Notes on “The Shock Doctrine”
A few months ago, I wrote about Naomi Klein’s latest book The Shock Doctrine and the assertions it makes about the privatization efforts underway in New Orleans in the aftermath of Hurricane Katrina. But The Shock Doctrine is not only about New Orleans. Indeed, according to Klein, the dismantling of the public school system and the depletion of funding for public hospitals and low-income rental housing are merely symptoms of a larger economic paradigm, one primarily informed by the Chicago School and famed economist Milton Friedman. It is a paradigm predicated on the “science” of the “free markets,” and it rejects the validity of most government regulations and publicly-owned services (in favor of sweeping privatization). Because of this, politicians frequently couch this economic policy in the language of democracy, and while citizens think they’re experiencing the shock therapy needed to transition into a true democracy, they are actually being led into adopting a new economic policy, which, as Klein eloquently demonstrates, has been proven disastrous in country after country throughout the last part of the twentieth century.
When Jonas Salk found the cure for polio, he said that patenting it would be like trying to patent the sun: It belongs to all of us. But today, we have no problem with multinational corporations who patent life-saving drugs and cures for potential plagues (i.e. avarian flu and the drug Tamiflu). Tesla once said that he couldn’t imagine a world in which people sold electricity, and today, countries across the world are privatizing everything from their airwaves to their water supply. We’ve come along way since the New Deal, and much of it probably has to do with the sustained threat of Cold War Russia (and the ability of a handful of individuals to marry “communism” with practically all public works and public services).
Klein compares the Chicago School paradigm to a crack high; by selling off publicly-owned companies (always at a severe discount) to a group of well-connected, politically powerful individuals, governments can immediately create a new class of billionaires– and along with that class, the undeserved perception that the economy must be working, despite skyrocketing unemployment (privatization almost always comes with huge lay-offs), illiteracy rates, inflation, and poverty rates.
Friedman’s first foray into drafting economic policy was in Chile during the tenure of notorious General Augusto Pinochet. Pinochet came to power in a bloody coup in which the democratically-elected socialist President Allende was killed and thousands of “dissidents” were subsequently rounded up, tortured, and then murdered. He privatized, deregulated, and adopted Milton Friedman’s blueprint for success, and within a matter of months, Chile went from being one of the most prosperous South American countries to one of the most impoverished. The numbers do not lie.
Friedman and his disciples moved on to other places across the globe: Bolivia, Argentina, China, South Africa, Poland, and yes, eventually, even Russia (during the Yeltsin years). The next frontier is, of course, Iraq, where United States economic policy has restricted locally-owned investment through targeted language in RFPs, laid off 500,000 government employees, and sold a handful of publicly-owned companies to a very small group of multinationals, most of whom are housed right here in the United States (which means Iraq doesn’t even receive the full tax benefits… which, by the way, the US reduced anyway by over 20 points).
I say all of this to pose some (implied) questions, because certainly, there are many people who believe wholeheartedly in the efficacy of the Chicago School. There are others who assert the United States is in Iraq for “moral” and not economic reasons. And there are many people right here in Louisiana who believe that New Orleans will only recover if the government gives tax breaks and tax credits to the rich and to rich corporations.
Personally, I have never heard a story of this system working for the poor and the working lower and middle classes, who make up the majority of practically every country in the world. Modern history seems to be filled with the horror stories– escalating violence, a surge in people living under the poverty line, a dramatic decrease in health care and education– and it all seems to be done by an incredibly small group of people who wait in line to collect the windfall profits while the majority are subjected to a severe economic depression.
