I suggested in my recent series on the Iraq war (Geopolitics label) that readers pick up a copy of The Ugly American for its insights into why American foreign policy creates anger in so many countries.
Lyn wrote, “A more recent (and excellent) rendering of the Ugly American theme is a book by John Perkins titled Confessions of an Economic Hit Man — highly suggested reading.”
On my way back to Japan, I bought a copy in Los Angeles and read it cover to cover over the Pacific. The subject deserves more than just my general thumbs up or down on the book.
Today, I present excerpts that capture what I consider to be the theme of the book. I will not comment on them yet. Instead, I welcome reader feedback and will compose a discussion article from that feedback along with my own thoughts.
Here are the excerpts I chose from the book:
We are an elite group of men and women who utilize international financial organizations to foment conditions that make other nations subservient to the corporatocracy running our biggest corporations, our government, and our banks. Like our counterparts in the Mafia, EHMs [economic hit men] provide favors. These take the form of loans to develop infrastructure — electric generating plants, highways, ports, airports, or industrial parks. A condition of such loans is that engineering and construction companies from our own country must build all these projects. In essence, most of the money never leaves the United States; it is simply transferred from banking offices in Washington to engineering offices in New York, Houston, or San Francisco.
Despite the fact that the money is returned almost immediately to corporations that are members of the corporatocracy (the creditor), the recipient country is required to pay it all back, principal plus interest. If an EHM is completely successful, the loans are so large that the debtor is forced to default on its payments after a few years. When this happens, then like the Mafia we demand our pound of flesh. This often includes one or more of the following: control over United Nations votes, the installation of military bases, or access to precious resources such as oil or the Panama Canal. Of course, the debtor still owes us the money — and another country is added to our global empire.
My job was to forecast the effects of investing billions of dollars in a country. Specifically, I would produce studies that projected economic growth twenty to twenty-five years into the future and that evaluated the impacts of a variety of projects. For example, if a decision was made to lend a country $1 billion to persuade its leaders not to align with the Soviet Union, I would compare the benefits of investing that money in power plants with the benefits of investing in a new national railroad network or a telecommunications system. Or I might be told that the country was being offered the opportunity to receive a modern electric utility system, and it would be up to me to demonstrate that such a system would result in sufficient economic growth to justify the loan. The critical factor, in every case, was gross national product. The project that resulted in the highest average annual growth of GNP won.The unspoken aspect of every one of these projects was that they were intended to create large profits for the contractors, and to make a handful of wealthy and influential families in the receiving countries very happy, while assuring the long-term financial dependence and therefore the political loyalty of governments around the world. The larger the loan, the better. The fact that the debt burden placed on a country would deprive its poorest citizens of health, education, and other social services for decades to come was not taken into consideration.
[We] openly discussed the deceptive nature of GNP. For instance, the growth of GNP may result even when it profits only one person, such as an individual who owns a utility company, and even if the majority of the population is burdened with debt. The rich get richer and the poor grow poorer. Yet, from a statistical standpoint, this is recorded as economic progress.
…throughout most of history, empires were built largely through military force or the threat of it. But with the end of World War II, the emergence of the Soviet Union, and the specter of nuclear holocaust, the military solution became just too risky.The decisive moment occurred in 1951, when Iran rebelled against a British oil company that was exploiting Iranian natural resources and its people. The company was the forerunner of British Petroleum, today’s BP. In response, the highly popular, democratically elected Iranian prime minister (and TIME magazine’s Man of the Year in 1951), Mohammad Mossadegh, nationalized all Iranian petroleum assets. An outraged England sought the help of her World War II ally, the United States. However, both countries feared that military retaliation would provoke the Soviet Union into taking action on behalf of Iran.
Instead of sending in the Marines, therefore, Washington dispatched CIA agent Kermit Roosevelt (Theodore’s grandson). He performed brilliantly, winning people over through payoffs and threats. He then enlisted them to organize a series of street riots and violent demonstrations, which created the impression that Mossadegh was both unpopular and inept. In the end, Mossadegh went down, and he spent the rest of his life under house arrest. The pro-American Mohammad Reza Shah became the unchallenged dictator. Kermit Roosevelt had set the stage for a new profession, the one whose ranks I was joining.
“Vietnam is just a holding action,” one of the men interjected, “like Holland was for the Nazis. A stepping stone.”“The real target,” the woman continued, “is the Muslim world.”
I could not let this go unanswered. “Surely,” I protested, “you can’t believe that the United States is anti-Islamic.”
“Oh no?” she asked. “Since when? You need to read one of your own historians — a Brit named Toynbee. Back in the fifties he predicted that the real war in the next century would not be between Communists and capitalists, but between Christians and Muslims.”
“Arnold Toynbee said that?” I was stunned.
“Yes. Read Civilization on Trial and The World and the West.”
“But why should there be such animosity between Muslims and Christians?” I asked.
Looks were exchanged around the table. They appeared to find it hard to believe that I could ask such a foolish question.
