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Naomi Klein's Global Coup

Her zooming book is reframing the debate.

By Crawford Kilian 11 Sep 2007 |

Crawford Kilian is a frequent contributor to The Tyee.

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  • The Shock Doctrine: The Rise of Disaster Capitalism
  • Naomi Klein
  • Knopf Canada (2007)

Aristotle called it anagnorisis -- the moment near the end of a drama when the characters, and the audience, suddenly understand the true nature of their situation. Usually defined as "recognition," the word literally means "high knowledge," an insight above that of ordinary life. Anagnorisis often involves a setback, the peripeteia, which throws one or more characters back on their own resources in a suddenly changed world. When Oedipus realizes he's killed his father and married his mother, it's a horrible recognition; only abdication and self-blinding can atone for his crimes.

A similar kind of anagnorisis must affect many readers of Naomi Klein's The Shock Doctrine: The Rise of Disaster Capitalism.

But we don't feel like Oedipus; we feel like characters in an Agatha Christie novel, gathering around Hercule Poirot to learn the murderer's identity. As Detective Klein calmly and logically marshals her evidence, we look at one another with a kind of nausea: Yes, we saw that, and that, but we didn't understand what we were looking at. Oh God, are we ourselves the murderer's accomplices?

Like a latter-day Poirot, Klein reviews the last 35 years and connects dots that always seemed unrelated: the overthrow of Allende, Argentina's dirty war, Reagan's firing of the air traffic controllers, the Falklands, the rise of Solidarity in Poland, the fall of the U.S.S.R., even the deaths of hundreds of security "contractors" in Iraq.

The birth of the Chicago Boys

In effect, Klein argues, we are living with the results of a decision of the U.S. government in the 1950s. Its original intent was to import Chilean students to the University of Chicago, pay their way through studies with the "Chicago School" of economics led by Milton Friedman, and then send them home to change Chile's mixed economy with its high tariffs and expensive social programs.

Scores if not hundreds of "Chicago Boys" went home to Chile but had zero impact on their country's politics and economy. Then Salvador Allende was democratically elected, and the U.S-funded the coup that killed him and put Augusto Pinochet in power. On the day he took over, the Chicago Boys gave Pinochet a 500-page "brick" of plans to establish a free-market utopia in Chile.

By now, Milton Friedman had been a voice in the wilderness for a generation, evangelizing against the mixed economy that Keynes had promoted in the 1920s and '30s. Friedman's ideas were politically impossible to establish in democratic countries, but a great many conservatives loved him. Even Richard Nixon, while he publicly endorsed Keynes in the U.S., authorized the coup that put Pinochet and the Chicago Boys in power.

Killing chickens to scare monkeys

Klein makes her narrative a kind of Bildungsroman, the story of the education of the Chicago School and its political allies. Chile (and then Argentina, Uruguay, Brazil, and Bolivia) taught Friedman and his students that nothing changes until a crisis -- an economic or political shock -- throws a society off balance. Disoriented, the society accepts whatever solution is presented to it -- or forced upon it.

They quickly learned that brutality was key to free-market success. The persons and groups benefiting from the old order had to be suppressed, suddenly and violently. When the Brazilian generals tried to run a "gentlemen's coup," they nearly lost power. Not until they began to imprison and "disappear" their opponents did they re-establish themselves. Conspicuous kidnappings and public murders added more shocks; as the old Chinese saying goes, "Kill the chicken to scare the monkeys."

Klein shows that it wasn't all thanks to the Chicago Boys. In 1965, a similar group of hot young economists from Berkeley helped General Suharto entrench himself in Indonesia, after a coup that led to the slaughter of over half a million Indonesian communists.

Thugs like Suharto, Pinochet and the Argentine generals knew nothing about economics except how to steal. But they were willing to impose Friedman's shock therapy as the price of American loans and military aid.

The contribution of Canada's mad scientist

The thugs also accepted advice in torture techniques that the CIA had learned from funding Canadian psychiatrist Ewen Cameron in the 1950s. With drugs, electroshock, and sensory deprivation, Cameron thought he could erase sick minds and grow healthy minds in their place.

He utterly failed, except to destroy his patients. But the CIA taught his methods to the juntas -- and they applied them to the union leaders, human-rights advocates, and academics who resisted the imposition of a free market.

The Chicago Boys' education continued. Margaret Thatcher, less popular in 1982 than George W. Bush is today, exploited the shock of the Falklands War to regain authority, break the British coal miners, and gravely weaken the British welfare state.

