The Shock Doctrine: Milton Friedman's Hold and The People's Hopeful Resistance

You might have read the piece in Salon the other day where John Dean laments the passing of the Republican Party as a positive, or, even, a non-damaging force in American life. The party he has known for forty years, and the party he says that his friends now know, is a hateful, entirely corrupt, and self-interested body composed of those who take revenge and those who fear having revenge taken upon them. Every current candidate for the presidency is "authoritarian" in an extreme and unAmerican way that Dean thinks would have in earlier decades been "corrected" by the political system, but the Republicans, according to Dean, have broken the political system precisely so that it won't correct them. Sounds like the financial markets, doesn't it?

Personally, I would have put things slightly differently. The Republican Party now seems to work like a gang, in which the most valued qualities in members are loyalty to the gang and the leader, obedience to authority, and violence toward outsiders. The gang is constantly having to prove its dominance, and so candidates for leadership vie with one another for the most tyrannical or violent rhetoric, rhetoric which simultaneously demonizes those who don't accept the authority of the gang and the leader and removes all rules and laws for the gang and the leader. No one is exempt from the wrath of the gang. In this case, the Republican party has now separated itself fairly clearly from the general American population, and as Americans support it less, they come to seem to the Republicans to be more and more the enemy. The far away enemy is one thing, in terms of threat (think Al Qaeda, Shiites, Sunnis) but the enemy close at hand is more threatening because their enmity is seen as a "betrayal."

I don't doubt Dean. I always thought that for a Republican, he had something of a conscience. What amazes me is that Republicans who are now exclaiming at what has happened to the Republican Party (and yes, I talked to my mother this morning) didn't see this coming. Everything, every value, that the Republicans have held up for my lifetime as desirable has been pointing us in this direction. As I've said before on the HuffPost, all of this is the necessary consequence of traditional Republican values, not an accidental byproduct. Or maybe I'll put it this way -- when you reject common humanity, value profits above people, practice sectarian religion, feel contempt for the choices of others, exalt wealth, conflate consumersim with citizenship, join exclusive clubs, daily practice unkindness rather than kindness, and develop theories, such as those of free market capitalism, that allow you to congratulate yourself morally for selfishness and short-sightedness, then being a gang member is in your future.

Speaking of Free Market Capitalism, John Dean should start reading Naomi Klein's new book, The Shock Doctrine, which is being published next week, simultaneously in the US and in Britain. As Karl Marx pointed out, history and politics are not only psychological, they are also material. This week, the Guardian is running not only four excerpts from Klein's book, but also several commentaries both disagreeing and agreeing with her thesis. Her thesis is this (and if I am slightly inaccurate, blame me, not Naomi): In the fifties and sixties in the US, at least two lines of thought converged. One was about how to change people's minds without leaving marks and the other was about what was the best way of organizing a given economy. The first grew out of experiments in psychological torture (whoops, I mean electrocshock therapy) run by Ewen Cameron in the late 1940s. The theory was that patients could be rid of mental illnesses by "regressing" them to an infantile state, attaining a "clean slate" upon which new patterns of behavior and thought would be etched. Cameron used both electroshock and powerful drugs to attain his clean slate, having no actual knowledge of the chemistry of the brain or how it works -- in other words, he was operating in accordance with a metaphor. The result of Cameron's experiments, for the patients, was often considerable loss of short term and even long term memory and a subsequent lifelong feeling of "blankness" on the part of the patients (apparently, later refinements of electroshock techniques have mitigated these effects). In the 1950s, the CIA redirected these techniques toward torture of political opponents, allegedly to find out information, but really to test the techniques themselves (hello, Jose Padilla!).

At the same time, Milton Friedman was coming up with the idea that if only an economy could be purified of any kind of restraints on the free market (for example labor unions or socialized medicine or history), then the free market would be able to perfectly gauge the value of any type of good or service, and therefore an economy would balance itself, and, most importantly, inflation would be controlled (also, as you can see, a metaphor, or, perhaps, an extended analogy).

