"It's the economy stupid" was the phrase that supposedly kept Bill Clinton's campaign team focused on what they needed to do in order to win the 1992 election campaign. Pound away mercilessly on the woeful state of the economy in post Regan America, and lay the blame for it at his former Vice President, and incumbent President, George Bush Sr.
What that consisted of was simply pointing out to Americans what they already knew. A great many of them were unemployed, real wages sucked, the government was billions if not trillions of dollars in debt, and the policy of cutting taxes and increasing military spending was ruinous beyond belief. Clinton's election over a sitting President was a major rebuttal to the supposedly free market, small government, and cutting of social programs measures practiced by the neo-conservatives who surrounded Ronald Regan.
Compared to the majority of industrialized nations in the world the United States has, depending on your point of view, lagged far behind in terms of the social safety net or led the way in cutting back on government interference in the economy. While the United States has never fully committed to either completely free markets or a real social safety net, it is the country where the two major contrasting schools of economic thought have battled it out on a regular basis.
John Maynard Keynes proposed government intervention in the economy in order to protect the populace from the vagrancies of economic fluctuations like recessions, depressions, and inflation. He advocated government run insurance programs to offer protection to people in times of vulnerability; unemployment, old age, and illness. His ideas formed the basis of what is known as the welfare state – which was never meant to be a derogatory term by the way.
At the complete opposite end of the economic spectrum was Milton Friedman who advocated that the economy must be allowed to proceed without any government interference at all. Only then would it be able to operate at maximum efficiency and provide plenty for everybody. It's Mr. Friedman's philosophies and the manner in which they have been, and are being implemented that come under intense scrutiny in Naomi Klein's latest book published by Random House Canadathrough its Knoff Canada imprint, The Shock Doctrine: The Rise Of Disaster Capitalism.
The title refers to Mr. Friedman's contention that for his theory to work the economy has to be shocked back to a state of zero, where their is no government ownership or involvement in the economy. It is Ms. Klein's contention in her book that not only is the philosophy being implemented whenever opportunities present themselves, but that American policy over the last eight years has been geared to ensuring it's implementation when and where ever possible.
From the outset, Ms. Klein makes it clear that she doesn't believe Capitalism is an inherently evil system. What she does do is systematically lay forth a damning and convincing case in support of her thesis. She has spent the last two years travelling the globe conducting interviews, and investigating situations and circumstances where the shock doctrine has been implemented.
In Sri Lanka and Indonesia after the tsunami, fishing villages that had been on the coasts for generations providing families with their livelihoods have seen their land sold out from under them to hotel, resort, and condominium developers, while they've been stuck in refugee camps. In New Orleans, the destruction of the Ninth Ward has been called an opportunity to start over again from a clean slate. Never mind the people who no longer have any place to live – think of the condominiums that can be built. Think of what can be privatized!
Of the 134 public schools that used to be under the control of the local board of education only four have not been turned into privately run institutions. Of course with no students why should the schools be kept open. The fact that students have no homes to live in and are still scattered across the country is conveniently forgotten.
It's when she examines the situation in Iraq, and the "security" arrangements implemented in the name of Homeland Security that Ms. Klein builds her case against the Bush administration. It is her contention that in order for the type of economic shock treatment required to make the clean slate, a government needs to have dictatorial power over its population to curtail opposition.
She sites as an example the first time this type of economic experiment was attempted in practice; following the American backed military coup in Chile. Pinochet's government had eliminated most avenues of dissent through the simple expedient of killing any opposition voices during the coup. When they implemented the economic policies of complete privatization and cutting spending across the board they simply continued the practice they had started of squelching opposition.
Ironically, the policy ended up being a complete failure. Pinochet was forced to start re-nationalizing industry in the 1980's, and many of the same social programs he had cut were re-introduced in order to stave off economic collapse.
In Iraq the American team charged with rebuilding the country, has been systematically selling all the country's industry and resources to American corporations. Contracts for everything from private armies to act as security forces to building swimming pools in public parks are awarded to American companies. Services like health care, electricity, policing are all being removed from the governments control and contracted out into private hands.
When the Vice President of the United States has gone on public record as saying he advocates the use of torture against enemies of the state, and there is an army occupying your country that has no qualms about shooting and killing anyone it feels like – how loudly would you be inclined to complain? Looking at the American "slogan" for this invasion – "Shock And Awe" – the connection between it and Shock Doctrine economics becomes all too clear according to Ms. Klein.
The state control of personal freedoms in the United States itself may not be as obvious as troops in the street, but any person anywhere can be arrested without reason and denied access to a lawyer under provisions of the Homeland Security Act. The British perfected that one years ago with their anti-terrorist legislation allowing them to hold anybody without charges or access to a lawyer just by saying the magic word terrorism.
What constitutes a threat to security anyway? I'm sure a case could be made for disrupting the economy being construed as a threat to national security - don't you? Without a healthy economy, how can all those necessary security measures be paid for after all?
Naomi Klein has written a very lucid and convincing argument in support of her thesis that governments around the world are taking advantage of natural disasters to implement drastic changes in economic policy at the expense of their populations' well being. What's even more disturbing is the fact that she just as clearly outlines how governments are creating the circumstances enabling those situations to develop and taking steps to ensure that opposition to the changes is suppressed.
This is a book for people of all political stripes to read. Even if you disagree with Ms. Klein's politics, that won't matter. This is a book about "economics stupid", not about whether you are on the left or the right.
(Originally posted September 2007)
Richard Marcus is the author of two commissioned works published by Ulysses Press, editor in the books section of Blogcritics.org and contributor at Qantara.de. He has been writing since 2005 and his work has appeared in publications all over the world including the German edition of Rolling Stone Magazine.