Reviewing Naomi Klein’s "The Shock Doctrine"

Naomi Klein is an award-winning Canadian journalist,

author, documentary filmmaker and activist. She writes

a regular column for The Nation magazine and London

Guardian that’s syndicated internationally by the New

York Times Syndicate that gives people worldwide

access to her work but not its own readers at home.

In 2004, she and her husband and co-producer Avi Lewis

released their first feature documentary - "The Take."

It covered the explosion of activism in the wake of

Argentina’s 2001 economic crisis. People responded

with neighborhood assemblies, barter clubs, mass

movements of the unemployed and workers taking over

bankrupt companies and reopening them under their own

management.

Klein is also the author of three books. Her first was

"No Logo - Taking Aim at the Brand Bullies" (2000)

that analyzes the destructive forces of globalization.

Next came "Fences and Windows - Dispatches from the

Front Lines of the Globalization Debate" (2002)

covering the global revolt against corporate power.

Her newest book just out is "The Shock Doctrine: The

Rise of Disaster Capitalism" that explodes the myth of

"free market" democracy. It shows how neoliberal

Washington Consensus fundamentalism dominates the

world with America its lead exponent exploiting

security threats, terror attacks, economic meltdowns,

competing ideologies, tectonic political or economic

shifts, and natural disasters to impose its will

everywhere. Wars are waged, social services cut, and

freedom sacrificed when people are too distracted,

cowed or bludgeoned to object. Klein describes a

worldwide process of social and economic engineering

she calls "disaster capitalism" with torture along for

the ride to reinforce the message - no "New World

Order" alternatives are tolerated.

"Free market" triumphalism is everywhere - from Canada

to Brazil, China to Bulgaria, Russia to South Africa,

Vietnam to Iraq. In all cases, the results are the

same. People are sacrificed for profits and Margaret

Thatcher’s dictum applies - "there is no alternative."

"The Shock Doctrine" is a powerful tour de force, four

years of on-the-ground research in the making and well

worth the wait. In an age of corporatism partnered

with corrupted political elites, it’s must reading by

an author now firmly established as a major

intellectual figure on the left and champion of social

justice. Naomi Klein is all that and more. Even for

those familiar with her topics, the book is stunning,

revealing, unforgetable and essential to know. This

review will cover a healthy sample of what’s in store

for readers in the full equisitely written text. It’s

in seven parts with a concluding section. Each will be

discussed below starting with a brief introduction.

Introduction - Blank Is Beautiful: Three Decades of

Erasing and Remaking the World (into Hell)

New Orleans, post-Katrina, is a metaphor for an

American-style "New World Order" with unfettered

capitalism unleashed in its most savage form. Klein

quotes Republican congressman Richard Baker telling

lobbyists: "We finally cleaned up public housing in

New Orleans. We couldn’t do it but God did." And New

Orleans developer Joseph Canizaro added: "I think we

have a clean sheet to start again (and take advantage

of) big opportunities." Their scheme is erasing

communities and replacing them with upscale condos and

other high-profit projects on choice city real estate

at the expense of the poor mother nature forced out

and government won’t allow back.

Enter the "grand guru" of free-wheeling capitalism,

then age 93 and in failing health. This was

conservative/libertarian economist Milton Friedman’s

moment that he first articulated in his 1962 book

"Capitalism and Freedom." His thesis: "only a crisis -

actual or perceived - produces real change. When a

crisis occurs, the actions that are taken depend on

the ideas that are lying around....our basic function

(is) to develop alternatives to existing policies

(ones Friedman rejects, and have them ready to roll

out when the) the impossible becomes politically

inevitable." Klein calls crises "democracy-free

zones," and Friedman’s thesis "the shock doctrine."

For New Orleans it means "permanent reforms" like

destroying public housing and issuing vouchers for

privatized schools in lieu of rebuilding public ones

with government reconstruction funds.

For Friedman, government’s sole function is "to

protect our freedom both from (outside) enemies....and

from our fellow-citizens." It’s to "preserve law and

order (as well as) enforce private contracts, (and)

foster competitive markets." In his view, anything

else in public hands is socialism that for "free

market" fundamentalists like Friedman is blasphemy.

Until 1973, Friedman’s radical doctrine stayed in his

classroom, but all that changed on an earlier

September 11. Following General Augusto Pinochet’s

bloody ascent to power, he had a real life laboratory

as advisor to the new Chilean dictator. His

prescription came to be known as the "Chicago School"

revolution of rapid-fire economic transformation he

called "shock treatment," now known as "shock

therapy." It’s an economic version of "destroy(ing)

the village (and country) to save it" from the Vietnam

era and nearly as harsh.

Millions know its lessons, but Friedman’s not their

hero. It’s central tenets are structurally adjusted

mass-privatizations, government deregulation,

unrestricted free market access for foreign

corporations, and deep cuts in social spending with

repressive laws, harsh crackdowns and torture along

for the ride to reinforce the core tenet Reaganites

call "trickle down" and Brits call "Thatcherism."

Its recipients call it hell, and Klein explains why -

in Chile, Argentina, Uruguay, Bolivia, Brazil, China,

Russia, the Falklands, Poland, South Africa, Sri

Lanka, New Orleans, Israel, and coming to a

neocon-occupied homeland neighborhood near you. It’s

"disaster capitalism" unleashed, and business is

booming. Klein cites insiders saying opportunities are

on a par with a thriving "emerging market...."the

deals are even better than the dot-com days, and the

’the security bubble’ picked up the slack when those

earlier bubbles popped."

Reaganomics adherents are today’s neoconservatives

with the "full force of the US military machine

(serving their unfettered) corporate agenda" of greed

writ large. Its holy policy trinity is: "elimination

of the public sphere, total liberation for

corporations and skeletal social spending (if any at

all)." But instead of lifting all boats as promised,

it’s mirror opposite. It creates a powerful ruling

corporatist class partnered with corrupted political

elites - "with hazy and ever-shifting lines between

the two groups." Russia got billionaire "oligarchs,"

China "the princelings," Chile "the piranhas," and

America the Bush-Cheney "Pioneers."

Everywhere, the scheme is the same: huge public wealth

transfers to private hands, exploding public debt most

often, "an ever-widening chasm between the dazzling

rich and disposable poor, and an aggressive

nationalism (like George Bush’s permanent "war on

terrorism" and the world) that justifies bottomless

spending on security." "Inside the bubble" is

paradise. Outside, however, is hell with "aggressive

surveillance, mass incarceration, shrinking civil

liberties," a declining standard of living, and

repression and torture reinforcing the message to

non-believers.

Klein calls the harshness "a metaphor of the shock

doctrine’s underlying logic." When applied, it induces

a state of "deep disorientation," and shock to force

targets "to make concessions against their will." The

"shock doctrine" works the same way on a mass scale,

and the 9/11 experience proved it. It exploded the

"familiar world" and created a period of

disorientation and regression the Bush administration

jumped on abroad and at home. As Klein put it:

"Suddenly we found ourselves living in a kind of Year

Zero (with) everything we knew of the world before

(now) dismissed as ’pre-9/11’ thinking." We became a

"blank slate, a clean sheet of paper," and the

administration did what was impossible before. It’s

how the "shock doctrine" works: "the original disaster

(terror attack, war, hurricane, market meltdown) puts

the entire population into a state of collective

shock" enabling policy manipulators to move in for the

kill to remake the world in their image and get it

done before the shock wears off.

Part 1 - Two Doctor Shocks - Torture and Chicago

School Fundamentalism

Following a crisis shock, another quickly follows. The

corporate piranhas exploit disorientation with

economic "shock therapy" along with "police, soldiers

and prison interrogators" with torture their method of

choice "to build a model country (by) erasing people

and then trying to remake them from scratch."

Klein reviews the history of CIA’s interest in torture

as a way to control the human mind. It began with the

Montreal doctor they funded to perform "bizarre

experiments on his psychiatric patients (by) keeping

them asleep and in isolation for weeks, then

administering huge doses of electroshock (plus)

experimental (psychedelic LSD and hallucinogen PCP

angel dust) drug cocktails."

The experiments were performed at McGill University’s

Allan Memorial Institute by Dr. Ewen Cameron even

though they clearly violated all standards of medical

ethics using human guinea pigs without their

permission with permanent damage their reward. Cameron

believed by blasting the human brain with an array of

shocks, he could "unmake and erase faulty minds, then

rebuild (on a blank slate) new personalities" cleansed

of their previous nature. It was voodoo science, and

it failed. His patients were his victims, but CIA

gained a wealth of knowledge it now employs with no

pangs of conscience or regard for ethics.

Klein traces CIA’s interest in mind manipulation to a

1951 trinational meeting of intelligence agencies and

academics in Montreal when concern was that Communists

could brainwash POWs to control them. That was when

the spy agency engaged Canadian researchers to learn

how, and one of them was Dr. Donald Hebb, director of

psychology at McGill, who was working on the problem.

Intelligence agencies were impressed enough with his

work to fund classified sensory-deprivation

experiments on volunteer McGill students.

They proved intensive isolation interferes with clear

thinking enough to make people more receptive to

suggestion. They were also "formidable interrogation

techniques" amounting to torture that Hebb knew

violated medical ethics. He later characterized

Cameron’s work as "criminally stupid," but CIA got

what it wanted - a way to interrogate "resistant

sources" in a "new age of precise, refined torture,

not the gory, inexact" kind from the Spanish

Inquisition or what Nazis and other tyrants often

practiced. Cameron’s experiments with human guinea

pigs built on Hebb’s earlier work laying the

foundation for CIA’s "two-stage psychological torture

method" of sensory deprivation followed by sensory

overload. University of Wisconsin historian Alfred

McCoy in his book, "A Question of Torture" on CIA

interrogation, called it "the first real revolution in

the cruel science of pain in more than three

centuries."

