The New Confessions of an Economic Hit Man

John Perkins feels haunted every day by what he has done as an economic hit man, influencing third-world leaders with payoffs, blackmail, and threats. Recently the American EHM system has worsened, spreading like a cancer around the world, invading America itself and becoming “the dominant system of economics, government, and society today” (1).

Americans are told they are threatened by insurgents and terrorists, and that they must spend large sums and go into debt to protect the country. This money feeds the coffers of the American “corporatocracy—vast networks of corporations, banks, colluding governments, and the rich and powerful people tied to them” (2), including the World Bank and related organizations.

The key is indebtedness: “debt enslaves us and it enslaves those countries,” resulting in a “‘death economy’—one based on wars or the threat of war, debt, and the rape of the earth’s resources” (2). It amounts to a distorted form of capitalism that “ultimately is self-destructive” (2).

Though this process requires hundreds of ongoing conspiracies around the world, the real culprit is a philosophy that believes “people who excel at stoking the fires of economic growth should be exalted and rewarded, while those born at the fringes are available for exploitation” (4). To protect America’s comfortable way of life, all means, up to and including war, are justified.

The New Confessions of an Economic Hit Man is updated throughout, and an entirely new fifth section “explains how the EHM game is played today” (4) in a manner worse than ever. The fifth part also suggests ways to overthrow the EHM system. The book concludes with a lengthy section of documentation that offers “further proof of the issues covered in this book” (4).

As American revolutionary writer Tom Paine puts it, “If there must be trouble, let it be in my day, that my child may have peace” (4).

In 1968, fresh out of business school, John Perkins and his new bride Ann travel to Ecuador to work for the Peace Corps. They discover a country deeply impoverished. At their posh hotel they meet a Texaco seismologist who is helping to develop “a vast sea of oil beneath the jungle” (8) and use giant loans from the World Bank to pay for it, along with funding from USAID, the Pentagon, and the CIA.

Perkins and Ann soon learn that Texaco controls most of Ecuador, including the army, and that it can dictate laws, receive protection against “the Indians who don’t want oil rigs on their lands” (9), and overthrow the government if it resists.

Perkins works in the Andes with brickmakers to improve the efficiency of their process. He learns that the “ricos,” who own most of the country’s wealth, buy the bricks for a pittance and “sold them at roughly ten times that amount” (10). Workers who complain can be arrested as insurgents or, worse, end up dead. The brickmakers ask Perkins to beg the ricos for forgiveness and protection.

Perkins realizes the rico system goes all the way back to the Conquistadores and that “the people themselves were collaborators in this conspiracy”; he tells them that “[t]hey needed to stand up to the ricos” (10). The workers form a co-op, rent a truck and warehouse space, and contract with Norwegian Lutheran missionaries who buy the bricks at five times the going rate—which still costs the Lutherans only half what the ricos charge—and build a church with the bricks.

Within a few years Perkins becomes a prosperous EHM, traveling in style to exotic locales, at first believing he is helping indigenous peoples escape the clutches of communism with huge development loans. “Then the nightmares began” (11), as he recalls countless scenes of unrelenting poverty, disfigurement, and death among the people he is supposed to be helping.

He dreams about talking to a third-world leader, promising him wealth if he signs off on loans that will pay American companies to build infrastructure in his country, and casually threatening the leader with death if he refuses. Perkins awakens in a sweat, realizing that the dream is, in fact, what he does in waking life.

It’s true that the poor countries where Perkins sets up the loans grow economically, but nearly all that growth goes into the pockets of a few connected families. “Everyone else suffered” (13). The loans prove onerous: “Money that had been budgeted for health care, education, and other social services was diverted to pay interest on the loans” (13).

Usually when a country has trouble paying, the International Monetary Fund (IMF) will demand resources at cut rates, establishment of American military bases, control over the country’s United Nations vote, and control of basic services like water and power, which it sells “to the corporatocracy. Big business was the big winner” (13), and those businesses are always American.

Perkins is born in 1945 to a New England family. He grows up living at the private Tilton School in New Hampshire, where both his parents are teachers, but Perkins attends public school down the hill. His parents convince him that his townie school chums are not quite worthy. At 14 Perkins receives a full scholarship to Tilton, whereupon he abandons his old friends.

Lonely and frustrated, Perkins focuses on his school activities, being “an honors student, captain of two varsity teams, [and] editor of the school newspaper” (16). Perkins wins an athletic scholarship to Brown, and he wants to go there, but his parents convince him to attend their alma mater, Middlebury. Perkins agrees and attends on an academic scholarship, but he is miserable there. He meets Ann, with whom he enjoys a deep but platonic relationship. He also befriends Farhad, son of an important Iranian general, former professional soccer player, and charismatic friend who encourages Perkins’s rebellious side. Perkins’s grades collapse, and he loses his scholarship.

