The book I read was titled Hoodwinked: An Economic Hit Man Reveals Why the Global Economy Imploded – and How to Fix it by John Perkins. Published in the United States by Crown Business, an imprint of Crown Publishing Group, a Division of Random House Inc., New York. Copyright © 2009, 2011 by John Perkins. ISBN: 978-0-307-58994-1. The author, John Perkins, bases much of this book off his own experiences as an Economic Hit Man (EHM) and former chief economist of a major consulting firm. John is the bestselling author of Confessions of an Economic Hit Man which spent seventy weeks on the New York Times bestseller lists. His website is johnperkings.org.
Structure and summary
Hoodwinked is split into two sections: “Part I: The Problem” and “Part II: The Solution”. In part one Perkins goes into detail describing many different events and actions that lead up to the 2007-2009 recession, the worst recession since The Great Depression. In part two Perkins tells his readers what action we need to take to be part of the solution, which he recognizes as “creating a sustainable, just, and peaceful world.” Below is a brief insight into each chapter:
Part I: The Problem
Chapter 1: Not a Fluke
In this chapter the author merely summarizes the facts of what exactly happened in our economy to lead up to the recession. Housing prices skyrocketing until 2005 and dropping in 2006, and the subprime-backed mortgages leading to the credit crunch.
Chapter 2: Titans Clash: Keynes versus Friedman
He discusses how his work as an EHM made him work in Third World countries promoting new infrastructure, based on the belief in profit maximization and privatization. He discussed Keynes’ and Friedman’s opposing views on free markets, and different presidents that supported one or the other. He also introduced this idea of “corporatocracy” and basically how large corporations rule and control everything.
Chapter 3: The First Economic Hit Man
This racy chapter gives the readers insight on Perkin’s new relationship with Claudine, a fellow EHM. It was 1971 and was just hired by MAIN- a major economic consulting firm and Claudine was a consultant there too. She taught him tons about being an EHM and she explains that the government hires consultants like MAIN to do the dirty work so that it isn’t actual government employees doing it. She also gave him some books on the consumption function, capitalism, and freedom and told him “If you understand them, you’ll get to live like James Bond…without, of course, pens that convert into missiles.” He grew better at his job and Perkins was promoted to Chief Economist. Looking back, he realized he was hoodwinked. Getting undeveloped countries into massive debt with new infrastructure made countries worse off instead of alleviating poverty as he thought it would. “My job, as I would discover, was to hoodwink the world.”
Chapter 4: Iran and the Swirling Clouds
Claudine left him while he was away in Indonesia, which was sad. Soon after thought he embarked on a trip to Iran. He discussed everything that was going on while he was there in 1971, trying to convince them to Americanize and overthrow Mossadegh. One day he was contacted by a friend and was told to leave the country ASAP. Only two days later, he saw in the news there were riots. Iran was accusing the US of “crimes against the Iranian people and humanity.” Perkins continues to explain how overthrowing Mossadegh was a bad idea and continued to haunt them into their 2009 elections. He then says how the US doesn’t dominate anymore and our rulers are corporate CEO’s and those rulers of corporatocracy are similar to dictators. Another point he made in this chapter was a quote by a Harvard MBA student: Intimidation is not openly taught in business schools “but we know it’s a standard operating procedure at many companies.” Perkins states “They also share a common goal: to maximize profits regardless of environmental and social costs.”
Chapter 5: Mercenaries
For a while, corporations were forced to consider public interests when making decisions. Then came this idea of the “Golden Era of Robber Barons”. With this corporation could more freely buy and sell their corporations and no longer had an obligation to consider public interest. Eventually the money supply was expanded, interest rates sky rocketed as everyone began defaulting, millions of individuals and businesses went into bankruptcy. Enron kept getting all sorts of new deals and contracts that no one could believe how they did it. Enron hoodwinked everyone: they hid stuff off the books and kept things off shore. They went bankrupt in 2001 and were convicted for securities fraud. They had many far into debt by this.
Chapter 6: Enslaved by Debt
This chapter gives readers an insight on the shackles of debt; it even gives examples of people being forced to sell their daughters to pay their debts. He goes on to explain the corporations know that burden that individuals face by being bankrupt and “shunned as financial pariahs”.
