PDF Summary:Confessions of an Economic Hit Man, by John Perkins

Most people believe foreign aid helps developing nations build prosperity. In Confessions of an Economic Hit Man, John Perkins offers a different perspective: He argues that Economic Hit Men (EHMs) use debt, fear, and division to control countries and funnel resources to corporations and wealthy elites. Perkins describes how this system operates through organizations like the World Bank and IMF, using loans that countries cannot repay to impose policies that benefit multinational corporations at the expense of local populations.

Beyond explaining how EHMs operate globally—from post-World War II tactics to contemporary strategies in Africa and Southeast Asia—Perkins examines how similar coercive economic practices have been applied domestically in America. He contrasts what he calls the "death economy" (focused on short-term profits and exploitation) with a "life economy" (centered on sustainability and community benefit) and suggests ways individuals can help shift toward more regenerative economic systems through their choices as consumers, employees, and voters.

(continued)...

Let’s next explore the structures of global economic control and the mechanisms of debt and policy conditioning.

Structures of Worldwide Economic Domination

Perkins contends that global economic control is maintained through a corporatocracy that benefits a select group of people at the top. In this system, a few people at the highest levels of a capitalist hierarchy oversee those beneath them in a descending order of subordinates, while a vast number of laborers at the base are essentially slaves.

The corporatocracy has made us believe that we're divinely entitled to elevate a small group to the apex of capitalism and spread it worldwide. However, this imperialist push has caused most wars, environmental destruction, famines, extinction of species, and mass killings. It has also harmed the morality and health of people in these empires, fostering societal unrest and creating a situation in which the most affluent cultures throughout human history are afflicted by unprecedented levels of suicide, substance abuse, and violence.

System Justification

In A Theory of System Justification, John T. Jost explores how people often rationalize and defend existing social, economic, and political systems, even when these systems are unfair or oppressive. This tendency, known as system justification, helps people cope with uncertainty and threat by convincing them that the status quo is fair and legitimate. Jost argues that people are motivated to see their social systems as just and necessary, even when they’re not. This motivation is often reinforced by ideological narratives, including religious and meritocratic belief systems, that explain why those who occupy positions of advantage are presumed to deserve their outcomes.

Mechanisms of Debt & Policy Conditioning

According to Perkins, EHMs use debt and conditioning to exert influence over countries. This strategy relies on four elements: fear, debt, scarcity-driven anxiety, and tactics that split and control. The US's EHM method for achieving control is rooted in debt. The US provides loans from entities like the US Treasury Department and others connected with the Washington Consensus, such as the IMF and World Bank, and then implements neoliberal strategies. These programs involve austerity measures that reduce taxes for the wealthy, wages, and social services, deregulate the government, sell public-sector businesses to investors from wealthier countries, and suppress collective bargaining. They support "open" markets that benefit multinational companies. Neoliberal advocates promote the perception that money will flow from businesses and elites to the broader population, but these policies almost always cause greater inequality.

The Washington Consensus and the Spread of Neoliberalism

In Globalization and Its Discontents, Joseph Stiglitz explains that the 1980s were a turning point in the development of the debt-linked policy model. As Latin American countries faced economic crises, the US and international financial institutions began to formalize their approach to economic reform. Previously, support was provided on an ad hoc basis, but by the end of the decade, the Washington Consensus had emerged as a standardized set of policies. This shift meant that countries seeking financial assistance had to accept a package of reforms that went beyond immediate economic stabilization and extended to broader structural changes. The Washington Consensus was then exported to other regions, including East Asia and the former Soviet Union, as a one-size-fits-all model for economic development.

Perkins also highlights that these neoliberal measures are often imposed on countries that cannot repay their debts.

(Shortform note: Perkins’s claim that neoliberal measures are often imposed on countries that cannot repay their debts resonates with ongoing debates in development economics and international political economy. Scholars have examined how debt overhang—when a country’s debt burden is so large that it deters investment and growth—can lead to a cycle of dependency on international financial institutions.)

Consequences, Contemporary Players, and Paths Toward an Economy of Life

Perkins explains that the destructive economy prioritizes immediate financial gains, leading to ecological and societal harm. This system benefits only a narrow segment of society, irrespective of the societal and ecological costs. It pushes companies to exploit one another, the population, and the natural world, ruining resources necessary for their sustained survival. It prioritizes exploitative and consumer-focused products and services over those that improve living standards. Additionally, the death economy is heavily influenced by financial activities that aren't productive, including the financialization of markets, stock manipulation, and gambling. It doesn't consider factors like environmental damage and worker exploitation when evaluating metrics like profit, GDP, and more.

(Shortform note: In In Defense of Globalization, economist Jagdish Bhagwati argues that globalized capitalism has improved living standards for millions, not just a small elite. He contends that countries integrating into the global economy experience faster growth and reduced poverty. Bhagwati acknowledges that multinational corporations can sometimes exploit workers, but he argues that they often provide better wages and working conditions than local alternatives. He also notes that globalized markets have led to increased access to technology, education, and healthcare in developing countries.)

