NAOMI KLEIN'S BROADSIDE AGAINST NEOLIBERALISM: The Easiest Time to Spread Corporatism Is after a Disaster

By LaBerge, Roy | CCPA Monitor, November 2007 | Go to article overview

NAOMI KLEIN'S BROADSIDE AGAINST NEOLIBERALISM: The Easiest Time to Spread Corporatism Is after a Disaster


LaBerge, Roy, CCPA Monitor


NAOMI KLEIN'S BROADSIDE AGAINST NEOLIBERALISM: The easiest time to spread corporatism is after a disaster The Shock Doctrine: The Rise of Disaster Capitalism, by Naomi Klein, Knopf Canada, 662 pages, $36.95.

During and immediately after a major disaster-a tornado, flood, hurricane, earthquake, war, or revolution-people are fearful, confused, and disoriented...and therefore open to changes they would not accept at other times. That's "the shock doctrine."

The easiest time to implement the neoliberal globalization agenda is while the victims of a disaster are fearful, confused, and disoriented. That's "the rise of disaster capitalism."

In The Shock Doctrine, author Naomi Klein tells how, for more than three decades, neoliberals (sometimes called neoconservatives) have been perfecting this strategy: waiting for a major crisis, selling off pieces of the state to private players while citizens were still reeling from the shock, and then quietly making the "reforms" permanent. At times, they actually created a crisis rather than waiting for one to happen.

Klein points out that 9/11 and the U.S. invasion of Iraq provided a bonanza for disaster capitalism: "Policing, surveillance, detention, and war-making powers of the executive were dramatically increased, though nothing in the [U.S.] Constitution permits it. Then the whole package, including occupation and reconstruction, was outsourced to well-connected private firms that responded with generous campaign funds." Jobs once done by the military were contracted out to civilians-"from providing health care to soldiers, to interrogating prisoners, to gathering and 'data mining' information on all of us."

L. Paul Bremer, the U.S. director of the occupation authority in Iraq, saw to it that laws were passed to benefit American and other foreign companies. The corporate tax rate was cut to a flat 15% from 40%. All restrictions on imports were removed. Another law enabled foreign companies to own 100% of Iraqi assets, and to take all the profits out of the country. Investors could make deals and leases lasting 40 years so that no future government could change them. About 200 state-owned companies were privatized immediately, "to get inefficient state enterprises into private (predatory) hands." Bremer fired about 500,000 state workers, most of them soldiers.

Five months after the fall of Baghdad, "Iraq was in the midst of a humanitarian emergency." Unemployment had risen to 67% and malnutrition was rampant.

In The Shock Doctrine, Klein describes how disaster capitalism has exploited other countries, including Chile, Argentina, Uruguay, Bolivia, Brazil, Poland, China, the Falklands, South Africa, Sri Lanka, New Orleans, Iraq-and Canada. Disaster capitalism also hit Russia, but with a difference: State enterprises were sold at fire-sale prices, but mostly to Russian capitalists rather than foreigners.

The disaster capitalism strategy was fostered and promoted by Dr. Milton Friedman, the "grand guru" of unfettered capitalism, a University of Chicago Economics professor, "who taught that only a crisis-actual or perceived-can produce real change."

"Friedman's first popular book, Capitalism and Freedom, laid out what has become the global free-market rule-book," Klein explains. "First the governments must remove all rules and regulations standing in the way of the accumulation of profits. Second, they should sell off any assets they own that corporations could be running at a profit. And third, they should dramatically cut back funding of social programs."

Friedman was convinced that, once a crisis had struck, it was crucial to act quickly, "to impose rapid and irreversible change before the crisis-racked society slipped back into the 'tyranny of the status quo'." He estimated that a new administration "has six to nine months in which to achieve major changes. If it does not seize the opportunity to act decisively during that period, it will not have another such opportunity. …

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