The Informer posted by Richard Seymour

Review of John Perkins, Confessions of an Economic Hit Man, San Francisco, 2004.

“Economic hit men are highly paid professionals who cheat countries around the globe out of trillions of dollars. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex and murder.”

1.
Susan George constructed the Lugano Report as a satire on the priorities of capitalism and the brutality of the political right. Purportedly a report by top academics, economists and experts on preserving capitalism against new threats in the 21st Century, George’s narrative has recommendations such as population reduction through disease and war offered seriously to the government commissioning the report. This book, which is not satire but testimony, doesn’t quite go that far. Still, the story it tells is damning and compelling. Before we get to that, however, there is one small matter to clear up. Spies. Spies are sexually charismatic, unusually intelligent and sadistic, as we all know. They charm their way into the lives and beds of enemies, before wasting them with a one-liner as dry as a shaken Martini. Decisive, effectual, calculating and ultimately superior in every way to the anonymous henchmen they send to their graves every day, they are the modern equivalent of those awesome and thrilling heroes, the aristocrats of early modern Europe. From Percy Blakeney to James Bond, the fixtures of clandestine political subversion have been the same. To my knowledge, only a few works of fiction have undermined this alluring mirage: one is Harlot’s Ghost by Norman Mailer; another is the quasi-fictional Confessions of a Dangerous Mind by Chuck Barris; others might include the occasional anti-heroes in the works of Graham Greene and John Le Carre.

In John Perkins Confessions of an Economic Hit Man we have the first factual account of the spy as social misfit and malcontent. Perkins was recruited to the US National Security Agency by a man known as ‘Uncle Frank’ to become an Economic Hit Man (EHM) because, he believes, they liked his profile: he had experienced a stressful upbringing in a poor household with puritanical and manipulative parents, was frustrated with life and the absence of sex, money and opportunities. They did not dwell on his degree from the Boston University College of Business Administration. Another thing they were unconcerned about was that, as a patriotic American, he opposed the Vietnam War. This was in 1967 so one must assume that such a stance was still controversial. Indeed, part of his reason for wishing to be recruited by the NSA was that positions with it exempted one from the draft. One other option was a position with the Peace Corps, where one might be sent to such places as the Amazon rain forests in order to help the indigenous peoples. Being of Abnaki background himself, Perkins wanted to immerse himself in the forest lore. Seeking direction, he called his Uncle Frank.

Uncle Frank amazed him by suggesting that he should definitely take the Peace Corps position because, after the fall of Hanoi, the Amazon was going to become a vital region. “Loaded with oil,” he explained, “we’ll need good agents there – people who understand the natives”. He added with a chuckle that Perkins may well end up working for “a private company, instead of the government”. Though he didn’t know it yet, Perkins was being promoted from a spy to an EHM. His notice of acceptance arrived in the mail, along with the same for his wife Ann, and they were sent to Ecuador following training at Peace Corps camps in South California, in September 1968. At first it was a blast, working with descendants of the Incas in hunting-farming subsistence villages. Perkins sympathised with them in a way he never had with the townsfolk where he grew up. Then, with dreary punctuality, a man named Einar Greve, Vice-President of Chas T. Main (consulting firm to the World Bank), descended on the airstrip. He was there to assess whether Ecuador should receive loans of billions of dollars in order to build hydro-electric dams. Felicitously, he was also a colonel in the US Army reserve.

Greve wanted to recruit Perkins for Chas T. Main. Yes, he told Perkins, he too had ‘liaised’ with the NSA, (wink and nod). The pair chatted, agreed to communicate by mail, and Perkins thenceforth used a small, portable typewriter to compose reports assessing Ecuador’s economic prospects, political changes and the growing frustration of the indigenous people as they found themselves confronting oil companies and international development agencies. The Peace Corps tour ended, and Perkins was invited to a job interview at MAIN headquarters in Boston. MAIN dealt mainly with engineering prospects, but the World Bank was beginning to insist that they retain qualified economists on their staff to assess the feasibility of projects. “The letters you sent me,” Greve told him, “indicate that you don’t mind sticking your neck out, even when hard data isn’t available”. So, in January 1971, Perkins was offered a position as an economist with MAIN at 26 years old. Fully aware that these circumstances had probably been engineered by Uncle Frank, Perkins’ ego nevertheless tumesced as he considered the possibilities of sipping Martinis in plush hotels, surrounded by bikini-clad nymphs as he nurtured a loaded firearm inside his jacket.

