Hippie Shakedown

Last night I trundled down to the Barnes & Noble on Astor Place for a reading by John Perkins, whose book, Confessions Of An Economic Hit Man has inched up the bestseller lists on the back of a sophisticated, if somewhat melodramatic, critique of global finance.

Perkins says he was a consultant at Chas. T. Main, a venerable steam boiler maker, that grew into a utilities consulting firm, and is now defunct. He says that in that role he was an "economic hit man", an unacknowledged arm of US foreign policy, whose job was to convince foreign, usually developing, countries to buy stuff and build projects they didn't need. The aim of this work was to stimulate US industry, as well as secure US control of foreign natural resources.

Funnily enough, I write about this sort of thing for a living, so was rather interested to hear more about the process. Which is, unfortunately, where Mr. Perkin's flair for melodrama loses us. He mentions marching into the offices of various dignitaries in countries such as Panama and swaggering in like a Mafia soldier. "On the one hand, economic hit men hold hundreds of millions in bribes for them and their family, in the other hand they hold a gun. With a bullet with their name on it."

That large-scale lending institutions such as the World Bank, or US banks such as US Ex-Im, frequently do skew their sympathies towards the projects that justify their existence is institutional bias. Likewise for consulting firms - which make most of their fees for advising on these projects. Whether, however, these people do function as the skirmishers that go out in front of the CIA in suborning unhelpful democracies is more doubtful. Certainly much harder to prove.

And before going much further, I should note that I picked up his book on the way out, and the book is where Perkins promises a wealth more detail, but have not yet read it. I'm going on his remarks from last night.

But it would be easy to suggest, based on what I've observed, that this cosy commonality between big business, lenders and consultants could go on quite naturally without being fostered by the CIA. As evidence one could point quite easily to the success that the British, Japanese, Koreans, French and Germans have all had in building white elephants in various parts of the world. One of Mr. Perkins' questioners sort of suggested this, asking what America can do to stop such countries from stepping in and taking over. The answer is that they already have.

Which isn't what Perkins says. He is eager to promote the idea, one that both left and right tend to agree on, that the US is the only actor on the world stage with the resources and clout to achieve such dastardly ends, as well as fix the problem. Which he suggests that we might achieve through positive thinking, fair trade buying, and selective boycotts. Which can actually turn round some US corporations, but works less well on Europeans. Just ask Nestle.

Maybe I'm just cynical, and I'm definitely hopelessly compromised, but the man's very charismatic, and still seems to have a bit of the buzzword-spewing consultant about him still. He says that he had been bribed and scared into suppressing his story until 9-11 gave him the indignation to take up his pen. But it would have been hard until very recently to have ascribed so much credence to his story.

As it stands, the man is on a roll. Penguin picked up the rights to the paperback version (twenty houses had apparently turned down the hardback), and he has a second book, more of a spiritual self-help tome, on sale. So I'll hold fire for a while. I've always thought that 90% of scoops were about reporters building on the work of earlier reporters, and bringing them to a wider audience. To the majority of industry players, such deals, even the corruption, will not be a surprise. Likewise many NGOs, which have been banging on about these lending practices for a while.

But Perkins has shed some light on the subject, albeit a garish neon-hued one. I'll see what the book's like.