'Shock' Tactics to Privatize Public Sector

by William S. Kowinski, San Francisco Chronicle, September 23, 2007

Klein Alleges U.S. Used 'Shock' Tactics to Privatize Public Sector

The connections are daring in journalist Naomi Klein's new book, "The Shock Doctrine," but the result is convincing. With a bold and brilliantly conceived thesis, skillfully and cogently threaded through more than 500 pages of trenchant writing, Klein may well have revealed the master narrative of our time. And because the pattern she exposes could govern our future as well, "The Shock Doctrine" could turn out to be among the most important books of the decade.

In recent years, bookstore shelves have groaned with many worthy tomes on the Bush administration and the war in Iraq, geopolitics, macroeconomics and U.S. foreign policy of the past several decades, all suggesting reasons for our predicaments. Like the best of these, Klein's book is well researched and reported, with a mixture of sharp first-person observations, compelling narrative based on sources and absorbing writing. But it differs in two respects: First, it is more comprehensive, not only explaining the occupation of Iraq but also linking such seemingly disparate events as Chile under Pinochet with Russia after the Soviet Union crumbled, and Sri Lanka after the tsunami with New Orleans after Katrina. Second, and most powerfully, there's a precise thesis, a governing metaphor that illuminates the stark goals behind the blandly stated strategies. And as an added act of genius, Klein takes that central image - the shock doctrine - from the strategists' own words.

The narrative begins with University of Chicago economist Milton Friedman and what Klein calls his "free market fundamentalism," which called for privatizing everything, including the public and nonprofit sectors, requiring that the mixed economies prevalent in most countries be quickly and completely superseded, overwhelmed and demolished. In Chile in the 1970s, Friedman and his "Chicago boys" got their first client and began what would come to be called "shock therapy," imposed by international institutions, that made radical privatization a condition of loans and aid.

After sketching this connection, Klein in her revelatory first move goes back to the origin of the metaphor, to the eminent psychologist Ewen Cameron, who pioneered a particular use of electroshock therapy in the 1950s. His stated intent was to erase a patient's personality, including memory and even a sense of space and time, so that better behavior could be programmed in. After shocking patients repeatedly into a near-vegetative state, he played taped messages ("You are a good mother and wife") for 20 hours at a stretch. Cameron's work soon caught the attention (and funding) of the CIA, and it became a template for contemporary torture.

Likewise cloaking itself with the mystique of science, economic shock therapy also intends to wipe the slate clean - even of culture and history - and inculcate new behavior. By inducing shock on individuals, societies and economies, radical transformation is possible, not only to replace what has been destroyed but also to take advantage of the lowered resistance of people in shock. But because people often oppose becoming impoverished and disenfranchised, such economic shock has required repression, including kidnapping, torture and murder.

From the Chilean dictatorship and the "disappeared" of Gen. Augusto Pinochet (whom Friedman personally advised on economics), Klein narrates successive instances of shock therapy in Argentina, Uruguay, Bolivia, Poland, Russia, South Africa and China, until shock therapy became "shock and awe" - the bombing campaign designed to create mass fear - in Iraq, to further smooth the way to what Klein calls an attempted "corporate utopia."

Klein contends that the primary reason why neither Iraq nor New Orleans has been rebuilt isn't incompetence nor mismanagement, for the Bush administration did exactly what it always intended to do: destroy public and local institutions in favor of outside crony corporations. Iraq became the prime exemplar of the new faith: "the acceptable role of government in a corporatist state - to act as a conveyor belt for getting public money into private hands." The resulting unrestricted corporate feeding frenzy in Iraq led to multiple subcontractors for each job - each taking a cut with the work left to cheap foreign labor using shoddy materials. "Corruption during the occupation was not the result of poor management but of a policy decision." With most Iraqis left out, all tensions increased. Sectarian divisions "were far weaker" before this. When it comes to governance as well as economics, disaster capitalism doesn't work, except for the favored few, creating what Klein calls "disaster apartheid."

The same basic approach was taken in New Orleans after the disaster of Katrina provided opportunities. "The Bush administration refused to allow emergency funds to pay public sector salaries," Klein writes, but it quickly instituted all 32 privatization policies devised by the Heritage Foundation ("ground zero for Friedmanism"), which had supplied many of the Americans in charge of the Iraqi occupation. Several contractors with no-bid contracts in New Orleans were the same heavy political contributors (some with financial ties to prominent officials) who received billions of federal dollars in Iraq.

But it had all come home even before that, Klein asserts, thanks to the constantly revived shock of 9/11 and specter of terrorism, which led to "a domestic form of economic shock therapy" in which "everything from war fighting to disaster response was a for-profit venture," leading to "the creation of the disaster capitalism complex - a full-fledged new economy in homeland security, privatized war and disaster reconstruction tasked with nothing less than building and running a privatized security state, both at home and abroad." As Friedman wrote, "only a crisis - actual or perceived - produces real change."

What can be done in the future when the shock of a terrorist attack, climate crisis or pandemic hits? "Once the mechanics of the shock doctrine are deeply and collectively understood, whole communities become harder to take by surprise, more difficult to confuse," Klein writes. At this point, even a skeptic has to paraphrase the question Tom Wolfe posed of another paradigm smasher in the 1960s, Marshall McLuhan: "What if she's right?" That question alone makes this a significant book, requiring serious attention.

Klein has reported for the Nation and the Guardian, especially on issues of globalization, from many parts of the world, including Iraq. She has seen the caged factories in Indonesia, where workers are virtually enslaved, and such experiences clearly inform and motivate her writing. The connections she makes are partly visceral. Interviewing one of the prime victims of those 1950s electroshocks, Klein realized "she reminded me of Iraq." They were "different manifestations of the same terrifying logic."

The story she tells so very well is very dark, however - darker than we'd like to believe. In the Harry Potter books, creatures called dementors steal souls and suck all the hope out of the air. Therapy for a dementor encounter is eating chocolate. Though this book is superbly constructed and written, and in that sense is easy to read, the content is relentlessly harrowing. It deserves to be widely read, but readers may want frequent access to a handy supply of chocolate.

William S. Kowinski is the author of "The Malling of America."

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