Pre-9/11, these techniques were freely used covertly

as any form of abuse or torture violates the Geneva,

UN and other statutes prohibiting these practices as

well as the US Army’s own Uniform Code of Military

Justice barring "cruelty" and "oppression" of

prisoners. No longer, as "On September 11, 2001, that

longtime insistence on plausible deniability went out

the window" as well as any claim this nation respects

the law and rights of free people everywhere. What

once was done sub rosa or by proxy is now condoned and

authorized at the highest levels of government on the

fraudulent claim of national security to hide the real

aim of social control.

Klein notes torture is still technically banned in the

US, but only when pain is the "equivalent in intensity

to (what accompanies) serious physical injury, such as

organ failure." Simply put, anything goes, but it’s

not put that way. In Iraq, it was thought "shock and

awe" would be so stunning, Iraqis "would go into a

kind of suspended animation." A second makeover

Chicago School fundamentalism shock could then be

imposed on a blank post-invasion slate, and bingo,

mission accomplished. Klein notes "there was no blank

slate, only rubble and shattered, angry people" who

were blasted with more shocks when they resisted. Like

Cameron and his experiments, "Iraq’s shock doctors can

destroy, but they can’t seem to rebuild," and the same

is true wherever these shock doctors show up.

Milton Friedman and the Search for a Laissez-Faire

Factory

The epicenter of shock ideology is the University of

Chicago Economics Department. It came out of the 1950s

"in the thrall" (of a) man on a mission to

fundamentally revolutionize his profession," and on

that score Milton Friedman succeeded mightily.

Friedman, now gone, believed, markets work efficiently

and best unfettered of rules, regulations, onerous

taxes, trade barriers, entrenched interests, and human

interference. Whereas Cameron believed electroshocks

could restore natural health, Friedman favored

economic shock as extreme and destructive to nations

as Cameron and CIA’s methods are to human minds.

Friedman taught this voodoo science and believed to

the end, all contrary evidence aside, it was perfect

and worked. Chicago School fundamentalism developed at

a post-war time in the 1950s when leftist ideas

supporting worker rights were gaining ground. Where

they "promised (workers) freedom from bosses, citizens

from dictatorship (and) countries from colonialism,"

Friedman promised "individual freedom" to choose that

appealed to owners of capital who embraced him and his

thinking.

It stood in stark contrast to what became known as

"developmentalism" or "Third World nationalism" in the

post-war developing world. Economists in it favored an

"inward-oriented industrialization" strategy to break

the cycle of poverty and grow. Like Keynesians and

social democrats, they showed it worked in Latin

America’s Southern Cone with leaders like Juan Peron

"put(ting) their ideas into practice with a vengeance

(by) pouring public money into infrastructure

projects, (providing) local businesses generous

subsidies, and keeping out foreign imports

with....high tariffs." It brought prosperity to the

South and "dark days" for Friedman, his acolytes, and

free-wheeling capitalists losing out to social

progress.

It sprung corporate America to action by funding a

legion of think tank and Chicago School foot soldiers

to change the message and fortunes of their

businesses. Friedman was their ideological leader

preaching public wealth should be in private hands,

rules and regulations out the window, accumulation of

profits unrestrained, and social welfare programs

curtailed or abolished. In short - deregulate,

privatize and get government out of the business of

everything besides providing security and enforcing

contracts. He also believed taxes were onerous and

once said he was "in favor of cutting (them) under any

circumstances and for any excuse, for any reason,

whenever it’s possible...."

He also said corporations should be exempt from

federal taxes claiming what they pay ends up in

consumer prices that, in fact, is pure nonsense as

every marketing MBA (like this writer) learns

straightaway. The fundamental law of pricing is to

charge what the market will bear, no more or less. In

other words, get all you can but no more than buyers

will pay. Soon enough they’d pay plenty in the

developing world.

In 1953, the US declared war against

"developmentalism" with CIA’s first ever coup against

Mohammed Mossadegh in Iran. Another followed the next

year in Guatemala, and in both instances

democratically elected leaders were ousted because

corporate interests opposed them. It was only the

beginning, and Friedman and his "Chicago Boys" soon

had a real time laboratory to prove their "capitalist

utopia" worked.

Salvador Allende’s Popular Unity government electoral

victory in 1970 was the opportunity. Three years later

he was out giving Friedman the chance he wanted. Klein

related the results in what she called "the first

Chicago School state" with others to follow. They’re

all the same with "an unstoppable hurricane of

mutually reinforcing destruction and reconstruction,

erasure and creation" following the crisis. Next is

unfettered economic shock therapy with torture and

disappearances awaiting resisters and anyone guilty of

bad thinking. Friedman’s brave new world was beginning

to roll. It’s devastation is everywhere including at

home.

Part 2 - The First Test - The Bloody Birth of the

Counterrevolution

Counterrevolution began 34 years ago in Chile on

another September 11 that should have been

unimaginable and had to seem surreal. There were tanks

in the streets and fighter jets attacking government

buildings in a scene all too real and deadly. It

played out in Santiago and around Chile and was just

the beginning of a long nightmare. It brought General

Augusto Pinochet to power (with plenty of CIA help)

who called his action "a war," not a coup, and to

reinforce his message he made it seem like one. Blood

in the streets, the presidential palace in flames, and

President Salvador Allende dead ended the most vibrant

democracy in the Americas. It was a cakewalk with "the

junta’s grand battle over by mid-afternoon."

A state of siege was imposed followed by mass arrests,

killings and torture in a climate of fear that

enveloped the country. Allende supporters were

targeted in Chile’s "Caravan of Death." Chileans paid

dearly, but the Chicago Boys had their moment of

triumph, and they were ready. Rolling off the press

was their detailed economic manual for the new

government called "The Brick." It was a 500 page

Chicago School shock therapy wish list. It was "the

first Chicago School state," its first "global

counterrevolution" victory, and "a genesis of terror"

in a brave new world for Chileans.

The economic playbook was right from Milton Friedman’s

"Capitalism and Freedom" that’s long on free market

triumphalism and void on its effects on real people.

It was pure Friedman featuring mass privatizations,

deregulation and deep social spending cuts flavored

generously with corporate-friendly tax cuts, trade

unionist crackdowns, savage repression for

non-believers, and an end to Chile’s social democratic

state Friedman condemned.

Pinochet bought it along with a team of Chicago School

alumni called "technos." They embarked on a free

market binge with disastrous results. In the first

year, inflation hit 375%, thousands of Chileans lost

jobs, the country was flooded with cheap imports,

local businesses closed and hunger grew along with

public and small business discontent in this free

market "paradise." In desperation, "it was time to

call in the big guns" with Milton Friedman coming to

Santiago to reinforce his message that for things to

improve they first had to get worse. It was classic

shock treatment and Chicago School baloney with

Friedman preaching patience and promising an "economic

miracle" if his prescription was followed.

Pinochet agreed, and slash and burn followed with

visions of paradise at the end of the rainbow. It was

pure untested fantasy, and the results showed it.

After one year of hardened shock therapy, Chile’s

economy contracted 15%, unemployment rocketed to 20%,

and contrary to Friedman’s rosy scenario it lasted for

years with no social safety net help for desperate

Chileans.

Klein notes Chile today is still cited as a model that

free market "Friedmanism" works in spite of the clear

evidence it doesn’t. Growth did resume a decade later,

but only after conditions worsened. It forced Pinochet

to reinstate Allende policies like renationalizing

privatized companies but not his social democratic

agenda. Chileans were left with the shambles. When the

economy stabilized and rapid growth resumed in the

late 80s, poverty was 45%, but the richest 10% saw

their incomes rise by 83%. Even today, Klein notes,

Chile remains one of the most unequal societies in the

world. It’s shock therapy miracle shifted "wealth to

the top and shock(ed) much of the middle class out of

existence."

It’s the way it works everywhere and a glimpse of the

future: "an urban bubble of frenetic speculation and

dubious accounting fueling superprofits and frantic

consumerism, ringed by ghostly factories and rotting

infrastructure of a development past; roughly half the

population (excluded); out-of-control corruption and

cronyism; (decimated) nationally owned small and

medium-sized businesses; (mass) transfer of (public)

wealth (and resources) to private hands (accompanied

by) a huge (shift) of private debts into public

hands." Inside the Chilean bubble was paradise.

Outside was "The Great Depression." Bubble-benefitters

reacted with "junkie logic: Where is the next fix?"

It was first across the border in other Latin American

Southern Cone countries where the "counterrevolution

spread (and) people vanish(ed)." Argentina, Brazil and

Uruguay were targeted with similar results as in Chile

under juntas replacing democrats. Chicago School

fundamentalism was on a roll, and woe to the

non-believers. Nations that were developmentalism

models became wastelands with decades of worker gains

lost almost overnight. Factories closed, wages fell,

unemployment soared, poverty grew severe, dissenters

disappeared, and ordinary people suffered to prove

what pin-stripped academics knew after Chile went

sour. Instead, it was on to the next target.

In them all, the slate was cleansed and terror

unleashed, unrestrained by national borders. Former

Allende economist and diplomat turned activist Marcos

Orlando Letelier became a victim in September, 1976.

While living in Washington, he condemned Chile’s

"economic freedom" for the privileged and paid with

his life. Pinochet’s DINA secret police killed him and

his American colleague, Ronni Moffit, by

remote-detonating a bomb planted under his driver’s

seat. An FBI investigation learned the assassins

entered the country under false passports with full

CIA knowledge and complicity.