His first role was to travel to Java and assess the prospects for engineering projects there – with the firm suggestion in his ear that he produce a glowing report if he wanted advancement. Java was, Greve assured him, an “economy that will soar like a bird”. He produced econometric models for predicting growth in Kuwait, Indonesia and anywhere that prospects for huge construction works emerged, submerged himself in a welter of statistics and charts from the IMF and other sources, laboured intensively in the library – until he was approached by an attractive brunette named Claudine Martin. Martin, a Special Consultant to Chas T. Main, Inc., had been asked to help in Perkins’ training.

She explained that his position was an unusual one, and that he would keep it confidential. He was to be moulded into an EHM, (a term selected, apparently, because no one would take it seriously). “No one can know about your involvement – not even your wife.” She would teach him what she could over a series of weeks, then he would have to choose, finally, whether he was in or out. Seduced, he was very much in. Martin had used the NSA profile on him to present a calculated front of physical allure and verbal manipulation. His role, he was told, would be to use his understanding of economics to “justify huge international loans” that would send billions of dollars sluicing back to companies like MAIN, but also Bechtel, Halliburton, Stone & Webster, and Brown & Root. His other role would be to ensure that these economies were bankrupted after receiving these loans so that they would “be forever beholden to their creditors, and so they would present easy targets when we needed favours, including military bases, UN votes, or access to oil and other natural resources”.

Perkins would assess prospects just as before, but now “The unspoken aspect of every one of these projects was that they were intended to create large profits for the contractors … while assuring the long-term financial dependence and therefore the political loyalty of governments around the world. The larger the loan, the better.” Claudine explained to Perkins that “We’re paid – well paid – to cheat countries around the globe out of billions of dollars. A large part of your job is to encourage world leaders to become part of a vast network that promotes US commercial interests.” Kermit Roosevelt was the first EHM, Martin told him, and had been an important accomplice in the coup against Mossadegh of Iran. This was the proud tradition he was to inherit.

2.
This is how Perkins got in. What follows in the book is an imbrication of history (about the CIA-MI6 coup in Iran, the Monroe Doctrine and so forth), memoir, and starkly rendered details of how he helped construct this vast network of debt and fealty. The story is told very much with Perkins’ present judgement weighing on it. He is self-mocking, ironic, astounded at his own naiveté. He looks back on his youth and his early manhood with tenderness and condescension, drawing his story out of the characters he has dealt with, and contextualises each operation in the geopolitics of the US at the time. The reader is not allowed to be in the dark as to why Indonesia became so important, for instance. Perkins own motivations, including his ‘relationship’ with Claudine and the breakdown of his marriage (he viewed his bond with Ann as the result of one of his boyish capitulations to parental whim), are explained deftly but are not allowed to overwhelm the political narrative.

Take Indonesia, for instance. We are taken there on the back of Perkins’ romantic visions of Balinese dancers, Bugi pirates, Komodo dragons and sarongs. Then, the mirage dissipates and we are confronted with a Jakarta of young prostitutes offering themselves for a few coins, lepers with bloody stumps instead of limbs, canals built by the Dutch colonists turned to cess-pools, sewers lying open, families crammed into hovels made from cardboard. “I had seen poverty before … but nothing to prepare me for Jakarta.” Happily, Perkins and his team are based in the Hotel InterContinental Indonesia which caters to the “whims of wealthy foreigners, especially oil executives and their families”. There he meets their project manager, Charlie Illingworth, an armchair warrior who specialised in historical accounts of great military battles. Illingworth lights a cigar, sighs and drinks to a good life. Everyone joins the toast.

Their mission was officially to electrify Java. Unofficially, they were there to “accomplish nothing short of saving this country from the clutches of communism” and “make sure Indonesia doesn’t follow in the footsteps of its northern neighbours, Vietnam, Cambodia and Laos.” Indonesia was also oil-rich, which would make it a “powerful ally” to the oil-dependent United States, Illingworth observed. Perkins’ job was to develop a master plan to get the oil industry, ports, pipelines and construction companies electrified. He should “err on the high side” in his estimates, otherwise Indonesia might “live under the hammer and sickle or the Red Flag of China!” Perkins can deceive himself, for a while, by pretending that what is at issue is idealism, and helping Indonesia lever itself out of a medieval economy. Until he looks out of the window of his hotel room, “across the opulence of the hotel’s gardens and swimming pools, and see the hovels that fanned out for miles beyond. I would know that babies were dying out there for lack of food and potable water, and that infants and adults alike were suffering from horrible diseases and living in terrible conditions.” He knows full well that Illingworth and the rest are there for self-interest, and to serve the interests of US foreign and commercial policy, which prompts the following epiphany:

“I also realised that my college professors had not understood the true nature of macroeconomics: that in many cases helping and economy grow only makes those few who sit at the top of 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 – just as such revelations would cost me mine.”

