John Perkins, author of “Hoodwinked” and “Confessions of an Economic Hitman” says he had a hand in creating the current economic crisis. As an “Economic Hitman” his job was to promote corporate interests at the expense of anyone, anywhere; an unjust, untenable, and unsustainable practice he referred to as “Predatory Capitalism”. Speaking at the 2009 Net Impact Conference, he discussed this side of multi-national corporate behavior with a surprisingly positive outlook. According to Perkins we still have an opportunity to learn from the mistakes of predatory capitalism and turn the economy around.
Predatory Capitalism, according to Perkins, is a mutation of capitalism that comes about when the single focus of a corporation is to make profits – ie, an extreme adoption of Milton Friedman. In the predatory world, when profit making conflicts with the public interest, profit making wins no matter the cost or consequences to others. As an Economic Hitman, Perkin’s job was to find Third World countries with desirable resources. He would arrange large and seemingly attractive loans loans for infrastructure development contracted out to US corporations. These loans were much larger than needed and ultimately the country would be unable to pay back the debt. When the country could not make the required payments, the financing group would extort payment in the form of economic resources.
And so it went, from country to country, corporations seizing the precious resources that belonged to the many and using them to benefit a few, until now. Thanks to the internet, and more organized global communication, leaders are learning to say, “No”. In Latin America, ten countries have recently voted in leaders who want to stop the exploitation of resources by foreign corporations. These leaders believe that their county’s resources should be used to bring their own people out of poverty rather than make a foreign corporation rich.
Perkins believes that the new stance in Latin America will change the corporate paradigm, from making profits regardless of the impact to making profits while considering the impact on people and the planet. “Corporations need to make profits in a responsible manner in order to create an amazing world.” Five percent of the world population lives in the United States and consumes twenty five percent of the world’s resources. Latin America is the second wealthiest area in terms of resources and its people are poor. But Latin America is recognizing its strength. “It is to the benefit of the US to become a partner with, not the enemy of, these nations.”
While a big issue, there are positive solutions that benefit all. Perkins suggested a creative solution that would both bolster the US economy and make the world a better place – taking a portion of the military budget and spend it on addressing water issues and food shortages. Contract with the same corporations, the GE’s and the Booz-Allen‘s, but use their talents and skill sets to solve world issues. And by solving the issues of basic human needs, you remove the root cause of terrorism, thus reducing the need for a large military. It’s a win-win situation. Perkins wholeheartedly believes that we cannot have “homeland security unless we recognize that the world is our homeland. We won’t have safety for our children until we have safety for all children.”
While it was hard to hear about the devastating effects some corporations have had in the quest for short-term profits, it was encouraging to hear about potential solutions and about positive steps being taken by corporations today. Companies such as Novo-Nordisk are addressing world health issues, Dannon is working on improving nutrition in Bangladesh, and Nike improving working conditions in contract factories. The current economic situation is not good, but there is hope on the horizon if we learn from the mistakes of the past.