Winning by Failing -- Disaster & Murder is good for USA business
The Shock Doctrine by Alfonso Cuarón and Naomi Klein
MUST SEE!
Alfonso Cuarón, director of "Children of Men", and Naomi Klein, author of "No Logo", present a short film from Klein's book "The Shock Doctrine: The Rise of Disaster Capitalism."
Canada's premiere business newspaper, "The Globe and Mail," published an excerpt of "The Shock Doctrine" along with an embedded link to the accompanying video on their web site.
Here's a snip from the excerpt of "The Shock Doctrine" published on The Globe and Mail's web site:
So while the reconstruction of Iraq was certainly a failure for Iraqis and for U.S. taxpayers, it has been anything but for the disaster-capitalism complex. Made possible by the Sept. 11 attacks, the war in Iraq represented nothing less than the violent birth of a new economy.
This was the genius of [former secretary of defence Donald] Rumsfeld's “transformation” plan: Since every possible aspect of both destruction and reconstruction has been outsourced and privatized, there's an economic boom when the bombs start falling, when they stop and when they start up again – a closed profit-loop of destruction and reconstruction, of tearing down and building up. For companies that are clever and far-sighted, like Halliburton and the Carlyle Group, the destroyers and rebuilders are different divisions of the same corporations.
The Bush administration has taken several important and little examined measures to institutionalize the privatized warfare model forged in Iraq, making it a permanent fixture of foreign policy.
In July, 2006, Bowen, the inspector-general for Iraq reconstruction, issued a report on “lessons learned” from the various contractor debacles. It concluded that the problems stemmed from insufficient planning and called for the creation of “a deployable reserve corps of contracting personnel who are trained to execute rapid relief and reconstruction contracting during contingency operations” and to “pre-qualify a diverse pool of contractors with expertise in specialized reconstruction areas” – in other words, a standing contractor army.
In his 2007 State of the Union address, Bush championed the idea, announcing the creation of a brand-new civilian reserve corps. “Such a corps would function much like our military reserve. It would ease the burden on the armed forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them,” he said. “It would give people across America who do not wear the uniform a chance to serve in the defining struggle of our time.”
A year and a half into the Iraq occupation, the U.S. State Department launched a new branch: the Office of Reconstruction and Stabilization. On any given day, it is paying private contractors to draw up detailed plans to reconstruct 25 different countries that may, for one reason or another, find themselves the target of U.S.-sponsored destruction, from Venezuela to Iran.
Corporations and consultants are lined up on “pre-signed contracts” so that they are ready to leap into action as soon as disaster strikes. For the Bush administration, it was a natural evolution: After claiming it had a right to cause unlimited pre-emptive destruction, it then pioneered pre-emptive reconstruction – rebuilding places that have not yet been destroyed.
There's a school of thought that free markets and democracy go hand in hand and together they make people free and prosperous. You're arguing that free-market ideology has triumphed around the world not because people have embraced the market but because the ideology has been imposed on them, often in moments of distress. Furthermore, these moments of distress have sometimes been created by governments as a pretext to bring in free-market policies. To top it all off, the policies haven't really worked. They've just enriched the people who introduced them. How's that for a summary?
That's pretty good. I would quibble with a few things. I don't know that there are examples of the governments themselves creating the crises.
Okay. Is violence inherent in capitalism or is that something that's recently mutated out of capitalism as it's been practised over the last several hundred years?
I think you can make that argument. But the book is really looking at a war between different kinds of capitalism. It's about a battle of ideas between Keynesianism -- a mixed economy, which is what we have in this country -- and what I describe as a fundamentalist strain of capitalism which has an objection to the very idea of mixed economy. When these sort of fundamentalist capitalists get their way what is constructed is not capitalism at all, it's actually corporatism, China being one example ...
Give me the attributes of fundamentalist capitalism.
They're almost the attributes of every fundamentalist: the desire for purity, a belief in a perfect balance, and every time there are problems identified they are attributed to perversions, distortions within what would otherwise be a perfect system. I think you see this from religious fundamentalists and from Marxist fundamentalists, and I would argue that [Austrian economist Friedrich] Hayek and [University of Chicago economist Milton] Friedman shared this dream of the pure system. These are brilliant mathematicians, in many cases, so it looks perfect in their modelling. But I think anyone who falls in love with a system is dangerous, because the world doesn't comply and then you get angry at the world.
So you have these economists advocating for this pure form of capitalism -- what is the attraction of disasters to these people?
Well, disasters are moments where people are blasted out of the way, where they are in a state of shock, whether they're scattered -- as after a hurricane hits in New Orleans -- or just picking up the pieces after having been bombed, or their entire world view has just been shattered -- as after Sept. 11. These are malleable political moments. And there is an awareness that disasters create these opportunities, so you have a whole movement -- much of it standing at the ready within the think-tank infrastructure. I think of these think tanks as sort of idea-warmers -- they keep the ideas ready for when the disaster hits. Milton Friedman said that only a crisis, real or perceived, produces real change, and when that crisis hits, the change that occurs depends on the ideas that are lying around.
Let's talk about Chile. This is a country that ... when was it, about 1970, Allende was elected. He was a social democrat, socialist, comes into power but doesn't get along with the United States, is seen to be friendly to Castro and the Soviet Union, and successive American presidents are highly suspicious of him.
