Feature
Shock tactics
by Matt Nippert
Nobel Prize-winning economist Milton Friedman’s “catastrophic” doctrines have harmed millions, says Canadian activist Naomi Klein in her new book The Shock Doctrine: Disaster Capitalism.
Milton Friedman: up there with Stalin and Hitler? Naomi Klein thinks so. The Canadian activist and journalist reckons that history should put the Nobel Prize-winning economist in the same category as those two great 20th-century dictators. All three, she argues, took advantage of desperate times to implement radical reform.
“The movements that take advantage of crises,” says Klein, “whether they’re fascist, Bolshevik or fundamentalist capitalist, do share something in common – and that’s a disdain for everyday non-apocalyptic reality.”
Speaking from London as she prepares for the international launch of her new book The Shock Doctrine: Disaster Capitalism, Klein says those who take advantage of crisis to circumvent checks and balances on their way to power are exploiting “an anti-democratic impulse”.
Although Friedman didn’t build concentration camps or gulags, Klein says his brand of neo-liberal economics honed at the University of Chicago invaded economies all around the world and caused harm to millions.
When Chile’s President Salvador Allende was overthrown by Augusto Pinochet in 1973, Friedman’s “Chicago boys” moved in to slash public spending and privatise state assets, which sent the economy into a tailspin. In a year economic activity contracted by 15 percent and unemployment climbed more than sixfold to 18 percent.
The shock doctrine – wiping the economy clean of state involvement in order for the private sector to prosper – was born.
But The Shock Doctrine is even more ambitious in scope, drawing a long bow in equating CIA interrogation procedures with International Monetary Fund restructuring policies.
Klein even equates manipulation of the North American public after September 11, 2001, with inducing Stockholm Syndrome in prisoners. This is a psychological condition that leads captives to identify with their captors and become extremely malleable to suggestion.
After the attacks on New York’s Twin Towers, Klein says, “I remember vividly how we all became somewhat childlike. And we looked to Rudy Giuliani and George Bush – leaders who on September 10 we had a very healthy distrust of – and suddenly they become quasi-father figures and we just wanted them to take care of us.”
Changes pushed through in the wake of the public shock, writes Klein, generated an annual $250 billion market for Homeland Security – excluding weapons and engineering firms – mostly provided by the private sector.
A parallel growth in public/private partnerships has resulted in the US private sector turning disaster relief and reconstruction into a profitable business. The Asian tsunami, the war in Iraq and Hurricane Katrina have provided many opportunities for commercial exploitation, and investors are loving it, says Klein. “Homeland Security stocks have tripled in the past few years.”
However, for some, her attempt to tie psychiatric electro-shock therapy to the establishment of the Department of Homeland Security will be a step too far. Societies as a whole respond differently to political shocks than do individual brains to real voltage.
But Klein’s case studies on Pinochet’s Chile, Thatcher’s Britain and East Asia during the financial crisis provide an extensively researched alternative history of economic change. Some may question, though, her painting of the Tiananmen Square massacre as a crackdown by pro-capitalist forces. It was Chinese conservatives who sent in the tanks.
In two case studies – Russia and Poland – economist and Friedman protégé Jeffrey Sachs comes in for scathing criticism over his role in post-Soviet privatisation programmes. Klein labels these reforms a “catastrophe”.
While describing the Columbia professor as a “prominent economist who does lots of fantastic work on aid today”, Klein spares no quarter in dissecting Sachs’s version of history. “He wrote a book called The End of Poverty,” she says, “in which he tells his personal journey as an economist, and it has an entire chapter on Russia. But he never mentions the fact that Boris Yeltsin, in order to protect the economic shock-therapy programme that had been prescribed by Sachs, called in tanks to fire on the Russian Parliament, arrested the Opposition leaders and suspended the constitution. It’s the victor’s history.
“We got this fairy-tale version of history that began with Reagan and Thatcher and was embraced democratically and peacefully. My goal is simply to put the shock back into the story, to have a fuller picture, because I think it is very selectively told history at the moment.”
Though she comes from a family of activists (her mother made the anti-porn film Not a Love Story), it wasn’t until Klein wrote No Logo in 1999 that she became a public personality. A vigorous attack on the dishonesty of marketing and branding, the book chronicled a new vision of political activism that tended to target companies rather than governments about trans‑national rather than domestic issues.
No Logo was already at the printers when the “Battle of Seattle” turned her into the poster girl of the anti-globalisation movement. In 1999, an army of protesters, including unionists, anarchists and peasant farmers, succeeded in shutting down the World Trade Organisation meeting in Seattle. Commentators quickly seized on Klein’s book as articulating their common concerns over untrammelled free trade.
And in many ways the book foreshadowed the subsequent growth in ethical consumption typified by Fair Trade labels and climate-change-friendly advertising. Although she welcomes the rise of consumer power, Klein is sceptical about its effectiveness.
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