Monday, March 23, 2009

The Shock Doctrine 6: Entirely Unrelated

(Previous posts here, Matt's posts here, Trend's "How to Overthrow a Government" here.)

Since Klein's chapter here notes how the Nobel Prize for Economics legitimized Friedmanism and cleansed it of its taint of involvement with the horrors of the Pinochet regime (after Amnesty International won the Nobel Peace Prize for its work against Pinochet), I thought it was only right to quote another Nobel Prize-winning economist on Friedman.

Paul Krugman wrote,

"Keynesianism was a great reformation of economic thought. It was followed, inevitably, by a counter-reformation. A number of economists played important roles in the great revival of classical economics between 1950 and 2000, but none was as influential as Milton Friedman. If Keynes was Luther, Friedman was Ignatius of Loyola, founder of the Jesuits. And like the Jesuits, Friedman's followers have acted as a sort of disciplined army of the faithful, spearheading a broad, but incomplete, rollback of Keynesian heresy."

Krugman is a little bit intellectually dishonest in this piece, I think, mentioning Chile briefly and all but ignoring the abuses of the regime while poking at Friedman's failures there, but this shows exactly what Klein is talking about in this chapter. As here:

"Similar questions about the lack of clear evidence that Friedman's ideas actually work in practice can be raised, with even more force, for Latin America. A decade ago it was common to cite the success of the Chilean economy, where Augusto Pinochet's Chicago-educated advisers turned to free-market policies after Pinochet seized power in 1973, as proof that Friedman-inspired policies showed the path to successful economic development. But although other Latin nations, from Mexico to Argentina, have followed Chile's lead in freeing up trade, privatizing industries, and deregulating, Chile's success story has not been replicated.

On the contrary, the perception of most Latin Americans is that "neoliberal" policies have been a failure: the promised takeoff in economic growth never arrived, while income inequality has worsened. I don't mean to blame everything that has gone wrong in Latin America on the Chicago School, or to idealize what went before; but there is a striking contrast between the perception that Friedman was vindicated and the actual results in economies that turned from the interventionist policies of the early postwar decades to laissez-faire."

"Everything that has gone wrong in Latin America" clearly is a euphemism for the abuses of the people, and "what went before" is the developmentalist/socialist state of Allende.

Still, I didn't start this to beat up on Krugman, just to use him to illustrate a point. It's simply not allowed for anyone, even a high-profile progressive who has no problem attacking others (:cough: Obama) to question whether Friedman was "a great man," let alone to imply that he might've been willing to collaborate with disgusting regimes with full awareness of their abuses.

Klein goes on to discuss Amnesty International and the rise of nonpartisan human rights watchdog groups, who were forced to prove their lack of partisanship by only being allowed to critique the abuses, not the governments that perpetrated them and the larger framework under which those governments operated.

This reminds me of nothing so much as the tendency of the US military to blame abuses of detainees on "a few bad apples" and ignore the larger, systemic flaws. And we see this now going on with our own economic policy.

Human rights abuses connect with economic policy abuses very easily: laissez-faire economics favors the rich and its supporters, and writes off as bad in itself the idea that people should care what happens to those poorer than they. If we should not care about what happens to poor people as far as paying bills and feeding kids, why bother worrying if they simply disappear off the streets? (Of course, things went the opposite way in repressive Communist states--those who dissented were counterrevolutionaries who were out to hurt the people and must be reeducated or removed. Either way, the idea they would pollute the whole is significant.)

Klein also notes the involvement of philanthropic groups in this scrubbing of human rights talk from left-right ideologies. The Ford Foundation, she notes, was funding both the programs that trained economists in Friedmanism and the human rights groups arguing against the regime's excesses. It was possible to critique the violence, but never to connect the dots.

Klein writes,
"In a way, what happened in the Southern Cone of Latin America in the seventies is that it was treated as a murder scene when it was, in fact, the site of an extraordinarily violent armed robbery."

It is impossible, she notes, (and cites such voices as Simone de Beauvoir for support) to rule a people against their will without violence. It is impossible too to take away social supports they have grown used to without violence. The violence stems from the ideology that says you do not have to care what happens to the others, you just take care of yourself.

Krugman again:

"When Friedman was beginning his career as a public intellectual, the times were ripe for a counterreformation against Keynesianism and all that went with it. But what the world needs now, I'd argue, is a counter-counterreformation."

He's right. But he does not take it far enough. What we need is not just a counter-counterreformation of economics, but one that links everything in the chain together. An understanding that people have basic needs and rights and that the job of government and economic policy is to provide for those needs and protect those rights for ALL, not just for the people who can afford to have them protected. The anger over bonuses and such is for the first time properly directed: at the rich. Now we have to direct that anger in the right direction and use it to change policy, not just opinion polls.