Chapter 7: Modern Robber Barons
This chapter talks about multi-millionaire CEOs that pay for all their fancy things at the expense of the public, their customers, and even their employees. These robber barons started with the energy sector being deregulated and that’s when Perkins quit being an EHM.
Chapter 8: The Coming Deregulation
In this chapter, Perkins quits his job as an EHM in 1978. This was when PURPA was put into place to deregulate the energy sector. He became the CEO of an electric company and they were supposed to create environmentally friendly power plants. PURPA was the cause of 84 power companies in the US, and all but his and 6 other companies folded. Ashland Oil Company shackled his company into debt and they were forced to sell. Many law followed PURPA leading back to regulation.
Chapter 9: The Regulation Scam
This chapter discusses how some industries with lots of capital require heavy regulation to avoid disaster from too much competition. It goes onto describe how so many airlines went under because of deregulation and how deregulation caused a large decline in the number of media companies. Deregulation lead to fake accounting.
Chapter 10: Fake Accounting
This chapter describes how consumers were hoodwinked by companies leaving things off the books such as the externalities and future costs to society. This lead to a movement called Full Cost Accounting to include these externalities.
Chapter 11: Double Standards
This chapter describes countries that were enslaved by debt and were then required to accept structural adjustment programs (SAPs), which required them to reduce government spending and sell assets. These SAPs actually hurt economies more than it helped and exacerbated the economic crises.
Chapter 12: Militarized, Paper Economy
Perkins describes the events that caused the US economy to move from the manufacturing economy to a paper economy. Meaning, most US profits were earned in the financial sector just by people pushing paper around. It also discusses how much is spent by the military. For example, “The United States accounts for about 50 percent of the world’s total military spending.”
Part II: The Solution
Chapter 13: Changing Capitalism’s Goal
Perkin’s describes how we need to abolish corporations. He continues on to say that we don’t need to get rid of capitalism, just change it. “The new form will set more compassionate goals. Instead of maximizing profits regardless of the environmental and social costs, profits will be made within the context of creating a sustainable, just, and peaceful world.” Currently, our form of capitalism is where the only goal is profit maximization and where our accounting principles omit costs of externalities. Our solution to the current form of capitalism is to recreate it and fix it, not just get rid of it. China did just that.
Chapter 14: China: A Lesson in Transformation
Chapter 14 discusses how China’s economy is booming and what Perkins saw on a recent trip there in 2009 and how futuristic it looked. He was surprised by how many trees there are in medians on the highway and such. He spoke with an MBA student there at a conference who said they are aware of the effect the pollution their creating has on the environment but they are working to fix and trees are part of the plan. Later Perkins explains how our current form of government does not seem like democracy because everything has been given to corporatocracy. He seems confident that we can rid ourselves of corporatocracy and move back to a democracy.
Chapter 15: David Versus Goliath
Perkins main point in this chapter is that change begins with us not the government. He provides the example slavery ended not because of Lincoln just being in the White house, but because we the people elected a president because we wanted to end slavery. Perkins goes on to say that changes happen because of us and because we want them to happen.
Chapter 16: The Burden of Melting Glaciers
Perkins point in this chapter begins by him describing a story where he was in another country where the glaciers were melting and the rivers were drying up and they don’t have much water because of global warming. He continues by stating that everyone on the planet is facing the problem of global warming. If we care for our future children and grandchildren, we need regulations that prevent our glaciers from melting because “We have but one planet. It is our home – all of it.”
Chapter 17: Terror and Other “isms”
This chapter discusses how bad free trade regulations have been for us. Terrorism isn’t an “ism”. It just diverts attention from the root of the problems. He basically defines corporations as a big problem, an “ism”. We are hoodwinked by the word terrorism. He ends the chapter by saying we need to implement strategies that will provide a safeguard for our future.
Chapter 18: The Dalai Lama: Prayer AND Action!
In this chapter Perkins describes a meeting he had with Dalai Lama and how we can’t just pray for something and expect it to happen. We need to act to make it happen.
