The Shock Doctrine 11: Democracy Born in Chains

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

I know, it's been a while. I've been busy, and while I still am, I had a moment this weekend to relax and read and I caught up on Shock Doctrine so I could post more for all of you. Look grateful.

This week's chapter is about South Africa, and I don't know enough about South African history to really critique Klein's position. However, I know someone who does, and so I asked Shenid Bhayroo, professor of journalism at Temple University, to tell me what he thought of Klein's take on his country.

Here's some of what he told me:

To the analysis of South Africa: I would argue that Klein's "shock" metaphor does not adequately explain the post-1994 political economy of South Africa. First, her analysis, in the book as a whole and for South Africa, begins circa 1970s. This is curious, in the case of South Africa, since this disregards the significant anti-colonial, anti-apartheid history dating back to the post-WWII years. In particular, the role of the independent trade union movement, the socialist left in South Africa, and individuals such as Steve Biko.

Second, the now-ruling party, the ANC, never capitulated to the policies of the IMF and the World Bank. On the contrary, the former liberation movement never advanced a leftist, let alone a socialist, agenda. The ANC (African National Congress, the South African Indian Congress, the Coloured People's Congress) created with popular support in 1955 the "Freedom Charter." This document addressed the many injustices of the Apartheid system and created a set of principles (the Charter) that would form the framework of a "new" South Africa. The Freedom Charter represents a minimum set of demands/principles for a democratic society, with human rights for all citizens. It is a populist document, reflecting the minimal demands/requirements of a "free" society.

More than a "shock doctrine" of SAP's and high interest loans, the current political economics we now have in SA is the consequence of the system of Apartheid, which in turn was a manifestation of rapacious capitalism - as evident by the exploitation of the millions of working class (black) workers. Labor laws, the education system, the health care system, the economics of the system were engineered so as to facilitate the development and entrenchment of a ruling elite--both economic and political. The transition to a post-Apartheid South meant that the ANC could deliver on its promise to build on and expand political power for the "people." This it has done to a large degree. (BTW: In the last two general elections I voted for the ANC). But the government has not done the same for economic freedoms. Hence the scourge of corruption, the emergence of a wealthy black elite, and the lack of real empowerment of the working class.

Thus, I would argue that the shock doctrine thesis oversimplifies the ANC's economic agenda - which from the outset sought to assure foreign investors that a "free market" would prevail in post-Apartheid South Africa. In fact, large scale privatization of public resources took place in the early years of ANC rule in South Africa. The ANC was never substantively critical of the fundamental policies of the "free market," or for that matter critical of the system of capitalism.

As Dr. Bhayroo points out, Klein does stress that apartheid itself was an economic system, but she doesn't make much of an effort to look at the internal critiques of that system. She does mention the boycott strategy, which held corporations accountable for doing business with the apartheid government, but as Rushkoff notes in Life, Inc. this sets up a dichotomy of good corporation/bad corporation, when really the existence of the massive corporations AT ALL is inherently problematic.

In other words, separating corporatism/radical capitalism from human rights violations, as Klein notes in earlier chapters, doesn't work. As long as the post-apartheid government, or the post-Bush government here at home, still believes in "markets" (by which they mean the right of state-subsidized corporations to exist) then the problem will never completely be solved. Corporate capitalism requires an underclass to do the low-paying work it thrives on.

How does this relate to the U.S.? Torture--as in our current discussions of the proper response to Bush Administration torture--is not the main problem. It's a symptom of the sickness. Maybe the most obvious outward one, but a symptom nonetheless. We cannot separate the torture from the rest of the decisions made by the government. It is a symptom of a world in which corporate power is absolute and people don't matter except for what one can get from them. A commission on torture that obsesses over who knew what and when misses the entire point. Of course Pelosi was in some degree complicit--of course Obama is. We still have the same system in control.

"I think when you focus on torture and you don't look at what it was serving, that's when you start to do a revision of the real history."
-Yasmin Sooka, South African Truth and Reconciliation Commission, quoted in The Shock Doctrine

The Shock Doctrine 7: Saved By A War

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

Ohhh, Maggie Thatcher. For feminists like me, Thatcher is a conundrum. On the one hand, she's a success story--a leader of a country, a pioneer for women in power, and one that no one ever doubted was tough enough for the job. And yet everything she did makes me cringe and want to deny her any sort of association with women.

This weekend at WAM we started talking about Palin and the new conservative feminism, and I wonder why none of us thought to bring up Thatcher. The question we were asking was whether one has to be prochoice to be feminist, because that's the question the Palin-types have been asking. But Thatcher? Well...

Klein notes that Thatcher and Pinochet became close friends, but that Thatcher knew she couldn't enact Shock Doctrine-style reforms in England without immediately being tossed out on her ass.

