Book review: Confessions of an Economic Hit Man

A modern masterpiece reveals how the west has enslaved the third world

What we’ve got here is a classic. I had high expectations for this book and it didn’t fail to deliver. To summarize in a sentence: Confessions of an Economic Hit Man tells the story of how western institutions have saddled EM countries with unpayable debt in order to control their governments and extract their resources.

The animating force behind much of what I do is an unceasing desire to understand the world. I want to know what’s really going on and I’ve got to say, John Perkins really advanced that cause. I learned how the United States has toppled democratic regimes on a whim, turned third world countries into debt slaves and generally done a bunch of nefarious shit that you won’t hear about on the evening news. That’s the story of the latter half of the twentieth century. In the twenty-first century the Economic Hit Man’s story centers on the ways in which western governments and corporations have turned these exploitation protocols on their own citizenry.

I would wager that no matter where you fall on the political spectrum, you feel that our institutions have failed us. Perkins paints a picture of how corruption has replaced competence, and how there’s been an appreciable decline in moral behavior.

Although I had to admit that things I’d done had set the stage, I was struck by the contrasts between the ways we EHMs had operated and the ruthlessness of the modern bankers. In my day, we worked hard to justify debts. We crafted fancy econometric models to demonstrate that our projects would generate economic growth in the targeted countries. In addition to convincing the citizens of those countries, we also needed to convince ourselves. These modern EHMs did not find it necessary to justify their actions. They were blatant. They were defiant. They were utterly ruthless. They relished their roles as bandits and mafiosi, bragged about being part of a cartel. It shocked and infuriated me to see that this new breed took pride in exploiting everyone else.

Economic Hit Man is not an uplifting book. In fact it’s liable to make you feel like burning your passport. However little faith you might have in the west*, I promise there’s still room to become more jaded. So on that cheery note I’ll explain how Economic Hit Men (EHM) do their work, then I’ll present my take on John Perkins as a person.

*I like the west! As my name suggests I think capitalism is the best thing going. Nonetheless, yikes… Economic Hit Man does not paint a pretty picture of how the west has conducted business.

Hey, it could be worse

There is a certain line of reasoning which argues that nobody should cheer on the demise of the American led order because whatever replaces it will be worse. While there may be a good deal of truth to that idea - would you prefer to have the Russians or Chinese moderating the planet? - it’s not exactly a source of inspiration. Support the Americans because they’re less vile than whoever would replace them. Hooyah!

I realized that my gloss as chief economist, head of Economics and Regional Planning, was not the simple deception of a rug dealer, not something of which a buyer can beware. It was part of a sinister system aimed not at outfoxing an unsuspecting customer but, rather, at promoting the most subtle and effective form of imperialism the world has ever known. Every one of the people on my staff also held a title—financial analyst, sociologist, economist, lead economist, econometrician, shadow pricing expert, and so forth—and yet none of those titles indicated that every one of them was, in his or her own unsuspecting way, an EHM, that every one of them was serving the interests of global empire.

After reading Confessions of an EHM I find it difficult to summon much support for the actions of my country. I knew that we’d done some really lousy stuff but I didn’t quite realize how morally bankrupt America had become. Toppling democratically elected administrations, assassinating popular presidents, saddling countries with unpayable debts so that they become beholden to us. All just another day at the office for the movers and shakers at EHM headquarters.

John Perkins was an economic hit man for a prestigious consulting firm and with that title came certain responsibilities. Here’s how the con works.

1. John goes to a third world country that has valuable commodities (or perhaps just cheap labor) but little in the way of economic development

2. Under the guise of modernization and economic prosperity, John draws up a development plan that “proves” that with enough power plants, an enhanced electric grid and some new highways, said third world country is going to be much better off

3. The country signs up for billions in dollars of loans to pay for these wonderful new projects

4. The local politicians and officials steal as much of the borrowed money as is humanly possible

5. What’s left of the pilfered funds is funneled to American engineering firms, thus keeping the cash in-house

6. After a few years the country defaults on its debt because the supposed economic miracle never materializes. The miracle never arrives because John Perkins cooked the books. The job of the economic hit man is to create an optimistic but completely bullshit picture of how much growth is possible. When the projects fail to create a full return on investment, the country is forced into default. That’s right where the west wants them; you’re our bitch now, darlen’. The bankruptcy is known before the first bulldozer ever breaks ground, the default is preordained

Understanding the con forces us to read the headlines differently. I admit that whenever I heard about some third world country getting an IMF bailout my first response was always, oh why can’t these countries just get their shit together? I pay my bills on time, why can’t they?

Certainly there will always be elements of incompetence and bribery, however, it’s clear that the western powers deliberately support this revolving door of bailouts. Here we see that John can hardly contain his excitement at discovering some new obscure economic model his firm can use to create bullshit growth projections.

Bruno came up with an idea for an innovative approach to forecasting: an econometric model based on the writings of a turn-of-the-century Russian mathematician. The model involved assigning subjective probabilities to predictions that certain specific sectors of an economy would grow. It seemed an ideal tool to justify the inflated rates of increase we liked to show in order to obtain large loans. - It was exactly what we wanted: a tool that scientifically “proved” we were doing countries a favor by helping them incur debts they would never be able to pay off.