According to Klein, it soon became apparent that all powerful shocks to a system had a similar effect, whether the system was a human body or a national body, and this was to temporarily disable the system's defenses. The US government, the CIA, and the free market economists began to act on this insight, to collude in larger experiments. The first of these was the right wing coup, in Chile, led by Augusto Pinochet, in 1973. At the time, Chile had a functioning leftish government and economy, and the voters had already rejected Friedman's pure free market troika: privatization of government functions, an end to social spending, and deregulation.The new economy was dependent upon outside investors and highly profitable to them -- let's call that the allure of globalization. Pinochet set about instilling terror in the population (that's the shock therapy) using death squads, exemplary killings, and torture. Taking advantage of this, the economists installed the new free market way of doing things within days of the coup. But Friedman's ideas did not work -- inflation rose. In the eighties, the Chilean government tried again, this time by inducing a profound economic crash -- essentially impoverishing the populace in order to bring them to heel. Ultimately, the Chilean "miracle" (Friedman's term) did nothing for the population, but it did enrich the top ten per cent and put 45% below the poverty line. It turns out that as far as the economists were concerned, this was a good thing.

The Shock Doctrine traces what the US, the CIA, the economists, the Neocons, and the multinational corporations learned from the Chilean experiment and subsequent ones (Argentina, Uruguay, Brazil, Poland, Russia, China, England) and finally makes its way to Iraq (this is a 590 page book, and the print is small). Essentially, they learned that a small economy is easier to "regress" than a large one, that the shock has to be brutal, and that the free market doesn't work as Friedman said it would (automatically assigning appropriate value), but that it sure does make a few people rich beyond their wildest dreams, and that these people were Friedman's (and his students') benefactors and paymasters. They also learned to lie lie lie in order to sell what amounts to a program of inhuman greed to voters who have other needs, wishes, and ideas.

For our purposes, the more interesting section of Klein's book is about Iraq, where she traveled in the first year after the invasion, and this section forms part of her series of posts at the Guardian. She believes that the Iraq War was intended to not only steal Iraqi oil, but also to impose a radical free market on an unwilling populace, and that that was what was behind the installation of Bremer as the capo of Iraqi reconstruction. She believes that, thanks to the resistance of the Iraqis and their deep resentment at being used and exploited by the Americans, this effort has failed. However, a parallel effort, to shock the US economy into absolute deregulation, privatization, and an end to social spending, has been and is succeeding. What this amounts to is the fleecing of the American taxpayer in order to enrich the war making industries. The byproduct, as in Chile, is the gutting of the rule of law and the American political system as we have known it. Why did Bush and Cheney go to war? Well, where do they get their fortunes? The Shock Doctrine works perfectly for them. As for that 45% below the poverty line, well, once the globalizing manufacturers exported the well-paying US jobs, then the globalizing financiers moved in and sold the newly impoverished working class a few sub-prime mortgages guaranteed to take whatever else they had. Then the financiers screamed for a bailout, and Bernanke gave it to them. The free market, you might say, is working perfectly now, at least according to its shock principles.

So, John Dean, stop wondering what happened to your fellow Republicans. They embarked, knowingly in many cases, unknowingly in some cases, with utter indifference in still other cases, upon the destruction of the common good. They began doing this in the Cold War and kept up with it when it turned out to benefit them economically. Some of them did this because they were fearful and aggressive by nature, and hurting those outside their own families and clubs felt good, or reassuring. Some did it for money. Some did it for "patriotism." Some did it for religion and some did it out of pure cussedness, but they did it, and they did it over time.

Klein ends her book on a hopeful note -- in many places such as Chile and Lebanon, the people have learned from their experiences -- they are cannier and more resistant to the shocks administered to them by Bushco and their own ruling classes. Having endured "Disaster Capitalism" for several decades, they understand their own self-interests better and aren't as easy to fool. I would like to be as hopeful. The question, as always, with Bush and Cheney, is how far are they willing to go? And, is anyone willing to stop them? From John Dean's article, it doesn't sound as though it is going to be the Republicans.

Jane Smiley is a novelist and essayist. Her novel A Thousand Acres won the Pulitzer Prize and the National Book Critics Circle Award in 1992.

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