Perkins’ position therefore relied on self-deception. He rationalised his choices: he had worked hard for this; was only doing what he had been trained for; was in agreement with the best minds in the world on the matter; maybe all that stuff about the economy’s likely exponential growth was true. His estimates might have been exuberant, but… Howard Parker, formerly of the New England Electric System, was assigned to help design the electrification project. Fresh out of retirement, he was an embittered (but astute) old man who knew precisely what was going on. “They’ll try to convince you that this economy is going to skyrocket,” he told Perkins, “Charlie’s ruthless. Don’t let him get to you.” Perkins, however, had already bought the entire line. This project would see Indonesia’s economy flourish, he said. “I’ve seen what can happen when oil is discovered. Things change fast.” Parker wasn’t having any of that. “I’ve forecasted electric loads all my life … And I can say for sure that no electric load ever grew by more than 7 to 9 per cent a year for any sustainable period. And that’s in the best of times. Six per cent is more reasonable.”

Perkins was recalcitrant, even as Parker accused him of “being in it for the money” and selling his soul to the devil. Yes, it troubled him, sent him on a long walk while he battled with his doubts. But a soothing thought returned him briefly to equanimity: Howard Parker had said that he would do what he considered right, regardless of Perkins’ conclusions. Travelling across Indonesia and interrogating local officials in major population centres for data, he was shocked to find that ordinary Indonesians saw the World Bank’s involvement in the country as part of Nixon’s foreign policy, not only across Indochina, but also the Middle East. US policy was not merely greedy, rapacious, but also anti-Islamic (This was just before the high watermark of political Islam). The Soviets, some students told him, would not last, but the next civilisational strife would be between Islam and Christianity – just read Arnold Toynbee’s Civilisation on Trial, and The World and the West. It’s all there. And they warned:

“You must open your hearts to the poor and downtrodden, instead of driving them further into poverty and servitude. There’s not much time left. If you don’t change, you’re doomed.”

Doubts aside (and Perkins really does lay on the self-flagellation rather thick), the econometric report he produced pointed to exactly the enormous spike in growth that was expected of him. Howard Parker was fired because he had “lost touch with reality”. Perkins was promoted, because he estimated ‘load growth’ of between 17 and 20 per cent. He was given the title of Chief Economist and a raise: “It did cheer me up a bit.” He adopted the bravado of Robert MacNamara, president of the World Bank and adjuvant to US goals in preventing any UN intervention on the Indonesian slaughter of East Timor. Despite what he considered his limited expertise, Perkins found his reports being approved, stamped and put to use. He was the Chief Economist now, and he began to see himself as “a Merlin who could wave his wand over a country, causing it to suddenly light up, industries sprouting like flowers”.

3.
Having successfully indebted Indonesia, propped up a pro-US dictator and sent a sluice of money funnelling back to American corporations, Perkins moved on – to Panama. And here, the story darkens. The history of US involvement in Panama is skilfully adumbrated, before we arrive at the coup which places Omar Torrijos in power. Torrijos, unlike many Latin American dictators, wished to steer Panama in an independent direction. The country’s ruling families had done splendidly out of being the chief supplicants of US power in the country, but Torrijos advocated certain limited social reforms for the poor, and objected to the School of the Americas which was located in the Canal Zone.

Opposition to US foreign policy and Nixon was all over Panama. The poor were becoming radicalised. Perkins was there on a hit job, but his stay took him through the shanty towns as well as the banks of privileged middle class houses and clubs. His government guide, Fidel, was able to point him to crowds of recent immigrants from surrounding countries with fascist dictatorships supported by America, to prostitutes offering themselves for a few US dollars. He meets Omar Torrijos, who lectures his ear off about US imperialism in Iran. The Shah he is not altogether fond of, but he thinks he can learn a few things about how to modernise an economy from him. He knows, however, that he will not survive should the US decide to get rid of him: “We have the Canal. That’s a lot bigger than Arbenz and United Fruit.” Torrijos expresses admiration for Arbenz and his programme, adding that “They couldn’t afford to let [him] give the rest of us ideas.”

