SANE Views

Vol.7 No.23, 16 August 2007

A Game as Old as Empire.

SANE VIEWS

The Secret World of Economic Hit Men and the Web of Global Corruption.
Edited by Steven Hiatt
Berrett-Koehler Publishers, San Francisco

Reviewer: Margaret Legum

This book will turn you up. And keep you reading. It comprises the personal accounts of people who know from inside – from personal involvement – how global financial relationships work. It will fascinate professionals and lay people alike.

It is a sequel to John Perkins’ Confessions of an Economic Hit Man, which was published two years ago, and which, despite making the best-seller lists, received very little notice in the American press. The explanation given concerned doubts as to its representatively. Could such cynical exploitation of poor people by corporate entities and government agents be widespread, or just a frightful exception?

This new multi-authored book shows that judgement to have been wide off the mark. The stories it tells will keep you goggle-eyed. All the authors had everything to lose, and nothing to gain, by coming clean.

The topics include the way that bankers cover for each other, allowing, for instance, millions of people to be destituted by the eventual bankruptcy of BCCI; exploitation of the rare resources of a country like DRC so that we might have cheap cell phones; the abandonment of poor communities to death via environmental destruction, because the oil companies ensure a revolving door for politicians and senior civil servants; how international funds flow, via the Bretton Woods institutions straight into the pockets of top people; how export credit agencies, using public funds, operate in secret with the sole purpose of selling a countries goods, regardless of whether it will benefit the countries concerned.

John Christensen’s account, for example, of the ‘secret world of offshore banking’ details the tide of money flowing into offshore tax havens – astonishingly mostly with the agreement of governments, who thereby lose billions in revenue. Tax evasion, kickbacks, capital flight and money laundering for the drug trade and other illicit activities carry on under the cover of client secrecy.

But far from welcoming the Tax Justice Network, which Christensen directs, for revealing this activity, governments are reluctant to seek agreement to end it. The fear of corporate revenge is endemic in all governments.

Ellen Augustine’s chapter on the Philippines is a classic example of how destitute economic theory and practice inevitably produce a wealthy small elite and a work force competing in the race to the bottom in terms of wages. What that means is that a powerful multi-national interest has only to get the elite under its control to become the controlling force – regardless of the results of elections.

The end result of that global control by powerful corporations, backed by governments, is that money flows consistently from poor countries to rich ones. It is a Marshall Plan in reverse. The debt crisis for poor countries, starting in the 1980s, was itself created to deal with the global over-supply of petro-dollars. The repayment – made increasingly impossible by structural adjustment policies imposed as condition for the loans – now amounts to something like twenty times the value of foreign aid.

The book ends with an account by Antonia Juhasz of the state of the global justice movement, which aims to take back control of democratically elected governments.