The story of a modern day slave-master

Confessions of an Economic Hit Man - John Perkins

It is a little ironic that I am sitting in McDonalds, the flagship of corporate America, writing a commentary on a book about the evils of corporate America. Maybe that is why they wouldn't let me onto their free wi-fi. Anyway, I have got internet (thankyou Telstra) simply by turning my mobile phone (or is it a smart phone) into a modem, and simply connect my laptop to it (or turn it into a wi-fi hotspot, though I don't like doing that in a public place). Anyway, I am just killing some time in the city before I jump on the Airport bus to fly off to Sydney (only for a night though).

Anyway, this book is about debt, but not able the type of debt that we find ourselves shackled to, though the two types of debt are basically the same. Okay, not all debt is equal, and many companies (in fact all of them) tend to go into debt to further their operations. However, that form of debt is what I call investment debt, or the more technical term, gearing. However, I do at times wonder how it is that companies really make a profit when there is a huge amount of debt on their books. Is that profit really profit or is it only illusionary? I guess that was the question that came out of the Global Financial Crisis of 2008 where companies that were booking massive profits on top of crippling debt only to have the whole house of cards come crashing down.

However, this book is not about corporate debt either, it is about sovereign debt, and not any form of sovereign debt, but debt that is thrust upon third world countries. The nature of the economic hitman that Perkins is confessing about is that he goes into these countries and offers loans to these countries for the purpose of development, however due to the nature of the debt (and the governments as well) the money actually does not go to development, and what ends up happening is that the country is suddenly shackled under immense debt that it cannot pay back and any money that the country does make goes to servicing the debt. As such the bond holders then move in on the country and begin to carve up whatever resources that they can get their hands on, including, but not limited to, water.

This happened in Bolivia, where the bond holders pretty much took ownership of all of the country's water, including that which fell out of the sky. As such, nobody could actually collect water unless they paid the bond holders for the privilege of collecting the water. Mind you it backfired when the population of Bolivia took to the streets and forced the bond holders to back down. However, this is not the case in every country that is out there, and in fact the people who end up servicing the debt is generally not the government, but the population through prohibitive taxes.

In a way it is the means of prevent developing countries from actually developing – keep them in debt and by keeping them in debt they cannot ever be in a position to challenge the powers that be. This is nothing new because in times past some governments, such as the British and the Americans, were known as creditor nations and they would use their clout as creditor nations to keep other, debtor, nations under their thumbs. However things have changed and the countries that used to be creditor nations no longer are. In fact there is probably only one creditor nation out there now, and that is China (and maybe Russia, as well as parts of the Middle East).

The world has changed a lot since the era of the British Empire because back then if corporations existed they tended to be an extension of the government. Look, in places like China and Russia they still are (and you could also argue that the Russian Mafia is an extension of the Russian Government), however outside these states the main creditors are no longer governments but private corporations. In fact, you will probably discover that much of the American debt is actually in the hands of the corporations. No longer are corporations the extension of the government, but the government (at least in America) has become an extension of the corporations (not that there is anything new about that, since Butler Smedley openly admitted that many of the wars that he fought in were primarily for American Corporate interests).