Perkins drops out of Middlebury during his sophomore year, and Farhad is expelled for defending Perkins with a knife during a bar fight. They move together to Boston; Perkins gets a job at a newspaper.

Perkins takes an interest in his family’s military history, as he “was raised on tales about my colonial ancestors—who include Thomas Paine and Ethan Allen” (19). At first he wants to join Army Special Forces but soon he objects strenuously to the Vietnam War. To avoid the draft and Vietnam, Perkins enrolls in business school at Boston University. Ann visits more and more often, and soon they marry.

Ann’s father is a high-level engineer for the Navy; his best friend, Uncle Frank, works at the National Security Agency (NSA), where he secures an interview for Perkins. In the interview Perkins is forthright about his opposition to the war, his frustrations with his parents, and his desire for the good life. He thinks he flunks the interview; however, “[a]nger at my parents, an obsession with women, and my ambition to live the good life gave them a hook” (19), and his friendship with Farhad proves a plus, since Farhad’s father works with the American intelligence community.

Perkins is interested in the lives of Native North and South Americans. With Uncle Frank’s blessing—he says there’s oil to drill in the Amazon, and “[w]e’ll need good agents there—people who understand the natives” (20)—Perkins and Ann apply for a posting with the Peace Corps. Their first assignment is Ecuador, whose rivers form the headwaters of the Amazon basin. Perkins and Ann receive training and go to Ecuador, where they work first with Amazonian natives and then with the brickmakers. While there, Perkins finds sympathizes with the indigenous people.

In Ecuador Perkins meets Einar Greve, a vice president at Chas. T. Main (MAIN), a consulting firm evaluating Ecuador for infrastructure loans. Greve suggests Perkins might like to work for MAIN; he asks Perkins “to send him reports assessing Ecuador’s economic prospects” (22). During the next year, Perkins sends 12 long reports to Greve.

After the Peace Corps, Greve invites Perkins to interview at MAIN, telling him he needs economists who can work in-country to evaluate local situations. In January 1971 Perkins is offered the position; Perkins accepts. Little does he know that his job “was in fact closer to James Bond’s than I ever could have guessed” (23).

MAIN has a strict code of confidentiality; “[a]s a consequence, hardly anyone outside MAIN had ever heard of us” (24), although some of MAIN’s competitors, including Halliburton and Bechtel, are familiar to the public. Though MAIN employs many engineers, it doesn’t build; it consults.

Perkins’s first job is as “part of an eleven-man team sent to create a master energy plan for the island of Java”; Greve predicts that Indonesia has an economy “that will soar like a bird!” (24). While he waits for the posting, Perkins is encouraged to study up on his second assignment, Kuwait. Greve gets him access to libraries at Harvard and MIT. Perkins takes courses in econometrics; he learns that statistics can be manipulated.

One day at the Boston Public Library, a woman hands him a book that contains information he has been searching for. She tells Perkins her name is Claudine Martin, and she works for MAIN; “her assignment was to mold me into an economic hit man” (26). She warns Perkins not to discuss his work with Ann, saying, “We’re a rare breed, in a dirty business” (26). They meet regularly at her apartment. Claudine knows how to bedazzle and manipulate Perkins; he falls under her spell.

Perkins’s task is “to justify huge international loans that would funnel money back to MAIN and other US companies” (27). His second task is to bankrupt the client countries so that they become utterly dependent on their benefactors. He does this first by evaluating the effect of various infrastructure projects on a country’s gross national product (GNP); “[t]he project that resulted in the highest average annual growth of GNP won” (27). These projects “were intended to create large profits for the contractors” (28), even if they caused the countries involved to stagnate.

GNP figures can be manipulated: If one person gets rich in a poor country, that country will appear to make economic progress “even if the majority of the population is burdened with debt. The rich get richer and the poor grow poorer” (28).

One purpose of all this activity is to prevent countries from becoming communist and, instead, to make them dependent on American interests. Claudine declares Indonesia is “the next domino after Vietnam […] We must win the Indonesians over. If they join the Communist bloc, well…” (28). Perkins must convince the banks to loan the money; his economic forecasts must be bulletproof.

Perkins worries that this work is unethical; he wonders aloud whether he might end up “working from the inside” to expose it. Claudine replies, “Don’t be ridiculous. Once you’re in, you can never get out. You must decide for yourself, before you get in any deeper” (29). Perkins understands the threat behind her words, but he moves forward with the training. As Claudine explains, this work is important because it helps “to satisfy our political, economic, or military needs” (30). The old way of military conquest is too risky in the nuclear age.

