In my rereading of my old books I got as far as John Perkins’ The Secret History of the American Empire (2007). Like the Confessions, also this book has some interesting content, mainly the sad stories from different countries. But in the last part Perkins preaches like an all-American evangelist television minister. He wants us all to turn to better people, go spreading the good message (i.e., disturbing other people and large corporations with appeals to their good heart towards developing country problems), naturally he asks for donations to NGOs (non-governmental organizations) running several of them. This is not so bad. I guess we could be better, consuming less and recycling waste, but it does not change much.
One particularly interesting part in his praise of what NGOs so far have accomplished is entitled Changing Wall Street Through Financial Leverage. Only that is not what is explained. This section tells how in 1996 Texaco employers were making racist comments of African-Americans and Rev. Jesse Jackson called a friend in New York who had a million shares of Texaco. This friend threatened Texaco with court, so the company was made to pay 176 million to settle this issue. This story is given as an example how the Wall Street is your friend and can tell the corporations to behave better.
What’s wrong with that? Nothing, only I thought the real problem was the Wall Street. Or that it was the Chigago boys of late Milton Friedman. Naome Klein in The Shock Therapy presents the theory of disaster capitalism, i.e., create a catastrophe or wait until one comes, then use the catastrophe to change the economy to globalism. That means, free capital movements, remove import taxes, cut public spending, all this that has caused the economic catastrophe in all countries that had to take loans from the World Bank (the loans must be accepted by IMF, which makes these demands) after the globalists got into power in 1980s. Well, certainly it is the Wall Street Banks who want globalization. They need the freedom to move capital.
I see it like this. Perkins worked in a construction company MAINS (building electrical installations) when the old Keynesian policy was still used by IMF and the World Bank. There was GATT lowering import taxes, but not removing them completely. Capital movements were not freed. Many developed countries took these loans and tried to build own industry and commerce behind import tax protections. Perkins tried to get projects to his company and he made inflated growth predictions, and had to bribe some people in the country for that purpose. Other companies, like oil companies, got rights to natural resources in the country. So, this was one form of old type imperialism.
It was bad but not so bad. If international (mostly American) companies take over natural resources of a country, they can exploit the locals by paying low wages, but they cannot do this forever. It is because finally either the people make trade unions and start to demand better wages, or they elect a president who nationalizes the resources or negotiates a better deal.
In Perkins’ time the USA could send assassins (jackals, in his book) to kill such presidents, but finally the companies cannot keep the wages very low. It is because they cannot move the natural resources elsewhere. If import taxes give enough protection to native enterprises, they will finally become competitive. It is quite fine if many of these native enterprises are run by foreigners, or are associated with foreign companies (if they cannot home their profits), as they bring up-to-date knowhow. This is how industrialization happened e.g. in Finland. There came Karl Fazer from Switzerland in the 19th century and started making chocolate in Finland, now it is a Finnish chocolate firm and doing fine in international competition without import taxes. But in the beginning you needed the protection. These companies could not leave Finland when workers asked for better wages because capital movements were not freed, so wages could not stay miserably low too long. And the companies had to invest in the country as they could not invest abroad and you must invest every now and then. This system does not lead to outdated technology and non-competitive companies provided that you can get the knowhow from the world (i.e., no COCOM, embargo, or similar) and it is known that finally the protection tax gradually lowers in some not too distant future.
Now the system is different. It was the idea of the Chicago boys to conquer the world claiming that they only fight inflation or stagnation or decreasing profitability (profits go down in competition, it is not an error, it is what should happen in capitalism). The IMF demands that there is no import tax, so foreign (better) products come to the market. They are a bit cheaper, so you may say that the customer earns but as the customer has no work because there are fewer work places as competition kills local firms, he cannot buy these products. But there comes investments, like international companies that make shoes or clothes. They pay very poor wages, but if workers demand better wages, the companies simply move elsewhere. This is because capital movements are freed.
I do not really understand why the World Bank should give any loans in Friedman’s system. These loans are Keynesian. Only less than half of the loans succeed in the planned way. It is clear that too many loans fail and the country gets into huge loans. If these loans are not Keynesian, they should not be at all. Loans should only come from private banks. But I think there should be import tax, tied capital and loans should come from the government of these countries, like it used to be.
What Perkins asks us to do is to demand that these companies must pay the locals better. What happens is that the company moves elsewhere and these workers lose their jobs. As import taxes are removed and public spending is low, there are only few jobs available. So it happens that female workers have to go to prostitution and male workers can e.g. join some terrorist group, as there is nothing else they can do when they lost jobs. This is what the NGOs of Perkins achieve. What he should try to do is to stop the catastrophic IMF policy of globalization, which it what the Wall Street Banks want. But no, Perkins thinks the banks can help by threatening corporations with lawsuits of racist talk among employers and getting millions for it.
Perkins has other great ideas in this book. He wants that corporations turn democratic. I think that can only be national democracy (i.e., nationalization) or workplace democracy (i.e., a cooperative). Well, neither have worked all that well in the past.
I would still add one point. Perkins thinks that Israel was America’s Foot Soldier. I think this misses something. Israel is not exactly America’s soldier. It is more like America’s soldiers often defend Israel. There is this interesting issue of Iran-Israel trade which is usually forgotten when the Iran-Contra scandal is described (though many conspiracy writers do explain it, it is not unknown). It is a complicated scenario with Israel. So, the USA supported Saddam Hussein of Iraq and Iraq attacked Iran. Iran was the bad guy for the Americans. Saddam was fine. Iran had American weapons, like airplanes, bought by the Shah before he was ousted. That means that Iran needed spare parts to these weapons, but the USA did not sell them. So, who did? Naturally Israel. In exchange Israel got oil from Iran. Iran could not export oil elsewhere as the USA considered Iran leaders as the axis of evil. But I in some way thought that Israel and the USA were supposed to be on the same side. Apparently not quite. Israel did not have so many spare parts to the airplanes, so NATO supplies were emptied of these spare parts, they were taken to Israel and it sold them highly overpriced to Iran, and got oil that very few oil countries wanted to sell to Israel. It was something like this, if I correctly remember.
But Perkins thinks that such a small country like Israel naturally was just a slave of the mighty USA. He presents a strange theory that Israel’s 1967 attack was a response to Nixon’s 1971 decision to leave the gold basis and to an elaborate plan Americans had made to trap Saudi Arabia to back the dollar by oil. But I find a problem in the timing between 1967 and 1971. Perkins also thinks the Arabs made 9/11. Surely he also thinks Oswald shot Kennedy. With all this impressive thinking Perkins has done in his two books, it should be rather obvious that I did not much like the second book. It is either deception or naive. I will next reread Naomi Klein’s Shock Doctrine, but her books, like those of Perkins, are best sellers. Should it not be so that if the USA sends jackals to assassinate dissidents and the evil corpotocracy controls the media it should follow that no real conspiracy book telling the truth gets published. I mean, that would be logical.