“Because,” she said slowly, as though addressing someone slow-witted or hard of hearing, “the West — especially its leader, the U.S. — is determined to take control of all the world, to become the greatest empire in history. It has already gotten very close to succeeding. The Soviet Union currently stands in its way, but the Soviets will not endure. Toynbee could see that. They have no religion, no faith, no substance behind their ideology. History demonstrates that faith — soul, a belief in higher powers — is essential. We Muslims have it. We have it more than anyone else in the world, even more than the Christians. So we wait. We grow strong.”
“We will take our time,” one of the men chimed in, “and then like a snake we will strike.”
“What a horrible though
t!” I could barely contain myself. “What can we do to change this?”The English major looked me directly in the eyes. “Stop being so greedy,” she said, “and so selfish. Realize that there is more to the world than your big houses and fancy stores. People are starving and you worry about oil for your cars. Babies are dying of thirst and you search the fashion magazines for the latest styles. Nations like ours are drowning in poverty, but your people don’t even hear our cries for help. You shut your ears to the voices of those who try to tell you these things. You label them radicals or Communists. 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.”
These men and women think of themselves as upright. They return to their homes with photographs of quaint sites and ancient ruins, to show to their children. They attend seminars where they pat each other on the back and exchange tidbits of advice about dealing with the eccentricities of customs in far-off lands. Their bosses hire lawyers who assure them that what they are doing is perfectly legal. They have a cadre of psychotherapists and other human resource experts at their disposal to convince them that they are helping those desperate people.The old-fashioned slave trader told himself that he was dealing with a species that was not entirely human, and that he was offering them the opportunity to become Christianized. He also understood that slaves were fundamental to the survival of his own society, that they were the foundation of his economy. The modern slave trader assures herself (or himself) that the desperate people are better off earning one dollar a day than no dollars at all, and that they are receiving the opportunity to become integrated into the larger world community. She also understands that these desperate people are fundamental to the survival of her company, that they are the foundation for her own lifestyle. She never stops to think about the larger implications of what she, her lifestyle, and the economic system behind them are doing to the world — or of how they may ultimately impact her children’s future.
I eventually found myself once again looking at that smoldering hole [Ground Zero, where the World Trade Center once stood in New York], the twisted metal, that great scar in the earth. I leaned against a building that had escaped the destruction and stared into the pit. I tried to imagine the people rushing out of the collapsing tower and the firefighters dashing in to help them.Instead, I saw Osama bin Laden accepting money, and weapons worth millions of dollars, from a man employed by a consulting company under contract to the United States government.
I wondered what the people who walked those streets today thought about all this — not simply about the destruction of the towers, but also about the ruined pomegranate farms and the twenty-four thousand who starve every single day. I wondered if they thought about such things at all, if they could tear themselves away from their jobs and gas-guzzling cars and their interest payments long enough to consider their own contribution to the world they were passing on to their children.
I forced my attention back to Ground Zero. At the moment, one thing was certain: my country was thinking about revenge, and it was focusing on countries like Afghanistan. But I was thinking about all the other places in the world where people hate our companies, our military, our policies, and our march toward global empire.
I wondered, What about Panama, Ecuador, Indonesia, Iran, Guatemala, most of Africa?
In the final analysis, the global empire depends to a large extent on the fact that the dollar acts as the standard world currency, and that the United States Mint has the right to print those dollars. Thus, we make loans to countries like Ecuador with the full knowledge that they will never repay them; in fact, we do not want them to honor their debts, since the nonpayment is what gives us our leverage, our pound of flesh. Under normal conditions, we would run the risk of eventually decimating our own funds; after all, no creditor can afford too many defaulted loans. However, ours are not normal circumstances. The United States prints currency that is not backed by gold. Indeed, it is not backed by anything other than a general worldwide confidence in our economy and our ability to marshal the forces and resources of the empire we have created to support us.The ability to print currency gives us immense power. It means, among other things, that we can continue to make loans that will never be repaid — and that we ourselves can accumulate huge debts. By the beginning of 2003, the United States’ national debt exceeded a staggering $6 trillion and was projected to reach $7 trillion before the end of the year — roughly $24,000 for each U.S. citizen. Much of this debt is owed to Asian countries, particularly to Japan and China, who purchase U.S. Treasury securities (essentially, IOUs) with funds accumulated through sales of consumer goods — including electronics, computers, automobiles, appliances, and clothing goods — to the United States and the worldwide market.
As long as the world accepts the dollar as its standard currency, this excessive debt does not pose a serious obstacle to the corporatocracy. However, if another currency should come along to replace the dollar, and if some of the United States’ creditors (Japan or China, for example) should decide to call in their debts, the situation would change drastically. The United States would suddenly find itself in a most precarious situation.
In fact, today the existence of such a currency is no longer hypothetical; the euro entered the international financial scene on January 1, 2002 and is growing in prestige and power with every passing month. The euro offers an unusual opportunity for OPEC, if it chooses to retaliate for the Iraq invasion, or if for any other reason it decides to flex its muscles against the United States. A decision by OPEC to substitute the euro for the dollar as its standard currency would shake the empire to its very foundations. If that were to happen, and if one or two major creditors were to demand that we repay our debts in euros, the impact would be enormous.
Please send me your thoughts, knowing that I’ll get a lot and will not reply individually to each. I’ll read everything I get and assemble a representative sampling along with my take in a future article.
Again, for background, this discussion sprang from the Iraq war articles under my Geopolitics label.
