http://www.naomiklein.org/shock-doctrine
THE
SHOCK DOCTRINE The Rise of Disaster Capitalism.
By
Naomi Klein. 558 pp.
Metropolitan Books. $28. (Sep 10, 2007)
Bleakonomics
By JOSEPH E. STIGLITZ Published: September
30, 2007
There
are no accidents in the world as seen by Naomi Klein. The destruction of New
Orleans by Hurricane Katrina expelled many poor black residents and allowed
most of the cityÕs public schools to be replaced by privately run charter
schools. The torture and killings under Gen. Augusto Pinochet in Chile and during ArgentinaÕs military dictatorship were a way of
breaking down resistance to the free market. The instability in Poland and
Russia after the collapse of Communism and in Bolivia after the hyperinflation
of the 1980s allowed the governments there to foist unpopular economic Òshock
therapyÓ on a resistant population. And then there is ÒWashingtonÕs game plan
for IraqÓ: ÒShock and terrorize the entire country, deliberately ruin its
infrastructure, do nothing while its culture and history are ransacked, then
make it all O.K. with an unlimited supply of cheap household appliances and
imported junk food,Ó not to mention a strong stock market and private sector.
THE SHOCK DOCTRINE The Rise of Disaster
Capitalism.
By
Naomi Klein. 558 pp.
Metropolitan Books. $28. (September 10,
2007)
ÒThe
Shock DoctrineÓ is KleinÕs ambitious look at the economic history of the last
50 years and the rise of free-market fundamentalism around the world. ÒDisaster
capitalism,Ó as she calls it, is a violent system that sometimes requires
terror to do its job. Like Pol Pot
proclaiming that Cambodia under the Khmer Rouge was in Year Zero, extreme capitalism loves a blank slate, often
finding its opening after crises or Òshocks.Ó For example, Klein argues, the
Asian crisis of 1997 paved the way for the International Monetary Fund to establish programs in the region and for a
sell-off of many state-owned enterprises to Western banks and multinationals.
The 2004 tsunami enabled the government of Sri Lanka to force the fishermen off
beachfront property so it could be sold to hotel developers. The destruction of
9/11 allowed George W. Bush to launch a war aimed at producing a free-market
Iraq.
In
an early chapter, Klein compares radical capitalist economic policy to shock
therapy administered by psychiatrists. She interviews Gail Kastner, a victim of
covert C.I.A.
experiments in interrogation techniques that were carried out by the scientist
Ewen Cameron in the 1950s. His idea was to use electroshock therapy to break
down patients. Once Òcomplete depatterningÓ had been achieved, the patients
could be reprogrammed. But after breaking down his Òpatients,Ó Cameron was
never able to build them back up again. The connection with a rogue C.I.A.
scientist is overdramatic and unconvincing, but for Klein the larger lessons
are clear: ÒCountries are shocked — by wars, terror attacks, coups dÕŽtat
and natural disasters.Ó Then Òthey are shocked again — by corporations
and politicians who exploit the fear and disorientation of this first shock to
push through economic shock therapy.Ó People who Òdare to resistÓ are shocked
for a third time, Òby police, soldiers and prison interrogators.Ó
In
another introductory chapter, Klein offers an account of Milton Friedman — she calls him Òthe other doctor shockÓ —
and his battle for the hearts and minds of Latin American economists and
economies. In the 1950s, as Cameron was conducting his experiments, the Chicago
School was developing the ideas that would eclipse the theories of Raul
Prebisch, an advocate of what today would be called the third way, and of other
economists fashionable in Latin America at the time. She quotes the Chilean
economist Orlando Letelier on the Òinner harmonyÓ between the terror of the
Pinochet regime and its free-market policies. Letelier said that Milton
Friedman shared responsibility for the regimeÕs crimes, rejecting his argument
that he was only offering ÒtechnicalÓ advice. Letelier was killed in 1976 by a
car bomb planted in Washington by PinochetÕs secret police. For Klein, he was
another victim of the ÒChicago BoysÓ who wanted to impose free-market
capitalism on the region. ÒIn the Southern Cone, where contemporary capitalism
was born, the Ôwar on terrorÕ was a war against all obstacles to the new order,Ó
she writes.
One
of the worldÕs most famous antiglobalization activists and the author of the
best seller ÒNo Logo: Taking Aim at the Brand Bullies,Ó Klein provides a rich
description of the political machinations required to force unsavory economic
policies on resisting countries, and of the human toll. She paints a disturbing
portrait of hubris, not only on the part of Friedman but also of those who
adopted his doctrines, sometimes to pursue more corporatist objectives. It is
striking to be reminded how many of the people involved in the Iraq war were
involved earlier in other shameful episodes in United States foreign policy
history. She draws a clear line from the torture in Latin America in the 1970s
to that at Abu Ghraib and Guant‡namo Bay.
