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