Confessions of an Economic Hitman

A review of the new book by John Perkins

New Statesman, 13th March 2006

As a New Statesman reader, I'll bet that at some stage you have used the word 'empire' to refer to the global dominance of the USA. You may have used it in connection with the war on Iraq, or to refer to the US-led project of economic globalisation. It's a good bet, too, that you will have been scoffed at by someone for using the term; painted as a naïve old lefty who doesn't understand the subtleties of politics and power.

If so, John Perkins is here to show that you were right all along - and that, if anything, you were probably understating the case.

Confessions of an Economic Hit Man, Perkins' painfully confessional autobiography, is one of the most remarkable books I have read in a long time. It is also one of the most frightening. From the 1960s to the 1980s, Perkins was employed as an EHM - an Economic Hit Man. An EHM's role is to 'cheat countries around the globe out of trillions of dollars. 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 terrifying dimensions during this time if globalisation.'

It sounds more like the cover blurb for a John Le Carre thriller than a work of non-fiction, and many of the events Perkins describes would stretch credibility had he not participated first-hand. So much so, he tells us, that his publisher initially suggested he fictionalise the book, as no-one would believe it otherwise.

Perkins story starts in the late 1960s when the young graduate was approached by an international consulting firm called MAIN, and offered a job as an economist. He soon found out what the work entailed.

'There were two primary objectives of my work', he writes. 'First I was to justify huge international loans that would funnel money to MAIN and other US companies (Such as Bechtel, Halliburton, Stone and Webster and Brown and Root) through massive engineering and construction projects. Second, I would work to bankrupt the countries that received those loans … so they would be forever beholden to their creditors, and so they would present easy targets when we [the US] needed favours, including military bases, UN votes or access to oil and other natural resources.'

There, in a paragraph, is your recipe for Empire - and over the next 20 years, Perkins helps build it. He begins in Indonesia, where his task is to plan an electricity grid for Java. He is instructed to produce wildly-inflated economic growth forecasts which will allow international banks and USAID to justify vast loans to Indonesia, which its government will be unable to pay back - creating dependency on the US.

He does well, and is sent on to Panama, to do the same thing for the country's 'master development plan', under which the World Bank will invest billions in the country's infrastructure, sell the construction rights to US corporations and hopefully force an anti-American government to climb down over its ambitions to take back control of the Panama Canal.

Then it's on to Saudi Arabia, and perhaps the most shocking story of all. In Saudi, Perkins is required not simply to produce the usual inflated growth forecasts to justify loans and corporate contracts but to 'find ways that would ensure that a large portion of petrodollars found their way back to the United States.' America needs dependable supplies of oil, and no repeat of the OPEC-led 1970s oil crisis that nearly bankrupted its economy.

Perkins does his masters proud with a plan which makes Saudi Arabia 'the cow we can milk until the sun sets on our retirement.' The Saudi government agrees to maintain oil supplies and prices which will be acceptable to the US. In return, the US offers total political and military support. But the clincher is the desert kingdom's promise to use its petrodollars to purchase US government securities, the interest on which will be spent 'developing' the Kingdom along Western lines. In other words 'our own US Department of the Treasury would hire us, at Saudi expense, to build infrastructure projects and even entire cities throughout the Arabian peninsula.' Genius.

It's tempting to stop reading at this point in despair, but it's worth persevering, for Perkins' aim is to expose the Empire in order to dismantle it. He got out, he emphasises - and the wider world can get out too. We can disband the Empire - but only if we know how it really functions. There are few better places to find out.