Chapter 19: Accepting Consumer Responsibility
This chapter talks about the problem of companies who use sweat shops, abuse employees, put them in bad work environments, and don’t even pay a living wage overseas to maximize profits because it is illegal to do that stuff in the US. A prime example of this is Nike. There are other smaller shoe companies that have unionized factories and pay decent wages with benefits. To find this data he used reponsibleshopper.com and greenpages.org. To stop these problems in companies like Nike, we need to stop buying things from Nike and patronize companies that embrace social responsibility.
Chapter 20: Embracing a New Economy
This chapter talks about companies, like Chiquita and Dole, who move operations overseas to use dangerous pesticides and chemicals that are illegal in the US. Because of this, countries like Nicaragua who have tons of fresh water, have no fresh water anymore because it is so polluted. He continues on to explain there are new leaders in Latin America that are helping create a new economy and showing the world that we can institute a goal of making profits while “creating a sustainable, just, and peaceful world.”
Chapter 21: Green Markets
Chapter 21 introduces to us the concept of green markets. In cities throughout the US there are these Green Festivals which feature many eco-friendly businesses and sell their product to promote sustainable business practices.
Chapter 22: Good Stewardship, New Icons
This chapter explains how our icons have changed from people like Jack Welch, former CEO of General Electric, J.P. Morgan, and John D. Rockefeller to companies like Whole Foods and Publix who practice sustainable business and are profitable. He also discusses how MBA students used have the goal of obtaining power and making lots of money. That goal has since changed to creating a better world. Now, we want to honor people who meet that goal and make them our icons.
Chapter 23: New Rules for Business and Government
Chapter 23 starts by explaining that laws that were intended to protect the public proved to be destructive. Perkins states “This nation deserves a whole new set of rules and regulations that ensure a sustainable, just, and peaceful world…. The cancer that lurks beneath this economic crisis will not be cured by merely addressing the problems of the banking, insurance, and auto industries.” We can’t be hoodwinked by minor indicators of “good news”. The old norm of consuming more than we produce while others starve needs to end. He later states “We have the power to make it happen. The only requirement: that we focus on our individual passions and talents.”
Chapter 24: Honoring Your Passion
Perkins’ point in this chapter is all in the title: we must follow our passion as it drives everything. We must use our talents and our passion to create a sustainable. John Perkins ends by saying “…we can each walk a separate path. The important thing is that we all head toward the same destination – a sustainable, just, and peaceful world.”
I think Perkins main ideas expressed are quite clear. We must defeat corporatocracy, redefine capitalism, and renew our economy to create a sustainable, just, and peaceful world that our children and grandchildren can thrive in. He clearly shows this is the goal in all of the chapters, but more towards the end of this book.
Relation to class material
I suppose much of what he says could indirectly relate to some of what we have discussed this semester. However, it doesn’t seem that any of it is directly relatable. We did briefly discuss sustainability in unit 2, but we merely defined. He discusses more of how to implement it. We also briefly defined capitalism, but did not go into much detail about it. Perkins discusses it more in-depth in his book.
New to me
There were SO many great things that John Perkins discussed and he hit on so many different topics! None of the topics were entirely new to me, but his view on corporatocracy was. He is so passionate about how corporatocracy is taking over and this idea was definitely a new one for me, and I found it very interesting!
Has this book changed my thinking?
I already had an idea of sustainability and the importance of it after attending a conference on this last fall and discussing it in other classes. However, I think after reading I may act differently when making certain purchases to help move toward sustainability. I am even thinking about attending the Green Festival in Chicago over the next year or two. It seems like such a great experience and I’m so glad I learned about it in his book.
Overall, I am so glad that I chose this book and don’t think I could have made a better choice. I originally thought it would be much different, like basic ideas of the housing crisis and credit crunch and then making different decisions. But it was so much more than that! I’ve recently had an interest in learning about sustainability and didn’t even know that this book had any sustainability information when I got it. So I’m so glad I read this fantastic book by John Perkins.
Source: Hoodwinked: An Economic Hit Man Reveals Why the Global Economy Imploded – And How To Fix It, By John Perkins.