Naomi Klein shows how the United States now uses other countries’ moments of crisis to enrich corporations
A week to the day after I interviewed journalist/author/filmmaker/activist Naomi Klein, the Justice Department revealed that a private legal opinion, authored shortly after the swearing-in of Attorney General Alberto Gonzales, advocated the use of torture during interrogation procedures. It seemed appropriate; the opinion, which sanctioned the use of "simulated drowning," head-slapping, and frigid temperatures during interrogation, exemplifies the rise of what Klein calls a "shadow state" -- one that operates with total impunity under the public radar.
Klein's most recent book, The Shock Doctrine (Metropolitan Books, 576 pages), is more than the latest dispatch from hell -- it places the post-9/11 world within a historical pattern, the roots of which are in the callous laissez-faireism of the economist Milton Friedman, a man whose logic birthed the modern world's most repressive regimes. Klein explains in detail how shock -- economic and military -- became the vehicle of Milton Friedman's "Free Trade" policies in the aftermath of World War II. The breadth and depth of her summary -- which covers Asia, Europe, the Americas, the pre- and post-Cold War world -- is pretty incredible. Most importantly, though, Klein contextualizes the occupation of Iraq within a globalized, corporatized world -- the book's real strength, in other words, lies in its ability to make sense of a senseless war.
Who was Milton Friedman and what does his brand of shock therapy entail? Milton Friedman was the guru of the stage of radical, unrestrained, gloves-off capitalism that we've been living with since Reagan and Thatcher. Friedman wrote a book in the 1950s called Capitalism and Freedom, and it was a manifesto for a world in which the only acceptable role for government was to enforce business contracts and police borders. He acted as an economic advisor to Nixon, to [Chilean dictator] Augusto Pinochet, and to the Chinese government as it transitioned from a Communist economy to a corporatist economy. Friedman popularized, essentially, a corporate world.
Friedman also understood that his policies were unpopular. He understood that if you ran in an election and said, "Okay, I am going to eliminate the post office, privatize water, and do away with welfare," that you wouldn't get elected. He experienced this firsthand when Nixon, who had been very much in line with Friedman ideologically, went in the opposite direction politically and was rewarded [with re-election].
Because Friedman understood that his policies were incompatible with democracy, he developed this theory, which I am calling "the shock doctrine." In an essay from 1982, Friedman said, "Only a crisis, actual or perceived, produces real change. When the crisis occurs the actions that are taken depend on the ideas that are lying around."
He's saying there that you push through this "extreme country makeover" by doing it all at once... after there has been some kind of shock or crisis.
In the book, I prove [Friedman] right. And by proving him right, it's really a challenge to the story that we have been told for so long: that this brand of radical capitalism triumphed around the world democratically because people wanted it and because it is synonymous with freedom.
I do that by looking at the key laboratories where his ideas were adopted.... I saw, in each case in which there was a major crisis that disorientated the population, a laying of the foundation for economic "shock therapy." I show how each of these regimes used the power of crisis, whether a manufactured crisis or one that happened spontaneously, to push through [Friedman's] polices.
And I also show that when people resist they often are subjected to a third shock, which is the shock of the police truncheon.
How was it employed in Iraq? In Iraq it was employed so nakedly that we can all see it -- the war itself was called ''Shock and Awe." It was a military strategy that was based on the power of shock. If you read the Shock and Awe military manual, it talks about targeting the society at large so that they go into a state of mass disorientation and fear.
Immediately after Baghdad fell, Paul Bremer was sent to Iraq. Paul Bremer... proceeded to push through the most radical dose of economic shock therapy that anyone had ever seen anywhere. First of all, he annihilated the public service sector.
This was called "deBaathification," and it involved the firing of hundreds of thousands of public employees in one go. He eliminated the Iraqi army and essentially handed security over to [private security firm] Blackwater USA. He made Iraq the most wide-open free trade zone in the world, with absolutely no restrictions on the flow of goods in and out. He allowed foreign companies to come in and own 100 percent of Iraqi assets and take 100 percent of profits.... Economists called it the "Wish List For Foreign Investors."
When people started to rebel in Iraq, it was in direct response to these economic polices, which were seen as pillage.... In response to that uprising, you saw the emergence of the systematic use of that third form of shock, the shock of torture.
So when we hear that the Iraqi government isn't meeting its benchmarks, that's the point, in a sense: the Iraqi government was not made to function. It's certainly made to be weak. The biggest reason why Saddam was ousted was because he was no longer as pliant as he used to be. There's no doubt that the goal was to install a pliant regime. That was clear with this sort of Plan A of getting [former interim prime minister Ahmed] Chalabi in there. Iraqi politicians don't have control over intelligence in the country; they don't even have control over reconstruction funds. They are barely in control of the Green Zone. It's not a functional government -- it's not really a government at all.