It was Nixon and Kissinger together. I end the book with a quote from a declassified letter from Kissinger to Nixon where he says that the threat of Allende was not about any of the things they were publicly saying at the time -- that he was cozying up to the Soviet Union, that he was only pretending to be a democrat and that he was going to turn Chile into a totalitarian system. Kissinger writes the real threat is the problem of social democracy spreading. The Soviet Union was a convenient bogeyman. It was easy to hate Stalin, but what was always more of a threat was the idea of democratic socialism, a third way between totalitarian Communism and capitalism.
And you think they feared that more than they feared the Soviet Union in the context of the Cold War?
Well, if you follow the coups, the overthrow of [Prime Minister] Mossadegh in Iran, [President] Arbenz in Guatemala -- these are the first two CIA coups in the '50s -- these were democratic nationalists, and it was always the same pattern of setting up this bogeyman of it's really a Soviet regime in disguise. So if we follow the coups, what we see is a desire to stomp out, systematically, this idea of a middle democratic ground. And they are a threat to U.S. foreign investment, there's no doubt.
So Allende's overthrown by Pinochet, Pinochet has a great deal of support from the United States and from the economists of the Chicago School, and is well-known to have engaged in mass murders and various forms of brutality against his opposition, and you see that as an integral part of the program, really, of installing this new economics in Chile?
The idea that you could turn Chile into a laboratory for extreme Chicago School economics is a little like thinking you could launch a revolution against capitalism in Beverly Hills. It was deeply inhospitable for these ideas. But in this collaboration between Pinochet and the economists who'd gone to the University of Chicago on grants from the U.S. State Department, Chile was a laboratory for all these ideas that to this day have not been implemented in the United States, like a flat tax -- a 15 per cent flat tax -- charter schools, labour laws that essentially made it illegal for unions to be involved in any political activity. Straight out of the handbook, you know? It was like they took Friedman's manifesto and just turned it into law. The idea that this could happen in Chile at this point in history when there was so much support for developmentalism of course required force.
You talk a lot about torture and brutality and the shock of massive change and what it does to populations, and you see it as part of the mindset of the economists, that that was the only way -- to severely shock and disorient people -- to get them to change their behaviour and accept a new ideology.
There was, and continues to be, an understanding that unless there is a massive crisis that makes the alternative look even worse, then people just don't give up things that make their lives better, whether it's unemployment insurance or public housing. I mean, look at New Orleans. People wouldn't have given up their homes if there hadn't been a natural disaster. Now, they didn't plan the natural disaster but I can tell you I was in New Orleans a week after the hurricane hit, while it was still half under water, and the newspapers were quoting a Republican congressman saying, "We couldn't clean out the housing projects but God did."
The debate in China right now is not self-congratulatory. There's a new school of intellectuals in China -- they call themselves China's new left -- and they're criticizing the party. The government, the Communist party, is extremely worried about the levels of inequality that have opened up between the countryside and the city and between the hyper-rich and the hyper-poor living side-by-side. And it's responding in two ways. One is to do some redistribution, which is really outside of the Chicago model. You have major new investments in the countryside, you have a commitment to waive school fees for the first nine years for rural children, because there were 87,000 protests in China last year -- an unbelievable statistic -- so clearly someone's not happy with how things are going in China.
At the same time we're starting to see the extraordinary ways in which China is becoming a laboratory for new technologies to put people under a level of surveillance that would have been impossible under Mao. There was just an article in the New York Times about how Shenzhen -- the port city where the export processing zone model was born -- is now this testing ground for biometric identification cards that have everything from your landlord's phone number to your reproductive history to your credit history to your police record. They are leading the way in terms of networking CCTV cameras -- there are 200,000 of them in one city -- and all the police are equipped with GPS. I mean, it is totally sci-fi what is going on there. So, to say there's an opening up at the same time as you have this extraordinary level of surveillance with, interestingly, the full complicity of some of the largest technology companies in the world -- this system was built by Microsoft ..
And everyone from Google to Yahoo! is playing along.
In 1989 the discourse of these big communications companies was that television -- satellite television -- was going to bring freedom and democracy to China. And now it's almost like that technology, with the full complicity of these same companies, has been flipped, and rather than being tools for communication and freedom, they are now tools for intense hyper-surveillance. So I don't think we've even begun to come to terms with what's going on in China, but it supports my thesis pretty strongly because what neither you nor I would contest is that China is an extraordinarily profitable country.
What I think China shows is this idea that there was a natural correlation between capitalism, between free markets and free people -- it's simply not the case. China's either undergoing a very slow transition or they've skipped the democratic phase completely, just sidestepped it, and ended up with this thing that, I think, should be described as corporatism. But that is the trend not just in China but also in Russia, in the United States, in Chile under Pinochet. It was the same patterns of heavily indebted states, actually quite interventionist governments but intervening on behalf of corporations, against workers.
With reference to the United States, tell me what you see.
Well, what I see -- if we bring it back to Friedman -- is a very explicit political campaign against the New Deal. You know, he wrote that history took a wrong turn after the 1930s. There was a consensus, after the market crash, that what had gone wrong was that the market had been left to regulate itself and that was simply too brutal. The New Deal came to embody another kind of capitalism, which did much more redistribution. And it wasn't because people were nice; there was a battle of ideas between Communism and capitalism, and in the 1930s and '40s and '50s and '60s it was capitalism in a seductive phase. And so elements of socialism were inserted into this model so that a more radical version of socialism would be less attractive. I'm quoting FDR and Keynes. And that model actually was the period where you had the most rapid economic growth, but it was more fairly distributed. This was the period where the middle class really grew, not just in the United States but in countries like Chile and Argentina. And then kind of a class war was waged -- a right-wing class war.
