Economic Hit Men: Hiding in Plain Sight
Those who serve the interests of global empire play many different roles. As John Perkins points out in Confessions of an Economic Hit Man, “Every one of the people on my staff also held a title—financial analyst, sociologist, economist … and yet none of those titles indicated that every one of them was, in his or her own way, an EHM.” A London bank sets up an offshore subsidiary, staffed by men and women with respectable university degrees dressed in the same designer outfits you would expect to see in the City or on Wall Street. Yet their work each day consists of hiding embezzled funds, laundering the profits from drug sales, and helping multinational corporations evade taxes. They are economic hit men. An IMF team arrives in an African capital armed with the power to extend vitally needed loans—at the price of slashing its education budget and opening its economy to a flood of goods dumped by North American and European exporters. They are economic hit men. A consultant sets up shop in Baghdad’s Green Zone, where, protected by the U.S. Army, he writes new laws governing exploitation of Iraq’s oil reserves. He is an economic hit man.
EHM methods range from those that are legal—indeed, some are imposed by governments and other authoritative institutions—through a series of gray areas to those that violate a whole catalogs of laws. The beneficiaries are those so powerful that they are rarely called to account: an elite centered in First World capitals, who, together with their Third World clients, work to arrange the world to their liking. And their world is one where only dollars—and certainly not the planet’s billions of everyday people—are citizens.
Excerpted from the just released book, ‘A Game as Old as Empire’, the follow-up book to John Perkins' Confessions of an Economic Hit Man
A never-ending accumulation of property must be based on a never-ending accumulation of power. — Hannah Arendt
In June 2003, after declaring “Mission accomplished!” in the wake of Operation Iraqi Freedom, George W. Bush told cheering West Point cadets that America has “no territorial ambitions. We don’t seek an empire.” Meanwhile, neoconservative pundits like Niall Ferguson and Charles Krauthammer were encouraging him to do precisely that: to “make the transition from informal to formal empire,” by acknowledging America’s actual role in the world and accepting the reality that “political globalisation is a fancy word for imperialism.”[i] Had the post-postwar world—the new order emerging since the Berlin Wall came down in 1989—come full circle to a new Age of Empire?
The victory of the Allies in 1945, confirming the right of peoples to self-determination in their Atlantic Charter declaration, seemed to signal the end for the world’s colonial empires. Colonial peoples in Asia, Africa, and the Middle East had seen the armies of Britain, France, and the Netherlands defeated in 1940–41, and knew that the former imperial powers now had neither the military nor the financial resources to enforce their rule for long. Moreover, the two strongest powers, the U.S. and the Soviet Union, were formally on the anti-imperialist side. The U.S. had long pursued an “open door” policy advocating formal independence for developing countries. The Soviet Union had denounced imperialism since its birth in 1917, and the communist movement it led had wide appeal in parts of the colonial world as a result.
Nevertheless, the European colonial powers tried to hang on to their possessions as long as they could. Britain did finally “quit India” in 1947, but fought insurgents in Kenya, Cypress, and Malaya before granting those countries independence. France fought losing, divisive wars in Indochina and Algeria to retain its bit of imperial gloire. Still, the tide of history was clearly running in favor of self-determination around the world. The quandary for Western elites was how to manage this process. Would the new Third World leaders attempt to strike out on their own, taking control of their countries’ resources in order to build their own national industries? Or—worse—would they ally with the Soviet bloc or would nationalist campaigns prepare the way for takeovers by communist parties? For Western Europeans, loss of access to colonial resources and markets would be an enormous blow: their weakened economies were only slowly recovering from World War II, and they planned to force the colonies to help pay for reconstruction. For its part, the U.S. feared that colonial independence would weaken its European allies and might well lead to the expansion of Soviet influence in Europe. And U.S. business leaders were concerned about a postwar return to the depression that had marked the 1930s, so they were eager to preserve access to resources and possible new markets.
