Friday, May 14, 2021

Review of "New Confessions of an Economic Hitman" by John Perkins

I would have liked "New Confessions of an Economic Hitman" more, if it was written from the view point of a capitalist rather than from a view point of a communist or socialist. 

The summary of the book is, the big corporations, banks and US government are destroying many countries. IMF and world bank give loans to poor countries in the name of developing that country. They over estimate the growth and give more loans for projects that are not sustainable. The big corporations (mainly from US) get the projects to develop the infrastructure in that country. Essentially the entire loan money is going back to US. After that, the country is burdened with both principle and interest and eternally indebted to US for everything.

If any government does not accept, then US government brings CIA or others, and tries to topple the government or assassinates the head of the state and installs a puppet of CIA. The author gave many examples for this.

The part that I was not happy with the author is, he projected as if even giving loans and taking projects etc., is bad. He has shifted all the blame from the countries which are in poverty to the banks which gave loans. 

I feel only threatening is bad. If others are done in acceptance of that government, then it is not bad. In fact, that is very good and we must encourage that more.

If I were a head of a country, and if IMF/World bank is coming to me and offering me a loan and if I have option of taking a loan or not, then it is good. After taking loan, what do I do with the loan is my responsibility. If I don't use that money for the country and use it for my personal gain or waste money by investing in the projects that do not give any returns, then I am bad, not IMF or world bank.

Similarly for the projects that were given to US corporations. If my country is a poor country, most probably, my country might not be having enough infrastructure. I may have to import the technology. If US is ready to sell that technology for a fair price, what is the problem in buying from US corporations? 

If the price is more from US companies and the bank dictates me to buy from US companies, then may be I should not take loan in the first place. Or I should do the cost benefit analysis, like, if I take loan elsewhere, what is the additional burden on the interest and what is the savings due to less expenditure on the project and decide.

If I am threatened to take loan, then it is bad. If I am bribed to take loan, then it is not wrong from the point of view of US or banks. Because, if bribing is the only option for a bank or corporation to increase their business, they may do that. If I take bribe, people of my country should realize that, I am a corrupt person and should bring down me and my government.

IMF, World bank, US Government or US Corporations are not responsible for ending poverty in my country. The head of the state is responsible for the country (unless he/she is threatened). In the book, the author wrote as if the banks are responsible for ending the poverty in many countries.

In one instance, the author says, Boeing threatened Washington state to give huge tax breaks. If the state does not give, it would move the production facilities to another state. This is not threatening. Every company has right to decide where to operate. They decide based on many factors, which includes tax exemptions. It is unfair to comment on their decisions. 

In few places, the author said different companies stole money from US tax payers. Whereas, the correct terminology is in many of those contexts is, the companies found ways to avoid/reduce the taxes. Legally avoiding/reducing tax is not at all same as stealing tax money from tax payers.

He talked negatively about tax haven countries. Every sovereign country has right to decide their tax laws. It is unfair to comment on that. Each country can decide taxes on the business that is happening on their country's land. If the government thinks the companies are showing zero profit, they can impose more tax on their sales etc. and get the revenue by some other means. 

At one place, he used the organizations that collected the debt from poor countries as vultures. We take money from someone and when they ask us to repay the money, we say that they are vultures. This is very very unfair. 

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