naomi klein on the use of shock to sell capitalism

Naomi Klein, the corporation-bashing Canadian author of “No Logo: No Space, No Choice, No Jobs,” has a new book coming out on the 18th. It’s called, “The Shock Doctrine: The Rise of Disaster Capitalism.” It’s about economist Milton Friedman’s free market crusade and how conservatives have used horrendous world events to advance the cause of radical privatization. Yesterday’s “Guardian” had an exclusive excerpt from the book in which Klein tells of the privatization of the New Orleans school system in the immediate aftermath of Hurricane Katrina. Here’s a clip:

…Friedman first learned how to exploit a shock or crisis in the mid-70s, when he advised the dictator General Augusto Pinochet. Not only were Chileans in a state of shock after Pinochet’s violent coup, but the country was also traumatised by hyperinflation. Friedman advised Pinochet to impose a rapid-fire transformation of the economy – tax cuts, free trade, privatised services, cuts to social spending and deregulation.

It was the most extreme capitalist makeover ever attempted anywhere, and it became known as a “Chicago School” revolution, as so many of Pinochet’s economists had studied under Friedman there. Friedman coined a phrase for this painful tactic: economic “shock treatment”. In the decades since, whenever governments have imposed sweeping free-market programs, the all-at-once shock treatment, or “shock therapy”, has been the method of choice.

I started researching the free market’s dependence on the power of shock four years ago, during the early days of the occupation of Iraq. I reported from Baghdad on Washington’s failed attempts to follow “shock and awe” with shock therapy – mass privatisation, complete free trade, a 15% flat tax, a dramatically downsized government. Afterwards I travelled to Sri Lanka, several months after the devastating 2004 tsunami, and witnessed another version of the same manoeuvre: foreign investors and international lenders had teamed up to use the atmosphere of panic to hand the entire beautiful coastline over to entrepreneurs who quickly built large resorts, blocking hundreds of thousands of fishing people from rebuilding their villages. By the time Hurricane Katrina hit New Orleans, it was clear that this was now the preferred method of advancing corporate goals: using moments of collective trauma to engage in radical social and economic engineering…

When I began this research into the intersection between super-profits and mega-disasters, I thought I was witnessing a fundamental change in the way the drive to “liberate” markets was advancing around the world. Having been part of the movement against ballooning corporate power that made its global debut in Seattle in 1999, I was accustomed to seeing business-friendly policies imposed through arm-twisting at WTO summits, or as the conditions attached to loans from the IMF.

As I dug deeper into the history of how this market model had swept the globe, I discovered that the idea of exploiting crisis and disaster has been the modus operandi of Friedman’s movement from the very beginning – this fundamentalist form of capitalism has always needed disasters to advance. What was happening in Iraq and New Orleans was not a post-September 11 invention. Rather, these bold experiments in crisis exploitation were the culmination of three decades of strict adherence to the shock doctrine…

On her website, you can find the following promotional film, shot by Alfonso Cuaron, the director of the film “Children of Men.” The execution is a bit over the top for my taste, but the underlying theory seems plausible enough.

Not enough Naomi Klein for you? How about this video of her speaking about Michigan’s McCaw free market think tank? I had no idea, until watching it, that Michigan played a vital role in the privatization of Mongolia’s yak herds.

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16 Comments

  1. Ed
    Posted September 10, 2007 at 2:04 pm | Permalink

    I’m not suggesting that 911 was an inside job, but you really couldn’t have orchestrated a more perfect “shock” to the American psyche.

    Happy 911 Eve.

  2. Robert
    Posted September 10, 2007 at 5:03 pm | Permalink

    Yeah, I feel the same about the execution being a bit over the top, but I love Naomi Klein. There is nothing hotter than a woman who is smarter than me. That narrows it down to only about 98% of them. Of course, the remaining 2% are all professional models and TV anchors, so they’re obviously super hot too, but more in a Hefner-companion sense.

  3. egpenet
    Posted September 10, 2007 at 7:58 pm | Permalink

    Shock has ALWAYS been a strategy for those in power or wanna-bes to kick their movements into a higher gear. FEAR is the big one!

    The shock of 9-11 was only topped by the FEAR that G.W.B. and his cronies added to the fire.

    The opposite trick, founded on HUBRIS, is to make fun of someone who says: “The globe is warming! The globe is warming!” In THAT case, G.W.B. maintains that that somebody is “Fear-mongering.” Works either way.

    Somewhere in the middle is Dingell who dangles, or Levin who likes to levy.

    Not ALL private enterprise is bad. Friedman would have underestimated Saddam’s mercilessness if he were advising the old regime. For a lesson in economics in Iraq, I give you the free enterprise of the Kurds, which has its edginess … but which is largely unrestrained and successful … ask Tom Freatman.

  4. Ol' E Cross
    Posted September 10, 2007 at 10:02 pm | Permalink

    But wait, I’m still suffering from shock that George W is our president.

    Who … has … been … is … manipulating … me ..?

    Damn you, Mark Maynard.