Torrijos lets Perkins in on a secret. The Panamanian government has Bechtel pissing on its leg because they plan to build a new canal at sea level, which they intend to allow the Japanese to finance and build. This will leave Bechtel out in the cold, and when the president of Bechtel is George Schultz, formerly Nixon’s secretary of the treasury, you don’t want to leave them out of anything. Hence: “Panama needs your help. I need your help.” Perkins is bewildered. Torrijos says that he needs to show that he can look after the poor without being the servant of Russia or China. He wants to be a model for other poor countries seeking independence and well-being. He knows full well that Perkins and his company obtain contracts and money by vastly inflating the size of projects, but in this instance he needs to build up electricity, transport and communications and to do it he needs money: World Bank money.

Perkins, amazed and thrilled at Torrijos’ offer, nevertheless wonders what he’s been smoking. Torrijos must be aware that the international aid game is a sham, designed to make him rich and keep his country poor. It was assumed that all men in power were corruptible. If he did not use it for his own personal benefit, as Suharto and others did, this would be seen as a threat – especially if he sought independent development. Despite his forebodings about it, Perkins agrees to the proposals and the money pours in. Now, all seems to go well. Perkins gets on with his life, travels to Saudi Arabia and launders some money there, then gets the Kingdom hooked on a vast amount of debt, which betroths the Saudis to investments in US companies and compels them to maintain oil prices at a reasonable level. He pimps a woman for someone he calls ‘Prince W.’ He meets Graham Greene in a trip back to Panama, and shares some of his stories with him. He nets Colombia into huge loans, again by massively inflating the estimates. And then, Jaime Roldos is assassinated.

4.
Roldos, the President of Ecuador from 1979 until his death in May 1981, had been a staunch opponent of big oil, and had a particularly rocky relationship with Texaco. His ‘Hydrocarbon Policy’, upon which he was elected, stipulated that as Ecuador’s oil supplies were potentially its most important asset, it should seek to develop and exploit such resources only in ways that benefited the majority of the population. He wanted to use this policy to deliver social reform, although he was also aware that he needed to carry many influential families with him.

In November 1980, Ronald Reagan was elected President of the United States - the Panama Canal Treaty negotiated with Torrijos, and the Iranian hostage crisis were major factors in that election. Early in 1981, Roldos presented his new hydrocarbon policy to the Ecuadoran parliament. In the US, the PR men set to work portraying him as another Castro, a dictator effacing democracy and the Ecuadoran constitution. A strange evangelical outfit known as the Summer Institute of Linguistics (SIL), which colluded with the oil companies in persuading locals to move out of their homes when some drilling needed doing, began to hysterically attack Roldos. He in turn accused them of colluding with the oil companies and ordered them out of the country. He also told the oil companies that their plans would not be approved unless they benefited the majority of the country. On May 24th, 1981, he died in a fiery helicopter crash.

Torrijos wept for and eulogised after Roldos, and he too expelled the SIL. Two months later, On July 31st 1981, he himself died in a plane crash. According to Perkins, these were classic CIA assassinations – further, he is fairly certain he knows the reasons for the interventions. The EHMs had not succeeded in their work, and so ‘the jackals’ were brought in to take care of the situation.

5.
Perkins, in the meantime, had quit his job at MAIN and set up his own company called Independent Power Systems, whose goal was to provide environmentally sound ways of generating electricity. Having connived in ripping countries off for billions to enrich US corporations, assisting pro-US dictators & servicing targets with sexual favours, he'd finally had enough. He was out as far as he was concerned, but – as he had been warned – one is never really ‘out’. He was rewarded surreptitiously for his services and, when it emerged that he was working on a book called Conscience of an Economic Hit Man, was offered a bribe – which he took. Coded threats and bribes emerged each time he considered spilling the beans, and each time he acquiesced. It was not until 9/11 and after that he decided the book must come out. Conspiracy theories abounded, he says, and still do because much of the truth is unknown. But the truth, although often concealed, is not a conspiracy. It is a story of Empire that is as old as Rome and as new as capitalism. In fact, one of the things that Perkins does an excellent job of showing is the connection between economic imperatives and foreign policy. This does often lead him to reductive analysis, but at least he tries – he is not merely satisfied with giving you his scoop, he wants the reader to understand the nature of the beast and to find ways of putting it down.

The arc of Perkins narrative is one of naivete, corruption, sin and redemption. Having started with a description of an ugly town called Shell, scraped out of the Ecuadoran Amazon jungle to serve the oil company it is named after, a stark military zone as well as a workplace for thousands of indigenous labourers, he ends his book with a call to Jefferson and Paine. From ‘corporatocracy’ – his phrase – to authentic revolutionary democracy, in fact. And it may well be that this hit man’s latest kill has taken out the pristine platitudes with which Empire legitimises itself, an appropriately iconoclastic accomplishment from the son of Calvinists.