At what period?
In the U.S. it starts with Reagan. I've talked about the University of Chicago as an ideological and an intellectual movement but it wasn't purely an intellectual movement, it was very heavily funded by Wall Street. And the decision to wage what was a counter-revolution against Keynesianism was about the elites of the United States being sick and tired of sharing so much of the wealth with the workers of the United States. In 1980 the gap between CEOs and the workers who worked for them was 43:1 and now it's 422:1.
But there's also lots of evidence that the counter-revolutionaries haven't had much success. The United States is still very much a mixed economy, and if you look at spending on entitlement programs and Medicare and medicaid and government spending as a percentage of GDP, it's higher than it was at the start of the counter-revolution ...
But the money doesn't go to the people. The U.S. health care system gets the money to the HMOs. Look, I don't believe these guys are ideologues. Ideology serves as sort of a cover story to rationalize massive personal enrichment. If you look at what I call the disaster capitalism complex, the seventh most successful company on the Forbes list is an HMO that has gotten rich off treating traumatized soldiers coming back from Iraq, because Rumsfeld privatized health care for soldiers. Tamiflu -- we're talking about harmonizing disaster response with the U.S. Well, that's a pretty scary idea because I consider the Bush administration to be an administration of disaster capitalists who make their money selling drugs for flu outbreaks and pandemics, AIDS drugs, hurricane response, like Bechtel and Halliburton. These are people who very directly become wealthy when things go really badly. I don't think Canadians should be working with them. Whether the counter-revolution has succeeded, I think it has succeeded in opening up this incredible inequality. The situation for workers is weaker than pre-New Deal.
No, in the U.S. the great mass of working-class people are better off than they were pre-New Deal. I don't think anyone would want to go back to the subsistence levels that they were at at the time.
Minimum wage in the U.S. doesn't even come close to meeting the poverty ...
I'm not saying it couldn't be higher, just on the whole. We're talking aggregates of working-class people.
Well, it is a story in inequality, so aggregates are misleading. Whenever we add it all together and divide it we end up with figures that gloss over the past 30 years, which is a story of an opening up of a gulf. And when you add to that the ideological campaign's successful attack on the public sphere then you have a situation like in New Orleans after hurricane Katrina where the state has been so decimated that the public transit doesn't work, the disaster response consists of handing out DVDs and telling people to run for their lives.
Do you see significant differences between how the Clinton administration behaved in these regards and the Bush administration?
There's something uniquely naked about the Bush administration. The Clinton administration did everything it could to advance this agenda. They lopped off the arms of the state and all that was left was the core, and the Bush administration has devoured the core and turned the government into an empty shell. They've privatized the army and given it to Blackwater! It's what we're seeing now with bridges collapsing and the can't-do state, as Paul Krugman calls it. You knock on the door of the Department of Homeland Security and the entire thing is outsourced.
Okay, let's talk about Iraq. You don't see U.S. involvement in Iraq as a misguided attempt to bring peace and democracy to the Middle East, or even a wild goose chase for the weapons of mass destruction, you see it as a wholly illegitimate exercise to find new markets and new profits for corporatism.
I think it's complex, I think it was a combination of teaching the world a lesson -- "This is what happens when you mess with the U.S." -- wanting to re-fight the Gulf War, the fact that the military had been playing war games with Iraq for the previous 12 years. All of that contributed, and oil. I also think there are people who really did believe that they were going to build a model in the Middle East, but I have to tell you that I think that is the scariest rationale of them all. Sometimes this is described as idealistic, this idea that we could just turn Iraq into a model free-market democracy and it would spread throughout the region. That idea is manifest destiny, and the violence that has engulfed Iraq is inherent in the violence of that idea.
You acknowledge in the book that it's not unusual for new ideas -- whether they be pro-market or anti-market or any other kind -- to be opportunistic, to seize openings brought by disasters, or even promote disasters in order to make opportunities, and you see revolutionary Marxism as paving the way for this ...
I've always hated this idea. At leftie talks there's always somebody who goes up to the mike and says, "But don't things have to get worse before anything happens?" and I slam those people down because the values that I would hope we represent are human values, and that is such a profoundly anti-human idea -- of desiring a descent so there can be some shock that will wake people up.
That's just how politics works, isn't it?
It may well. You know, I wrote the book because I think we should know our history a little better. I do think more disasters will come. All of the statistics would indicate we are going to be seeing more intense natural disasters, more category 5 hurricanes, more terrorist attacks. It brings me no joy to say this but we are in shocking times and I wrote the book because I want people to be more shock-resistant. I don't see it as a game, I actually think that when we know our history and know how these tactics work we are less exploitable, by the left or the right.
But why wouldn't you be ready? As somebody who believes in a different set of ideas why wouldn't you seize the opportunity?