The purging included cleansing wrong ideas and

thinkers like legendary left wing Chilean folk singer,

Victor Jara. He was seized and taken to Chile’s

notorious National (killing and torture) Stadium to be

reeducated. Soldiers broke his hands so he couldn’t

play the guitar. Then they shot him 44 times "to make

sure he couldn’t inspire from....the grave." One

culture was being erased and replaced by another. As

in Nazi Germany, books were burned, newspapers and

magazines shuttered, universities occupied and strikes

and political meetings banned. Trade unionists were

specially targeted as threats to the new economic

order. It’s leaders were rounded up, movement members

viciously attacked, and "battalions" targeted workers

in factories. They were arrested, imprisoned,

tortured, and disappeared in a sweeping reign of

terror designed to crush opposition and

wrong-thinking.

In Argentina, Ford Motor Company’s local subsidiary

was complicit. It helped soldiers and secret police

rid unionists from its factories and supplied vehicles

as well. Green Ford Falcon sedans became the feared

symbol of terror an Argentine playwright called

"death-mobiles." Many thousands kidnapped and

disappeared rode off in these cars, never to return.

Farmers involved in land reform struggles also were

targeted along with anyone with "a vision of society

built on values other than pure profit." It affected

community worker activists, many church-connected, who

wanted social services like health care, public

housing and education the state was erasing through

shock therapy and mass repression. Klein noted while

"policies attempted to excise collectivism from the

culture, inside....prisons (the practice was to)

excise it from the mind and spirit." The sickness was

democratic socialism, the cure pain and suffering.

Wrong-thinkers were taught the hard way, and many paid

with their lives. Chicago School fundamentalism is

harsh medicine. Its grand guru, Milton Friedman, was

unrepentant. He called it "freedom" and took his

mathematical model miracle to the grave amidst a hail

of undeserved eulogies.

In his memoirs before he died, his "blatant

revisionism" on Chile was shameful and disturbing. He

falsely claimed Pinochet only asked for help in 1975

when, in fact, the Chicago Boys worked with the

military before the 1973 coup, and their policies were

implemented on Pinochet’s first day in power. Friedman

also claimed the junta’s repressive years didn’t undo

Chilean democracy. In his view, it opened up "more

room for individual initiative and for a private

sphere of life (offering a greater) chance of a return

to a democratic society." It was classic convoluted

Chicago School thinking. It made him famous courtesy

of corporate triumphalism, generous funding and an

utter disdain for human rights and dignity.

Friedman also used his 1976 Nobel lecture to argue

economics was as scientifically accurate and objective

as other sciences. He failed to mention its dark side

 devastating poverty, unemployment, shuttered

factories and mass human misery and deaths in the

first nation adopting his ideology on its victimized

people. Now it’s everywhere and savagely enforced in

an age of corporate dominance, wars for profit and

neglect of human needs to fund them. That’s Friedman’s

real legacy from the barrel of a gun and called

"freedom."

Part 3 - Surviving Democracy

Chicago School dogma became known as Thatcherism in

Britain, but its prime minister wasn’t an early

adherent. Margaret Thatcher thought Chilean shock

therapy wasn’t possible in a democracy like the UK

because voters wouldn’t buy it. Three years into her

first term, her approval rating was lower than George

Bush’s. She was in danger of not being reelected and

didn’t dare risk imposing bitter economic medicine

that would sink her chances. That is, until destiny

intervened on April 2, 1982 when Argentina invaded the

British-held Falkland Islands off its coast that was

unimportant to either country except for the political

hay to gain from war.

Thatcher jumped at the chance to regain her footing

and "went into Churchillian battle mode," even though

Argentina’s president, General Leopoldo Galtieri,

wasn’t Adolph Hitler. But defending the British empire

was almost as good, and it paid off. Thatcher’s

political future was at stake. She revived it, more

than doubled her approval rating and henceforth was

known as the "Iron Lady" that for her was high praise,

and she made the most of it.

She launched a "corporatist revolution" based on

Chicago School economics she thought impossible

earlier. She parlayed her new popularity to a victory

against striking coal miners in 1984 with tactics like

unleashing 8000 "truncheon-wielding" riot police in a

single confrontation. Before the strike ended,

thousands of workers were injured, but Thatcher stood

firm with a clear message to other unionists. Take

what you’re offered or get the same medicine.

She didn’t stop there, and what followed was a radical

economic agenda in a wave of state enterprise

privatizations including British Telecom, British Gas,

British Airways, British Steel and others in what

Klein called "the first mass privatization auction in

a Western democracy." It proved Chicago School

fundamentalism didn’t need repressive dictatorships to

advance as long as "Iron Ladies" like Thatcher were

around to match the best of them, short of all out

tanks in the streets shock therapy, that is. Her

eleven and a half years in power proved it, and

Britain hasn’t been the same since with Labor as

committed now as the Tories.

Bolivia was soon targeted as well, but in 1985 was

part a democratic wave sweeping the world. It was an

election year with two familiar figures facing off for

the presidency - former dictator Hugo Banzar and

former elected president, Victor Paz Estenssoro. It

was close and Banzar thought he won so before final

returns were in he named 30 year old Harvard economist

Jeffrey Sachs to help develop an anti-inflation

economic plan for the country.

Sachs was part Keynsian but larger part Chicago School

adherent that made for a bad combination. He bought

its orthodoxy in softer form by supporting debt relief

and generous aid along with the shock therapy he

advised Banzar to adopt as the only solution to

hyperinflation.

As it turned out, Banzar lost and Paz won, and while

no socialist, he was no Chicago School adherent

either, or so voters thought. Four days into his term,

he charged his emergency economic team to radically

restructure the economy using shock therapy with a

twist. It was much harsher than Sachs proposed with

the entire state-centered structure Paz erected

decades earlier dismantled in the first 100 days

before the public could react. In its place, food

subsidies were ended, price controls lifted, wages

frozen, oil prices hiked 300%, deep government

spending cuts imposed, unrestricted imports allowed,

and state-owned companies downsized as a first step to

privatizing them. It cost hundreds of thousands of

full-time jobs, pensions and safety net protections.

Friedman continued to roll.

The results were predictable. The minimum wage never

regained its value, and two years later real wages

were down 40% and average per capita income dropped

from $845 in 1985 to $789 in 1987. As in other shock

therapy countries, a small elite got richer while the

great majority of Bolivians lost out with campesinos

faring worst. In 1987, they earned on average $140 a

year, or less than one-fifth the nation’s declining

average income.

Bolivian misery gave Sachs star status for the

country’s "Miracle." It launched his new career and

brought him to Argentina, Peru, Brazil, Ecuador,

Venezuela and Russia later on plus a best-selling book

and three-part PBS "success story" series. The only

problem was it wasn’t true. President Paz had no

mandate for shock therapy, and many workers were

predictably furious at his betrayal. They went on

strike and Paz’s response made Margaret Thatcher’s

earlier action against striking coal miners seem tame

by comparison. Tanks rolled in the streets, and riot

police raided union halls, a university and factories.

Hundreds of arrests followed, including the top 200

union leaders, and oppositional politics was banned.

The siege lasted three months during the decisive

shock therapy period with more repression and Chicago

School medicine later.

It showed shock therapy needs harsh authoritarian rule

backing with Bolivia’s pin-stripped politicians,

economists and bureaucrats administering it, not

uniformed soldiers as in Chile. Paz’s democratic

victory was illusory like others when leaders renege

on promises and sacrifice them on the alter of Chicago

School orthodoxy.

Argentina was another "textbook case." In the

post-Falklands War period, it was burdened with

billions in odious debt Washington insisted be

serviced and paid. It was far more onerous after the

(Paul) "Volker Shock" when the US Federal Reserve

Chairman hiked interest rates up to 21% in the

early-mid 1980s to fight inflation, so he said. It was

painful in the US and disastrous for developing

countries turning their debt burdens into crises. New

loans were needed to pay off old ones, and the debt

spiral was born afflicting nations then and still

today. That was the whole idea, or at least one of

them.

Argentina, Brazil and other countries had another

option they didn’t take - defaulting on debt so great

it was unrepayable. As Klein put it: "Understandably

(new democracies were) unwilling to go to war with

Washington (and the international lending agencies it

controls so they) had little choice but to play by

Washington’s rules (and) in the early eighties (they)

got a great deal stricter....It was the dawn of the

era of ’structural adjustment’ - otherwise known as

the dictatorship of debt."

In the 1980s, Chicago School economists colonized the

IMF and World Bank to advance their corporatist

crusade. Economist John Williamson named it "the

Washington Consensus" that stuck ever since. It

consisted of core economic policies both institutions

consider essential for economic health according to

their orthodoxy. We know them well: all "state

enterprises ....privatized (and) barriers impeding

entry of foreign firms....abolished." There was more

that together was classic Friedman dogma:

privatization, deregulation, unrestricted free trade

(never called fair), and deep cuts in government

spending except for security.

Indebted developing countries learned shock doctrine

101 the hard way. Getting aid meant accepting

Washington Consensus rules - the whole package. So to

save their countries, they had to "sell (them) off."

Klein calls Argentina the "model student" in the 1990s

under leaders like Carlos Menem. Appointing Domingo

Cavallo economy minister signaled he bought the

corporatist package. But as Klein points out:

"Argentina was not unique (and by 1999) Chicago School

alumni included more than twenty-five government

ministers and more than a dozen central bank

presidents from Israel to Costa Rica."

Shock therapy was on a role that in Argentina turned

into a textbook case of therapeutically induced

disaster. What Time magazine in 1992 called "Menem’s

Miracle" became Menem’s Mirage when the economy

collapsed in 2001, and Argentina did the unthinkable

with Menem gone and a new president in power. It

defaulted on an $805 million debt to the World Bank.

