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Book Reviews

Hitting them where it hurts

John Perkins: Confessions of an Economic Hit Man. Ebury £7.99.
Greg Palast: The Best Democracy Money Can Buy. Robinson £7.99.

An economic hit man or EHM is a person who works for a bank or international finance house. Their job is to organise loans to developing countries, to help with infrastructure projects such as power plants, roads or airports. But it is a condition of these loans that companies from the country doing the lending have to undertake the building. The money, therefore, simply moves from a bank to an engineering company. But the recipient country of course has to pay it all back, with interest. If it defaults, the lending country can impose controls such as installing military bases or gaining access to raw materials.

John Perkins worked as an EHM for an American company called Chas. T. Main, but he eventually realised the effects his work was having and so he got out. His book recounts his experiences and how he came to see through what he was doing, and so gives an interesting insider's account of how US control over the Third World is established and maintained. Ecuador, for instance, was loaned billions of dollars, but in thirty years its official poverty level grew to 70 percent and its public debt to $16billion. Nearly half of its national budget is devoted just to paying off its debts.

Saudi Arabia was brought under US influence, partly to ensure there would be no repetition of the 1973-4 oil embargo. The Saudi rulers used their petrodollars to buy US government securities, and the interest on these paid US companies to build infrastructure projects, which were then operated by cheap labour imported form other Middle Eastern or Islamic countries. But on Perkins' account, Saddam Hussein refused to play the EHM game, thus bringing the wrath of the US down on him. He further claims that Venezuela was saved from invasion simply because the US could not take on that country as well as Iraq and Afghanistan at the same time.

The back cover of Confessions has a laudatory quote from Greg Palast, whose own book (first published in 2002) is a wide-ranging look at the links between government and big business. He quotes an IMF report from 2000 which reviewed the impact of globalisation and concluded that “in the recent decades, nearly one-fifth of the world population has regressed”.

One of Palast's particular concern is privatisation, which he claims has led to huge profits for some and worsening services for the many. Another is shared with Perkins, that of how the Third World is controlled and kept in a subordinate position by the most powerful capitalist companies. In 2001, for instance, Argentina was subjected to IMF-imposed austerity measures that led to soaring unemployment and a dramatic fall-off in industrial production. In 1998 Brazil was loaned billions of dollars and at the same time forced to sell its power companies: British Gas bought the São Paulo Gas Company for a song. New Labour, with Blair and Mandelson leading the way, were instrumental in helping US and UK companies get their hands on Brazilian companies and raw materials. The fate of Allende in Chile, overthrown by a CIA coup, was sealed because he refused to pay compensation to American companies whose property he had expropriated.

Palast also has a forceful chapter on how George W Bush supposedly stole the 2000 presidential election. He's also good on the emptiness of Blair's Labour, which is driven by ambition rather than any convictions. But it's the picture of how corporations (what Perkins calls the corporatocracy) go about the work of making over the world in their own image that is conveyed memorably by both these volumes.


Darwin's Origin of Species by Janet Browne. Atlantic Books, 2006

In a New York Times poll in November 2004, 55 percent of respondents agreed that God had created human beings in their present form. Clearly the Darwinian revolution has some way to go. Darwin's revolutionary work was first published in November 1859 with the full title: On the Origin of Species by Means of Natural Selection, or the Preservation of Favoured Races in the Struggle for Life. And yet the theory of evolution could have been known under a different name. In the previous year the naturalist Alfred Russel Wallace had sent Darwin an essay in which he set out the theory of evolution by natural selection. Darwin's friends hurriedly arranged for both works to be published at the same time, so the theory should really be known as the Wallace-Darwin theory, if not the Wallace theory of evolution. In any event, Wallace and Darwin became good friends and Wallace collaborated with Darwin in his research and helped in the revised editions of Origin of Species.