We don't have to give everything up just because we get shocked. I'll use this phrase from Frederico Allodi, a founder of the Canadian Centre for the Victims of Torture. He says, "In Spain people have metabolized their history." Countries that have gone through this process of metabolizing their terror become more shock-resistant when the next shock hits. When Spain was hit with the terrorist attack you immediately had Aznar going on television blaming the Basques, saying this is why we're in Iraq, engaging in sort of fearmonger tactics, and he got voted out of office. People said, "It reminded us of something. It reminded us of how Franco used to keep us afraid." So, to me, it's less about whose ideas are going to win the next shock and more we don't actually have to give up our brains if we get hit by a terrorist attack. It doesn't have to be the excuse to let the Bush agenda come into Canada, for instance. Because people will be ready when that happens, and we can be resistant, we can be ready too, not to push through our dream world, because that is anti-democratic, but to just keep our heads.
I disagree. Most of those statistics are about China and India, countries that are undergoing rapid urbanization, and what a dollar means if you're living on a farm and growing your own food and have access to water and what it now means in a slum on the outskirts of Delhi, is completely different. But of course there have been successes, and there are wonderful things about living in a capitalist country -- I benefit from it, you benefit from it. We've been forced into believing we can't have the benefits of a market system unless we destroy the bridges that'll allow more people to have that access. And when we do things like, in this country, triple tuition fees over the course of the '90s, and privatize health care, and take out these bridges between classes, we have a very brutal economic law.
We haven't privatized health care.
No, but that is the agenda, and it's certainly been deeply eroded.
So would you be happy with a market economy if it distributed wealth better?
Absolutely.
I've been trying to figure out your politics and I can't.
Look, I think there's going to be a lot of radical leftists who would be disappointed by how Keynesian this book is.
Are you a Keynesian advocate of a mixed economy?
I think I'm a realist.
Have you ever been active in politics?
No. I vote NDP.
But you are a leader to a lot of people, and you do believe in democracy and in elections, and it would seem a natural step.
Thanks for the career advice.
It's not advice, I was asking!
Maybe it's just selfishness, because I enjoy the research process so much -- I love it -- and politics is so different. But I'm not ... I think there could be a political moment where if there was sort of a political project that engaged me ...
Would you do it in Canada?
Yeah, that's the only place I would do it. But probably what I would do would be more on the sort of policy wonk side.
You mean get involved with the government?
Yeah, or like a ... I don't even think of it as a government, Ken, because I just think we'd lose! I won't get past the campaign!
KENNETH WHYTE | September 10, 2007 |
http://www.macleans.ca/culture/lifestyle/article.jsp?content=20070910_109113_109113
Naomi Klein - The Shock Doctrine - Part 1 of 6
Brilliant... Naomi Klein lays out the economic piracy that governments and corporations have conspired to implement, their twisted Globolization/Free Trade pro-business agenda, when some crisis comes along, or is created.Someone this articulate should be on TV every night.
http://www.youtube.com/watch?v=Ka3Pb_StJn4
part 2 of 6 http://www.youtube.com/watch?v=Du3mpRkaz8g
part 3 of 6 http://www.youtube.com/watch?v=og2gYUVURAI
part 4 of 6 http://www.youtube.com/watch?v=RRvuGLM_Pe4
part 5 of 6 http://www.youtube.com/watch?v=H7FcoU0LLUU
part 6 of 6 http://www.youtube.com/watch?v=CG_xRZW32X0
Naomi Klein talks about her new book, The Shock Doctrine: The Rise of Disaster Capitalism. Speaking at a benefit event for the Canadian Centre for Policy Alternatives, a social justice research institute.
Naomi Klein explodes the myth that the global free market triumphed democratically. Exposing the thinking, the money trail and the puppet strings behind the world-changing crises and wars of the last four decades, The Shock Doctrine is the gripping story of how America's "free market" policies have come to dominate the world-- through the exploitation of disaster-shocked people and countries.
Here's a review of the book by Richard Marcus
"It's the economy, stupid" was the phrase that supposedly kept Bill Clinton's campaign team focused on what they needed to do in order to win the 1992 election campaign. Pound away mercilessly on the woeful state of the economic union in post-Regan America, and lay the blame for it at his former Vice President, and incumbent President, George H. W. Bush.
What that consisted of was simply pointing out to Americans what they already knew. A great many of them were unemployed, real wages sucked, the government was billions if not trillions of dollars in debt, and the policy of cutting taxes and increasing military spending was ruinous beyond belief. Clinton's election over a sitting President was a major rebuttal to the supposedly free market, small government, and cutting of social programs measures practiced by the neo-conservatives who surrounded Ronald Regan.
Compared to the majority of industrialized nations in the world the United States has, depending on your point of view, lagged far behind in terms of the social safety net or led the way in cutting back on government interference in the economy. While the United States has never fully committed to either completely free markets or a real social safety net, it is the country where the two major contrasting schools of economic thought have battled it out on a regular basis.
John Maynard Keynes proposed government intervention in the economy in order to protect the populace from the vagrancies of economic fluctuations like recessions, depressions, and inflation. He advocated government run insurance programs to offer protection to people in times of vulnerability; unemployment, old age, and illness. His ideas formed the basis of what is known as the welfare state — which was never meant to be a derogatory term, by the way.
