How America's Predatory Capitalism imporverished the LDCs

Nairobi-Mombasa Expressway. Just a prototype

The passage of the  US Marshal Plan in 1947 paved the way for the spread of American "Predatory Capitalism." 

The plan helped in the resuscitation of war-ravaged Europe and also opened the European market for American goods. Larger markets demanded more resources, particularly crude oil, which was available elsewhere.  At this point, there was a congruency of interests between profits and power.

Both the MegaCorps and the government were wary of the Soviet Union's control of the resources. Therefore, the desire to control resources became intertwined with the desire to dominate the world and control the spread of communism. Coming so soon after World War II, America had no stomach for conflagrations. But still, the industrial complex needed raw materials to produce goods and sell to the world. A subtle way had to be found. The search for a subtle and cheap way of controlling the world and its resources gave birth to an unholy alliance between the American Megacorps, the big banks, and the government.  

“Consultancies” whose job was to lead in the exercise were born. These were privately-owned companies linked to the US National Security Agency, NSA. They in turn created Economic Hitmen whose job was craft control mechanisms. Their weapon of choice was to plunge the target country into deep debt through loans from the World Bank. 

 In the book Confessions of an Economic Hitman, EHM, by John Perkins, explains the mechanisms.  Go to https://www.youtube.com/watch?v=xQPZnyD0fgY

This is how it worked. “Experts” in the "correct" consultancy firms, identified a country in the newly independent developing world with resources the US needed or a strategically important country to the US cold war era needs.  They then identified and proposed a critically needed development project, say a Sea Port, a huge electricity plant or any fancied mega-project then build fancy economic models with exaggerated benefits. They tabled the proposal before the target country’s government whose political elite also, controlled a large chunk of the economy.

Southern Bypass Nairobi. Operational

 Once approved, the “consultant” then proposed to the government that they could also arrange a World Bank loan on the condition that “American Engineering firms build the project.” The  Engineering firms, in turn, insisted on being paid directly by the World Bank rather than the client country.  Thus, "the money never left the US, said Perkins,  It was just moved from the World Bank to another bank in the US. The developing world “never got a penny, just the debt.”

The loans were deliberately so large that the country in question will default sometime in the future. On default, the “corporatocracy” swooped in demanding concessions such as access to resources, military bases, Votes at the UN, and similar concessions.

The political elite in the developing world was sucked in the vice. They were allowed or even guided into siphoning money from the projects by overpricing supplies. If they were reluctant to rob their country, subtle threats were floated. The frightened Presidents simply played along, according to John Perkins, a confessed “economic hitman,” The discussion, he says, went something like this “On my left hand, I have money for you, your family and friends. On the right, I have a gun.” 

The Hitman's modus operandi included payoffs, fraudulent financial reports, Coup d’états, and assassinations. It thrived on instilling fear, fear of communism, fear of coups or murders. They funneled money from the World Bank and the US government through USAID to line pockets of the corporate sector, thereby cheating the developing world of trillions of dollars as the projects never produced the projected outcomes. 

Some Presidents played hardball, according to John Perkins-,and paid with their lives. Listen to https://www.youtube.com/watch?v=aLc3ehhPIKA.  He names two Latin American Presidents who were killed in a span of three months in air crashes. The Ecuadorian and Panama Leaders died in air crashes in 1981.  President Jaime Roldos Aguilera of Ecuador died on May 25, 1981 when his plane “fell to the earth,” reported New York Times. His Panama counterpart, Brig. Gen. Omar Torrijos Herrera died in a similar crash three months later on August 2, 1981, reported the same Newspaper. Investigations later suggested that the planes “were blown up in the air,” said Perkins.

The Ecuadorian President, Aguilera was killed for demanding that the big oil companies, many of them from the US, pay a fair share of their profits to Ecuadorians or he will nationalize them, while the Panama strongman, Brig. Gen. Herrera was killed for transferring the Panama Canal to Panamanians from the US. He describes the two men as “men of integrity who refused to play the US game.”

Outer ring Road Nairobi. Operational

The Congolese President Patrice Lumumba, said Jenkins, was overthrown and killed for the same reasons. 

The result; debt, poverty, poor governance, climate change, as the West worked to dominate the world, exploiting its resources to the exclusion of others. The developing world, including Africa, was saddled with mountains of debt and nothing to show for it. They spend large chunks of their national wealth to service the debt and were thus subjugated.

Although government-supported economic hitmen ended with the collapse of the Soviet Union and the end of the cold war, it morphed into other euphemisms in the US Corporate sector where they perpetuate the same zombie ideas. These include; low wages, weak labor unions, intimidation about communists take over, tax breaks, and small government.  We are talking about predatory capitalism that controls the world.  Zombie ideas are perpetrated by Think-Tanks and lobby groups whose goal is to protect corporate greed. and control politicians and governments. Also, read https://eaers.blogspot.com/2020/10/time-to-retool-capitalism.html

The death of the Soviet Union paved the way for the growth of China as an economic powerhouse as the US focused on wars in the middle-East. China, also seeking access to similar resources, chose a different path.- that of funding development projects in the developing world, particularly Africa.  It built roads, railroads, and other infrastructure at a rate alarming to the West. This gave birth to the anti-china rhetoric in Africa.  China is accused of being a “predatory capitalist” dishing out large loans to Africa which threatens Africa’s sovereignty.  But the West's lethargy in financing real development in Africa paved way for the Chinese. The other day, I stumbled on a Chinese newspaper article on the Tazara – the Tanzania-Zambia Railway build in the 1970s. Go to https://www.chinadaily.com.cn/a/202106/22/WS60d198f4a31024ad0bacab4e.html

The gist of the piece is that the West rejected requests by Tanzania and Zambia to finance the Railway line. In desperation, the two nations approached China for support. The Chinese built the 1806.5 KM kilometer Railway line between Zambia and Tanzania despite her own economic hardships. The project was completed 18 months ahead of schedule.  

This piece is in tandem with a view by the former British Prime Minister, Tony Blair. In 2006, Tony Blair correctly diagnosed the cause of China’s growing popularity in Africa. “When Africa approaches China for finance to build a road, he said, the Chinese are there the next day with a shovel. The West, on the other hand, saddles African officials with heaps of paperwork that takes two years to read,” he concluded. President George Walker Bush, who was in the same forum disagreed. 

Such denials opened the door wide for the Chinese to enter Africa. The Chinese, for all their frailties, are efficient in project implementation. Contrary to the experience with the Western Engineering Firms, delays and cost overruns do not exist in the Chinese lexicon

 Kenya’s experience with Chinese-funded projects is a testimony to this fact.  All Chinese funded and build projects are completed on time and on budget. The SGR for instance was completed on time and on budget.  Efficiency is one of the selling points of the Chinese in Africa. 

The corporate sector in the West on the other hand is lethargic and expensive, says a former Liberian Minister for Transport. That is why they are losing business in Africa. This, coupled with the West's condescending attitude towards Africans drove Africa to China, he adds.

For comparison purposes, the American engineering and construction firm, Bechtel, is yet to start work on the Mombasa superhighway in Kenya- three years since it won the contract. The last time we heard of them, they said they have “suspended the project due to corruption.” 

 Analysts say the narrative about Chinese “predatory capitalism” is simply a zombie idea to scare Africa from slipping from changing partners. “The West is using scare tactics to maintain its grip on Africa,” say knowledgeable sources. John Perkins agrees, saying the Chinese “cannot manage predatory capitalism.” Predatory capitalism is backed by violence and the Chinese do not appear keen on military activities in Africa.