Origin of Species went through six editions during Darwin's lifetime and he made many corrections and alterations. In the fifth edition (1869), at Wallace's suggestion, Darwin first introduced the notorious phrase “survival of the fittest.” Wallace had taken this phrase from the writings of Herbert Spencer, a well known atheist and supporter of capitalism in late nineteenth century Britain. Spencer's ideas would became known as “Social Darwinism” and he maintained that society was an organism exactly the same as a biological organism. From his perspective he argued against the building of lighthouses around the British coastline because, so he claimed, shipwrecks were “nature's” (i.e. capitalism's) way of sorting out the fit from the unfit. Darwin had never taken any of Spencer's ideas on social evolution seriously and the phrase “survival of the fittest” is at odds with Darwin's own ideas about natural selection by adaptation.

Browne ends her account of Wallace by saying that he went on to become a “utopian socialist.” In fact he became a supporter of utopian capitalism. He advocated land nationalisation and was an enthusiast for Edward Bellamy's state capitalist vision of the future in his novel Looking Backward (1888). When Darwin died in April 1882 aged seventy-three, Origin of Species had truly become one of the Books That Shook The World, the publisher's title for this series of biographies which includes Marx's Das Kapital (see the review in the October Socialist Standard). There is a slight link between the two books. Marx thought very highly of Origin of Species and sent Darwin a presentation copy of Das Kapital. But he did not, as sometimes claimed, offer to dedicate Das Kapital to Darwin. Rather it was Marx's son-in-law, Edward Aveling, who offered to dedicate one of his books to Darwin. Darwin never read Das Kapital and he rejected Aveling's offer.


Fidel Castro, A biography.
By Volker Skierka. Polity. ISBN 0-7456-4081-8

This is the second English edition brought out on the occasion of Castros 80th birthday in August. Written in German, it originally appeared in 2000 and contains some fascinating material from the East German archives as to what its diplomats in Havana thought of Castro and his policies (not always favourable).

Castro was the leader of a guerrilla war and popular uprising that led to the overthrow, on 1 January 1959, of the corrupt Batista dictatorship. The revolution was originally carried out under the banner of Cuban nationalism, but within a few years proclaimed itself to have been a socialist revolution, with Castro famously declaring in December 1961: "I am a Marxist-Leninist and will remain so until the end of my days".

By which he meant that he was committed to the idea of arriving at a society in which there would be no classes, no state, no money and no wages (which he called "communism" and which we more usually call "socialism") via a period of national state capitalism (which he, but not us, called "socialism"). The theory (which is still held by Castro) is that a revolutionary vanguard committed ultimately to socialism/communism can seize power without a conscious majority desire for socialism and then, afterwards, create such a socialist desire through education.

The argument against this is that it doesn't and can't work. The revolutionary minority can seize power but, without a socialist majority, can't establish socialism and so has no alternative but to oversee the operation and development of capitalism, even if in a statised form. Although they can take some measures to protect workers (and Cuba has by all accounts done this in the fields of education and health care) economically they are forced to pump surplus value out of them so as to accumulate capital and develop industry. Cuba, as a small island with limited resources, can only survive in the surrounding capitalist world through importing a whole range of essential supplies but these have to be paid for by income from exports, an income which must exceed the cost of producing them. Cuba's main export has been sugar but, to compete with other sugar-producing countries, it has to keep its production costs, including labour costs, down.

On top of that, there has been the vicious and relentless US blockade. When the Russian state-capitalist bloc and then the USSR collapsed at the beginning of the nineties, Cuba suffered dire economic consequences. The revolutionary vanguard under Castro has seen its role as to protect the people of Cuba from the worst effects of the operation of world capitalism. But it has not been easy, with the vanguard finding itself at times forced to impose drastic cuts in living standards. The most it can claim is to have done this in a more equal way than in other Third World countries, though at the same time it has sought to protect the people not just from capitalist propaganda but also from any criticism of its own regime.

Will the state capitalist regime in Cuba survive the death of Castro? Skierka thinks that the regime is more solid than the Cuban exiles in Miami (and the CIA) imagine. But already the vanguard has been forced to develop tourism which has taken over from sugar as the main generator of foreign currencies but, with this, have come some of the very things that the revolution wanted to remove such as servility and money-seeking.

Unfortunately, there literally is no hope for the people of the Third World within the world market system that is capitalism. It must go before anything constructive can be achieved.