At the complete opposite end of the economic spectrum was Milton Friedman who advocated that the economy must be allowed to proceed without any government interference at all. Only then would it be able to operate at maximum efficiency and provide plenty for everybody. It's Mr. Friedman's philosophies, and the manner in which they have been and are being implemented, that come under intense scrutiny in Naomi Klein's latest book published by Random House Canada through its Knoff Canada imprint, The Shock Doctrine: The Rise Of Disaster Capitalism
The title refers to Mr. Friedman's contention that for his theory to work, the economy has to be shocked back to a state of zero where there is no government ownership or involvement in the economy. It is Ms. Klein's contention that not only is Friedman's philosophy being implemented whenever opportunities present themselves, but that American policy over the last eight years has been geared to ensuring it's implementation when and where ever possible.
From the outset, Ms. Klein makes it clear that she doesn't believe Capitalism is an inherently evil system. What she does is systematically lay forth a damning and convincing case in support of her thesis. She has spent the last two years traveling the globe conducting interviews, and investigating situations and circumstances where the shock doctrine has been implemented.
In Sri Lanka and Indonesia after the tsunami, fishing villages that had been on the coasts for generations providing families with their livelihoods have seen their land sold out from under them to hotel, resort, and condominium developers, while they've been stuck in refugee camps. In New Orleans, the destruction of the Ninth Ward has been called an opportunity to start over again from a clean slate. Never mind the people who no longer have any place to live — think of the condominiums that can be built. Think of what can be privatized!
Of the 134 public schools that used to be under the control of the local board of education only four have not been turned into privately run institutions. Of course, with no students why should the schools be kept open? The fact that students have no homes to live in and are still scattered across the country is conveniently forgotten.
It's when she examines the situation in Iraq, and the "security" arrangements implemented in the name of Homeland Security that Ms. Klein builds her case against the Bush administration. It is her contention that in order for the type of economic shock treatment required to make the clean slate, a government needs to have dictatorial power over its population to curtail opposition.
She cites as an example the first time this type of economic experiment was attempted in practice, following the American backed military coup in Chile. Pinochet's government had eliminated most avenues of dissent through the simple expedient of killing any opposition voices during the coup. When they implemented the economic policies of complete privatization and cutting spending across the board they simply continued the practice of squelching opposition.
Ironically, the policy ended up being a complete failure. Pinochet was forced to start re-nationalizing industry in the 1980's, and many of the same social programs he had cut were re-introduced in order to stave off economic collapse.
In Iraq, the American team charged with rebuilding the country has been systematically selling all the country's industry and resources to American corporations. Contracts for everything from private armies to act as security forces to building swimming pools in public parks are awarded to American companies. Services like health care, electricity, and policing are all being removed from the governments control and contracted out into private hands
When the Vice President of the United States has gone on public record as saying he advocates the use of torture against enemies of the state, and there is an army occupying your country that has no qualms about shooting and killing anyone it feels like — how loudly would you be inclined to complain? Looking at the American "slogan" for this invasion — "Shock And Awe" — the connection between it and Shock Doctrine economics becomes all too clear, according to Ms. Klein.
The State control of personal freedoms in the United States itself may not be as obvious as troops in the street, but any person anywhere can be arrested without reason and denied access to a lawyer under provisions of the Homeland Security Act. The British perfected that years ago with their anti-terrorist legislation allowing them to hold anybody without charges or access to a lawyer just by saying the magic word "terrorism."
What constitutes a threat to security anyway? I'm sure a case could be made for disrupting the economy being construed as a threat to national security — don't you? Without a healthy economy, how can all those necessary security measures be paid for, after all?
Naomi Klein has written a very lucid and convincing argument in support of her thesis that governments around the world are taking advantage of natural disasters to implement drastic changes in economic policy at the expense of their populations' well being. What's even more disturbing is the fact that she just as clearly outlines how governments are creating the circumstances enabling those situations to develop and taking steps to ensure that opposition to the changes is suppressed.
This is a book for people of all political stripes to read. Even if you disagree with Ms. Klein's politics, that won't matter. This is a book about "economics, stupid," and not about whether you are on the left or the right.
Cliff Schecter:
This film and book discuss the CIA's experimentation with using electric shock to break people down. Yet, the more important point of these works is that a broader "shock" to the systems of a people as a whole, like say 9/11, can have the kind of impact the CIA was searching for in their tests, one that breaks down a whole society and makes them so fearful they are open to nefarious suggestions.I am sure none of this sound familiar, does it? This is very powerful stuff that can explain how a traumatized society may act, and may just explain to you why a certain former Mayor of New York mentions 9/11 4.75 times per sentence.
In any case here is a description in Naomi Klein's words--Watch the video!:
"My publisher came up with the idea of a "web trailer" but we ended up with a powerful piece of cinema instead. I never saw the film as a promotional tool for the book, or even an adaptation of it. I always saw it as a companion piece to the book, as a way to enter the same subject matter -- shock therapy, disorientation, torture -- on a different, much more emotional level. The central idea of the book is about the use of shocks to exploit people, whether an individual in a torture cell or an entire society. That is such a visual, physical idea that I felt limited by what I could do with mere words on a page -- I could argue and document but I knew that a true artist could find ways to take that argument and reach people on a deeper level. That's what Alfonso did.
When I finished the book, I sent it to Alfonso because I adore his films and felt that the future he created for Children of Men was very close to the present I was seeing in disaster zones. I was hoping he would send me a quote for the book jacket and instead he pulled together this amazing team of artists -- including Jonás Cuarón who directed and edited -- to make The Shock Doctrine short film. It was one of those blessed projects where everything felt fated."
