Zone5

Essential reading for anyone who wants to understand world history of the last 50 years is Naomi Klein’s The Shock Doctrine.

Her extraordinary account begins with the exploits of one Dr. Ewan Cameron, president of the American and World Psychiatric Association, who’s theories on treating psychiatric patients by erasing their personalities became influential in the spread of Electric Shock Treatment (EST) in U.S. hospitals from the late 1940s.

Cameron believed that he could use a combination of sensory deprivation, EST and drugs to reduce the personality to a tabula rasa- “shock and awe warfare on the mind.”

The application of these methods in political torture are probably obvious and well-known, but what Klein’s book does is to show the link between this method of first erasing the personality and then reconstructing it according to the desires of the “therapist” were applied systematically, not just to individuals but to whole countries through the economic theories of Milton Friedman.

In the 1950s, Friedman was the main figure in the so-called Chicago school of economics out of which emerged the dominant political philosophy of our time: free market capitalism, and its most refined form of neoliberalism.

Milton’s philosophy was pursued with evangelical religious fervor. The doctrine states that an economy can only be healthy if government’s role is reduced to merely insuring that nothing interferes with the proper functioning of the market. According to this fundamentalist functionalist belief, any social problems- unemployment, inequality- are a result of government interference and the cure is alwasy the same: privatise more and keep taking the medicine.

Knowing that unrolling free-market economic policies will cause at least short-term pain that will be unpopular with the electorate, it was always understood that these “reforms” would need to be imposed abruptly, as many as possible, as fast and radically as possible.

Beginning with Pinochet’s Chile and the South American dictatorships of the 1960s, Klein charts the spread of this doctrine across the world: the end of apartheid in South Africa; the breakup of the Soviet Union; the miner’s strike under Thatcher; reaganomics; the collapse of the Asian Tiger economies in the late 90s- behind all of these earth shaping political events lies the workings of the shock doctrine.

It works something like this: a country is let slip into debt. It has problems. Often, if a popular government is coming into power it is inheriting the debts and problems of the previous regime. The World bank and the IMF offer loans- but the conditions are always the same: take the medicine of the Shock Doctrine and open wide the gates to Free market ideology. Only this will heal the wounds.

Almost inevitably, one by one each of these countries and regions succumbed to this tactic only to find their progressive ideals destroyed. Often deals were done behind closed doors right after a populist election, as happened in Poland for example, but the new leaders were left no choice.

Poland became the textbook example of Friedman’s theory: the disorientation of rapid political change combined with the collective fear generated by economic meltdown to make the promise of a quick and magical cure- however illusory- too seductive to turn down.

Behind these seismic changes in world affairs was always Friedman barking “more more”- more shock, more radical imposition of free market economics.

In its most recent form we have Katrina and New Orleans, the South Asian Tsunami, 9-11 and the most complete exposition of the Shock Doctrine so far: Iraq, the complete erasure of the personality of a whole nation, to be rebuilt in the image of its destroyer.

What Friedman has never admitted- nor his younger apostle Jeffrey Sachs- is that to actually impose these policies requires brutality, torture and oppression by the state. Friedman has always seen this a “unfortunate side-effects” rather than central, as Klein argues, to the whole program. Free Market policies would never be acccepted by a population who can see the wealth of their whole nation being ransacked, so we have the thousands of Disappeared, death camps and Guantanamo.

The mature form of the Shock Doctrine is Disaster Capitalism- the deliberate running down of economies through privatisation and deprivation in order to create an environment where the shock doctrine can be imposed. It is then wide open for private corporations to go and do the jobs which used to be the preserve of government social services.

For companies that are clever and far-sighted, like Halliburton and the Carlyle group, the destroyers and rebuilders are different divisions of the same corporations.

A minor but interesting aspect to all this is a different perspective suggested by Klein with regard to the 9-11 conspiracy theories.

Yes, Ive seen all the films and read all the books on this and I certainly don’t think that it is completely beyond the realm of the possible that Cheney was behind the 9-11 attacks- conspiracies certainly do happen-, but Klein offers gives another take on this and other conspiracies (the blogosphere is already humming with speculation about the recent attacks in Mubai):

The truth is at once less sinister and more dangerous. An economic system that requires constant growth, while bucking almost all serious attempts at environmental regulation, generates a steady stream of disasters all on its own, whether military, ecological or financial. the appetite for easy, short-term profits offered by purely speculative investment has turned the stock, currency and real estate markets into crisis-creation machines, as the Asian financial crisis, the Mexican peso crisis and the dot-com collapse all demonstrate. Our common addiction to dirty, non-renewable energy sources keeps other kinds of emergencies coming: natural disasters (up 430% since 1975) and wars waged for control over scarce resources (not just Iraq and Afghanistan but lower-intensity conflicts such as those that rage in Nigeria, Columbia and Sudan), which in turn create terrorist blowback… Given the boiling temperatures, both climatic and political, future disasters need not be cooked up in dark conspiracies. All indications are that simply by staying the present course, they will keep coming up with ever more ferocious intensity. Disaster generation can therefore be left to the market’s invisible hand. This is one area in which it actually delivers.

As the march of the free market leads to the privatisation of practically everything including security forces, prisons and social services, the profit motif will ensure that none of these things serve the public very well: that is no linger their primary purpose.

How much of the current financial meltdown has simply been let happen to facilitate the unrolling of what might be the Endgame of free market Economics?

Klein’s impressive and authoritative survey of modern history ends with the optimism of the activist: the world may have gotten used to shock. Across South America, the region with the most experience of this process, Shock has worn off and the people are wiser and will no longer accept the overtures of the World Bank which, she claims, is nearly going bust. Perhaps the recent admission by Greenspan that he was wrong, and the widespread disaffection with the banks over here will have woken people up to how the world works.

Certainly, the more people who read Klein’s book the less likely we will be fooled again by the lie that the market will, left to its own devices, satisfactorily meet people’s needs.