UFPPC (www.ufppc.org) Digging Deeper XXXVII: October 22, 2007, 7:00 p.m.

Naomi Klein,

The Shock Doctrine: The Rise of Disaster Capitalism

(New York:Metropolitan Books, 2007).INTRODUCTION: Blank Is Beautiful:Three Decades of Erasing andRemaking the World.

Post-Katrinaconversion of New Orleans educationalsystem to private charter school systemas an example of “disaster capitalism”(3-6). Friedman theorized [in

Capitalismand Freedom

] about the need for crisis toproduce “real change” (6-7). Chile & Iraq(7-8). Through work on Iraq, she“discovered that the idea of exploitingcrisis and disaster has been the modusoperandi of Milton Friedman’s movementfrom the very beginning. . . . Seenthrough the lens of this doctrine, the pastthirty-five years look very different” (9).Wars and financial crises (10-11).September 11 was exploitable for “thedisaster capitalism complex” (11-14).“Now wars and disaster responses are sofully privatized that they are themselvesthe new market; there is no need to waituntil after the war for the boom” (13). Telling the history of the complex isdifficult because “the ideology is ashape-shifter,” but its variousincarnations all advocate “the eliminationof the public sphere, total liberation forcorporations, and skeletal spending” (14-15). The best term for the result is a“corporatist” society (15). Torture asboth “silent partner” and “metaphor of the shock doctrine’s underlying logic”(15-17). This differs from the officialaccount of Friedman’s career (17-18). “Iwill show that this fundamentalist form of capitalism has consistently beenmidwifed by the most brutal forms of coercion” (18). Like other “clean slate”ideologies “[r]ooted in biblical fantasiesof great floods and great fires,” it “leadsineluctably toward violence” and is “adanger to the public” (19). If Communism is to be held accountable forits crimes, so must free-marketfundamentalism (19-21).

PART 1: Two Doctor Shocks:Research and Development.

Ch. 1: The Torture Lab: EwenCameron, the CIA, and the ManiacalQuest to Erase and Remake theHuman Mind.

Gail Kastner, a Canadianvictim of 1950s mind experimentssponsored by CIA (25-30). Dr. EwenCameron of McGill Univ. and his work onmental repatterning was funded by theCIA from 1957 to 1961 (30-32; 35-38). The MKULtra program; though it wasresearch on torture, when exposed it wasframed as mere foolishness (33-38). Theresearch informed the 1963

Kubark Counterintelligence Manual

, made publicin 1997 (38-41). U.S. personnel usuallyacted as mentor or trainer in use of theseillegal techniques (41-42). Sept. 11 ledto U.S. “in-sourcing” of torture (42-46).Cameron’s effect on Gail Kastner was likethe U.S.’s effect on Iraq (46-48).

Ch. 2: The Other Doctor Shock:Milton Friedman and the Search fora Laissez-Faire Laboratory.

MiltonFriedman and the Univ. of Chicago (49-50). “A love of numbers and systems”(50-51). Friedman’s origins (52). Hismovement’s enemy: Keynesianism’s“revolution against laissez-faire (53-56).

Capitalism and Freedom

(1962) attacksthe New Deal heritage, advocatesprivatization (56-57). U.S. combats“developmentalism” (i.e. economicnationalism) abroad by coups (58-59)and, in the Southern Cone of LatinAmerica, by an ideological plan devisedin 1956 by Albion Patterson, director of the U.S. International CooperationAdministration (which would laterbecome USAID) in Chile, and TheodoreW. Schultz, chair of Chicago’s economicdepartment, to sponsor Chilean students

at Chicago (59-62). Chilean politics wasmoving to the left (62-63). But Nixonwaged economic war against Chile, thenAllende was overthrown, using the“Indonesia approach” (63-71).

PART 2: The First Test: Birth Pangs.Ch. 3: States of Shock: The BloodyBirth of the Counterrevolution.

Afterthe Sept. 11, 1973, coup, the impositionof “The Brick,” as the economic plan wasknown (75-77). Similar events wouldfollow in dozens of countries, “But Chilewas the counterrevolution’s genesis―agenesis of terror” (78). Pinochet knew noeconomics, but proclaimed the“naturalness” of the changes (79). Facedwith difficulties, Friedman visited Chile inMarch 1975 and advocated to Pinochet afuller embrace of free markets, using theterm “shock treatment” for the first timein the context of a real-world economiccrisis; in 1975 Pinochet and Sergio deCastro embraced the advice (79-85). The“Miracle of Chile” is a myth; what wasreally produced was a highly inegalitariancorporatist country (85-86). Brazil,Uruguay, and Argentina follow (87-89). Torture, using

Kubark

methods,accompanied the changes (89-94). In“An Open Letter from a Writer to theMilitary Junta” (1977) sent the day beforehe was killed, Rodolfo Walsh, Argentina’sleading investigative journalist, wrote:“It is in the economic policy of thisgovernment where one discovers notonly the explanation for the crimes, but agreater atrocity which punishes millionsof human beings through plannedmisery” (95; 94-96). To justifyrepression, the myth of dangerousMarxist terrorists and guerrillas waspromoted (96-97).