If you are really interested in this subject, you must read Alexander Ruestow:
Freedom and Domination: A Historical Critique of Civilization
Alexander Rustow was a sociology professor at Heidelberg University in Germany. He lived through Hitler's nightmare and was a leading opponent of the Nazis. When Rustow originally wrote this history in his native German language, he filled three volumes. In his reputation of writing history, he was Germany's version of our William Appleman Williams or our Howard Zinn. He wrote "I affirm freedom and reject domination, I affirm humaneness and reject barbarism, I affirm peace and reject violence. The pairs of opposites are the great poles between which the drama of human history is enacted".
His research led him to uncover the root of what ails mankind and by assuming the role of a self-conscious "pathologist", he sought the origins for the Nazi horrors of the twentieth century. His discovery was not a popular one in his time. He learned that the root of conquest and domination was the establishment of the state. In other words, government is the problem - not the solution. During the twentieth century, too many people were dreaming about a welfare state that would take care of their needs or a warfare state that could do the same, both by robbing from Peter to pay Paul.
Rustow's book is able to lay out the historical development of domination in a easy-to-understand drama. Libertarians, true conservatives, progressives, and others concerned about the global corporatists and the neocons who rape the Bill of Rights while they bomb and kill our global neighbors would benefit from reading this one-volume condensation of Rustow's history.
key analyst of power – Alexander Rüstow.
Fifty-five years ago, Alexander Rüstow published the first of three volumes in his classic work with the rather nondescript title of Taking Bearings on the Present. It remains today one of the most powerful statements of historical sociology in the classical liberal tradition. Although the full original work has never been translated from the German, Princeton University Press published in 1980 a one volume edited translation of Rüstow’s work under the much more compelling title of Freedom and Domination.
This is a book with extraordinarily rich insights from a classical liberal perspective – one that could shape promising research agendas for many younger scholars - yet it remains largely neglected in the social science disciplines. As a catalyst for research, Rüstow’s book could also help to address two of the key weaknesses of the current classical liberal movement – its relative lack of depth in history or sociology.
Rüstow, a distinguished sociologist at the University of Heidelberg in Germany when he published his three volume work, had spent 16 years of his academic life in political exile from his native Germany at the University of Turkey in Istanbul. During his exile, he developed friendships with many leading Austrian economists, including Hayek, Mises and Röpke – in fact, he singles out Röpke as one of the major catalysts for writing his magnum opus.
Experiencing World War I firsthand as a lieutenant in the German army and then witnessing the rise of Hitler, Rüstow was not a detached academic. In the Foreword to his book, he makes his position clear:
. . . I affirm freedom and reject domination, I affirm humaneness and reject barbarism, I affirm peace and reject violence. These pairs of opposites are the great poles between which the drama of human history is enacted.
This in fact, is one of the powerful themes of Rüstow’s perspective: history represents a continuing struggle between these pairs of opposites. Rüstow does not advance a dialectical view of history; instead, like Proudhon, he describes antinomies. History does not unfold smoothly, but instead represents an ebb and flow between these opposites, shaped by ongoing struggle. Rüstow repeatedly resorts to words like combat, battle and conflict to characterize the historical landscape. The opposites are not just ideas, this is not just intellectual history – lives and freedom are literally at stake.
Rüstow looked to history to better understand the present and he sought this understanding to support the struggle for freedom. His goal was to understand the origins of the tyrannies that defined his era so that the forces of freedom could be more effective in resisting domination. Although his discipline was sociology, Rüstow believed passionately that understanding of today’s social formations hinged upon a deep understanding of history: “a culture can be fully understood only by tracing its historic roots.” In fact, Rüstow maintained that
. . . a “radical” critique of civilization and reassessment of our cultural self-consciousness – that is, a critique and reassessment going to the very roots - . . . must take its starting point precisely from this origin of civilization and from the circumstances surrounding it.
In Rüstow’s eyes, conquest played a fundamental role in the rise of the state. He employed the term “superstratification”, attributing the origin of the concept to the great Arab sociologist Ibn Khaldun and acknowledging the role of Augustin Thierry, Ludwig Gumplowicz and Franz Oppenheimer, among others, in developing the concept. Superstratification, in Rustow’s eyes, occurs whenever an invader occupies the same geographic space as an invaded population. This produces “human social groupings that, in their inner structure, were based on bloodshed and violence.” Whereas in earlier eras communities banded together and fought other communities, superstratification turns bloodshed and violence inward.
In the process, it permeates and reshapes all elements of society: “the division of the social body into two strata, its cleavage into rulers and ruled, is a permanent source of internal tension and unrest. . . . [it] has a distorting, destructive, and disintegrative effect on the natural communities affected by it . . .” The struggle between the twin forces of community and conquest lead to a host of pathologies including atomization and alienation on the one hand and what Rüstow describes as “pseudointegration” on the other hand – artificial efforts to bring people together, as in the efforts by rulers to artificially nourish and intensify hatred against external (and often internal) “enemies”.
One of the consequences of superstratification is economic exploitation:
It is clear that the “aristocratic” morality of the superstratifying upper class disparaged and despised work – especially manual labor – directly related to earning a living. . . . Indeed, the most important economic aim and practical effect of superstratification is to spare its bearers the drudgery of performing any remunerative work and to shift such activity on the subjugated strata.
