What will you do about the Chicago Shock Doctrine, Obama?

Welcome to the age of Milton Friedman's ghost, who looks on all suffering with equal opportunism, linking Argentina's junta, terror in Chile, Tiananmen, Boris Yeltsin's tanks, Margaret Thatcher's Falklands, Asia's financial crisis, Africa and Latin America's debt crisis, Canadian David Frum, and Donald Rumsfeld.  I'm only 40 pages in but can safely say that this book blows the lid completely off the modern zeitgeist. This despite its sociological style in which the author manages to state hir core thesis seventy-five times using different words by page 24!  Say what do we do with this work of actual parrhesia that does with detailed scholarship, historical investigation and synthesized compassion what No End in Sight and Sicko did with these things, and images? 

The Bush administration immediately seized upon the fear generated by the attacks not only to launch the "War on Terror" but to ensure that it is an almost completely for-profit venture, a booming new industry that has breathed new life into the faltering U.S. economy. Best understood as a a "disaster capitalism complex," it has much farther-reaching tentacles than the military-industrial complex that Dwight Eisenhower warned against at the end of his presidency: this is global war fought on every level by private companies whose involvement is paid for with public money, with [...] unending mandate.  In only a few short years, the complex has already expanded its market reach from fighting terrorism to international peacekeeping, to municipal policing, to responding to increasingly frequent natural disasters.  The ultimate goal for the corporations at the center of the complex is to bring the model of for-profit government, which advances so rapidly in extraordinary circumstances, into the ordinary and day-to-day functioning of the state–in effect, to privatize the government.

[...] in market terms, it cannot fail.

As a market analyst remarked of a particularly good quarter for the earnings of the energy services company Halliburton, "Iraq was better than expected." That was in October 2006, then the most violent month of the war on record, with 3,709 Iraqi civilian casualties. Still, few shareholders could fail to be impressed by a war that had generated $20 billion in revenues for this one company.

Amid the weapons trade, the private soldiers, for-profit reconstruction and the homeland security industry, what has emerged as a result of the Bush administration's particular brand of post-September 11 shock therapy is a fully articulated new economy.  It was built in the Bush era, but it now exists quite apart from any one administration and will remain entrenched until the corporate supremacist ideology that underpins it is identified, isolated and challenged.  The complex is dominated by U.S. firms, but it is global, with British companies bringing in their experience in ubiquitous security cameras, Israeli firms their expertise in building high-tech fences and walls, the Canadian lumber industry selling pre-fab houses that are several times more expensive than those produced locally, and so on.  "I don't think anybody has looked at disaster reconstruction as an actual housing market before," said Ken Baker, CEO of a Canadian forestry trade group.  "It's a strategy to diversify in the long run."

In scale, the disaster capitalism complex is on a par with the "emerging market" and information technology booms of the nineties.  In fact, insiders say that the deals are even better than during the dot-com days and that "the security bubble" picked up slack when those earlier bubbles popped.  Combined with soaring insurance industry profits (projected to have reached a record $60 billion in 2006 in the U.S. alone) as well as super profits for the oil industry (which grow with each new crisis), the disaster economy may well have saved the world market from the full-blown recession it was facing on the eve of 9/11.

In the attempt to relate the history of the ideological crusade that has culminated in the radical privatization of war and disaster, one problem recurs: the ideology is a shape-shifter, forever changing its name and switching identities.  Friedman called himself a "liberal," but his U.S. followers, who associated liberals with high taxes and hippies, tended to identify as "conservatives," "classical economists," "free marketers," and, later, as believers in "Reaganomics" or "laissez-faire."  In most of the world, their orthodoxy is known as "neoliberalism," but it is often called "free trade" or simply "globalization."  Only since the mid-nineties has the intellectual movement, led by the right-wing think tanks with which Friedman had long associations–Heritage Foundation, Cato Institute, and the American Enterprise Institute–called itself "neoconservative," a worldview that has harnessed the full force of the U.S. military machine in the service of a corporate agenda.