It should have ended the neoliberal experiment, but

instead it spread. Economic crises fueled it, and when

old ones ebbed "even more cataclysmic ones appear(ed):

tsunamis, hurricanes, wars and terrorist attacks.

Disaster capitalism was taking shape" with shock

therapy its tool of choice.

Part 4 - Lost in Transition: Slamming the Door on

History

Before the Berlin Wall fell, Lech Walesa became a

labor hero in Poland and the West by defying the

Moscow-controlled government and getting away with it.

Solidarnosc (Solidarity) spread from its Gdansk roots

to the country’s mines, shipyards and factories and

within a year had 10 million members. They won the

right to bargain but wanted more. They aspired to take

over the state and institute their own alternative

economic and political program. It’s radical

centerpiece was to transform huge state-run companies

into worker-run cooperatives so Solidarity members

could be empowered in their own "socialized

enterprise."

Walesa objected, lost the debate, and he feared what

then happened. The Jaruzelski government declared

martial law, sent tanks to the streets and rounded up

thousands of Solidarity members. By the late 80s, the

crackdown subsided, the economy was in free fall,

workers again struck and Mikhail Gorbachev’s reformist

government was in power in Moscow. Solidarity was

legalized, a Citizens’ Committee Solidarity wing was

formed, its members stood in snap elections and won

effective control of the government capturing 260

parliamentary seats.

It should have been the best of times, but with the

economy in trouble, Poland needed aid including debt

relief. With Chicago School alumni running IMF, none

was offered except under Washington Consensus rules,

take it or leave it. Enter Jeffrey Sach, the shock

doc, with an even harsher plan than imposed on

Bolivia. It included an immediate end to price

controls, slashing subsidies, and privatizing mines,

shipyards and factories. It short, it ran directly

counter to Solidarity’s aim for worker-run industry.

Sachs promised Solidarity Poland could become like

France or Germany under his plan. By swallowing shock

therapy medicine first, taking the pain, the patient

would end up cured and healthy - if he was right.

After debate, the verdict was in and the treatment

bought with predictable results. Sachs promised

"momentary dislocations" but delivered a full-blown

depression. Industrial production plummeted 30% after

two years of "reforms." Unemployment skyrocketed, and

in 1993 hit 25% in some areas. It’s still chronic

today with recent World Bank figures pegging it at

around 20%, the highest in the European Union. For

young people, it’s even worse with 40% of workers

under 24 unemployed.

Most alarming is the number of people in poverty. From

a 15% level in 1989, it rose to a startling 59% in

2003. Incredibly, the country, like Chile, is still

cited as a free market reform model. It’s pure myth,

angry Poles know it, but reports in the West ignore

them as they do shocked victims everywhere.

They didn’t ignore "the shock of Tiananmen Square,"

but didn’t report it accurately either. In the early

1980s, Deng Xiaoping was transforming his country

economically while keeping rigid political control

including iron-fisted repression when needed.

Democracy was nowhere in sight nor is it now. While

many of Deng’s reforms were successful and popular,

others in the late 80s weren’t, and it provoked deep

anger in the cities by people most affected. Price

controls were lifted, corruption and nepotism was

rampant, freedom minimal, job security eliminated,

unemployment soared, and deep inequalities grew

between "winners and losers in the new China."

It came to a head with mass protests in 1989 in

Tiananmen Square that Western reports characterized as

a clash between old-guard Communist authoritarians and

idealistic students wanting western-style democracy.

It was pure propaganda. The protests were massive and

threatened the government, but democracy wasn’t the

issue. It was popular discontent from wrenching

economic change raising prices, lowering wages, and

causing "a crisis of layoffs and unemployment."

Protesters weren’t against economic reform. They were

against the Chicago School version of it, but their

efforts were costly.

Deng declared martial law May 20, tanks rolled in the

square, indiscriminate shooting took place, and when

it ended thousands were dead, many more thousands

injured, and still more thousands hunted down,

arrested, jailed, some tortured, and hundreds likely

executed. Shock therapy rolled in China as in Chile -

through the barrel of a gun and raw state terror.

Following the crackdown, China opened to foreign

investment, joined the WTO, and turned the country

into the world’s largest low wage sweatshop for

Wal-Mart’s "Always Low Prices."

For foreign investors and party apparatchiks, it was a

win-win arrangement with Klein citing a 2006 study

showing 90% of China’s billionaires to be Communist

Party officials. About 2900 "party scions" (called

"the princelings") control $260 billion, and Klein

notes the "stark similarity between (China’s

authoritarian rule) and Chicago School capitalism - a

shared willingness to disappear opponents, blank the

slate of all resistance and begin anew" using shock

and fear to transform countries into free market

paradises for the privileged.

The Tragedy of South Africa’s "Democracy Born in

Chains"

Klein quotes Nelson Mandela in January, 1990 (two

weeks before he was freed) in a note to his supporters

from prison saying: "The nationalisation of the mines,

banks and monopoly industries is the policy of the ANC

(and changing) our views....is inconceivable. Black

economic empowerment is a goal we fully support and

encourage, but in our situation state control of

certain sectors of the economy is unavoidable." That

belief became ANC policy in 1955 in its Freedom

Charter. The liberation struggle wasn’t just about a

political system but an economic one as well. White

workers in mines earned 10 times more than blacks, and

large industrialists worked with the military to

enforce order and disappear dissenters.

Once apartheid ended, a new way was possible, and

Mandela seemed poised to lead it. The ANC had "a

unique opportunity to reject the free market orthodoxy

of the day" and choose a "third path between Communism

and capitalism." ANC candidates swept the 1994

elections and Mandela became president at a time South

Africa surpassed Brazil as the most unequal society in

the world. Negotiations were held with the ruling

National Party, and a peaceful handover was achieved

but not without "prevent(ing) South Africa’s

apartheid-era rulers from wreaking havoc on their way

out the door."

Negotiations took place on two parallel tracks -

political and economic. Mandela and his chief

negotiator, Cyril Ramaphosa, "won on almost every

count" politically. But along side it, economic

negotiations were held with the country’s current

president, Thabo Mbeki, in charge with the outcome in

the end far different. With ANC leaders preoccupied

with controlling Parliament, the former white

supremacist government and industrialists were

determined to safeguard their wealth, and they

succeeded by assuring Washington Consensus policies

would be instituted when political power changed

hands.

ANC economists and lawyers were outfoxed or outgunned

by the opposition, IMF, World Bank, GATT and power of

big capital against inexperienced politicians and

technocrats who ended up losers. Black officials

controlled the government, but discovered the real

power was elsewhere. As Klein put it: "The bottom line

was that South Africa was free but simultaneously

captured." The leadership mistakenly thought once

firmly in power they could undo earlier made

transition compromises.

They couldn’t or didn’t for the same reasons other

developing countries accept free market rules. Adopt

them or be punished by the market as Mandela learned

when he was freed. The South African stock market

collapsed in panic, and the country’s currency (the

rand) dropped by 10%. He acknowledged the problem

later on saying it’s "impossible for countries....to

decide economic policy without regard to the likely

response of these markets." It’s too bad he didn’t

know how Hugo Chavez managed after 1999 (oil aside).

He achieved what Mandela reneged on, and Venezuela’s

economy is booming. Had he and ANC officials stood

their ground early on, South Africa (with its mineral

riches) might have done the same thing - had a growth

economy in a socially democratic state and a model for

its neighbors.

They didn’t, black South Africans lost out, Mandela’s

legacy is tainted, and a key factor was current

president Thabo Mbeki. He spent spent years studying

in exile in England during the apartheid years during

which time "he was breathing in the fumes of

Thatcherism." He became the ANC’s free market tutor,

believed in market fundamentalism, and its

prescription was "growth and more growth." It meant

neoliberal shock therapy with the full Friedman

package Mbeki supported. He later professed: "Just

call me a Thatcherite," and Mandela told journalist

John Pilger the same thing in retirement saying:

"....you can call it Thatcherite but, for this

country, privatization is the fundamental policy."

After over a decade of that agenda (1994 - 06), Klein

highlighted the toll showing conditions today much

worse than under apartheid, and ANC’s leadership

responsible:

— the number of people living on less than $1 a day

doubled from two to four million;

— the unemployment rate more than doubled to 48% from

1991 - 2002;

— only 5000 of 35 million black South Africans earn

over $60,000 a year;

— the ANC government build 1.8 million homes while

two million South Africans lost theirs;

— nearly one million South Africans were evicted from

farms in the first decade of democracy; as a result,

the shack dweller population grew by 50%, and in 2006,

25% of South Africans lived in them with no running

water or electricity. And there’s more:

— the HIV/AIDS infection rate is about 20%, and the

Mbeki government shamefully denied the severity of the

crisis and did little to alleviate it; it’s been a

major reason why average life expectancy in the

country declined by 13 years since 1990;

— 40% of schools have no electricity;

— 25% of people have no access to clean water and

most who do can’t afford the cost; and

— 60% of people have inadequate sanitation, and 40%

no telephones.

"Freedom" for these people and all black South

Africans came at a high price, and no efforts are

being made to ameliorate it. Political empowerment was

traded for economic apartheid under Chicago School

fundamentalist rules. Klein observed: "Never before

had a government-in-waiting been so seduced by the

international community." If China, Vietnam and even

Russia saw "the neoliberal light," Mandela was told,

how could South Africa resist it. The ANC leadership

might have (and Mandela had the credentials to lead

them) had they examined the wreckage around the world

in Friedman-seduced countries. Instead, they took the

easy way out and surrendered.