To better understand superstratification, two important works provide a useful complement to Rüstow: John H. Kautsky’s The Politics of Aristocratic Empires discussing the persistence of exploitative relationships between aristocrats and peasants and Arno J. Mayer’s The Persistence of the Old Regime exploring the continuing domination of aristocratic classes in Western Europe well into the twentieth century. These books highlight a key dimension of superstratification: its residues persist and accumulate over time like geological sediments. The state may change forms as it evolves, but its essence does not change.
But superstratification is only one side of the story. Rüstow observes:
Man is by nature a communal being. Community is the form of coexistence consonant with human nature, and an ineradicable longing for community lives in every human being. Hence every noncommunity, every disturbed community, has a built-in inclination to return to community; only in community does it find rest. . . . Strong deviation from the essential community structure releases hidden springs of counter-forces which in their violent, explosive form we term “revolution”.
When Rüstow refers to community, he is highlighting the role of society as a countervailing force to the institutions and predation of the state. As Rüstow demonstrates, much of human history can be understood through the lens of the conflict between state and society.
Rüstow lays out his sociological analysis in Part 1 of the book. In Part 2, he takes us through Western history to show how the struggle between freedom and domination has unfolded. Finally, in Part 3, he uses these perspectives to analyze his current surroundings in the context of this historical struggle.
In his final chapter, Rüstow concludes that
To cure the social pathology of domination and unfreedom . . . there are in principle two methods. The first is to proceed consciously against all recognizable forms of the sickness . . . The other is to proceed half-consciously through a series of palliatives and attenuations, by way of checks and balances within the structure of domination. This was the course pursued by Western history . . . [but] domination and unfreedom have become ever more pronounced so that the entire structure of superstratification has reemerged with increasing sharpness.
The lessons are clear. Successful resistance to domination requires radical analysis of existing societies, in the literal meaning of going “to the roots”. This in turn requires deep understanding of the specific historical context within which current societies have evolved. Analytic concepts have limited value unless they are firmly rooted in historical understanding. But above all, successful resistance requires a commitment to fundamental change.
Rüstow indicates that he first encountered the concept of superstratification in the work of Franz Oppenheimer. In a future posting, we will discuss some of the key insights of Oppenheimer’s classic work, The State.
Whereas contemporary scholars often equate neoliberalism with market fundamentalism, the Freiburg School’s faith in the free market was moderate and pragmatic when compared to that of nineteenth-century liberals. First, Freiberg School economists argued that for the free market to function, the state must play an active role. The German neoliberals accepted the classical liberal notion that competition among free individuals drives economic prosperity, but they argued that powerful private actors—the monopolies and cartels that decimated Germany’s small businesses in the interwar years—could pose a threat to this freedom of competition. In order to keep private interests in check, the neoliberals supported the creation of a well-developed legal system and capable regulatory apparatus that went well beyond the minimalist, night-watchman state promoted by followers of Adam Smith.37 Alexander Rüstow, a prominent neoliberal of the time, summarized this position in a pamphlet entitled “Free Economy—Strong State.”38 In other words, the neoliberals sought to divorce liberalism—the freedom of individuals to compete in the marketplace—from laissez-faire—freedom from state intervention. They argued that a laissez-faire state policy actually stifles competition and destroys the free market as the strong devour the weak.39
A second element of German neoliberals’ moderate stance was their willingness to place humanistic and social values on par with economic efficiency. Alfred Müller-Armack, a German economist with close ties to the neoliberals, coined the phrase “social market economy” to emphasize the egalitarian and humanistic bent of this new form of liberalism.40 Walter Eucken, one of the founders and the most influential thinker of the Freiburg School, went so far as to claim that “social security and social justice are the greatest concerns of our time.”41 Another prominent neoliberal, Wilhelm Röpke, criticized classical liberalism as “blind to the deep-seated intellectual and social evils of our…civilization.”42 The German neoliberals’ concern that the rules of the game not be biased in favor of the powerful and wealthy also led some members of the Freiburg School to favor some income redistribution.43 While still opposed to full-scale Keynesian employment policies or an extensive welfare state apparatus, the German neoliberals held views on social policy “that would have shocked the Manchesterians.”44 These positions clearly set them apart from the market fundamentalism often associated with neoliberalism today.
Moreover, in contrast to the largely negative connotations and asymmetric use of the term neoliberalism in contemporary social science, the “neo” qualifier of German neoliberalism was intended to convey a positive notion of renovation, and multiple groups of scholars—not only those that shared the philosophy of the Freiberg School—sought to lay claim to this term. While no contemporary scholar self-identifies as neoliberal, the Freiberg School economists not only used the term in reference to themselves and their philosophy, but also explicitly debated whose liberal theories did and did not deserve the “neo” label. Supporters of a more traditional form of liberalism, such as the Austrian economist Ludwig von Mises, were “referred to by the neo-liberals as ‘palaeo-liberals’” for clinging to an outdated faith in unfettered markets.45 Other liberal economists of the era with fundamentally different ideas sought to appropriate the desirable neoliberal label in the pursuit of a more modern image, though members of the Freiberg School resisted these efforts. Alexander Rüstow, who coined the term paleoliberal, complained that “contemporary representatives of paleoliberalism call themselves neoliberal, although our neoliberalism arose precisely in contrast to…paleoliberalism.”While the “membership roster” of the neoliberal school and the boundaries between it and other contemporary liberal movements may not have been entirely clear, most scholars of the period understood the term neoliberalism as referring to the German experience and its principal economic theorists. In academic articles and book reviews published in the 1950s and 1960s, neoliberalism was most often associated with Germany or specifically with the Freiberg School and such economists as Eucken, Röpke, Rüstow, and Müller-Armack.51 The earliest reference we found to neoliberalism as an economic philosophy was also specific to the German experience.52 Although the Austrian economist Friedrich Hayek enjoyed important intellectual links with the neoliberals, serving as an editorial board member and frequent contributor to their journal Ordo, his ideas were more fundamentalist than those of the Freiberg school,53 and his name was only occasionally mentioned in conjunction with the term neoliberalism during this period. And while Milton Friedman would later be seen by many as the father of neoliberalism, scholars essentially did not associate him with the term at this time.
