Confessions of an Economic Hit Man

Charlie was a connoisseur of war; he devoted most of his free time to reading history books and historical novels about great military leaders and battles. He was the epitome of the pro–Vietnam War armchair soldier. As usual, this night he was wearing khaki slacks and a short-sleeved khaki shirt with military-style epaulettes.

After welcoming us, he lit up a cigar. “To the good life,” he sighed, raising a glass of champagne.

We joined him. “To the good life.” Our glasses clinked.

Cigar smoke swirling around him, Charlie glanced about the room. “We will be well pampered here,” he said, nodding his head appreciatively. “The Indonesians will take very good care of us. As will the U.S. Embassy people. But let’s not forget that we have a mission to accomplish.” He looked down at a handful of note cards. “Yes, we’re here to develop a master plan for the electrification of Java—the most populated land in the world. But that’s just the tip of the iceberg.”

His expression turned serious; he reminded me of George C. Scott playing General Patton, one of Charlie’s heroes. “We are here to accomplish nothing short of saving this country from the clutches of communism. As you know, Indonesia has a long and tragic history. Now, at a time when it is poised to launch itself into the twentieth century, it is tested once again. Our responsibility is to make sure that Indonesia doesn’t follow in the footsteps of its northern neighbors, Vietnam, Cambodia, and Laos. An integrated electrical system is a key element. That, more than any other single factor (with the possible exception of oil), will assure that capitalism and democracy rule.

“Speaking of oil,” he said. He took another puff on his cigar and flipped past a couple of the note cards. “We all know how dependent our own country is on oil. Indonesia can be a powerful ally to us in that regard. So, as you develop this master plan, please do everything you can to make sure that the oil industry and all the others that serve it—ports, pipelines, construction companies—get whatever they are likely to need in the way of electricity for the entire duration of this twenty-five-year plan.”

He raised his eyes from his note cards and looked directly at me. “Better to err on the high side than to underestimate. You don’t want the blood of Indonesian children—or our own—on your hands. You don’t want them to live under the hammer and sickle or the Red flag of China!”

As I lay in my bed that night, high above the city, secure in the luxury of a first-class suite, an image of Claudine came to me. Her discourses on foreign debt haunted me. I tried to comfort myself by recalling lessons learned in my macroeconomics courses at business school. After all, I told myself, I am here to help Indonesia rise out of a medieval economy and take its place in the modern industrial world. But I knew that in the morning I would look out my window, across the opulence of the hotel’s gardens and swimming pools, and see the hovels that fanned out for miles beyond. I would know that babies were dying out there for lack of food and potable water, and that infants and adults alike were suffering from horrible diseases and living in terrible conditions.

Tossing and turning in my bed, I found it impossible to deny that Charlie and everyone else on our team were here for selfish reasons. We were promoting U.S. foreign policy and corporate interests. We were driven by greed rather than by any desire to make life better for the vast majority of Indonesians. A word came to mind: corporatocracy. I was not sure whether I had heard it before or had just invented it, but it seemed to describe perfectly the new elite who had made up their minds to attempt to rule the planet.

This was a close-knit fraternity of a few men with shared goals, and the fraternity’s members moved easily and often between corporate boards and government positions. It struck me that the current president of the World Bank, Robert McNamara, was a perfect example. He had moved from a position as president of Ford Motor Company, to secretary of defense under presidents Kennedy and Johnson, and now occupied the top post at the world’s most powerful financial institution.

I also realized that my college professors had not understood the true nature of macroeconomics: that in many cases helping an economy grow only makes those few people who sit atop the pyramid even richer, while it does nothing for those at the bottom except to push them even lower. Indeed, promoting capitalism often results in a system that resembles medieval feudal societies. If any of my professors knew this, they had not admitted it—probably because big corporations, and the men who run them, fund colleges. Exposing the truth would undoubtedly cost those professors their jobs—just as such revelations could cost me mine.