It allocates substantial resources to militarization and contributes to pollution, ecological ruin, and severe economic and social disparity, which can cause political instability. Perkins also notes that the death economy portrays taxes negatively instead of seeing them as contributions to the military, infrastructure, social services, and more. It is not democratic and fosters the expansion of big companies run by a limited group of people whose wealth significantly impacts politics, leading to monopolies and oligarchies. It's founded on hierarchical, controlling power structures that encourage authoritarian leadership in corporate and political settings. It considers nonproductive roles like venture capitalists and investment bankers to be more valuable than productive positions such as laborers and factory workers, along with life-enriching professions like teachers, musicians, and artists. Countless people remain impoverished because of it.

(Shortform note: Some writers argue that the global economic system Perkins describes has actually led to a massive reduction in poverty. In Progress, Johan Norberg argues that over the last two centuries, and especially in recent decades, globalisation, economic freedom, and the spread of markets have produced the fastest and largest fall in extreme poverty ever recorded, so that whereas around 94 percent of humanity lived in extreme poverty in 1820, today less than a tenth of the world’s population does, despite there being many more people on the planet. He explains that this is because the global economic system has led to improvements in living standards, health, and education, and that it has also led to a reduction in child labor and an increase in life expectancy.)

Furthermore, the death economy treats all of nature, including flora and fauna, as finite assets, failing to safeguard the environment and resulting in widespread extinctions and other lasting damage. Globally, it emerged as the main supporter of its version of "capitalism."

How the Death Economy Drives Biodiversity Loss

In The Economics of Biodiversity, Partha Dasgupta explains how the death economy’s treatment of nature as finite assets leads to widespread extinctions and lasting damage. He argues that when we exclude the stock of natural assets from our measures of wealth, and fail to record the depreciation of ecosystems alongside the depreciation of produced capital, we create a chronic bias in favor of activities that transform habitats into marketed goods: forests into timber and farmland, wetlands into real estate, coastal mangroves into shrimp farms.

In contrast, Perkins argues that the life economy prioritizes sustainable advantages for humanity and nature. It's founded on generating value through recycling, teaching, healthcare, and artistic pursuits. It removes pollution, revives environments, and develops new eco-friendly innovations. It advocates for worker-owned companies within communities and decisions made democratically. The life economy offers financial prospects to people worldwide and reverses climate change and other emergencies.

(Shortform note: Perkins’s “life economy” echoes the “steady-state economy” proposed by ecological economist Herman Daly in the 1970s. Daly argued that the global economy should be kept within ecological limits, rather than being driven by perpetual GDP expansion. This would require a shift in economic thinking, prioritizing long-term sustainability over short-term profits.)

Next, we’ll explore some of the current tactics and global reach of those acting as economic mercenaries and the transition toward a regenerative economy.

Current Tactics & Global Reach

Contemporary Geopolitical Strategies

Perkins argues that China uses economic strategies to expand its influence in Africa and Southeast Asia. China’s EHMs have found success on the African continent by capitalizing on the region's dissatisfaction with Western nations. In Southeast Asia, China's economic hit men have capitalized on US blunders, made North Korea and the "unreliable US" seem frightening, and emphasized China's military defense. They've also encouraged using debt to fund projects aimed at eliminating severe economic hardship and advanced the idea of a unified world via the New Silk Road.

China’s Economic Strategies in Africa

In The Dragon's Gift, Deborah Brautigam challenges Perkins's view of China's economic strategies in Africa. She argues that China's loans to African governments are best understood as negotiated development finance, shaped by the priorities and bargaining power of African leaders and focused on infrastructure and growth, rather than as a hidden campaign of predatory lending designed to create dependency or external political control. This perspective suggests that China's economic engagement in Africa is more complex and less coercive than Perkins's economic hit man framework implies.

Domestic Applications of Financial Coercion

Perkins states that economic coercion is used domestically in America through subsidies and taxation policies. The US government has provided $68 billion in subsidies and targeted tax incentives to companies, with the majority of the funds directed to major corporations. These corporations benefit from public services but fail to contribute enough to support them.

(Shortform note: In The Triumph of Injustice, economists Emmanuel Saez and Gabriel Zucman argue that the US tax system has become increasingly regressive, with the wealthiest individuals and corporations paying lower effective tax rates than middle-class workers. They show that the total tax rate paid by the richest owners of corporations has fallen dramatically since the mid-20th century, while the tax rate for middle-class workers has remained relatively stable.)

Toward Regenerative Economies

Perkins believes individuals can help shift from a destructive economy to one that nurtures. They can utilize online platforms to inspire executives to act and lead the shift toward a life-centered worldwide economy. Through their employment, consumer choices, investments, and votes, they can convey the idea that being successful should be seen differently.

(Shortform note: One way to do this is to write a short statement about what success means to you, emphasizing how you want to contribute to society and the environment rather than how much money you want to make. Then, use this statement in your social media bios, performance reviews, and other public places.)