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About Street roots. (Portland, OR) 1998-current | View Entire Issue (Feb. 1, 2013)
Street roots Feb. 1, 2013 M ERG ER M A N IA " BY A R T H A Z E L W O O D Evolution of an economist out to defend the masses John Perkins used to sell predatory loans to developing nations. Now he’s urging business leaders to redefine profit BY A LEX BECKER C O N T R IB U T IN G W R IT E R ohn Perkins used to be an insider, so he’s seen it all before. J In the 1970s he worked as a chief mist at a major international consulting firm. He was covertly tasked with persuading leaders of developing nations to accept predatory loans for infrastructure development as a means of securing lucrative contracts for U.S. corporations. He wrote about the experience in “Confessions of an Economic Hit Man” (Plume, $16), a book that spent nearly a year and a half on The New York Times best-seller list. The book has been published in more than 30 languages and has sold over a million copies worldwide. In his latest book, “Hoodwinked: An Economic Hit Man Reveals Why the Global Economy Imploded — and How to Fix It” (Crown Business, $14), Perkins writes that many of the same economic policies that were once pushed on developing nations are now being pushed at home: Maximizing profits through privatization and deregulation is a business mantra. Rising unemployment and growing inequality are omnipresent. Corporate interests influence and threaten to undermine the democratic process. The very rich prey on the very poor. “Hoodwinked” is both a warning and a call to action in which Perkins offers tangible solutions to the social and environmental problems that surround us. Perkins is a founder and board member of nonprofit organization Dream Change, which is dedicated to shifting personal and global consciousness to transform the world, and The Pachamama Alliance, which works to empower indigenous people of the Amazon to preserve their lands and culture while educating people everywhere to create a just and sustainable world. That makes him a busy man who travels the globe. In October, he flew to Reykjavik, Iceland, to receive the Lennon Ono Grant for Peace. He recently made time to speak with me over the phone from his home on Bainbridge Island, Wash. We discussed economic philosophy, the rise of inequality and his ideas for transforming business into a tool that serves the public interest. would not buy into these deals; then they were assassinated by CIA-supported operatives. A.B.: Omar Torrijos said something to you that inspired the title o f your newest book. What did he tell you? A le x B e ck er : What is an economic hitman? J o h n P er k in s: Economic hitmen have created the world’s first truly global empire, not primarily through the military, but through economics. The people who run this empire are the “corporatocracy,” the heads of our largest multinational corporations. Economic hitmen identify countries that have resources coveted by corporations, like oil, and then arrange a huge loan to that country through the World Bank or one of its sister organizations. The money doesn’t actually go to the (people of the) country; instead it goes to corporations (as a subsidy) to build big infrastructure projects: power plants, industrial parks, things that help the few wealthy families in the country but don’t help the majority of the people, who are too poor to buy electricity and can’t get jobs in the industrial parks. (The countries) are left holding a huge debt that they can’t possibly repay. At some point (economic hitmen) say: “Since you have this huge national debt and can’t pay it, sell your resource to our corporation at low rates, without any social regulations or environmental restrictions... or, allow us to build a military base on your soil.” In a few cases where we economic hitmen fail to convince the government to take on this type of onerous project, the jackals step in. These are the people who overthrow governments or assassinate their leaders. I talk in my book about how I failed [to persuade] the democratically elected president of Ecuador, Jaime Roldds, and Omar Torrijos (former president of Panama). They had great integrity, and they J.P.: He basically said, “Don’t allow yourself to be hoodwinked.” In the end, he said people in the United States would suffer from predatory capitalism, which is of course what we’ve discovered. We’ve created a failed global economic system. It’s a failure for everyone except the people at the very top, what we call the one percent. They’re benefitting from this failed system, but everybody else around the world is suffering. A.B.: What is predatory capitalism? J.P.: Predatory capitalism has one single goal, defined by Milton Friedman at the Chicago School of Economics back in the 1970s; and that goal is to maximize profits, regardless of the social or environmental costs. When I went to business school in the late 1960s, we were taught that making profits was a goal; paying a decent rate of return to your investors was a goal, but it was by no means the only goal. We were also taught that you should take good care of your employees, that you should get them pensions, health insurance and retirement funds. A CEO would take a cut in pay before he would lay people off. We were taught that you should take good care of your customers and your suppliers and the community where you worked. You should be a good citizen. You should not only pay taxes, but you should also donate money to schools and recreation centers and other social services. The profit motive was one of a number of motives, but not necessarily the most important one. That all changed in the 1970s when this idea of maximizing profits as the only goal was put forward by the Chicago School of Economics and widely accepted by world leaders. Ronald Reagan was one of the first and most important (to accept this doctrine), but also Margaret Thatcher and others. It has pretty much been accepted ever since by every president of the United States — Democrats and Republicans alike. It has also created a world that has a failed economic system. There are many indications of this failed economic system. Less than a fifth of the world’s population lives in the United States and we consume almost 30 percent of the world’s resources. (At the same time), roughly half the world is living in poverty and starving, or on the verge of starvation. You can only define that as a failure. It’s not a model; China cannot repeat this system, nor can India, Latin America or Africa. They may want to replicate it, but they can’t. The numbers just don’t add up. So we have to understand that what we’ve created is a failed system for everyone except the very, very wealthy. And we must change it. A .B.: You argue that the same strategies that were designed to deceive and plunder the Third World are now being used in the United States. What are some o f these strategies, and how are they used? J.P.: (The strategy) of getting countries to take on loans they can’t repay, and then basically making them your servants, has really reached down to all levels of the United States today. A few years ago, bankers were convincing people who could only afford a $200,000 house to buy a $500,000 house. People believed their bankers. We were all brought up to believe that bankers wouldn’t give you a loan unless they (were) sure you (could) repay it. That used to be true, but that all changed a few See HITMAN, page 9
