Chris Hayes has a good review of Naomi Klein's new book
The Shock Doctrine (which I read an enjoyed and hope to soon review myself, when I have more free time) for
In These Times that makes the case that her book can best be understood as a "latter-day response to [Austrian economist Friedrich von] Hayek’s classic right-wing manifesto,
The Road to Serfdom." He has some interesting insights on both books, and his piece is as always short and extremely well-written.
Klein resurrects Hayek’s argument and inverts it, showing how time and again, the “economic freedom” envisioned by Hayek and his ilk has been imposed at the expense of political freedom, often, Klein writes, “midwifed by the most brutal forms of coercion.” From Chile to Iraq, majorities empowered to choose their own government don’t start clamoring for flat taxes, privatized post offices and an end to controls on foreign capital. Instead, they often form unions or call for increased social spending. The Shock Doctrine is an encyclopedic catalog of the tactics that governments, corporations and economists have used to impose— usually over popular opposition—what Klein calls the “policy trinity” of the Chicago-School program: “the elimination of the public sphere, total liberation for corporations and skeletal social spending.”
Over the course of 500 pages, Klein documents the moments of chaos and disruption that allow a small coterie of experts to swoop in and administer what’s invariably called “bitter medicine,” “painful reforms” or “shock therapy.” “Only crisis,” she quotes Milton Friedman as once observing, “actual or perceived, produces real change.” While Klein calls this the “shock doctrine,” I prefer a phrase she quotes from former World Bank Chief Economist Joseph Stiglitz, who called those who imposed free-market “shock therapy” on Russia in the early ’90s “market Bolsheviks.” Like Lenin, these economic policy-makers saw opportunity in crisis, and were skeptical, even contemptuous of democratic pieties. They were convinced that only an enlightened vanguard would be able to take the painful, sometimes bloody steps necessary to bring about revolution. The most extreme of them also shared with Lenin the impulse to start anew, to wipe out history, to work off a blank slate. They held the perverse belief that a proposal’s ideological purity is directly proportional to the pain and disruption it causes.
I must admit that even though I read
Serfdom again just a few years ago and never drew a connection between the two books as Hayes did, leaving me feeling a little jealous of his insight. Anyway, his article is highly recommended.
Update: Two more reviews of
The Shock Doctrine I highly recommend reading. First, Thomas Riggins analyzes Klein's theorum of "disaster capitalism" (from her October 2007 article in
Harper's Magazine (subscription only) for
IndyMedia NYC.
According to Riggins, the major theme in Klein's article “Disaster Capitalism: The new economy of catastrophe” is the direct relationship between the effects of war and of “natural” disasters on people and the environment. The contrast between the Green Zone in Iraq (a safe haven) and the Red Zone (the rest of Iraq) is analogized with the aftermath of Katrina and the difference between the areas of New Orleans inhabited by the rich (reconstructed and prospering) and the poor (neglected and festering).
He argues that: "Just as areas of Iraq outside the Green Zone have been destroyed and the people brutalized by Bush’s war, so have many areas throughout the world faced the same type of treatment and the people have seen their regions 'demolished by ideology, the war on ‘big government’, the religion of tax cuts, [and] the fetish for privatization.”
So, for instance, we have inadequate public infrastructure in the "Global South" that Riggins describes as "failing under the assault of the philosophy of 'free trade'”; in many cases throughout the world the roots of this problem can be directly traced to policies that cut back on public investment and social spending in order to enrich the private sector.
Thus, according to Klein: “Every time a new crisis hits-- even when the crisis itself is the direct by-product of free-market ideology-- the fear and disorientation that follow are harnessed for radical social and economic re-engineering.” That is to say,
the ruling class is using disasters, both natural and those brought about by their polices, to ram through social structural changes in their interests that they never could have brought about using the democratic process.
What is happening is that private corporations are rushing to take over the role of disaster relief and reconstruction and make super profits as a result. They are aided and abetted by those politicians who push the ideology of free market capitalism and slam as “socialism” any measures by the public sector to solve social problems. It is quite instructive, in this regard, to compare Alan Greenspan’s rapturous description of the wonders of the free market in his book The Age of Turbulence, with what Naomi Klein has found on the ground in her travels around the world. This new "disaster-capitalism complex" means in practical terms that we are evolving into a world "in which all conflict - and disaster - related functions (waging war, securing borders, spying on citizens, rebuilding cities, treating traumatized soldiers) can be performed by corporations at a profit."