Apparently, Friedman and his acolytes had already been disappointed once before, by none other than Richard Nixon. (Interestingly, our buddy Donald "War Crimes" Rumsfeld was named adviser to Nixon through his connections to Friedman). Nixon's "We are all Keynesians now" proclamation stabbed Friedman in his little shriveled heart.

Friedman paid it back with a crack about Nixon being "socialist," which would make me laugh if it wasn't such a common one in this country. I joked yesterday, after being aggravated by people on NPR calling Obama a socialist, that anyone who calls someone else a socialist should have to explain why that's a bad thing. But honestly, I'm tired of the misuse of the word, though I do wonder if overusing it constantly will actually take the scare power out of it--I wrote about this months ago.

Klein notes:

"The University of Chicago professor had built a movement on the equation of capitalism and freedom, yet free people just didn't seem to vote for politicians who followed his advice."

But the turning point for Thatcher was one we should be able to guess: war. War with Argentina (yes, the dictatorship) over the Falklands/Malvinas. Militarized conflict without allowed Thatcher to militarize conflict within Britain, unleashing riot police on striking coal miners--and plenty of domestic surveillance as well. Sound familiar? Like riot police and "protest pens" and warrantless wiretapping? Good. It should.

Thatcher's strike-busting, along with Reagan's, paved the way for radical capitalist reforms. Thatcher's code-name for the Falklands war was even Operation Corporate, whether out of humor or simple honesty.

Allan Meltzer, a colleague of Friedman's, noted "Ideas are alternatives waiting on a crisis to serve as the catalyst of change."

Klein notes that Friedman and his pals weren't looking for military crisis, but economic crisis.

"However, if an economic crisis hits and is severe enough--a currency meltdown, a market crash, a major recession--it blows everything else out of the water, and leaders are liberated to do whatever is necessary (or said to be necessary) in the name of responding to a national emergency.

If this is true, then right now what we have is an excellent opportunity for change. The Republicans are clearly out of ideas--this WSJ article was summed up on Twitter as:

FakeHowardDeanRT @kaiserbrown GOP Plan for Budget. CUT RICH PEPLZ TAXEZ, DIGZ US FOR OIL, ???, PROFIT!$!$!$

Americans aren't about to fall for that right now. Instead, we're seeing anger at the rich along with steady approval ratings for President Obama (I still kind of love typing that) and Paul Krugman's rock star status as he attempts to pull Obama's economic team further left only growing. It's time for ideas again, and this time it's us on the left who have them. Bernie Sanders has introduced a real single-payer health care plan in the Senate, and Sherrod Brown is having hearings discussing the New Deal. We can be the ones with the ideas this time around.

The Shock Doctrine 4: States of Shock

“If that track record qualifies Chile as a miracle for Chicago school economists, perhaps shock treatment was never really about jolting the economy into health. Perhaps it was meant to do exactly what it did—hoover wealth up to the top and shock much of the middle class out of existence.” - The Shock Doctrine, page 105

(Previous posts here, Matt's posts here, here and here.)

Trend gave us an excellent rundown of the events in Chile that led to the Chicago School takeover of its economic policy, so I don't need to sum that up here.

Pinochet embraced the Chicago Boys' prescription for Chile's economy, according to Klein, because he liked the idea of a complete revolution rather than a temporary correction. He drove out the other members of the junta and appointed several of the Friedmanites to high government positions, and privatized, slashed social spending, and deregulated. This, predictably led to...

inflation, unemployment, and poverty. So the solution? MORE privatization, deregulation, and slashing social spending. Oh yes, and a calculated terror campaign in which thousands of people were "disappeared." Argentina, Uruguay, and Brazil followed soon after, though some of them took notes from Pinochet and attempted to conceal their torture and murder under a blanket of plausible deniability--in order to stay open to foreign investment, of course.

Klein points out that for all Friedman's free-market utopianism, what resulted was more corporatism than purist capitalism. The countries were run by repressive regimes with deep ties to the corporations who profited from them. Sound familiar? (Well, minus some of the repression.)

The parallels with Bush's disaster capitalism are easier to see when you phrase it in these terms. Bush didn't need a coup (just a disputed election) when September 11 happened (coincidentally, exactly 28 years after the coup in Chile started radical capitalist experimentation).

Warrantless wiretapping certainly isn't mass disappearances of citizens, but it is a tool that keeps everyone in fear that they are next. It suppresses dissent and keeps people in fear for their basic safety, while around them their economic safety net is dismantled. America hadn't undergone enough of a shock to allow, for instance, Social Security privatization, but in Chile and the other Friedmanite regimes, torture and repression left people unable to fight back.

Roger Cohen in the New York Times (h/t Matt) referred to Obama's "counter-revolution," an interesting choice of words considering that The Economist called the spread of disaster capitalism in Latin America its own "counterrevolution."

Which revolution is Obama countering, then? The Reagan revolution, perhaps, since even Bill Clinton furthered Reaganite principles of deregulation and privatization and slashing social programs (:cough: Welfare reform)?