Russia Chooses "the Pinochet Option"

The man who ignited political and social change in

Russia wasn’t around long enough to lead it. Mikhail

Gorbachev became head of the Soviet Union’s Communist

Party in March, 1985, believing the economy stalled

and needed change. His solution became glasnost

(liberalizing opening up) and perestroika

(reconstruction), and Soviet Russia would never be the

same again. By the early 1990s the press was freed,

the constitutional court was independent, and

elections were held for Russia’s parliament, local

councils, president and vice-president. In addition,

Gorbachev favored a Scandinavian-style social

democracy combining free market capitalism with strong

social safety net protections. He hoped to build "a

socialist beacon for all mankind." He never got the

chance.

While still in office at the 1991 G7 meeting in

London, his fellow heads of state delivered a free

market message Chicago School-style. Later, the IMF,

World Bank and other international lending agencies

reinforced it - Soviet-era debts must be honored and

aid depended on adopting strict shock therapy rules.

The Soviet Union soon dissolved, Gorbachev was out,

Boris Yeltsin became Russia’s president, and Chicago

School fundamentalism was adopted as needed "reform."

Klein calls what happened next "one of the greatest

crimes committed against a democracy (in peacetime) in

modern history."

Yeltsin assembled a team of Chicago School ideologues

to remake the economy. Jeffrey Sachs showed up, too,

with other US-funded transition experts to help write

privatization decrees, launch a New York-style stock

exchange, and craft a total radical economic makeover

for a country long used to central planning. Only one

thing stood in the way - democracy, and a parliament

able to vote down what Yeltsin’s team designed. A

clash of wills drew closer in the spring of 1993 when

parliament’s budget diverged from IMF demands for

strict austerity. Yeltsin reacted with the "Pinochet

option." He issued decree 1400 dissolving parliament

and abolishing the constitution. Two days later,

parliament voted 636 - 2 to impeach him, and battle

lines were drawn.

Yeltsin sent troops to surround parliament and cut off

power, heat and phone lines. The army backed him and

he pressed on. He then proceeded to dissolve all city

and regional councils in the country. Then, on October

4, 1993, he ordered the army to storm the parliament,

set it ablaze and "defend Russia’s new capitalist

economy from the grave threat of democracy." The

assault took about 500 lives, wounded nearly 1000

others with the enthusiastic support from the West in

headlines like the Washington Post proclaiming

"Victory Seen for Democracy" in Russia. Some

democracy.

Yeltsin now had unchecked dictatorial power, the West

had its man in Moscow, and shock therapy had an open

field to inflict wreckage on Russia’s people who

didn’t know what him them as it unfolded. A

corporatist state replaced a communist one, and its

apparatchiks were winners along with a handful of

western mutual fund managers who made "dizzying

returns investing in newly privatized Russian

companies." In addition, "a clique of nouveaux

billionaires" (17 in all called "the oligarchs") were

empowered to strip mine the country of its wealth and

ship profits offshore at the rate of $2 billion a

month.

As a result, Yeltsin’s popularity plunged so he did

what all desperate leaders do to hold power with the

next election to worry about. He began a war in 1994

in the breakaway Chechen republic killing 100,000

civilians by the late 90s. Elections were held in

1996, and Yeltsin won by overcoming his low approval

ratings with huge oligarch-funding and near-total

control of television coverage. He then quietly handed

power to Vladimir Putin on December 31, 1999 without

an election but with the stipulation he was exempt

from criminal prosecution. His legacy was devastating

with Klein noting "never have so many lost so much in

so short a time." When Russia’s 1998 financial crisis

hit:

— 80% of Russia’s farmers were bankrupt;

— around 70,000 states factories had closed;

— an "epidemic" of unemployment raged;

— before shock therapy in 1989, two million Russians

lived in poverty on less than $4 a day; by the

mid-90s, the World Bank estimated 74 million were

impoverished and by 1996 conditions for 25% (almost 37

million) Russians were "desperate" and the country’s

underclass remained permanent;

— Russians drink twice as much now as before;

painkilling and hard drug use increased 900%, and

HIV/AIDS threatens to become epidemic with a 20-fold

jump in infections since 1995; suicides are also

rising, and violent crime increased more than

fourfold; and

— Russia’s population is declining by 700,000 a year

with capitalism having already having killed off 10%

of it as one more example of free market-inflicted

disaster. That’s the brave new world disease spreading

everywhere with another scorched-earth stop below.

Friedman called it "freedom."

The Looting of Asia

In the summer of 1997, economic crisis hit Asia from

no apparent cause beyond rumors the Thai bhat was in

trouble, and Thailand didn’t have enough dollars to

back it. Hot money in became an electronic stampede

out with "Asian Contagion" unleashed and heading for

Indonesia, South Korea and other so-called Asian Tiger

countries that were fast-growth miracles until they

crashed together with the plight of one affecting the

others. It then got worse and spread to Latin America

and Russia with US markets also affected briefly in

1997 and then again with a severe jolt in the summer

of 1998.

The 1997 Asian panic was crippling with $600 billion

in stock market wealth taking decades to build wiped

out in a year. Klein notes "a classic fear cycle"

ignited the crisis that might have been contained by

the same type "quick, decisive loan" rescue package

offered Mexico in 1994 in their so-called Tequila

Crisis. It would have been a strong signal to markets

the US Treasury and international lending agencies

wouldn’t let the Asian Tigers fail. No help came, and

the message instead was: "Don’t help Asia." Why?

Because "Asia’s catastrophe was an opportunity (for

predatory western corporations and vulture investors)

in disguise."

Asian Tigers grew by protecting their markets and

barring foreign companies from ownership of land or

national firms. They also restricted imports from the

West and Japan and instead built up their own domestic

markets. Western predators wanted unfettered entry to

the region with the right to scoop up the best Asian

companies but needed a way to do it. Now they had it

from an event Klein calls "the fall of a second Berlin

Wall," as important to western capital as the first

one.

Enter the IMF with crisis-struck Asian countries too

sick to resist it. They needed help, and the lending

agency had plenty to offer on similar terms as to

previous crisis recipients. With economies in trouble

and empty treasuries, the Tigers got no choice. First,

they had to remove all "trade and investment

protectionism and activist state intervention that

were the key ingredients of the Asian miracle." IMF

also demanded big spending cuts, "flexible" workforces

(meaning mass layoffs and constrained wages and

benefits), privatized basic services, and the rest of

the package they demand for loans.

The regional toll was devastating with the

International Labor Organization estimating 24 million

lost jobs along with "what was so remarkable about the

region’s ’miracle’ in the first place: its large and

growing middle class." In addition, 20 million people

fell into the "planned misery" of poverty, reversing

an earlier trend reducing it. Women and children

suffered most with families selling daughters to human

sex traffickers to survive as child prostitution had a

new growth market.

So did Wall Street as IMF structural adjustments put

"pretty much everything in Asia....up for sale" in the

affected countries. The more markets panicked, the

lower asking prices became, and the more pressured

hurting companies were to sell out for what they could

get or face bankruptcy. It was a bonanza for buyers,

and major deals went through in a great fire sale at

bargain prices. Asia became hugely transformed with

hundreds of local brands replaced by western

transnational ones. The New York Times called it "the

world’s biggest going-out-of-business sale." It also

became an early glimpse of post-9/11 disaster

capitalism - a way for corporate predators to exploit

crises in what’s become common practice in the age of

"terror" creating opportunities galore and big profits

for well-connected firms.

Klein notes the Asian crisis never ended as

desparation took root after 24 million people lost

jobs in two years. No nation handles that, and the

fallout can be unpredictable. It led to a rise in

religious extremism in Indonesia and Thailand and "the

explosive growth in the child sex trade." Unemployment

is still high and layoffs continue with new foreign

owners demanding higher profits with jobs disappearing

to provide them.

Eventually things settle down but never to where they

once were. Throwing people overboard, displacing small

farmers and business owners and crushing unions means

those affected stay that way. "They end up in slums,

now home to one billion people (and rising); they end

up in brothels or in cargo ship containers. They are

the disinherited (or what) German poet Rainer Maria

Rilke (called) ’ones to whom neither the past nor the

future belongs.’ " They’re the human wreckage left

behind by countries swallowing Chicago School economic

medicine. Its promised miracle is people-poison but

not for vulture investors thriving on it. Disaster

capitalism is on a roll, and its growth market

potential is unlimited and guaranteed to continue

unless mass public outrage stops it as one day it

will.

Part 5 - The Rise of the Disaster Capitalism Complex

Shock Therapy in the USA

Richard Nixon knew before the rest of us that Donald

Rumsfeld is "a ruthless little bastard." He also has a

knack for making enemies even inside the Pentagon he

ran as Defense Secretary. He planned to "reinvent

warfare for the twenty-first century (making it) more

psychological than physical, more spectacle than

struggle, and far more profitable" than ever before.

Talk aside, he wanted to revolutionize the military by

running it like the corporate world, and that meant

using methods like outsourcing and branding. His idea

was for fewer full-time troops, more as-needed ones

from the Reserves and National Guard, and a lot of

backup help from private contractors like Blackwater

USA for security and Halliburton for a range of

functions unrelated to soldiering. He wanted less

staff and more tax dollars diverted to private

companies. The Pentagon brass wasn’t pleased, but

Rumsfeld was boss and Dick Cheney backed him.

Klein calls them both "proto-disaster capitalists" who

practice "the central tenet of the Bush regime (that)

the job of government is not to govern but to

subcontract." The privatization mania was kick-started

in the Reagan era, but Bill Clinton bought it as well.

Now the feeling is anything government can do, private

business can do better so let them. That means fire

departments, prisons, public schools, public health,

data management, border control and even parts of the

military. As Klein explained: "crisis-exploiting

methods....honed over the previous three decades would

be used to (privatize) the infrastructure of disaster

creation and....response. Friedman’s crisis theory was

going postmodern (to create a) privatized police

state" by auctioning it off.