  5. Posted September 11, 2007 at 3:20 pm | Permalink

    September 5, 2007
    US B-52 in nuclear cargo blunder
    http://news.bbc.co.uk/2/hi/americas/6980204.stm

    September 10, 2007
    Chertoff: We’re Preparing for Nuclear Attack
    http://www.newsmax.com/newsfront/chertoff_nuclear/2007/09/10/31560.html?s=al&promo_code=39CB-1

    Any connection? The people of Omaha and Kansas City better hope not. I’d be curious to know if anyone in those two major cities, or any of the other towns which were directly under the flight path of that nuclear armed B-52, noticed anything unusual transpiring in their communities that day. Say, for example, something resembling the London 7-7 security drill Visor Consultants was running just as the “real attack” occured.
    http://www.youtube.com/watch?v=x3wCWhJ39bk

    If simi trailers driven by “Arab-looking” men were spotted hanging around Omaha or Kansas City truck stops, making a scene. I’d probably want to high tail it out of there. California is nice right now.

    Disclaimer: This is all meant purely in humor

  6. Steph's Dad
    Posted September 12, 2007 at 10:57 am | Permalink

    What exactly are you suggesting, Robert? Are you saying that this was a botched job to nuke one of our own cities and make it look as though it had been done by Arab men?

  7. Posted September 12, 2007 at 12:53 pm | Permalink

    Steph’s Dad, of course not. God no. To even suggest such a thing is ludicrous. I was just having a little fun in preempting all those crazy conspiracy theorists (like Mark for example) who might get it in their head that something sinister was afoot. Mel Ayton and I have our own theory about why so many people have this crazy tendency to see conspiracies everywhere. The idea that crime and espionage can be contracted is just so absurd. There are some things money just can’t buy. I mean please, can you really expect me to believe there are actually people out there somewhere who would put their own financial gain above the lives of even the smallest creatures. Of course not. Get real.

  8. Posted September 13, 2007 at 5:59 pm | Permalink

    Some reports say there were 5 warheads loaded onto the wings of the B-52. Other reports are saying 6 warheads were involved. That’s funny. Oh well, what difference does one nuclear warhead make anyway. Anyone who actually believes the suggetion that armed nuclear weapons could be loaded onto a B-52 bomber “accidentally” should really be kept in an institution where they can’t wander out into traffic or anything.

  9. egpenet
    Posted September 13, 2007 at 6:38 pm | Permalink

    Where’s number six? (oohhmagaawd!)

    Try Baggage Claim.

  10. Posted September 13, 2007 at 7:12 pm | Permalink

    There are some people trying to suggest that the discrepancy in the reported number of nukes was because the government has a “broken-arrow” situation on their hands. It’s being suggested by some that the Steve Fossett search in Nevada is a cover for a search for a lost nuke.

  11. Posted September 13, 2007 at 7:34 pm | Permalink

    I guess searchers did find something, but are now not saying what it was, except that it wasn’t Fossett’s plane.

  12. mark
    Posted September 13, 2007 at 10:33 pm | Permalink

    If we’ve lost one, I’m sure that the Russian’s have lost at least a dozen. It’s just a matter of time before one’s used somewhere. It might not be in the next decade, but it will eventually happen. From what I understand, all the programs to guard or otherwise buy up the Russian nukes pretty much stopped under Bush.

  13. Posted September 14, 2007 at 12:05 pm | Permalink

    That’s true, Mark. And now that our CIA and FBI are somewhat more focused on making sure the components of a nuclear device are not smuggled into this country, it might be that the nuke used to attack a domestic US target would more necessarily be one from within the US stockpile. Under the cover of a “drill” dummy parts could be smuggled into the country, making sure to leave plenty of evidence of that taking place. Then they could be driven by Iranian looking guys to a locale where they would unknowingly rendezvous with the missing US nuke just as it is detonated. Of course, this is all the stuff of fantasy.

    I’ve now seen other people suggesting the incident may have been an attempt to smuggle nukes OUT of the country, for the purpose of using them in the Middle East. The air base in Louisiana where they were flown, also happens to be the staging area for Middle East operations.

    I also talked to my buddy who served his time in the Air Force at Minot AFB*, and he confirmed the absurdity of the suggestion that the nukes were loaded onto the B-52 ‘by accident.’ There are so many points of protocol and so much time and paperwork involved in just moving one nuke, the official story of loading 6 on a B-52 is virtually impossible. He confirmed what I’ve read in the statements of military experts working in the media (and what any reasonably attentive person would conclude) and that is that for this to have happened by ‘accident’ it would require that dozens of ‘accidents’ were made, and by every single individual in the complicated process. It’s a statistical impossibility. Something else happened here, and we may never know what it was.

    * see my earlier reference to this friend of mine
    http://markmaynard.com/index.php/2007/06/11/drop_the_bomb#comments

  14. mark
    Posted September 14, 2007 at 10:45 pm | Permalink

    I don’t like speculating on conspiracies that have yet to unfold. It doesn’t seem to me to be a healthy use of my time. However, I suppose, if an administration wanted to deliver a nuke to the heart of the Muslim world and couldn’t, because of the inevitable outrage that it would cause, they could set things up so that another group had the opportunity. Or maybe they’d just frame another group… What if they dropped a bomb on Mecca and framed the National Organization of Women? Win. Win. Right?

  15. Robert
    Posted September 16, 2007 at 8:58 pm | Permalink

    For me, speculating on conspiracies is a lot like gambling on sports is to other people. It’s how I have fun, but it’s legal, and no religion considers it a sin.

  16. mark
    Posted September 16, 2007 at 9:34 pm | Permalink

    I feel like that about composting.

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