In 1951 Iranian Prime Minister Mohammad Mossadegh nationalizes British petroleum assets there. Instead of sending in the Marines, which might provoke a war with the Soviet Union, the United States sends in CIA agent Kermit Roosevelt, who bribes and threatens Iranians into staging street riots; Mossadegh is overthrown and replaced by an American puppet, Mohammad Reza Shah Pahlavi.

Sending CIA agents to destabilize countries is politically risky, so the United States begins to “identify prospective EHMs, who could then be hired by international corporations […] their dirty work, if exposed, would be chalked up to corporate greed rather than to government policy” (31). The age of the economic hit man is born.

“So you see,” Claudine concludes, “we are just the next generation in a proud tradition that began back when you were in first grade” (31).

During the colonial era, Indonesia is “a treasure worth far more than the Americas” (32). Many countries vie for its control; the Dutch win out. During World War II, the Japanese capture and brutalize Java; after Japan surrenders, Indonesians fight for and win their independence from the Netherlands under their new leader, Sukarno.

Controlling the vast nation proves difficult, and Sukarno becomes dictator, allies himself with communist countries, and tries “to spread communism throughout Southeast Asia” (33). Sukarno escapes an assassination attempt and launches military reprisals that kill as many as a half-million Indonesians. In 1968 General Suharto takes over and continues the dictatorship.

The United States, fearing that Southeast Asia will fall to communism, tries to rope Suharto in, much like the shah of Iran, with a huge electrification project managed by MAIN. As well, a huge pool of oil may lie beneath Indonesian soil.

Perkins is inspired by the possibilities that lie ahead for him. Unfortunately, he and Ann begin to quarrel; she complains that Perkins is “not the man she’d married or with whom she had shared those years in the Peace Corps” (34). As well, “on some level, Ann knew that there was another woman” (34) in Perkins’s life. They take separate apartments.

Claudine warns Perkins, “Talking about us would make life dangerous for you” (34). Perkins realizes that, since he and Claudine have always met at her place, there is no outside evidence of the affair. He reflects, “A part of me also appreciated her honesty; she had not deceived me the way my parents had about Tilton and Middlebury” (34).

Perkins expects to find an exotic and lovely country when he travels to Jakarta, Indonesia. The city contains great beauty but also intense poverty:

“Lepers holding out bloodied stumps instead of hands. Young girls offering their bodies for a few coins. Once-splendid Dutch canals turned into cesspools. Cardboard hovels where entire families lived along the trash-lined banks of black rivers. Blaring horns and choking fumes” (36).

Perkins and his team stay at the ritzy Hotel InterContinental. Charlie Illingworth, team manager, tells them, “We are here to accomplish nothing short of saving this country from the clutches of communism” (37). He reminds them that their planned electrical system “is a key element” (37). Because America depends on oil, the team must ensure that the oil industry gets “whatever they are likely to need in the way of electricity” (37).

Perkins wavers between feelings of inspiration and guilt. He tells himself, “I am here to help Indonesia rise out of a medieval economy” (37), yet he can see all the city’s unaddressed poverty outside his hotel window. He knows that America is here pursuing selfish ends. The word “corporatocracy” comes to mind; “it seemed to describe perfectly the new elite who had made up their minds to attempt to rule the planet” (38).

To Perkins, this kind of capitalism resembles feudalism. He consoles himself with the thought that he is “helping to implement a development model that was sanctioned by the best minds at the world’s top think tanks” (39). In the back of his mind, however, Perkins knows that “someday I would expose the truth” (39).

After a week getting organized in Jakarta, the team moves to the city of Bandung in a mountainous region. They live in a large and fully staffed guest house with lovely views, and work at a suite of offices at the government’s electric company. Perkins serves under executive Howard Parker, who encourages him to work quickly and produce optimistic economic forecasts. Elderly, bitter, and stubborn, Parker nonetheless proves a useful advisor to Perkins. He warns Perkins, “They’ll try to convince you that this economy is going to skyrocket” (42) even when it won’t.

At first Perkins protests, and Parker accuses him of selling out. Parker insists he won’t buckle under, and his electricity demand forecast will be honest. To assuage his conscience, Perkins tells himself that Parker’s figures will overrule his own; he can make an overly optimistic forecast and still “have no effect on the master plan” (46). However, Parker becomes ill and must return to the United States. He will finish his analysis there, far from Indonesia.