"Then came 9/11, and the idea of hollowing out

government seemed opposite of what a frightened public

wanted - a strong central government to protect them.

Bush promised it in speeches, but "his inner circle

had no intention of converting to Keynesianism."

September 11 security failures only reinforced their

belief that private firms could handle the challenge

better than government, and that meant transferring

hundreds of billions of public dollars to corporate

pockets. The Bush administration exploited shock and

fear "to push through its radical vision of a hollow

government in which everything from war fighting to

disaster response was a for-profit venture."

Mass disorientation post-9/11 provided the

opportunity, and the "war on terror" became a "bold

evolution of shock therapy....built to be private from

the start" to capitalize on it. It came in two stages.

First, policing, surveillance, detention and

war-making powers of the executive were dramatically

increased though nothing in the Constitution permits

it. Then, the whole package, including occupation and

"reconstruction," was outsourced to well-connected

private firms that responded with generous campaign

funds to keep the mutually reinforcing daisy chain

humming. Using the ploy of fighting "terrorism," the

homeland disaster capitalism complex emerged as a

full-blown new economy and what Klein calls "a virtual

fourth branch of government."

The Bush administration’s idea of government, with

security as one function, wasn’t to provide it but to

buy it at cost-plus market prices with lots of

latitude for the plus. Just as the internet launched

the dot-com bubble, from 9/11 emerged the disaster

capitalism one, and it was off to the races "in an ad

hoc....chaotic fashion."

Fighting "terrorism" is big business, and one of the

first opportunities was the market for surveillance

cameras with 30 million of them installed in the US,

billions of hours of footage, analytic software to

scan it, digital image enhancement to help it, and

information management and data mining technology to

handle all data government collects on everyone and

everything. September 11 unlocked the potential, a

huge new growth market was created, and protection

from terror became more important than big brother

watching. In six short years, an industry that barely

existed is now much larger than Hollywood or the music

business, and its potential looks limitless.

Klein calls it "an unprecedented convergence of

unchecked police powers and unchecked capitalism, a

merger of the shopping mall and the secret prison" in

a frightening brave new world most people barely

understand or know exists. It generates enormous

wealth that creates a powerful incentive for its

winners to sell fear for more of it and partnering

with government makes it easy, especially the kind in

power now.

Capitalism Becomes Corporatism in a Corporatist State

Proto-disaster capitalism defines the Bush

administration as crises, wars and other disasters

"conflate with what’s good for Lockheed, Halliburton,

Carlyle and (Rumsfeld’s old company) Gilead" Sciences.

Cataclysm is a growth business that in the current

climate involved "some of the seediest and most

blatant corruption scandals in recent history,"

war-profiteering in the hundreds of billions, and a

"whirling revolving door between government and

business" taken to a new level. The limitless homeland

security and war-profiteering markets are so alluring,

hundreds of administration officials can’t wait to

cash in like earlier ones did. Klein names some noted

ones like Richard Pearle, James Baker, Henry

Kissinger, Paul Bremer, George Shultz, John Ashcroft,

Tom Ridge, Rudi Giuliani, Richard Clarke, James

Woolsey, Joe Allbaugh, and Michael Brown who wrote an

infamous memo to a fellow FEMA staffer asking: "Can I

quit now?"

That’s the whole idea in a get rich quick environment - get an impressive government title, stay in office

long enough in a department handing out big contracts,

collect insider information with market value, then

quit and cash in. Klein calls public service now

"little more than a reconnaissance mission for future

work in the disaster capitalism complex." She also

quotes Danielle Brian, executive director of the

Project on Government Oversight (a nonprofit watchdog

group) saying: "It’s impossible to tell where the

government ends and Lockeed begins." She also believes

that corporatist economic goals and right to limitless

profit seeking lie at the heart of the most committed

neocons who talk a good game but value great wealth

their top priority. They partnered permanent war and

homeland security with the disaster capitalism complex

to get it, and it’s hard indeed telling where one ends

and the other begins. But it’s centerpiece project is

Iraq, and its headquarters is in Baghdad’s heavily

fortified Green Zone.

Part 6 - Iraq, Full Circle - Overshock - Erasing A

Country

Perhaps no country provides a greater untapped

opportunity for unfettered capitalism than Iraq. It

represents the planet’s last remaining low-hanging oil

resources fruit with potentially more of it than Saudi

Arabia according to some oil analysts. It’s also

strategically located in the heart of the oil-rich

Middle East (with two-thirds of proved reserves) Klein

calls the "crusade’s....final frontier." Iraq’s

potential alone is so enormous it made war the way to

crack open its market potential because peaceful

methods hadn’t worked. Its conquest would then serve

as "a different model in the heart of the Arab-Muslim

world" that could become a catalyst to opening the

whole region.

The potential is a giant free-trade zone, the illusion

of newly created democracies, and the freedom for

unfettered capitalism "to feed off freshly privatized

states." Klein explained this as "the model theory,"

Iraq as the model, with the idea not being

nation-building but nation-creating. But what of the

nation already there that’s known as the "cradle of

civilization." It would have to be erased, and Chicago

School fundamentalism would create a new one in its

place in its own image with a blank slate to work

from.

Bush administration war planners considered the full

array of possible shocks and went with them all -

blitzkrieg "shock and awe," elaborate PsyOps, use of

fear as a weapon, repressive occupation, mass

detention and torture, and "the fastest and most

sweeping political and economic shock therapy program

attempted anywhere....From the start, the invasion was

(Washington’s message) to the world....in the language

of fireballs, deafening explosions and city-shattering

quakes." It said dare challenge US authority, and

you’re next. Shock and awe planners designed its

strategy to deter "the public will of the adversary to

resist (to render) the adversary completely impotent"

from the effects of sensory deprivation and overload

inducing disorientation and regression.

In March, 2003, Baghdad got it on a massive scale. The

ministry of communication and four telephone exchanges

was blitzed and set ablaze cutting off millions of

phones and preventing people from learning if their

family and friends were alive. Television and radio

transmitters were also destroyed along with the

electrical grid plunging the city into "an awful,

endless night." Residents were trapped in their homes

unable to speak or hear each other or see outside at

night. "LIke a prisoner destined for a CIA black site,

the entire city was shackled and hooded. Next it was

stripped."

Unchecked looting did the most to erase the "country

that was....Gone are 80% of the museum’s 170,000

priceless objects....the national library is a

blackened ruin....the Ministry of Religious

Affairs....was left a burned-out shell (and the)

national heritage was lost." Paul Bremer’s senior

economic advisor, Peter McPherson, wasn’t bothered. It

made his job of radically downsizing the state and

selling it off easier. Cleaning the slate and erasing

the nation was proceeding fast. It "all unfolded in a

matter of weeks." Baghdad was "open for business," and

the fire sale for its assets began with US firms

having first dibs on everything, except oil, and that

would come later as it has now but is stalled.

While he was there, Paul Bremer was Washington’s man

in Baghdad charged with readying the launch of Iraq,

Inc. He saw to it laws were passed smoothing the way

for Chicago School shock therapy. Two hundred firms

were to be privatized immediately to get "inefficient

state enterprises into private (predatory) hands...."

New economic laws followed that comprised a "wish

list....foreign investors and donor agencies dream

of," according to The Economist. The corporate tax was

cut from 45% to a flat 15%; another allowed foreign

companies to own 100% of Iraqi assets and take all

profits out of the country; all restrictions on

imports were removed; and investors could sign deals

and leases lasting 40 years so no future government

could change them.

Iraq became a bold new experiment with invasion,

occupation and reconstruction transforming the country

into a fully privatized new market "with a huge pot of

public money" doing it. Klein called the adventure an

"anti-Marshall plan," mirror opposite the post-WW II

plan, and guaranteed "to further undermine Iraq’s

badly weakened industrial sector and send Iraqi

unemployment soaring." No funds went to Iraqis or

their industries nor was anything done to build a

sustainable economy, or rebuild local infrastructure

like electrical grids, schools, and hospitals. Iraqis

played no role in planning, local firms weren’t even

given "subsubsubcontracts," jobs were destroyed not

created while thousands of serf-type foreign workers

were brought in and abused, and critically needed

social services were ignored.

Another goal was for a fully outsourced, hollow

government with no function so "core" a contractor

couldn’t handle it for profit. It was pure pillage,

but nothing went as planned. "Each miscalculation

provoked escalating levels of resistance" with

occupying forces responding with counterrepression

"sending the country into an inferno of (unending)

violence." Everything "tearing Iraq apart today -

rampant corruption (and unfettered plundering),

ferocious sectarianism, the surge in religious

fundamentalism and the tyranny of death squads

(including US ’Salvador option’ ones) - escalated in

lockstep with....Bush’s anti-Marshall Plan." In that

environment, the country became "a cutthroat

capitalist laboratory" for shameless pillage. Iraq

today is a model, a metaphor for everything wrong with

Chicago School dogma showing it to be savage,

ruthless, heartless and bankrupt.

Its implementation is the core reason for resistance

that continues and grows, but it caught war planners

off guard when it began. They thought the shock and

awe of attack, invasion, occupation and rapid

transformation on the ground would be disorienting.

Instead, Iraqis demanded a say from the start in how

their country would be rebuilt and transformed. "And

it was the Bush administration’s response to this

unexpected turn of events that generated the most

blowback of all" that became even worse by crushing

democracy and effectively installing a puppet

government in the fortified Green Zone masquerading as

a real one.