What has happened is that a state within a state has been created-- a virtual corporate run state that now carries out many of the functions that the state represented by the US government used to perform. The Bush administration, for example, gave out 3.4 billion dollars in no bid contracts to its corporate buddies to rebuild after Katrina. E.g., Blackwater provides guards for FEMA operations for $950 a day per guard!
Its all our tax payer money that goes to fund these corporate crooks. The "shadow state," Klein writes, "has been built almost exclusively with public resources... and is all privately owned and controlled." This is how the famous free market works-- it simply loots the public sector for its profits.
This new disaster capitalist market now, Klein says, has to be protected. That means NGOs, charities, and government entities are seen as potential enemies and rivals by the new corporate state. For example the mercenary providers, firms such as Blackwater, are looking for bigger and better contracts. They now say "they are better equipped than the UN to engage in peacekeeping in Darfur." Just give them a big for profit contract and the African Union troops can stay home.
And it is not just Dafur. Klein quotes a Lockheed Martin representative about the contracting out of the police and fire departments of American towns and cities to private firms: "What they do for the military in downtown Fallujah [leave as a pile of rubble?--TR] they can do for the police in downtown Reno."
And if this isn't bad enough, Klein gives us a quote from Fast Company magazine on the results of the "War on Terror" [the unleashing of the US military as a result of the fluke 9/11 attack]. The "end result" will be "a new more resilient approach to national security, one built not around the state but around private citizens and companies .... Security will become a function of where you live and whom you work for, much as health care is allocated already."
This is another major theme of Klein's article. That the country is turning into a domestic copy of the Iraqi Green Zone. There will be gated and protected areas with state of the art schools, hospitals, police and fire protection, nice housing, etc. areas walled off from the rest of the common lower class herd of Americans, and all run by private companies.
We can see this trend in New Orleans today, Klein writes. Gated communities for the well off (mostly white) protected by private security forces, and FEMA villages: "desolate, out-of-the-way trailer camps for low-income evacuees, built by Bechtel or Fluor subcontractors and administered by private security companies that patrolled the gravel lots, restricted visitors, kept journalists out, and treated survivors like criminals."
An ominous new factor to note is, that heretofore terrorist attacks and national disasters used to send the stock market down. Now they make it jump up. The new disaster capitalists stand to make fortunes out of the human misery of these disasters now that the government just turns over no bid contracts for them to do the follow up. And they don't even have to do the work. There is little or no supervision or accountability. Any problems with poor results are explained away by the corporations and taken at face value by the Bush administration.
What used to be a "truism" of capitalist dogma, Klein says, is no longer so: namely, "that you couldn't have booming economic growth in the midst of violence and instability." At least for some parts of the economy and for the biggest corporations in the stocks representing aerospace, defense and homeland security, and, of course oil and gas just the opposite is the case. "The oil and gas industry," Klein says, "is so intimately entwined with the economy of disaster -- both as a root cause behind many disasters and as beneficiary from them -- that it deserves to be treated as an honorary adjunct of the disaster-capitalism complex."
It is important to note the relationship between the disaster capitalists and, Klein points out, "elite opinion makers." Not only do they have many members of Congress in their pockets (from both parties), but also many areas of the mass media is under their control and they fund "think tanks" to churn out propaganda in their interests (especially the National Institute for Public Policy and the Center for Security Policy).
So, Daddy Warbucks is alive and well. We can expect the US, I think, to bomb Iran for no other reason than to have an excuse to spend public money on corporations to sell the government the bombs and other weapons. Wars and disasters are ends in themselves-- an excuse to enrich the industrial- military complex [AKA disaster capitalism].
Wouldn't it be interesting if the Bushites were in Iraq not to "win" but simply to destroy as much as they could of both our own resources, human and material, and the Iraqi's, just so they could justify the transfer of billions, if not trillions, of dollars from the public funds of the US to the corporate allies of the Bush administration.
After all many, if not most, of the Pentagon big shots, after retirement, end up making real money on the boards of disaster capitalist companies. In any case, Iraq is a "win win" situation. Win, and you get the oil. Lose and you get to enrich the corporations anyway by all the expenditures. And, if Exxon can't have the oil, selling it for $80 a barrel is a good consolation.
Additionally, be sure to check out Nobel Laureate and Columbia University economist Joseph Stiglitz's excellent review of "Disaster Capitalism" in the
New York Times entitled
"Bleakonomics". The key excerpt:
One of the world’s most famous antiglobalization activists and the author of the best seller “No Logo: Taking Aim at the Brand Bullies,” 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 Guantánamo 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 isn’t 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. didn’t 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 didn’t stop two of South Africa’s 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.