All these incarnations share a commitment to the policy trinity–the elimination of the public sphere, total liberation for corporations and skeletal social spending–but none of the various names for the ideology seem quite adequate.  Friedman framed his movement as an attempt to free the market from the state, but the real-world track record of what happens when his purist vision is realized is rather different.  In every country where Chicago School policies have been applied over the past three decades, what has emerged is a powerful ruling alliance between a few very large corporations and a class of mostly wealthy politicians–with hazy and ever-shifting lines between the two groups.  In Russia the billionaire private players in the alliance are called "the oligarchs"; in China, "the princelings"; in Chile, "the piranhas"; in the U.S., the Bush-Cheney campaign "Pioneers."  Far from freeing the market from the state these political and corporate elites have simply merged trading favors to secure the right to appropriate precious resources previously held in the public domain–from Russia's oil fields, to China's collective lands, to the no-bid reconstruction contracts for work in Iraq.

A more accurate term for a system that erases the boundaries between Big Government and Big Business is not liberal, conservative or capitalist but corporatist.  Its main characteristics are huge transfers of public wealth to private hands, often accompanied by exploding debt, an ever-widening chasm between the dazzling rich and the disposable poor and an aggressive nationalism that justifies bottomless spending on security.  For those inside the bubble of extreme wealth created by such an arrangement, there can be no more profitable way to organize a society.  But because of the obvious drawbacks for the vast majority of the population left outside the bubble, other features of the corporatist state tend to include aggressive surveillance (once again, with government and large corporations trading favors and contracts), mass incarceration, shrinking civil liberties and often, though not always, torture.

(Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism, 14-15)

If images are what you need, there are some clips of Klein talking, well worth publicizing again and again on every blog and web page and television in the universe, until this madness ends, here..

Comments

[Alain]

Thank you for posting this Matt. I think the thesis is sound - it provides a very convincing meta-theory of the dominant strain of free market fundamentalism. I had read a discussion a while back in which Naomi Klein described the general process of privatization as a kind of cannibalism - the goal is a total devouring of all core government activities. Whether it is the military in Iraq, reconstruction efforts in New Orleans, or core public services the idea is to hallow out government and make it a conduit for paying for services "better provided" by the private sector.

Nixon's true legacy (cf. Sicko)...

[Chili Dogg]

>"Friedman framed his movement as an attempt to free >the market from the state, but the real-world track >record of what happens when his purist vision is >realized is rather different. In every country where >Chicago School policies have been applied over the >past three decades, what has emerged is a powerful >ruling alliance between a few very large corporations >and a class of mostly wealthy politicians–with hazy >and ever-shifting lines between the two groups. In >Russia the billionaire private players in the alliance >are called "the oligarchs"; in China, "the >princelings"; in Chile, "the piranhas"; in the U.S., >the Bush-Cheney campaign "Pioneers." Far from freeing >the market from the state these political and >corporate elites have simply merged trading favors to >secure the right to appropriate precious resources >previously held in the public domain–from Russia's oil >fields, to China's collective lands, to the no-bid >reconstruction contracts for work in Iraq."
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Sorry, but how can you claim that the Chicago School policies were applied when the "powerful ruling alliance between a few very large corporations and a class of mostly wealthy politicians" are the exact opposite of those policies and the type of system that Friedman opposed?

BTW, since you blame Friedman for almost everything else, didn't you forget to blame him for the Russian Revolution and the Holocaust?

Please take Klein with some grains of salt and read Johan Norberg's critique of her book at Reasaon magazine online: http://reason.com/archives/2008/09/26/defaming-milton-friedman. He points out numerous distortions, inaccuracies, and fallacious arguments.

Also, please read more of what Friedman actually wrote, rather than merely absorbing wholesale the description of his views by someone who is so biased against him. You'll see that he is opposed to many of the very things she accuses him of supporting. She should read more of what he wrote, too!

Thanks,

Chili Dogg