Friday night, I attended a panel discussion put on by The Nation in New York. It featured Joseph Stiglitz, Barbara Ehrenreich, Bill Fletcher, Jr., Jeff Madrick and Chris Hayes discussing the economic meltdown. Stiglitz referred repeatedly to the economic situation in the 70s in Latin America as what we need to avoid--and what we are in danger of repeating.

Madrick noted as well that "This is not recession as usual. This is not recession-plus as usual," but Ehrenreich reminded us that "It's always folly to say this is the end of capitalism."

She went on to note that "What we have to shake off is the curious religion that is market fundamentalism," and Fletcher referred to "the great crap game that is called capitalism."

The fact that there was a line around the block for this event says something about the times, and the amount of little white note cards with audience questions that Hayes had to sort through was evidence that people are scared right now. I fear what this situation would look like at the moment with McCain in office, and the panelists all agreed that it is hard to criticize Obama because he's so much better than what we've had for the past however many years (Madrick pointed out that the standard of living for most Americans has been declining since 1974--in other words, we were better off under NIXON).

Still, the more I read through The Shock Doctrine, the more I realize the parallels. Naomi Klein was supposed to be at this event, and she would've fit in quite well between the economists and the socialists, diagnosing not only the technical problems with our current situation, but the moral and ideological problems there as well.

But the panel on Friday night gave me hope because it proposed solutions. Because we talked about a return to a living wage, a resurgence in unions (EFCA battle coming to a political theater near you), real health care (ditto), and a change in our banking system--a return to "plain vanilla" lending, Madrick called it.

"What are the social functions which a good financial system should serve?" Stiglitz asked, and Milton Friedman might have rolled over in his grave. Still, these are questions being asked right now, and the people in power for the first time in my lifetime may actually be willing to attempt an answer.

The Shock Doctrine 1: Blank is Beautiful

The introduction to The Shock Doctrine had my blood boiling by the end of the first page. Naomi Klein quickly drops us in post-Katrina New Orleans, and moves from a young man at a shelter (run by Scientologists, a possibly-irrelevant detail that simply shows off Klein's adept writing) to the churning brains of Republican congressmen and business developers who can't wait to tear down what's left of New Orleans and remake it in their image.

I love New Orleans--lived there for four years during college--and people who fuck with it evoke rage in me much like people who hurt my friends. I want to kill. And this is what Klein is going for. Her book isn't just a history of an economic movement, it's a call to arms, an incitement to engagement and action.

From the developers, she introduces us to Milton Friedman, noting that the famed Chicago free-market theorist called himself a preacher, and indeed his dogmas spread like many religions: winning converts at the top of society and then being forced on those at the bottom whether they liked it or not.

Klein's thesis for the book, laid out so simply in her introduction, is that Friedman's theories of free market capitalism were dependent on disaster for implementation. A major collective trauma (think Katrina) is inflicted on a society, and then quickly the capitalists step in with their prescriptions for help: Privatize, deregulate, and cut social spending.

In New Orleans, the school system, never that great, is now a collection of charter schools, the teacher's union contract gone. Most of the former teachers were fired, and some were rehired by the private charter schools at reduced salaries. And we all know about what happened to the public housing, right?

"Only a crisis--actual or perceived--produces real change," Klein quotes Friedman, and this thought makes me cringe even more watching our economic crisis unfold.

Yes, the stimulus package just passed certainly is not Friedmanite policy, and for that I am thankful, but if it doesn't work and things only get worse, we may well end up with Republican majorities again and then, think of what could be implemented on a shocked and hungry America.

Klein says that the disaster capitalist Friedman disciples were "part of a movement that prays for crisis the way drought-struck farmers pray for rain and the way Christian-Zionist end-timers pray for the Rapture."

That sentence reminds me sharply of Max Weber's connection between capitalism and Calvinism, that Protestant movement that encouraged hard work in this world for a reward in the next. I'm sure there'll be more that will make this connection as I read on, but for now, it bears noting that the reason free market disciples came to power in this country was a marriage of convenience with the religious Right.

I've said before that when Bush and his cronies said "democracy," we should hear "capitalism," and when they said "freedom," we should hear "free markets." Klein also points out that the fight against communism which led to the fetishizing of capitalism in this country among everyday people was never framed as what it was: a fight FOR capitalism.

Klein isn't arguing for socialism, she's arguing for an examination of capitalism, one that is even more important right now. She notes that Friedmanite capitalism had, like many ideologies, a "signature desire for unattainable purity."

We cannot allow ourselves, in dealing with the current economic crisis, to fall prey to the same kind of thinking. Compromises will happen; mistakes will be made. What progressives have that neoconservatives don't is a concern for the welfare of everyone, and we can't let everyone suffer because of a desire for ideological purity.

(Make sure you read Matt's post as well. And please, comment, read along, discuss, point out things you think I missed...let's make this a real dialogue.)