The result was predictable and so was the harsh

response - mass detentions, aggressive interrogations,

administration-sanctioned gloves off torture, and US

unleashed "Salvador option" death squads making it

hard to know who’s doing the killing and blasting away

at selected targets. What is clear are the

consequences - "millions of psychologically and

physically (traumatized, angry and) shattered people,

first by Saddam, (then) by war, (then) by one another

(and the occupation). Bush’s in-house disaster

capitalists didn’t wipe Iraq clean, they just stirred

it up....Countries, like people, don’t reboot to zero

with a good shock; they just break and keep

breaking....Which....requires more blasting - upping

the dosage...."

Slowly, it’s disappearing, disintegrating, erasing an

entire country - women behind veils and doors,

children from schools, four million displaced, Iraqi

industry collapsed, a new growth industry in

kidnapping for ransom, a country so unstable

investment is high-risk, and even the heavily

fortified Green Zone is too unsafe for George Bush to

visit on one of his "surprise trips" to the country.

Bremer’s charge was to build a "corporate utopia" but

instead unleashed a "ghoulish dystopia," and, on an

April, 2004 visit to the country, Klein thought she

was witnessing a mass contractor exodus with 1500 of

them leaving in one week.

Now she’s not sure. Big investors like Wal-Mart, HSBC

and Procter and Gamble never showed up, and in

December, 2006, the Pentagon announced a new project

to get state-owned factories operating with plans to

buy cement and machinery from them instead of the

usual corporate suppliers. Does it signal a change of

disaster capitalism tactics? Not at all, and it’s

likely this amounts to no more than tinkering and

tokenism that in the end will do little for the local

economy and even less to reduce hardened anger.

The Big Oil drafted Hydrocarbon Law is still a work in

progress but already inflamed things further, and well

it should. It’s an anti-Marshall Plan project at its

worst, and in whatever final form is a shameless act

of theft on the grandest scale. It’s a privatization

blueprint for plunder giving Big Oil a bonanza and

Iraqis a mere sliver of their own resources. In one

draft, Iraq’s National Oil Company got exclusive

control of just 17 of the country’s 80 known oil

fields with all yet-to-be-discovered deposits set

aside for foreign investors. Even worse, Big Oil is

free to expropriate all earnings with no obligation to

invest anything in Iraq’s economy, partner with Iraqi

companies, hire local workers, respect union rights,

or share new technologies. In addition, foreign

investors are guaranteed long-term contracts up to 30

or more years, dispossessing Iraq and its people of

their own resources in a naked scheme to steal them

and deny them the one source of revenue able to

rebuild their shattered country and lives.

The battle for Iraq continues that involves clinging

to if not winning the hearts and minds on the home

front as well. The country is a wasteland, the nation

creation project bankrupt, and the prospect for

success bad and worsening. Iraq has been a graveyard

for past imperial powers, and it may just be a matter

of time until history again repeats. The Brits in the

South know it, and after four and a half futile years

are tiptoeing out to the dismay of their "coalition"

partners. One day, Washington may join them, and for

shocked Iraqis it can’t come too soon. For now,

though, the shock continues, and Iraq more closely

resembles hell than "the cradle of civilization."

Part 7 - The Movable Green Zone: Blanking the Beach -

"The Second Tsunami"

For coastal Sri Lankans, like those in Arugam Bay,

December 26, 2004 felt more like 1945 Hiroshima than

life before that fateful day changing everything for

them. A devastating tsunami took 250,000 lives and

left 2.5 million homeless throughout the region. It

affected Arugam Bay, "a fishing and faded resort

village" on the island’s east coast that government

was showcasing in its plans to "build back better."

Indeed, but not for the villagers hoteliers,

developers and the government wanted removed but

weren’t sure how until nature did what they couldn’t.

Everything was gone, and a blank slate remained for

what the tourist industry long wanted - "a pristine

beach (in a prime area), scrubbed clean of all the

messy signs of people working, a vacation Eden. It was

the same up and down the coast once rubble was

cleared....paradise."

"New rules" forbade homes on the beach and a "buffer

zone" imposed insured it. Beaches were off-limits,

displaced Sri Lankans were shoved into temporary grim

barracks camps inland, and "menacing,

machine-gun-wielding soldiers" patrolled to keep them

there.

Tourist operators were treated differently. They were

encouraged to build and expand on prime vacated

oceanfront land. It was all in a document called the

"Arugam Bay Resource Development Plan" to transform

the former fishing village into a "high-end ’boutique

tourism destination’ (with) five-star resorts,

luxury....chalets, (and even a) floatplane pier and

helipad." Arugam Bay was to be a model for

transforming up to 30 similar "tourism zones" into a

"South Asian Riviera." When the plan leaked out,

people in Arugam Bay and around the country were

outraged.

The grand scheme to remake Sri Lanka was around two

years earlier and began when the civil war ended. It

was to be the country’s reentry into the world economy

as one of the last remaining uncolonized places

globalization hadn’t touched, and a high-end tourism

project was seen as the right option. It would be a

luxury destination for the "plutonomy set," once a few

changes were made. Government’s 80% land ownership had

to be opened to private buyers, more "flexible" labor

laws were needed, and modernized infrastructure had to

be developed with World Bank and IMF providing funds

on their usual shock therapy terms discussed above.

With mass public opposition to the ideas, it wouldn’t

be easy, and before the tsunami hit, militant strikes

and street protests held it back.

Sri Lanka’s president, Chandrika Kumaratunga, was

elected on an "overtly antiprivatization platform,"

but the tsunami changed everything and helped her see

"the free market light." Four days after the disaster,

her government passed a bill "pav(ing) the way for

water privatization." It also raised gasoline prices

and began crafting legislation to privatize the

electricity company in pieces. It was like a second

tsunami, and the same scheme followed hurricane Mitch

in October, 1998 with Hondurus, Guatemala and

Nicaragua hardest hit like New Orleans discussed

below.

Klein explained when the tsunami struck in 2004,

"Washington was ready to take the Mitch model (now

familiar) to the next level - aiming not just at

individuals laws but at direct corporate control over

the construction." Sri Lanka’s president complied and

created a new body called the Task Force to Rebuild

the Nation fully empowered to proceed. On it were the

most powerful business leaders from banking and

industry including key players from the beach tourism

sector. Absent were villagers, farmers,

environmentalists or even a "disaster-reconstruction

specialist." Klein called the task force a new type

corporate coup d’etat mother nature made possible.

In ten days, then had a complete reconstruction

blueprint from "housing to highways" with aid money

directed to corporate development and nothing for

disaster victims. They were destined to become

permanent shantytown dwellers similar to the kinds

ringing most Global South cities and populating Global

North inner ones. Similar stories of law changes and

land grabs came out of other affected Southeast Asian

countries like Indonesia, Thailand, the Maldives and

India where around 150 Tamil Nadu displaced women had

to sell their kidneys for food.

A year after the tsunami, NGO ActionAid surveyed the

aftermath in five Asian countries and found the same

pattern everywhere - residents barred from rebuilding,

living in militarized temporary camps, hotels

"showered with incentives," no restoration of homes

lost, and "entire ways of life" destroyed. In July,

2006 in Sri Lanka, the Tamil Tigers ended their

cease-fire and war resumed. It’s hard knowing if

disaster capitalism had a role because peace was

always precarious, the government offered little, and

continued violence at least promised a chance for

something better before and more than ever now given

the choice between disaster capitalism and hope.

Disaster Apartheid - A World of Green and Red Zones

On August 29, 2005, Hurricane Katrina hit the Gulf

Coast and flooded New Orleans. The well-off left town,

"checked into hotels, and called their insurance

companies." For 120,000 others without cars or means

of transportation, it was another story. They depended

on the state, waited for help and got none. FEMA is

supposed to provide it, too, but it was one of the

many government functions Bush gutted advancing savage

capitalism at the expense of public service.

Katrina was disastrous for those affected, but Milton

Friedman saw "an opportunity" in a Wall Street Journal

op-ed. It was easy for him to say from his luxury San

Francisco digs as well as his like-minded ideologues

who met 14 days later to plan how to pounce on the

tragedy for profit. They produced 32 Chicago

School-type schemes packaged as "hurricane relief"

that was a wish list for developers and hell for the

displaced. They ranged from suspending Davis-Bacon

prevailing wage laws in disaster areas and making the

whole area a flat tax free enterprise zone to erasing

public schools by giving parents vouchers for

privately-run charter ones. They also wanted

environmental regulations suspended on the Gulf Coast

and permission to drill in the Arctic National

Wildlife Refuge that showed how far afield they’d go

to capitalize on the shock of a local tragedy.

Things moved fast, and within weeks "the Gulf Coast

became a domestic laboratory for the same kind of

(outsourcing schemes) pioneered in Iraq." The names

were familiar with Halliburton first in line along

with Bechtel, Blackwater USA and a host of others

homing in for the kill. Billions were at stake, and no

open bidding was required, just good connections. As

Klein put it: "within days of the storm it was as if

Baghdad’s Green Zone....lifted from....the Tigris and

landed on the bayou....As in Iraq, government once

again played the role of a cash machine equipped for

both withdrawals and deposits." Corporations took one

and repaid with the other in sizable campaign

contributions in a pattern now familiar.

They also ignored unemployed locals and relied instead

on cheap imported undocumented labor easily exploited.

The Bush administration showed its type compassion,

too, with $40 billion in budget cuts for essentials

like Medicaid, food stamps, student loans and more so

funds could go to contractors and the wars in Iraq and

Afghanistan. Again, a familiar pattern.

In visiting Iraq, Klein first thought the "Green Zone

phenomenon was unique to the war in Iraq." She then

discovered it emerges wherever disaster capitalism

lands with the same stark divisions between the

included and excluded. It was evident in New Orleans

with "gated green zones and raging red" ones - not

from flood damage but from predatory free market

solutions only for the privileged.

The Bush administration refused emergency funds for

public sector salaries so 3000 city workers were

fired. Charity Hospital closed and still isn’t open.