Klein
is not an academic and cannot be judged as one. There are many places in her
book where she oversimplifies. But Friedman and the other shock therapists were
also guilty of oversimplification, basing their belief in the perfection of
market economies on models that assumed perfect information, perfect
competition, perfect risk markets. Indeed, the case against these policies is
even stronger than the one Klein makes. They were never based on solid
empirical and theoretical foundations, and even as many of these policies were
being pushed, academic economists were explaining the limitations of markets —
for instance, whenever information is imperfect, which is to say always.
Klein
isnÕt an economist but a journalist, and she travels the world to find out
firsthand what really happened on the ground during the privatization of Iraq,
the aftermath of the Asian tsunami, the continuing Polish transition to
capitalism and the years after the African National Congress took power in South Africa, when it failed to
pursue the redistributionist policies enshrined in the Freedom Charter, its
statement of core principles. These chapters are the least exciting parts of
the book, but they are also the most convincing. In the case of South Africa,
she interviews activists and others, only to find there is no one answer. Busy
trying to stave off civil war in the early years after the end of apartheid,
the A.N.C. didnÕt fully understand how important economic policy was. Afraid of
scaring off foreign investors, it took the advice of the I.M.F. and the World Bank and instituted a policy of privatization, spending cutbacks, labor
flexibility and so on. This didnÕt stop two of South AfricaÕs own major
companies, South African Breweries and Anglo-American, from relocating their
global headquarters to London. The average growth rate has been a disappointing
5 percent (much lower than in countries in East Asia, which followed a
different route); unemployment for the black majority is 48 percent; and the
number of people living on less than $1 a day has doubled to four million from
two million since 1994, the year the A.N.C. took over.
Some
readers may see KleinÕs findings as evidence of a giant conspiracy, a
conclusion she explicitly disavows. ItÕs not the conspiracies that wreck the
world but the series of wrong turns, failed policies, and little and big
unfairnesses that add up. Still, those decisions are guided by larger
mind-sets. Market fundamentalists never really appreciated the institutions
required to make an economy function well, let alone the broader social fabric
that civilizations require to prosper and flourish. Klein ends on a hopeful
note, describing nongovernmental organizations and activists around the world
who are trying to make a difference. After 500 pages of ÒThe Shock Doctrine,Ó
itÕs clear they have their work cut out for them.
Joseph
E. Stiglitz, a university professor at Columbia, was awarded the Nobel in
economic science in 2001. His latest book is ÒMaking Globalization Work.Ó
http://www.huffingtonpost.com/john-cusack/calling-things-what-they-_b_66532.html
Calling
Things What They Are: More From My Conversation with Naomi Klein
Posted October 1, 2007 | 03:08 AM (EST)
Read
More: John
Cusack, John Cusack's War Inc., naomi
klein, Naomi Klein's Shock Doctrine, the shock doctrine, War Inc., Breaking Politics News
I hope you've checked out the video of
my conversation with Naomi Klein. If you haven't, click here.
But
after the camera crew stopped rolling, Naomi and I kept talking. Here's a
transcript of part of that conversation...
Cusack: One of my favorite quotes is from Arthur Miller, who
said: "An era can be considered over when its basic illusions have been
exhausted." And with The Shock Doctrine, you are basically trying to shatter and obliterate
the illusion of the supply side, fundamentalist free market -- this official
narrative wherein we not only are supposed to worship free markets that really
aren't free, we must actually kill to feed these markets.
What
the book rightly asks is: shouldn't we make a moral choice that you either make
defense policy or you profit from it? I think that kind of transparency would
be very important to have in the public sphere... Those people who go on CNN
and are treated as impartial statesmen when, in reality, the book -- which is triple
footnoted and sourced -- suggests otherwise. Like George Shultz or Richard
Perle.
Klein: Right. If we look at who the real intellectual
engines of this war are, we'd see a web of people who are not simply the
statesmen they appear to me but card-carrying members of the disaster
capitalism complex -- shareholders, board-members and directors of companies
that profit directly and enormously from war and other disasters --
Cusack:
Who would these people be..?