Ch. 4: Cleaning the Slate: TerrorDoes Its Work.

A month before he wasassassinated on Sept. 21, 1976, OrlandoLetelier denounced Milton Friedman inthe

Nation

as complicit in Pinochet’scrimes (98-100). In September 2006, Judge Carlos Rozanski of Argentina foundMiguel Osvaldo Etchecolatz guilty of “genocide” for his role in the Argentineterror (100-02). “[I]f genocide isunderstood as these courts define it, asan attempt to deliberately obliterate thegroups who were barriers to a politicalproject, then this process can be seennot just in Argentina but, to varyingdegrees of intensity, throughout theregion that was turned into the ChicagoSchool laboratory” (102). This was “adeclaration against this entire culture [of left-leaning citizens]” (104; 102-07). Trade unionists persecuted (107-09). Inthe name of fighting Marxism, “anyonewho represented a vision of society builton values other than pure profit” faced“preemptive attack”: agrarian leaders,community workers, etc., both toeliminate opposition and send a message(109-11). Torturers and economists usedthe same “supremacist logic” ormetaphor of “curing,” which extendedeven to separating children from parentsin the name of health (111-15).

Ch. 5: “Entirely Unrelated”: How anIdeology Was Cleansed of Its Crimes.

History has been rewritten by Friedmanand others, so that it appears that theChicago Boys were called in

after

thecoup, rather than being a part of it (116-17). The award of the 1976 Nobel Prizein Economics to Milton Friedman and of the 1977 Nobel Peace Prize to AmnestyInternational had the effect of disconnecting the two aspects of shock(117-18). Also tending in this directionwas the development of “the modern-dayhuman rights movement,” and AmnestyInternational in particular, which soughtto avoid politicization by looking atabuses narrowly (118-21). “It didn’t askwhy, it just asserted

that,

” essentiallydeveloping “a way of engaging in politicswithout mentioning politics” (121).Another factor in this was the desire toremain eligible for the money that wasavailable (as a sop to their consciencesand as insulation from criticism) from

philanthropic foundations like the FordFoundation: “when Ford rode to therescue, its assistance came at a price,and that price was―consciously ornot―the intellectual honesty of thehuman rights movement (124; 121-25). This has altered the way the history of the “free-market revolution” is told (124).In essence, the Southern Cone “wastreated as a murder scene when it was,in fact, the site of an extraordinarilyviolent armed robbery” (125). Torture isnot an aberration, but “an indicatorspecies of a regime that is engaged in adeeply anti-democratic project” (125;125-27). The failure to holdneoliberalism responsible for its crimesset the stage for our present “era of corporatist massacres . . . [a]nd onceagain the goals of building free markets,and the need for such brutality, aretreated as entirely unrelated” (128).

PART 3: Surviving Democracy:Bombs Made of Laws.

Ch. 6: Saved by a War: Thatcherismand Its Useful Enemies.

Thatcher andNixon illustrate the unpalatableness of Friedman’s ideas in democratic societies(131-36). But the 1982 Falklands Wargave Thatcher the political cover toimpose radical capitalist transformationin Britain (136-41).

Ch. 7: The New Doctor Shock:Economic Warfare ReplacesDictatorship.

Advised by economist Jeffrey Sachs, Bolivia’s newly electedPresident Paz imposed economic shocktherapy three weeks after his 1985election on a different platform; theensuing economic “miracle” wasaccompanied by repression, showing“that the corporatist crusade couldadvance by these baldly authoritarianmeans and still be applauded asdemocratic because elections had takenplace” (154; 142-54).

Ch. 8: Crisis Works: The Packagingof Shock Therapy.

Two kinds of financial crises as a means of justifyingshock therapy offered opportunities inthe 1980s: passing on odious debt (156-58), and debt shocks (159-61). The latterbecame more common in the early1980s as the “Washington Consensus”expressed the “colonization” of the WorldBank and the IMF by Chicago Schooleconomists, which became a clevermarketing strategy to impose radicalfree-trade regimes on poor countries(161-68).

PART 4: Lost in Transition: WhileWe Wept, While We Trembled, WhileWe Danced.

Ch. 9: Slamming the Door onHistory: A Crisis in Poland, aMassacre in China.

Poland embracesSachs’s reform plan (171-81). February1989: Fukuyama’s “end of history”thesis sponsored by John M. Olin,Friedman patron (182-84). In China, Tiananmen was repression to protecteconomic “reform” that has produced acorporatist state (184-91). In Poland,Solidarity supporters experiencedbetrayal, but a mythical Poland is “heldup as a model” of a peaceful, democraticradical “free-market makeover” (193).

Ch. 10: Democracy Born in Chains:South Africa’s Constricted Freedom.

The ANC’s Freedom Charter (194-97).Negotiations between the National Partyand the ANC (198-205). Mandela andMbeki embrace neoliberal shock therapy(205-10). The failure to pay reparations(210-17).

Ch. 11: Bonfire of a YoungDemocracy: Russia Chooses “ThePinochet Option.”

Russian “reform”was really a great “crime” in whichdemocracy was rejected and Yeltsin useddictatorial powers to effect radical free-market reform, then suppresseddemocratic resistance in an October