Public transit was gutted losing half its workers, and

most public housing is still boarded up and empty by

design. Some sits on prime land close to the French

Quarter, developers want it for luxury properties, and

New Orleans is being erased for profit just like Iraq.

It was all planned with the storm the excuse to do it.

Earlier "creative destruction" opportunities generated

"rust belts," neglected neighborhoods, and underfunded

inner city public schools. Creative neglect is at work

as well as the American Society of Civil Engineers in

2007 said it will cost $1.5 trillion over five years

to bring essential public infrastructure back to

standard. Instead it continues to deteriorate while

the well-off withdraw into gated communities and

luxury condos with all their needs met by private

providers. Klein calls this trend a

"state-within-a-state that is muscular" and as able as

the public one is frail. It no longer can function

without help from contractors as government is

hollowed so business can prosper.

New Orleans is a window on the future in which

survival depends on the ability to pay, and those who

can’t are discarded like trash. It promises a world of

protected Green Zones with those outside it neglected,

abandoned, ignored and forgotten.

Losing the Peace Incentive - Israel As Warning

Conventional wisdom once thought economic growth and

prosperity required peace and stability. No longer.

Post-9/11, the terror scare was ignited, wars rage in

Iraq and Afghanistan, more war is threatened on Iran,

oil prices touched $80 a barrel, the WTO Doha Round

trade talks collapsed, and "a golden period of broadly

shared growth" prevails (at least until the recent

credit crunch). How come?

Conflict and global instability don’t just benefit

arms related industries. They help the high-tech

security sector, heavy construction, private health

care companies treating soldiers and oil and gas. The

business bonanza in Iraq alone is hugely profitable

with all sorts of companies cashing in. The same goes

for New Orleans and Gulf Coast overall. Terrorist

attacks are good for business. The more destruction,

the more to rebuild - a great market for disaster

capitalism it pounces on with every incentive to

assure the trend continues unchallenged, and why not

when government throws public tax dollars at it.

Today, "instability is the new stability," and Israel

is its "Exhibit A." In the post-1993 Oslo years, the

Jewish state designed its economy to expand in

response to escalating violence at home at first and

now everywhere. The nation’s technology firms

pioneered the homeland security industry, and they

still dominate it. In addition, its economy overall is

the most "tech-dependent in the world," according to

Business Week magazine, twice as dependent as the US

representing half its exports.

Following the 2000 dot-com crash, Israel’s leading

tech companies needed a new global niche, and the

government encouraged expansion beyond information and

communications technologies into security and

surveillance. It launched a slew of start-ups

"specializing in everything from ’search and nail,’

data mining, surveillance cameras, to terrorist

profiling." It was perfect timing for a market that

exploded post-9/11, and Israel’s economy is thriving

with one of the fastest growth rates in the world.

Klein calls the country "a kind of shopping mall for

homeland security technologies," and Forbes magazine

says it’s "the go-to country for antiterrorism

technologies." Today, the country’s counterterrorism

industry is booming, and its defense-related exports

make it the fourth largest arms dealer in the world,

larger than the UK.

Klein notes: "With more and more countries turning

themselves into fortresses (with walls and high-tech

fences part of it), ’security barriers’ may prove to

be the biggest disaster market of all." In the case of

Israel, it’s also another "Chicago School frontier

marked by rapid stratification of society between rich

and poor inside the state." The security boom fueled a

wave of privatizations accompanied by social program

cuts, "an epidemic of inequality," and the virtual end

of Labor Zionism. Klein notes 24.4% of Israelis live

in poverty, including 35.2% of children, compared to

8% twenty years earlier (but she doesn’t say if these

figures include Arab Israeli citizens comprising 20%

of the population). She concludes Israeli industry no

longer fears war as it thrives on it.

Today, Baghdad, New Orleans and suburban Atlanta Sandy

Springs are glimpses of a gated community future run

by the disaster capitalism complex. But it’s in its

most advanced state in Israel - "an entire country

(turned into) a fortified gated community, surrounded

by locked-out people living in (the) permanently

excluded red zones" of Gaza and the West Bank that

aren’t just left out but are encroached on and under

attack. Disaster capitalism thrives in this

environment so it yearns to bring it to a neighborhood

near you, and that’s a prospect to fear.

Hopeful Signs - Shock Wears Off

Klein quotes Canada’s National Post editor, Terence

Corcoran, wondering if the Chicago School movement

Milton Friedman launched could continue as before

after his November, 2006 death. The movement’s

pinnacle was capturing the Congress in 1994 that it

lost in 2006 for three reasons - public disenchantment

with the Iraq war, political corruption, and a growing

class divide unseen since the Gilded Age of the

"robber barons" or roaring 20s. Each factor related to

core Chicago School economics - privatization,

deregulation and cutting government services. In the

US, it created a wealth disparity economist Paul

Krugman calls unprecedented while poverty is growing

and the middle class dying in the richest country in

the world that’s also the least caring one.

Everywhere Chicago School fundamentalism shows up, the

results are the same. A small elite gains hugely while

most others don’t. But cracks in the ideology are

visible as many of its front line adherents got caught

up "in an astonishing array of scandals and criminal

proceedings (from the) earliest laboratories in Latin

America to the most recent one in Iraq."

Before he died, Pinochet was under house arrest. In

Argentina, courts stripped former junta leaders of

immunity. Bolivia’s de Lozada got chased from the

country and is now a wanted man. In Russia, many of

the oligarch fraudsters were either in exile or jail.

In Canada, newspaper magnate Conrad Black was

convicted of fraud. In the US, a rogue’s gallery of

CEOs were charged and convicted as well, and other

high level types were caught up in scandals like

lobbyist Jack Abramoff’s influence-peddling one.

Klein notes another hopeful sign as well - shock

effects were beginning to wear off, and in Argentina’s

2001 economic crisis forced out five presidents in

three weeks. It was spreading and most apparent in

Latin America where it began with opponents of Chicago

School doctrine winning elections like Hugo Chavez in

Venezuela, but he wasn’t alone. It showed a renewed

faith in democracy and condemnation of Washington

Consensus dogma when people made a choice at the polls

in free and open elections. Today’s movements aren’t

replicas of the past, and one of the differences "is

an acute awareness of the need for protection from

shocks of the past" - coups, foreign shock therapists,

torturers, debt and currency shocks.

They’ve learned from the past and are building "shock

absorbers into their organizing models." It’s in

movements less centralized, Venezuela’s grassroots

community councils, Brazil’s Landless Peoples

Movement, and the streets of Oaxaca, Mexico where

thousands battled police since a year ago May and

still won’t quit. In addition, governments are

rejecting old trade models and adopting new ones like

Venezuela’s ALBA bartering system making it less

vulnerable to turbulent markets.

They’re also rejecting World Bank and IMF debt

slavery, and the change is dramatic. In 2005, 80% of

IMF’s lending portfolio was to Latin America. It

dropped to 1% in 2007. And IMF’s 2005 $81 billion

dollar portfolio shrank to $11.8 billion in three

years with nearly all of it in Turkey. The World Bank

is also being rejected. Venezuela severed its

relationship, and Ecuador’s Raphael Correa suspended

bank loans and declared its country representative

persona non grata in an extraordinary move the

equivalent of a well-deserved slap in the face. In

addition, the Doha Round trade talks collapsed, and

some observers thought it signaled "globalization is

dead," or if not, it’s at least breathing hard.

Resistance is showing up in Europe, too, with voters

in France and the Netherlands rejecting the European

Constitution the French call "savage capitalism" and a

codification of the corporatist order they reject. The

Putin era in Russia is also seen as a backlash against

the shock therapy of the 90s that impoverished

millions of its people still left out and many

desperate. The same is true in South Africa where

people in slums abandoned the ANC to protest against

their broken Freedom Charter promises. It even

surfaced in China where, according to official

government sources, 87,000 large protests were held

involving over four million workers and peasants. They

won major victories for new rural area spending,

better health care, and pledges to eliminate education

fees.

Millions of Lebanese were in the streets as well that

wasn’t a show of strength by Hezbollah as the major

media characterized it. It was a rejection of the

Siniora government’s willingness to accept Chicago

School reforms in exchange for billions of needed

reconstruction loans to recover from Israel’s summer,

2006 blitzkrieg attack. Klein called their actions "a

poor and working-class people’s revolt."

Examples are everywhere but so far just ripples in a

pond needing greater numbers for real change. They

were in tsunami-struck Thailand where, unlike in Sri

Lanka, many settlements were successfully rebuilt in

months but not by the government offering no aid. So

hundreds of villagers "engaged in what they called

land ’reinvasions,’ " defied their government with

direct-action, and rebuilt their communities making

them better than before the destruction.

The same thing happened in New Orleans. In February,

2007, housing project residents "reinvaded" their old

homes and reclaimed them in another example of "people

rebuilding for themselves" and bypassing government

indifferent to their needs and rights. Klein calls

this phenomenon "the antithesis of the disaster

capitalism complex’s ethos." The actions are communal

with people helping each other, rebuilding rubble, and

aiming to end the erasure "of history, of culture, of

memory."

It’s a message of collective shock resistance

replacing shock, but it’s too early to declare

victory. The signs are encouraging, and with enough of

them who knows what’s possible. Hopefully a better

world replacing the bankrupt notion that markets work

best and government is the problem. That’s an idea for

the trash bin of history where it belongs and where it

one day will be.

---

Stephen Lendman lives in Chicago and can be reached at

lendmanstephen@sbcglobal.net.

Also visit his blog site at http://sjlendman.blogspot.com and

listen to The Steve Lendman News and Information Hour

on TheMicroEffect.com Saturdays at noon US central

time.