Gangster Economics

Written by Stephen Marshall
Wednesday, 02 May 2007

John Perkins was recruited by the National Security Administration (NSA) and then put to work as an analyst for the international consulting firm of Chas T. Main. It was there, as he describes in his bestselling book, Confessions of an Economic Hit Man, that he became one of the titular assassins, or EHMs as they were known in the industry. His job was to create optimistic financial projections for developing countries that would justify huge IMF and World Bank loans. Though the money was supposedly lent to recipient nations for infrastructural development, much of it never left the United States since it went directly to Main or other U.S. construction and engineering companies like Bechtel or Halliburton which were contracted to do the work. More importantly, Perkins writes in Confessions, he would bring in such high loans that it would drive the countries bankrupt and they would be "forever beholden to their creditors, and . . . would present easy targets when they needed favors, including military bases, UN votes, or access to oil and other natural resources."

From 1971-80, Perkins worked in key, mineral-rich nations like Indonesia, Iran, Saudi Arabia, Colombia, and Ecuador. His conscience-free manipulation of statistics and long-term financial projections brought huge contracts to his firm and he was quickly promoted to partner, the youngest in the company's hundred-year history. But his motivation was not solely financial. He was trained to see the work as critical to the fight against Communism; by channeling American dollars into these poor nations, they would not fall into the trappings of Marxism.

But soon cracks began to form in the veneer. In 1977, working in Tehran under the U.S.-supported Shah, he was brought to a clandestine meeting at the edge of the desert. There he met a man who had been tortured by the Iranian security service, SAVAK. The man told Perkins that the Shah was as fascistic and bloodthirsty as Hitler, responsible for the death of thousands and, he explained, "with the full knowledge and support of your government." He warned Perkins that the Shah would be overthrown by a fundamentalist coup and that contractors like Chas T. Main would not be paid. At first Perkins did not believe him. He, and all the Americans working in Iran, were convinced that the shah was loved by his people. But two days after he left Iran -- when he was ushered out of the country by an old friend -- the Shah fell and the Islamist Revolution of Ayatollah Khomeini swept through the country in the fall of 1979. In a fury of anti-Americanism, Muslim students stormed the U.S. Embassy in Tehran taking seventy hostages and beginning the fourteen month standoff that helped usher in the Reagan administration.

Of the experience, Perkins wrote, "Iran illustrated beyond any doubt that the United States was a nation laboring to deny the truth of our role in the world. It seemed incomprehensible that we could have been so misinformed about the Shah and the tide of hatred that had surged against him." But they were. Just as so many Americans, influenced by Thomas Friedman's happy-go-lucky vision of globalization, were shocked by the sense of relief that rippled through much of the developing world after 9/11.

Speaking to Perkins on a quiet Sunday, he explains that this collective naivety about America's legacy in the third world isn't solely the fault of the people.

"It is amazing," he sighs, "I want to use the word 'conspiracy,' but it isn't a conspiracy because it's not illegal. But there is an incredible array of tools and institutions set up in this country to keep us from understanding what's really going on in the world. It starts in our education system, in the first grade or before that, where we are told about the ideals of this country and how we support them everywhere we go. We are taught to perceive all of our actions as altruistic."

And even when the darker truth is allowed to filter into our minds, that no man, no country does anything for entirely charitable reasons, then there is the second layer of the brainwash: that what we do in the world will always be of benefit to the other party. But as Perkins ascended to the higher realms of power, becoming one of the most powerful economic hit men in the world, he realized that his work was only enriching corrupt leaders who then scattered the crumbs of their graft into the public coffers. Worse, the industrial parks and power plants his firm built only further entrenched these men in power by creating the illusion of great political and economic leadership.

"It's a sham, it's a subterfuge," he says solemnly.

Perkins views the recent pledges by the G8 to Make Poverty History as the latest chapter in this legacy of economic entrapment.

"This program to forgive debt in eighteen nations, with another twenty-two on the back burner, that's an amazing tool of economic hit men. I believe totally in debt forgiveness, but this is not about debt forgiveness. Everyone of those countries is being asked to allow American corporations or international corporations to privatize their electric and water systems and many of their other resources. They are asked to accept the trade barriers we have in the United States and the other G8 countries and yet not keep their own trade barriers to protect their markets from our products. So we are using this debt forgiveness ploy as a way to get them more entrenched in the empire. It's a very, very subtle and effective economic hit man tool and yet, most people don't seem to realize that."


Stephen Marshall is a writer and award-winning filmmaker. A founder of Guerrilla News Network www.gnn.tv, he is coauthor of the book True Lies (Plume) with GNN colleague Anthony Lappé. He is the director of the feature film This Revolution, documentary features such as Battleground: 21 Days on the Empire’s Edge, and controversial, politicized music videos for the Beastie Boys, Eminem and 50 Cent. Over the span of his career, he has traveled and worked in more than 80 countries. He lives in New York City

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