When Lech Walesa and Solidarity took power in Poland, Bush's father offered no support until the country was in disastrous economic shape. Then he sent in the Chicago Boys to impose shock therapy, ditching the worker-controlled companies that Solidarity had sought for over a decade.

And so it went, as free-marketers moved into one crisis-ridden country after another, stripping each of its publicly owned assets. That was always the price of "stability," of an end to the crisis.

From the Gang of Four to the Gang of Chicago

Milton Friedman went twice to China to tutor the Communists on privatization, and they followed his advice. Tiananmen Square was largely a protest against the resulting higher prices, lower wages, and unemployment. Workers, not students, were the majority of those executed and imprisoned by a government that was defending capitalism, not communism.

Klein repeatedly notes that Friedman was absolutely right: A crisis is essential because no democratic country freely chooses a free market. (They may elect a free-marketer like Reagan or Mulroney, but they support him only if he runs a huge deficit to keep people working.)

"Voodoo politics" also worked: Run on a popular platform, then junk it when you're elected. The Bolivians voted for a centre-left president who promptly imposed shock therapy on them. (Impoverished workers turned back to growing coca.)

Eventually, Klein suggests, the Chicago School and its government disciples realized that you don't have to wait for a crisis like Tiananmen Square or 9-11. A natural disaster like the Boxing Day tsunami, or Katrina, will do just as well. A war launched on lies will enable you to impose the free market on a whole country like Iraq.

So Sri Lankan fishers lost their villages, which were handed over to tourism developers. New Orleans lost its public schools because, just before he died, Friedman said this was a great opportunity to rebuild the system with charter schools. And hundreds of privatized soldiers, "contractors," die in Iraq without raising a political ripple. Their deaths don't count.

Did we let it happen?

In Murder on the Orient Express, Hercule Poirot gathers the passengers and proves that they all had to be in on the murder. That's the way many readers will respond to The Shock Doctrine: If we didn't actually put the knife into Chile and Argentina and Poland, we stupidly stood by and let it happen. We may not like the free market and free trade, but we stupidly accept them as givens. A session with Dr. Cameron's students would serve us right.

But Klein lets us off the hook. She reminds us, toward the end of this extraordinary book, that shock is a transient phenomenon. Even those who died resisting, like Argentina's Rodolfo Walsh, predicted that the impact would wear off eventually.

Klein offers evidence that Latin America, as the first torture chamber of the Chicago School, is also the first region to recover. Left-wing governments are flourishing, free of loans from the IMF and World Bank. Countries like Venezuela, Bolivia, and Ecuador are starting to stand on their own feet.

Equally importantly, the Chicago Boys and their supporters are turning into felons. The politicians and technocrats who handed their countries over to Milton Friedman's acolytes are now in jail or on the lam, charged with embezzlement or worse. Some of their cheerleaders, like Conrad Black, are convicted fraudsters.

I can take some personal consolation in this outcome. Almost 20 years ago, as the Berlin Wall came down, I wrote in a Vancouver Province column that "Communism is just the first to fail." Friedman's savage capitalism has failed everywhere it was imposed, just as communism did. Klein gives us some reason to look forward to a re-mixed economy where the government provides essential services again, and very few are very poor.

Future shocks?

Yes, we may still be shocked -- by another Al Qaeda attack, or an American attack on Iran, or the collapse of the U.S. stock market. But Klein reminds us that we can become shock-resistant, and sometimes shocks just make us grow up fast.

The publication of her book is itself a notable shock: on, it has shot to #1 on the best-seller list in less than a week, and on, well before its American publication date, it's risen from almost #8,000 to #161. Alfonso Cuarón, director of Children of Men, has created an eight-minute "trailer" for the book that has spread across the web with a speed that viral marketers will study very seriously.

In other words, the free market has provoked an enormous demand for something better than itself. Lenin said, "The capitalists will sell us the rope we hang them with." Klein, no communist by any means, has tied the hangman's knot in that rope.

Those who have profited from political shock therapy will try hard to keep us off balance and scared; they're terrorists far more sophisticated than Osama Bin Laden. We can expect a ferocious counter-attack against Naomi Klein by the free-marketers.

But now that she has re-framed the debate, we have a fighting chance to shock the Chicago Boys right out of their half-century of misused power, giving them the anagnorisis, and the setback, they deserve. Like Oedipus, they must abdicate; they were self-blinded from the start.

[Naomi Klein will be speaking in Vancouver on October 4th.]