Ronnie Steinberg, Ms Magazine
, Fall 2007
President Eisenhower warned us about the military-industrial complex, but even he would be horrified by the Faustian bargain we see in today's neoliberal model of globalization. Not to be confused with the political liberalism of John Stuart Mill, neoliberalism is characterized by investigative reporter Naomi Klein as a "holy trinity" -- privatization, deregulation and cuts to social spending -- in which governments dismantle trade barriers, abandon public ownership, reduce taxes, eliminate the minimum wage, cut health and welfare spending, and privatize education. She calls the means of achieving this goal "disaster capitalism" and describes how it has resulted in a worldwide redistribution of income and wealth to the already rich at the expense of economic solvency for the middle and lower classes.
Klein's story begins in the 1970s in Latin America, where a series of CIA and corporate-guided coups replaced progressive leaders with military dictators. The military engaged in political shock therapy: massive public killings and visible "disappearances" of those believed to oppose the new economic order. Meanwhile, economic shock therapy -- recommended by Nobel Prize-winning free-market economist Milton Friedman, who said traumatized economies should be shocked immediately, before the public can respond to the change -- was also imposed. Finally, a form of individual torture, developed in the 1950s and employing isolation in small spaces, loss of sense of time, nudity and more conventional forms of bodily harm, was used to "cleanse" the minds of perceived enemies of their former beliefs.
Initial success in South America led to a broader vision of the shock doctrine. Political collapses in Eastern Europe and Russia were treated as windows of opportunity to further freemarket economics. Natural disasters, such as the 2004 tsunami and Hurricane Katrina in New Orleans, displaced the poor, while corporations reaped millions attempting to "repair" the damage. Poor nations that were unable to repay what they'd borrowed from international organizations like the International Monetary Fund and World Bank were forced to follow neoliberal principles to get their debts extended or forgiven.
In Iraq, the Bush administration used several forms of shock therapy -- quick dismantling of the existing regime, massive killing that incited fear of public resistance and torture of opposition leaders. In all these cases, the victors are the economic elite and deceptive politicians who line their pockets at the expense of their constituents.
As horrifying as her story is, Klein ends on a note of hope, providing evidence that the shock is wearing off. New leaders are taking control, protecting their countries from further coups, refusing international aid and the strings attached, and establishing projects grounded in egalitarian and democratic values. Villagers in Thailand, for example, "reinvaded" their land after the tsunami (one community encircled their wrecked coastal village with rope), relying on the international media to contain those political and corporate interests that had displaced survivors of the catastrophe. A work of extraordinary synthesis, The Shock Doctrine
is required reading for anyone who wants to know the roots of our current political and economic landscape and prepare for the shocks that await us.