On Debunking

I have been reading Confessions of an Economic Hit Man by John Perkins. The book has lived up to the hype and its bestseller status. I quote from the back cover of the book.

“Economic hit men,” John Perkins writes, “are highly paid professionals who cheat countries around the globe out of trillions of dollars. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as Empire but one that has taken on terrifying dimensions during this time of globalization.”

John Perkins should know—as an economic hit man for an international consulting firm, he convinced developing countries to accept enormous loans and to funnel that money to U.S. corporations. The American government and international aid agencies then requested their “pound of flesh,” including access to natural resources, military cooperation, and political support.

Confessions of an Economic Hit Man is the story of one man’s experiences inside the intrigue, greed, corruption, and little-known government and corporate activities that America has been involved in since World War II, and which have dire consequences for the future of democracy and the world.

The book is one of those stories that presents the difference between myth and reality when it comes to topics economical such as international development. First, there is a theory. Second, there is how the deeds actually get done. Theory and action often do not coincide.

Debunking myths and illustrating the difference between myth and reality have their claims to scientific methodology along with other scientific methodological tools. Regardless of where one’s economic and political sentiments lie, it never hurts to be clear how things actually get done.

We are never free from economic prejudices, which often coincide with our economic self interest. This seems a mundane and indisputable fact, although many try to forget it. Reading the economic news with an orthodox economics textbook by one’s side proves instructive. Trying to explain events on the basis of the orthodoxy is often no easy chore.

One reason why this is the case is because government is persuaded to intervene on the side of one privileged and favored economic interest. That is not to say that this is a bad thing. Despite what some people say there are such things as public goods that government should supply. The burden of paying for these public goods does not fall upon everyone equally.

The economic actor who bellies up to the public trough will often explain his need in glowing ideological terms that also happen to coincide with the public good. That is why the request should always be measured against the ideology to see if they match. For instance, Conservatives have been highly successful in convincing the media, policy makers, and the public that they are merely proposing free market ideas when they are doing no such thing. The truth is that they have been using government to achieve favored economic outcomes for certain groups at the public expense, and in many cases an increase in the size of government.

Keynes may have been right when he claimed the hard headed business man who eschews economics may, all the same, be influenced by the ideas some long dead economist. Adam Smith and Karl Marx were the two most influential economists in history. They arguably are the least read also. That leaves one wondering exactly what economic dogma rolls around in the mind of the busy business person.

The motives of business people vacillate between the egoistic and the altruistic. John Perkins points that out in his case. One can always rationalize one’s actions no matter what damage they cause others. That is another reason why it is important to not only listen to the ideology coming from mouths, but also to look at the actions of the bodies espousing the ideology.

Fortunately, sorting through myth and reality is a scientific endeavor that one does not have to be a specialist to do. In fact, in a democracy the citizen is expected to reason herself to conclusions about what is myth and what is reality. Not to do so is to give up the status of sovereign ruler.

Professional economists have lamented the woeful state of economic literacy in the United States. Maybe, the goal of economic literacy should be to arm the citizen with the basic tools to debunk economic myths, and not merely at the expense of keeping certain privileged myths unquestioned and in place. We all have our opinions on the way the world ought to be. Explaining why things often do not turn out that way is a valuable activity too.

Three cheers for debunking.