Events in Iran, Guatemala, and Egypt in the 1950s marked a new turn in Western policies in what was becoming known as the Third World. In 1951, Iranian prime minister Mohammad Mossadegh nationalized the country’s oil industry, which had been run by the Anglo-Iranian Oil Company (since renamed British Petroleum). A democratically elected nationalist, Mossadegh (Time’s Man of the Year for 1951) not surprisingly resented the fact that 92 percent of the profits from Iranian oil went to AIOC, a longstanding arrangement reflecting British domination of Persia early in the century. Winston Churchill had recently returned for a second term as prime minister, and he was determined to restore the UK’s finances and prestige in the face of this challenge from a newly assertive client state. Churchill ordered a blockade of the Persian Gulf to prevent Iran from exporting oil to other purchasers, and he was joined in a boycott of Iranian trade by the United States. More muscular action was not possible, however: the Korean War absorbed the attention of the U.S. and Britain, and Soviet intervention in support of Iran was a threat. A more subtle approach was needed, and the CIA devised Operation Ajax, directed by Kermit Roosevelt. The first step was to create political turmoil to undermine Mossadegh’s political support: a CIA disinformation campaign worked overtime spreading rumors designed to split secular democrats from Islamic nationalists. Finally, the military made its move in August 1953, and Mossadegh was arrested, a new prime minister was appointed, the Shah was restored to power, and the oil industry was denationalized. The US did demand a price for its help, however: British Petroleum now had to share its access to Iranian oilfields with several U.S. companies. U.S. military and foreign policy leaders were cheered by the success of their plan, recovering Iran at a low cost politically, militarily, and financially.
Guatemala was the next test case for this indirect method of policing empire. In May 1952, President Jacobo Arbenz announced a land reform program that would have nationalized unused land belonging to landlords and, especially the holdings of Boston’s United Fruit Company, the country’s largest landowner. His inspiration was Abraham Lincoln’s Homestead Act of 1862, with Arbenz hoping to enable peasants and rural laborers to become independent small farmers. But apparently Lincoln was too radical for the Eisenhower administration, especially with Secretary of State John Foster Dulles and CIA Director Alan Dulles sitting on United Fruit’s Board of Directors. Kermit Roosevelt described Alan Dulles’s reaction to plans for the CIA’s Operation PBSuccess: “He seemed almost alarmingly enthusiastic. His eyes were glistening; he seemed to be purring like a giant cat. Clearly he was not only enjoying what he was hearing, but my instincts told me that he was planning as well.”[ii] Arbenz was overthrown in a coup in June 1954; some 15,000 of his peasant supporters were killed.
Following the success of covert methods of intervention in Iran and Guatemala, the Suez Crisis of 1956 illustrated the dangers of old-style direct intervention. Egyptian President Gamal Abdel Nasser announced nationalization of the Suez Canal in July 1956; the canal was a key national resource in the hands of European investors, and Nasser hoped to use canal profits to pay for his ambitious Aswan High Dam project. His plans energized several enemies: Britain, the former colonial power, since a British company ran the canal; France, since Nasser supported the Algerian rebels that France had been fighting since 1954; and Israel, which hoped to settle accounts with a pan-Arab nationalist who supported the Palestinians. Israel invaded Egypt on October 29, 1956, and Britain and France quickly occupied the canal region despite Egyptian resistance. This resort to direct military intervention posed a problem for the United States. The Eisenhower administration was dealing with Soviet intervention in Hungary to depose reformer Imre Nagy. The U.S. hoped to use the Hungarian crisis to undermine the appeal of communism, which had already suffered a serious blow to its prestige earlier in the year with Khrushchev’s revelation of Stalin’s crimes at the Soviet Twentieth Party Congress. Western intervention in the Suez therefore undercut the U.S. position. The U.S. response this time was creative: Britain was pressured to withdraw, and the intervention collapsed—underlining the weakness of the old colonial powers, speeding decolonization, and enhancing the prestige of the United States in the Third World.
From then on, the U.S. would have to compete with the Soviets for influence, as dozens of newly independent countries flooded the halls of the United Nations.Decolonization vs. Control during the Cold War
For the most part, the newly independent states in Africa and Asia joined Latin America as producers of primary commodities: sugar, coffee, rubber, tin, copper, bananas, cocoa, tea, jute, rice, cotton. Many were plantation crops grown by First World corporations or local landlords, or minerals extracted by First World companies. In either case, these products were sold in markets dominated by European and U.S. companies, usually on exchanges in New York or London, and processed in plants in Europe or North America.
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