"These worst of times give rise to the best of opportunities for those who understand the need for fundamental economic reform." -Stephan Haggard and John Williamson, The Political Economy of Policy Reform, 1994
This is the quote at the beginning of this next section of The Shock Doctrine, and it once again reminds me why I'm really reading this book.
One of the quotes at the beginning of this chapter reminds me why we need that fundamental economic reform here and now.
"There's a certain chemical that gets released in your stomach when you make ten times your money. And it's addictive." -William Browder, U.S. money manager, on investing in Poland in the early days of capitalism.
Klein focuses here on Poland under Communism, noting that repressive governments were repressive governments whether they claimed to be leftist or right-wing. At first she focuses on the rise of the Solidarity movement, and then notes that "authoritarian regimes have a habit of embracing democracy at the precise moment when their economic projects are about to implode."
The U.S. under Bush was hardly an authoritarian regime like that of the U.S.S.R. or the Latin American dictatorships, and yet the release this week of the torture memos should remind us all of what they do have in common. And this line reminded me that we got a Democrat with progressive tendencies into the White House just when the economy was crumbling around us. One of my biggest fears is that the economy will end up Obama's problem because his economic team embraces too much of the same.
Anyway, back to Poland for a moment. Poland's economy was in free fall just as Solidarity won sweeping victories in the first real elections since Communism, and the IMF wasn't going to help them enact their kind of reforms--worker's collectives instead of central ownership? Bah! You need rich plutocrats!
Enter once again Jeffrey Sachs, this time with the help of George Soros--yes, that George Soros. Sachs was originally enlisted by the Communist government, and then began working with Solidarity, promising them loans if they followed his plan.
I don't really need to reiterate what his plan was by now, do I? The promise of "a quick and magical cure" was too much, and the government went with the Sachs plan. (Another reminder that anyone who claims to have a quick fix is selling something--or looking to buy it at fire-sale prices.)
Of course, then we got the fall of the Berlin wall and the mass of changes at the end of the 80s, and Fukuyama's ridiculous "End of History" (another rule--anyone who declares that they've found the end of history is selling something, too, whether it be Marx or Friedmanites).
I noticed at the tea party protests this week a distinct note of assumption that Obama was both socialist and Fascist, coupled with an apparent lack of comprehension of the contradictions there. I'm reminded again of the woman in the movie theater trying to explain Communism to her son when I went to see Miracle (the story of the 1980 U.S. hockey team).
"They weren't free," she said, which is both true and completely not the point. But that's all these people hear when they hear the word socialism. And it's because of this time period more than any other, when the fall of Soviet Communism became equated with a necessary reversion to free-market capitalism (often without democracy, as in China). We know how untrue this is.
Klein bursts the myth of the Tienanmen Square protests as a pro-Western liberalization movement, and instead notes that much of the dissent was rooted in opposition to the economic "reforms" as well as desire for free speech and elections. The repression, though, wasn't a myth.
I have to go back to the torture memos here, because the one difference between the U.S. and the other governments who applied the Shock Doctrine is that for the U.S., shock reforms were always appropriate for other countries, other people, but not for us. Reading the torture memos, it is shocking to see the justification hinge on the citizenship of the people being tortured and the location of the torture, as if it's OK so long as it's far enough away from us. The Shock Doctrine has always been something practiced on other people.
And yet it snuck up on us piecemeal, bit by bit, a tax cut here, a privatization there, some deregulation by both Democratic and Republican presidents. And so reading these chapters of history in other countries, so much of it reminds me of us.