Touring the countries he’s preparing to shove under the bus, John finds that the local officials always give him the falsified data he needs. The officials go along with the con because they know they’ll get paid off, or if they refuse to play the game wickedness will descend upon them and their families.

Without exception, the scheduled appointment was at least several days away, and when the meeting finally occurred, I was handed a folder of prepared materials. The industry owners gave me five and ten year plans, the bankers had charts and graphs, and the government officials provided lists of projects that were in the process of leaving the drawing boards to become engines of economic growth. Everything these captains of commerce and government provided, and all they said during the interviews, indicated that Java was poised for perhaps the biggest boom any economy had ever enjoyed. No one—not a single person—ever questioned this premise or gave me any negative information. As I headed back to Bandung, though, I found myself wondering about all these experiences; something was deeply disturbing. It occurred to me that everything I was doing in Indonesia was more like a game than reality.

My take on John Perkins

This might get a bit esoteric but stick with me, I have a plan…

At various points life presents us with an opportunity to step into a new role, much like a crustacean shedding its old shell. Sometimes the change required is relatively minimal and we adjust without too much trouble. At other points in our journey, moving to a new station in life can be so radical that we violently resist the transformation. While clinging to the known might feel more comfortable in the moment, a refusal to change ultimately holds us back from becoming the person we’re supposed to be.

It’s time to shed the old shell why not?

Five years ago the front tire of my motorcycle blew out while I was driving around a corner. I broke my finger and left some skin on the pavement, but I was more or less fine. I didn’t see my life flash before my eyes or fear for my death. However, that accident was the moment when I accepted that I would never be anything but a writer. I attained a vivid clarity as two nurses scraped the gravel out of my torn flesh before dousing me in iodine while I laughed and laughed because it was the most painful thing I’d ever felt in my life. A turning point at which I dropped all other paths and bet my future on writing. Stepping into a new role.

Alec Baldwin is an example of someone refusing the call. As you probably know, Baldwin shot and killed a cinematographer while filming a movie. It was a horrible accident, and what should have been a life changing moment for Baldwin. The old way is gone, in tragedy there is a call to cast off what didn’t work and begin something new. Maybe Baldwin would never act again. Perhaps he could have helped the victim’s family and started a charity. Started a course to teach actors how to use guns? Expanded that into a firearm safety course for all Americans? I don’t know what is called for, but if Baldwin were open to the process he could have discovered the new path. However, Alec is refusing the call. He appears to believe that if he fights hard and long enough, he can get his old life back. Alec is suing the film’s producers, doing interviews and refusing to acknowledge that the game is over. Alec will live a diminished life stuck in the old paradigm because he’s too scared to take a step into the unknown.

John Perkins was the best in the business. Working as an economic hit man he was well on his way to becoming a millionaire, was leading a team of highly intelligent people and had made a name for himself in the industry. In short, John had achieved a level of success that few will ever match. Despite his achievements the depravity of the job began to weigh heavy. John could have fought the urge to change. He could have rationalized his work, started drinking more, found a shrink to help him cope and generally led a life of unfulfilled potential.

Thankfully he didn’t go down that road. Much to the chagrin of his incredulous boss and colleagues, John quit his job and gave up a life of first class travel, five star hotels and stock options. John accepted life’s call. He founded charities, gave speeches about the inner workings of the global empire and wrote a book that has impacted me and hundreds of thousands of other people. I have tremendous respect for John’s decision to kick fear in its yellow teeth and follow life’s calling; consequences be damned. Hell yeah! That’s what bravery looks like.

The golden age of fraud

My chief strategist in charge of barking at strangers is usually quite upbeat, but even she got bummed out when I gave her this book to read

There is something going on in our society that’s more than meets the eye. Jim Chanos has said we’re living in the golden age fraud. There’s the obvious examples like SBF and Holmes, but I feel like that’s only the visible 10% of the iceberg. What has happened to the west in the last ~50 years? That’s one of the puzzles I’m trying to solve. There isn’t a single answer or one key piece of information that will crack this all open. However, I do feel that one factor could weigh heavy: a lack of growth.

As I documented in my review of The Rise and Fall of American Growth, 1880 to 1970 was a time of unprecedented positive change. In one-hundred years the western citizen went from riding a horse to traveling across the country in a jet airplane. Every generation born in that time period could accurately assume that their life would be better than their parents’. This is no longer the case, and for the first time ever Americans believe that their children will have it worse off than they did. In other words, the future ain’t nothing to look forward to. What kind of deleterious effect might this mindset have on how we behave? If we no longer believe in prosperity and opportunity, does that create the conditions for the flourishing of corruption, theft and moralistic decay?

I’m just throwing ideas out here, I don’t know how valid my thesis is. The dissection of our modern age will be a recurrent theme on this Substack. Hopefully in time we can create a better understanding what’s gone wrong, and what steps we can take to fix it. In the meantime, Confessions of an Economic Hit Man gives the dilligent reader quite a bit to chew on.