Book Review
Confessions of an Economic Hit Man,
By John Perkins,
Review by Jonathan A. Schwabish*
Economists do a lot of things. Some teach. Some work for the government. Some work at think tanks, universities or on Wall Street. And some, or at least so John Perkins claims in his new book Confessions of an Economic Hit Man, work as a pseudo-undercover agents. During the 1970s, Perkins worked for an international consulting firm trying to convince developing countries to accept international loan packages. Such loans were awarded with the understanding that subsequent building and infrastructure contracts would be awarded to firms in the sponsoring nation, namely the United States. Countries such as Ecuador, Indonesia, Saudi Arabia, and Panama all accepted these loans with the promise of rapid economic growth and the influx of foreign investment. These nations were then forced into an unending cycle of debt repayments, plunging them into high levels of unemployment, inequality and financial instability. The reason these nations would sacrifice long-term economic growth, or so Perkins claims, is because he, as an Economic Hit Man (or EHM), produced exaggerated estimates of economic growth and convinced leaders of these nations that accepting such loans would be in their best interest.
All at the same time, Confessions of an Economic Hit Man tries to be a confessional, a thriller, an international economic treatise, and a political expose; unfortunately, it fails at all four. Perkins’ writing is cliché and tiresome, his economic analysis nonexistent, and his political analysis simplistic. It appeals primarily to conspiracy theorists more interested in scathing indictments of such large corporations as Halliburton and Bechtel than in a thorough analysis of the issues facing the developing world. Perkins says he has wanted to tell his story for the past twenty years, but he was either threatened or bribed until now. The story is generally implausible and offers so few details that the author often seems simply paranoid.
Perkins is a Middlebury College dropout and Boston University graduate who traveled to Ecuador on a Peace Corps mission in 1968. Having interviewed with the National Security Administration (NSA) in that same year, and having been “profiled…as an ideal economic hit man,” Perkins was recruited by the consulting company Chas. T. Main, Incorporated (MAIN). (MAIN was bought by the Parsons Corporation in the late-1980s.) The recruiter, MAIN’s vice president Einar Greve was, according to Perkins, a “NSA liaison” and convinced him to join the international consulting firm. (In a July 2005 article in Boston Magazine however, Greve said that he doesn’t “know anyone in the NSA” and anyways “if I do they wouldn’t tell me about it.”)
Perkins’ primary responsibility at MAIN was to produce economic forecasts in developing countries without reliable or consistent statistics, and it was the emergence of the gorgeous “Claudine” (the story’s ‘Bond girl’) who trained Perkins how to be an EHM. She taught him the two main duties of an EHM: First, justify huge international loans to developing countries that would ultimately funnel money and contracts back to MAIN and other U.S. corporations (Bechtel and Halliburton are a focus of the book). Such funds would be used for massive infrastructure projects, such as damns, power plants and roads. Second, and the real key to the EHM’s job, is to make those projects so ambitious and the loans so large as to force these countries to appeal to their lenders for leniency. This, in turn, is where they are forced to help the U.S. with a favor—a vote in the U.N., a military installation, more building contracts, etc. Countries are then caught in a web of debt and repayments that cannot be paid back, but only mitigated through further promises. As Claudine puts it: “A large part of your job is to encourage world leaders to become part of a vast network that promotes U.S. commercial interests. In the end, those leaders become ensnared in a web of debt that ensures their loyalty.” We, as readers, are asked to believe that Perkins becomes an EHM not realizing the true meaning of his work and simply goes from country to country over an entire decade with a general feeling of unease and no real sense of consequence or morality.
It is as an EHM that Perkins is involved in the activities of a number of nations: Ecuador, Panama, Saudi Arabia, Indonesia. One would be hesitant to call Perkins an economist—certainly his writing in Confessions does not lead one to that conclusion. Virtually no statistics are brought to bear (except for those large macro statistics easily attained on the main webpage of the United Nations or World Bank), and no discussion of his methodologies presented. His academic papers, published in such journals as Consulting Engineer and Technical Association of the Pulp and Paper Industry made him, as he seems pleased to report, “famous throughout the industry.” I think this “academic” work brings him closer, at least in his mind, to Thomas Paine (and other Revolutionary War heroes) whom he references throughout the book. Their motivation and dedication inspires him, but again, it feels forced and cliché.
Having worked at MAIN for most of the 1970s, Perkins leaves the agency in 1980, succumbing to guilt about his work. Perkins constantly reminds the reader of these feelings and “the realization that money and power…trapped him.” He clearly became quite well-connected and wealthy from his work at MAIN (and his independent consulting and business ventures afterwards), which he doesn’t fail to mention. Despite his claims of guilt, the writing is void of emotion. He generally portrays himself as the victim of a vast conspiracy, as well as the powerful economist and statesman he believes he is. He is also pleased to tell his reader how smart and successful he is: He describes himself as a “whiz kid”, his “career skyrockets”, he is “instrumental” in successes around the world, “heads major projects around the world”, and had “built a small empire” at his department at MAIN.
During the 1980s and 1990s, Perkins worked as an independent consultant, venture capitalist and supporter of nonprofit organizations. He also wrote several books including, Shapeshifting: Techniques of Global and Personal Transformation and The World Is As You Dream It: Teachings from the Amazon and Andes—certainly not the titles of an economist working on the economic fortunes of the developing world. The events of September 11 and the subsequent invasion of Iraq finally compelled Perkins to write Confessions, clearly using Vice President Cheney’s former connection to Halliburton and the relationship between the Bush and Saud families to help make the book timely and marketable, especially to those looking for underhanded dealings between government and business.
Unfortunately, Perkins’ hope that his confession will lead to a new view of the relationship between the developed and developing worlds is undercut by his pleadings for sympathy and feelings of guilt. Mostly, however, the story is just not believable. While we are certainly not so innocent to believe that countries do not use underhanded methods of diplomacy, Perkins puts himself at the center of so many events that it fails to stir the sympathy, or even believability, that he seeks. If you’re looking for a good beach book next summer, this may do. But don’t look for economic insights—better to read Thomas Paine.
* The views expressed in this review are those of the author and should not be interpreted as those of the Congressional Budget Office.