Klein:
Well, for instance, the Committee for
the Liberation of Iraq was a propaganda arm of the Bush administration,
publicly making the case for the invasion of Iraq. And it was founded by Bruce
Jackson, a vice president of Lockheed Martin who had been out of his job for
just three months. Jackson stacked the committee with old colleagues from
Lockheed -- Charles Kupperman, Lockheed Martin's vice president for space and
strategic missiles was on it, and so was Douglas Graham, Lockheed's director of
defense systems. And even though the committee was formed at the explicit
request of the White House to make the case for war in the public mind, no one
had to step down from Lockheed or sell his shares. Which was certainly good for
committee members, since Lockheed's share price jumped 145 percent thanks to
the war they helped engineer -- from $41 in March 2003 to $102 in February
2007. The Committee for the Liberation of Iraq was chaired by George Shultz,
who wrote op-eds and went on TV beating the drums, and was presented just as
this respected statesman. But Shultz hasn't been in office for decades. And in
the meantime, he'd been working for Bechtel -- at the time he was calling for
the invasion, he was still on its board, and since Bechtel is a privately held
company, we don't know anything about his holdings. We do know that Bechtel was
one of the biggest winners of the reconstruction game in Iraq, landing
$2.3-billion in contracts.
Cusack: How about James Baker and the $1 billion that the
Carlyle Group used him to try to get from the government of Kuwait, which you
wrote about in The
Nation?
Klein:
Right. I talk about the incredible
power of the "formers." One of the distinguishing features of the Bush
administration has been its reliance on outside advisers and freelance envoys
to perform key functions: James Baker, Paul Bremer, Henry Kissinger, George
Shultz, Richard Perle, Bruce Jackson, and so on. So you have Congress playing a
rubber-stamp role during the pivotal decision-making years, and Supreme Court
rulings treated as little more than gentle suggestions, while these mostly
volunteer advisers have wielded enormous influence, especially when it comes to
Iraq. Their power stems from the fact that they used to perform key roles in
government -- they are former secretaries of state, former ambassadors and
former undersecretaries of defense. All have been out of government for years
and, in the meantime, have set up lucrative careers in the disaster capitalism
complex. And because they are freelance government contractors, they aren't
subject to the same conflict-of-interest rules as elected or appointed
politicians. The effect has been to eliminate the so-called revolving door
between government and industry and allow the disaster industries to simply set
up shop inside the government, using the reputations of these supposedly
illustrious ex-politicians as cover.
As
you say, in the press, they maintain their credibility as statesmen -- their
current, far more relevant work in the corporate world is almost never
mentioned. You brought up Baker. He was Bush's debt envoy to Iraq while he was
still a partner in the Carlyle Group, which is a major arms trader whose
fortunes have exploded since the war. He was also still a partner at Baker
Botts, which represents some of the largest oil companies in the world, as well
as Halliburton. Kissinger is another classic example of the power of the
formers because he's primarily been a businessman, not a statesman, now for
some 25 years. He met with Bush and Cheney regularly making Iraq policy --
according to Bob Woodward, more than any other advisor. But who was he
representing in those meetings? Kissinger has repeatedly put his business
interests ahead of the public interest, most dramatically when he resigned as
chair of the 9/11 Commission rather than disclose his list of corporate clients
at Kissinger Associates.
Another
example is Richard Perle. Richard Perle headed the Defense Policy Board. Just
two months after 9/11 he launched a venture capital firm called Trireme
Partners that exists to invest in the homeland security and defense sectors.
One of his first investors was Boeing -- it sunk $20 million in Trireme.
Meanwhile, Perle is using the Defense Policy Board to make the case for war.
And of course Boeing was another one of the huge winners from the invasion of
Iraq.
So
I asked the question, "Why is it that we refer to Richard Perle merely as
an ideologue -- rather than, say, as an arms dealer with an impressive
vocabulary?"
Cusack:
The question becomes one of
intellectual honesty and basic morality. I wanted to talk about the players or
the heirs of the Friedman legacy who are in the public sector today... The
Grover Norquists and Bill Kristols of the world come to mind ...You also talk
about the Heritage Foundation, the Cato Institute, the American Enterprise
Institute as pursuing the goal of the elimination of the public sphere and the
total liberation of corporations.
Klein:
I refer to the people in those places
think tanks -- as people who are paid to think by the makers of tanks, because
a huge amount of the funding for these think tanks is coming directly from the
weapons and homeland security industry. They are funded by some of the
wealthiest families and the wealthiest corporations in this country so the
question of intellectual honesty really has to come up. They exist in a strange
intellectual gray zone where they get money in order to think. And besides, I'm
not sure thinking really belongs in tanks.
Cusack: So you're saying that the Shultzes and the Perles and
the Kissingers and the Jim Bakers of the world are embedded in the homeland
security/privatized war economy?
Klein:
More than embedded. I mean, they are
it.
Cusack:
I was trying to --
[laughter ]
Klein: Why are you trying to be polite?
Cusack: I don't know. That's part of the problem, too: being
polite with this immorality and not having the courage to call something what
it is...The refusal of the Congress to challenge Bush in a meaningful way is
proof of the Democratic complicity in the new economy. To name only right wing
people is to ignore the central thesis of intellectual honesty as the first
step in a long corrective march... So we'll have to talk about what Democrats
are in on this and game and name them too... we'll have to get into that later.