Confessions of an Economic Hit Man

McNamara became a strong advocate of a Keynesian approach to government, using mathematical models and statistical approaches to determine troop levels, allocation of funds, and other strategies in Vietnam. His advocacy of “aggressive leadership” became a hallmark not only of government managers but also of corporate executives. It formed the basis of a new philosophical approach to teaching management at the nation’s top business schools, and it ultimately led to a new breed of CEOs who would spearhead the rush to global empire.¹

As we sat around the table discussing world events, we were especially fascinated by McNamara’s role as president of the World Bank, a job he accepted soon after leaving his post as secretary of defense. Most of my friends focused on the fact that he symbolized what was popularly known as the military-industrial complex. He had held the top position in a major corporation, in a government cabinet, and now at the most powerful bank in the world. Such an apparent breach in the separation of powers horrified many of them; I may have been the only one among us who was not in the least surprised.

I see now that Robert McNamara’s greatest and most sinister contribution to history was to jockey the World Bank into becoming an agent of global empire on a scale never before witnessed. He also set a precedent. His ability to bridge the gaps between the primary components of the corporatocracy would be fine-tuned by his successors. For instance, George Shultz was secretary of the treasury and chairman of the Council on Economic Policy under Nixon, served as Bechtel president, and then became secretary of state under Reagan. Caspar Weinberger was a Bechtel vice president and general council, and later the secretary of defense under Reagan. Richard Helms was Johnson’s CIA director and then became ambassador to Iran under Nixon. Richard Cheney served as secretary of defense under George H. W. Bush, as Halliburton president, and as U.S. vice president to George W. Bush. Even a president of the United States, George H. W. Bush, began as founder of Zapata Petroleum Corp, served as U.S. ambassador to the U.N. under presidents Nixon and Ford, and was Ford’s CIA director.

Looking back, I am struck by the innocence of those days. In many respects, we were still caught up in the old approaches to empire building. Kermit Roosevelt had shown us a better way when he overthrew an Iranian democrat and replaced him with a despotic king. We EHMs were accomplishing many of our objectives in places like Indonesia and Ecuador, and yet Vietnam was a stunning example of how easily we could slip back into old patterns.

It would take the leading member of OPEC, Saudi Arabia, to change that.

CHAPTER 15. The Saudi Arabian Money-laundering Affair

In 1974, a diplomat from Saudi Arabia showed me photos of Riyadh, the capital of his country. Included in these photos was a herd of goats rummaging among piles of refuse outside a government building. When I asked the diplomat about them, his response shocked me. He told me that they were the city’s main garbage disposal system.

“No self-respecting Saudi would ever collect trash,” he said. “We leave it to the beasts.”

Goats! In the capital of the world’s greatest oil kingdom. It seemed unbelievable.

At the time, I was one of a group of consultants just beginning to try to piece together a solution to the oil crisis. Those goats led me to an understanding of how that solution might evolve, especially given the country’s pattern of development over the previous three centuries.

Saudi Arabia’s history is full of violence and religious fanaticism. In the eighteenth century, Mohammed ibn Saud, a local warlord, joined forces with fundamentalists from the ultraconservative Wahhabi sect. It was a powerful union, and during the next two hundred years the Saud family and their Wahhabi allies conquered most of the Arabian Peninsula, including Islam’s holiest sites, Mecca and Medina.

Saudi society reflected the puritanical idealism of its founders, and a strict interpretation of Koranic beliefs was enforced. Religious police ensured adherence to the mandate to pray five times a day. Women were required to cover themselves from head to toe. Punishment for criminals was severe; public executions and stonings were common. During my first visit to Riyadh, I was amazed when my driver told me I could leave my camera, briefcase, and even my wallet in plain sight inside our car, parked near the open market, without locking it.

“No one,” he said, “would think of stealing here. Thieves have their hands cut off.”

Later that day, he asked me if I would like to visit so-called Chop Chop Square and watch a beheading. Wahhabism’s adherence to what we would consider extreme puritanism made the streets safe from thieves—and demanded the harshest form of corporal punishment for those who violated the laws. I declined the invitation.