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Home > Liberal Moments(SM)
#17. The Rise of Disaster Capitalism
by Bob Powell, 9/19/07
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Added 3/7/11: Shock Doctrine, U.S.A. By PAUL KRUGMAN 2/24/11

... What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy. And the power grab goes beyond union-busting. ... The language in the budget bill would, in effect, let the governor privatize any or all of [plants supplying heating, cooling, and electricity to state-run facilities] at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”

If this sounds to you like a perfect setup for cronyism and profiteering — remember those missing billions in Iraq? — you’re not alone. ...

The good news from Wisconsin is that the upsurge of public outrage — aided by the maneuvering of Democrats in the State Senate, who absented themselves to deny Republicans a quorum — has slowed the bum’s rush. If Mr. Walker’s plan was to push his bill through before anyone had a chance to realize his true goals, that plan has been foiled. And events in Wisconsin may have given pause to other Republican governors, who seem to be backing off similar moves.

But don’t expect either Mr. Walker or the rest of his party to change those goals. Union-busting and privatization remain G.O.P. priorities, and the party will continue its efforts to smuggle those priorities through in the name of balanced budgets.

The Republican Party over and over shows itself to be a criminal enterprise.

Here's the Liberal Moment (SM) Handout on The Shock Doctrine. It's all included below with active links. See also #20. Serving the Corporatocracy based on "Confessions of an Economic Hit Man" by John Perkins

Naomi Klein's book, The Shock Doctrine: The Rise of Disaster Capitalism, examines how what are called "free market reforms" cannot be brought about in the presence of democracy. Economic shocks and disasters are necessary to destabilize society and make way for such changes. I note that the "free market" produces, not democracy, but inequality and allows the few to externalize costs, to socialize costs, onto the many (socialism on the cost side).

10/18/08: Reading more of this book, I've found it truly chilling. They were torturing and killing "leftists" in Chile using the same kind of rhetoric that they're now using here. Excerpts:

p. 96 To the extent that killings by the state were acknowledged, they were justified by the juntas on the grounds that they were fighting a war against Marxist terrorists, funded and controlled by the KGB. If the juntas used "dirty" tactics, it was because their enemy was monstrous. Using language that sounds eerily familiar today, Admiral Massera called it "a war for freedom and against tyranny ... a war against those who favor death and by those of us who favor life ... We are fighting against against nihilists, against agents of destruction whose only objective is destruction itself, although they disguise this with social crusades."

p. 100 Pinochet ... got the last word in death, evading all the trials and issuing a posthumous letter in which he defended the coup and the use of "maximum rigor" in staving off a "dictatorship of the proletariat.

Current attacks against ACORN and the "conservative" hatred of democracy are consistent with these views.

Here's what they think of liberals: Bachmann Calls For McCarthyite Investigation Into Anti-American Activities Of Liberals, 10/17/08. Watch the video.

Appearing on MSNBC’s Hardball today, Rep. Michele Bachmann (R-MN) attacked the patriotism of Sen. Barack Obama (D-IL), based on his alleged relationship to former Weather Underground member William Ayers and the values of Obama’s former pastor, Rev. Jeremiah Wright. “I’m very concerned that he may have anti-American views,” said Bachmann. “That’s what the American people are concerned about.”

She then went further, suggesting that all liberal views — held by people such as Nancy Pelosi, Harry Reid, professors, and all Americans who identify themselves as “liberals” — are “anti-American.”

On The Shock Doctrine: The Rise of Disaster Capitalism 
by Naomi Klein, released 9/20/07
See the short film online and see the 9/17/07 interview on Democracy Now!

She makes the case:

The history of the contemporary free market was written in shocks. ... Some of the most infamous human rights violations of the past thirty-five years, which have tended to be viewed as sadistic acts carried out by antidemocratic regimes, were in fact either committed with the deliberate intent of terrorizing the public or actively harnessed to prepare the ground for the introduction of radical free-market reforms.

She makes the parallel between using electroshock on individuals with using "shock and awe" experienced by nations after natural and manmade disasters. What's done to individuals:

Isolation, both physical and psychological, must be maintained from the moment of apprehension. The capacity for resistance is diminished by disorientation. Prisoners should maintain silence at all times. They should never be allowed to speak to each other.

She says:

Take a second look at the iconic events of our era, and behind many you will find its logic at work. This is the secret history of the free market. It wasn't born in freedom and democracy; it was born in shock.

The U.S.-backed coup in Chile in 1970 replaced democratically-elected Salvador Allende with dictator Augusto Pinochet.

The coup made possible putting in place the "free market" policies of  recommended by economist Milton Friedman and the "Chicago School" of economics. Friedman once said, "Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around." Libertarians have assured his ideology was "lying around."

The "free market" "reforms" in Iraq are strikingly similar to what was done in Chile and what is being attempted in the U.S. now as defined by Bush's 2000 election platform. They include:

  • an "ownership society"
  • privatizing Social Security,
  • charter schools,
  • a flat tax

On Iraq, see "Baghdad Year Zero" (print-friendly versions: Word and PDF formats)


"... these crises, these disasters, these shocks soften up whole societies. They discombobulate them. People lose their bearings. And a window opens up, just like the window in the interrogation chamber. And in that window, you can push through what economists call "economic shock therapy." That's sort of extreme country makeovers. It's everything all at once. It's ... the kind of radical change that we saw in Russia in the 1990s, that Paul Bremer tried to push through in Iraq after the invasion. So that's the shock doctrine."

Milton Friedman, she notes,

"... had a vision of society, in which the only acceptable role for the state was to enforce contracts and to protect borders. Everything else should be completely left to the market, whether education, national parks, the post office; everything that could be performed at a profit should be. And he really saw, I guess, shopping -- buying and selling -- as the highest form of democracy, as the highest form of freedom."

Klein: "... the central myth of our time that democracy and capitalism go hand in hand is known to be a lie by the very people who are advancing it, and they will admit it on the record."

When Bush says "They hate our freedoms," he really means they hate the "free market," not that they hate democracy.

The unfettered "free market" does not produce democracy or true freedom. It could better be called a "lawless market" that allows the few to externalize costs, socialize costs, onto the many.

The unfettered "free market" produces inequality. Disparities in wealth happen due to natural dynamics, even when everyone starts out with equal ability and resources (see Wealth Happens).

The dynamic is called "path dependence" in system dynamics and "success to the successful" in systems thinking. It's the result of two interacting positive feedback loops.

Extremes in the distribution of wealth are greater when capital gains taxes are lower and when sales taxes are higher (they introduce "resistance" in the flows between individuals, impeding a leveling of wealth).

URL: http://www.exponentialimprovement.com/cms/discap.shtml

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