You know, it's interesting that one of the key [Iraqi government] benchmarks is adopting an oil law... I really see the Iraq oil law as the most shameless example of what I'm calling "disaster capitalism." It was the harnessing of a moment of disintegration to push through a law so deeply contentious that not even Paul Bremer had the guts to push it through.
Could you talk about America's domestic"shock treatment," which you argue was 9/11? That's certainly one of them. I think there have been other moments, for instance the ('90s) debt crisis.... It's worth remembering that Clinton's welfare "reform" took place in the context of the debt crisis. I think that the most dramatic course of economic shock therapy took place during the aftermath of September 11, but it was a little bit hard to see. It wasn't the sort of classic privatization program that I describe in the book. It wasn't like, for instance, Central America after Hurricane Mitch, where countries were told that, in exchange for aid money, they had to sell off all their state assets: water, electricity, roads, and so on.
The Bush Administration did things very differently -- it didn't sell off existing arms of the state; rather, it created a new framework for a vastly expanded state. That framework is the War on Terror, and it vastly increases the reach, power, and mandate of the state: [it allows the government] to engage in surveillance, to build a sort of fortress continent, to wage preemptive wars abroad. So you have this neverending war against evil, everywhere. The mandate of the War on Terror could not be more expansive. As a military strategy, it is unwinnable. But, as I argue in the book, as an economic strategy it's unbeatable.
First, you expand the region of the security state.... Secondly, you privatize and outsource it all. So the War on Terror becomes, then, a new economy--you have hundreds of new companies emerge that are feeding this security state economy. They do the data-mining, interrogate prisoners, perform privatized surveillance, and create the no-fly lists. [They also build] the virtual border with unmanned drones and whatever other gadgets they can think of.
The War on Terror is a new economy, not a war. It makes a lot more sense as an economy. I think it's an evolution of [economic] shock therapy -- but because the Bush Administration has done all of this under the cover of the War on Terror and in the name of security, the privatization aspect is less clear, less visible.
You've written a little about a "disaster-capitalism complex." This is a hard idea for me to get my head around -- when I hear about investment in the wake of disaster, I am inclined to assume that those investments, because of their very nature, are speculative, risky. How did disaster get so profitable? Oil companies, it's clear, right? Every disaster sends the price of oil soaring.... In terms of something like the Homeland Security sector, you can see it in the way our cities are being transformed... how much more security we are facing, even though there hasn't been another major terrorist attack in the United States. But the Homeland Security [is] no longer just selling it to the government--companies are selling [security infrastructure] to each other.
The only threat to this economy isn't risk; the only threat to this economy is a massive paradigm shift in thinking about what security means, what the proper response to terrorism is. That is why many of the key Homeland Security firms are investing in think tanks, in policy institutes, in media. [Homeland Security firms determine] the parameters of this war on terror and its fundamental founding premises. The idea that you can't negotiate [with terrorists is] left unchallenged. The idea that they only want our total annihilation [is left unchallenged]. If you did have a major challenge to some of those basic ideas, then these become risky investments.
In layman's terms, what does the rise of this "disaster-capitalism complex" translate into for the world's working poor? I think it translates into a world of included and excluded people, one in which survival is the luxury item. This is already the case in the American health care system. [The American health care system] is a slow-motion disaster, and what I'm talking about is extending that into a fast-forward disaster, as well. Who can afford to escape from climate change, from a crumbling infrastructure?
The War on Terror is a new economy, not a war.... The only threat to this economy is a massive paradigm shift in thinking about what security means, what the proper response to terrorism is. That is why many of the key Homeland Security firms are investing in think tanks, in policy institutes, in media.
We'll start to see the emergence of these "bubble zones" that are highly functional but privatized, with private security guarding them. In fact, much of the Third World works this way. In a country like Indonesia, say, you never really had a functional infrastructure.... But what you have are these sprawling, gated communities. Everything is privatized within those gated communities, including the water system and the electricity grids.... That's the way the Green Zone works in Iraq.
What it means for the poor is increasingly structured demarcations between the haves and have-nots: more fortressing for the haves, both at borders of countries and also at the borders of neighborhoods, more fences, more walls, more surveillance....
There is going to be more and more monitoring of so-called "illegals," and it will become easier and easier to get sucked into this privatized security infrastructure for some mild transgression.