% or less as offered by the Soviets or Chinese under Mao. This was good capitalist advice, but Perkins also explains why the level-headed such as Du Bois do not win out in Third World development.
When Panamanian nationalist Omar Torrijos set up a relationship with Perkins to have U.$. contract work done based on realistic appraisals, the U.$. government assassinated Torrijos. When the Saudi royal family started raking in oil money after the 1973 OPEC embargo, the U.$. government threatened a 1954-style-Iran coup. In other words, force enters the picture--especially coups backed by the united $tates. Perkins refers to the military hit men as "jackals," who come after the economic hit men do not have adequate success by U.$. government standards. People such as Bush, Schultz and Cheney make the decision on what is good enough Third World behavior for the U.$. contractor business.
Although Perkins is not a communist he does understand the capitalist relationship to the state, much better than various "democratic socialists" and others opposing Leninism. The U.$.-backed coups--the jackals--prove that People's War is necessary in the Third World. Any brave Third World bourgeois such as Omar Torrijos or Salvador Allende who tries to negotiate a tad better deal for his country ends up assassinated, so it is a huge mistake for the Third World leaders to try to operate within capitalism. To win a contest like that, the Third World leader needs military backing from his people to defeat coups and invasions. That means Mao's People's War or perhaps backing from a Mao if Mao happens to live next door and pose a credible threat.
It was typical for Perkins to predict high annual growth of electricity consumption for 25 years to justify a large loan for an electricity project done by Amerikan contractors: "averaging 19 percent per annum for twelve years after the new system was completed, tapering down to 17 percent for eight more years, and then holding at 15 percent for the remainder of the twenty-five-year projection."(p. 54) Other professionals in the field might predict less than half that success rate.
It's important to understand that if an infrastructure project can truly succeed, a huge loan and high interest rates are worth paying and the project should go forward. Perkins showed that in each case, the Amerikan-built project failed and then the Third World government could not make payments on the original loan. The NSA told Perkins that that was the strategy, because then the u.$. government would show up to demand that the Third World country give up something to make up for the loss of payments. This is how Third World countries end up in debt with no independence according to Perkins and it was all part of an NSA/CIA-implemented plan after World War II.
What is missing completely from the Perkins story which centers on the conscience of people in similar positions is that international banks also have a huge compulsion to invent stories to sell to the Third World, otherwise, they have no customers for their loans. Capital that sits around earns no interest and that spells the doom of capitalism, because investors will not have any reason to stick with capitalism if they make no return.
Perkins details how the World Bank was complicit in his activities, and he even says that Robert McNamara's World Bank crimes (p. 79) are greater than McNamara's Vietnam war crimes. As MIM explained before and as Perkins confirms factually, Robert McNamara was representative of a whole generation of professionals justifying u.$. financial expansion with a practically quota-driven system of loan exports. A previous book review on the World Bank was lacking in the sense that Perkins explains that the top U.$. officials do have a political view of how to extract a pound of flesh when quota-driven bank loans fail. There needs to be more discussion of this point--about whether the surplus of capital available for infrastructure loans puts the Third World bourgeoisie in good position to make a bargain as lower and mid-level bank officials might say or whether it ends up being the justification for political violence by the imperialists as Perkins says.
For its part, MIM is going to inject Perkins's contribution into discussion of Mao's Great Leap Forward (1958-1960). In both the united $tates and the Soviet Union, there are/were countless critics of Mao for promoting "giganticism" especially in the Great Leap Forward. The standard argument within communist terminology is that the Great Leap Forward was "ultra-left" and caused famine. Now we have Perkins to say that capitalists put forward giganticism (as opposed to say the popular idea today of "micro-lending") on an ongoing and regular basis. So now we have a contrast between Western giganticism and Maoist giganticism. 1) Mao recognized an error and ended it with self-criticism in three years time. In contrast, the World Bank, Bechtel and Halliburton bring Great Leap tragedies on an ongoing basis for decades at a time, Iraq being just the latest monstrosity. 2) Mao's error in the Great Leap resulted in economic experience for the Chinese people and tested the limits of economic growth for China. The giganticism of the economic hit men in various less developed countries results in contracts and economic experience for U.$. companies. Thus, the Third World masses do not even receive most of the benefit from learning from mistakes instigated by the economic hit men. Given that overdone enthusiasm is inevitable in the economy sometimes, we think it's pretty clear that Maoist hyperactivity is better than imperialist hyperactivity in the Third World.
Perkins repeatedly sidesteps communist critique. Thus he ignores Lenin's book Imperialism: The Highest Stage of Capitalism which long ago explained the compulsion of developed capitalist countries to seek out new businesses in the Third World to make loans to. Nonetheless, Perkins tries to put forward a non-communist idea of imperialism: "imperialist drive has been and continues to be the cause of most wars, pollution, starvation, species extinctions, and genocides."(p. 57)
This book is full of factual information and medium-range theoretical insights for readers. Our criticism aside from its sidestepping the obvious Marxist-Leninist theory about imperialism fully vindicated by his story would be that Perkins ends up in a typical Western dualism, where Perkins pits a Buddhist or New Age spirituality against his crude money-centered pursuits. Typical is Perkins's use of the Dalai Lama to cover up the excesses of his capitalist nature, but we are sure that Perkins is also aware of the CIA involvement in Tibet as well.
The unique contributions of this book are several. What Perkins says about Iran as the original paradigm example after World War II is not news. The basic idea that contracting companies and banks have an interest in making loans to the Third World is also not news. That point will stand even if no one else steps forward to confirm what he has said about Panama, Ecuador and Saudi Arabia. According to Perkins, Torrijos in Panama was a highly politically informed non-communist. He knew he was up against George Bush Sr. and Bechtel. He also knew that if he took a Japanese contract for canal work, the United $tates would not be happy and Japan would not defend him, so he sought out his choice of U.$. contractors and made a deal with Perkins, who iced out Bechtel and other competitors by agreeing.
There was a very similar story in Ecuador where a non-communist president named Jaime Roldos had friendly ties with the Sandinistas in Nicaragua and prohibited U.$. tuna fishers from within 200 miles. Perkins says the real reason for his assassination in 1981 was his hydro-carbons policy. In fact, he also explains that the 1995 war with Peru was ultimately about the potential for oil.
Another big contribution of Perkins is fleshing out the U.$-Saudi relationship that he contributed to shaping. When Nixon was president, the Saudi royal family actually agreed to hand over their money to the U.S. Treasury department to invest in U.$. contracts for Saudi infrastructure building in exchange for political protection. (p. 90) That basic model of doing business complete with U.$. threats should such business not appear forthcoming is apparently the model for Iraq today. Perkins reports that long ago, Muslims in Iran and Indonesia told him (in advance of the Iranian Revolution in 1979) that Muslims were not going to put up with Amerikan economic practices forever. Perkins says he decided that he had heard the basic Osama Bin Laden message long ago and it was time to publish this book despite the bribes and threats to prevent his publishing.