Early Latin American References to Neoliberalism: Admiration for the German Model
In the 1960s, groups of Latin American (particularly Chilean) pro-market intellectuals began to take notice of the ideas of the Freiberg School and their implementation in post-war Germany under Ludwig Erhard. These intellectuals used the Spanish term neoliberalismo—a direct translation of the German neoliberalismus—to refer to this school of thought, along with other phrases such as neocapitalism, social liberalism, and social market economy.The following is excerpted from Naomi Klein’s recently published book, The Shock Doctrine: The Rise of Disaster Capitalism:
As George Bush and his cabinet took up their posts in January 2001, the need for new sources of growth for US corporations was an urgent matter. With the tech bubble now officially popped and the DowJones tumbling 824 points in their first two and half months in office, they found themselves staring in the face of a serious economic downturn. John Maynard Keynes had argued that governments should spend their way out of recessions, providing economic stimulus with public works. Bush’s solution was for the government to deconstruct itself - hacking off great chunks of the public wealth and feeding them to corporate
For a while, that even seemed to be the case.” September 11 has changed everything,” said Ed Feulner, old friend of Milton Friedman, the guru of unfettered capitalism and president of the Heritage Foundation, 10 days after the attack, making him one of the first to utter the fateful phrase. Many naturally assumed that part of that change would be a re-evaluation of the radical anti-state agenda that Feulner and his ideological allies had been pushing for three decades, at home and around the world. After all, the nature of the September 11 security failures exposed the results of more than 20 years of chipping away at the public sector and outsourcing government functions to profit-driven corporations. Much as the flooding of New Orleans exposed the rotting condition of public infrastructure, the attacks pulled back the curtain on a state that had been allowed to grow dangerously weak: radio communications for the New York City police and firefighters broke down in the middle of the rescue operation, air-traffic controllers didn’t notice the off-course planes in time, and the attackers had passed through airport security checkpoints staffed by contract workers, some of whom earned less than their counterparts at the food court.
The first major victory of the Friedmanite counter-revolution in the
On September 10, as long as flights were cheap and plentiful, none of that seemed to matter. But on September 12, putting $6-an-hour contract workers in charge of airport security seemed reckless. Then, in October, envelopes with white powder were sent to lawmakers and journalists, spreading panic about the possibility of a major anthrax outbreak. Once again, 90s privatisation looked very different in this new light: why did a private lab have the exclusive right to produce the vaccine against anthrax? Had the federal government signed away its responsibility to protect the public from a major public health emergency? Furthermore, if it was true, as media reports kept claiming, that anthrax, smallpox and other deadly agents could be spread through the mail, the food supply or the water systems, was it really such a good idea to be pushing ahead with Bush’s plans to privatise the postal service? And what about all those laid-off food and water inspectors - could somebody bring them back?
The backlash against the pro-corporate consensus only deepened in the face of new scandals such as that of Enron. Three months after the 9/11 attacks, Enron declared bankruptcy, leading thousands of employees to lose their retirement savings while executives acting on insider knowledge cashed in. The crisis contributed to a general plummeting of faith in private industry to perform essential services, especially when it came out that it was Enron’s manipulation of energy prices that had led to the massive blackouts in
While CEOs were falling from their pedestals, unionised public sector workers - the villains of Friedman’s counter-revolution - were rapidly ascending in the public’s estimation. Within two months of the attacks, trust in government was higher than it had been since 1968 - and that, remarked Bush to a crowd of federal employees, is “because of how you’ve performed your jobs”. The uncontested heroes of September 11 were the blue-collar first responders - the
When Bush stood with the firefighters and rescue workers at Ground Zero on September 14 he was embracing some of the very unionised civil servants that the modern conservative movement had devoted itself to destroying. Of course, he had to do it (even Dick Cheney put on a hard hat in those days), but he didn’t have to do it so convincingly. Through some combination of genuine feeling on Bush’s part and the public’s projected desire for a leader worthy of the moment, these were the most moving speeches of Bush’s political career.
For weeks after the attacks, the president went on a grand tour of the public sector - state schools, firehouses and memorials, the Centres for Disease Control and Prevention - embracing and thanking civil servants for their contributions and humble patriotism. He praised not only emergency services personnel but teachers, postal employees and healthcare workers. At these events, he treated work done in the public interest with a level of respect and dignity that had not been seen in the
But far from shaking their determination to weaken the public sphere, the security failures of 9/11 reaffirmed in Bush and his inner circle their deepest ideological (and self-interested) beliefs - that only private firms possessed the intelligence and innovation to meet the new security challenge. Although it was true that the White House was on the verge of spending huge amounts of taxpayer money to launch a new deal, it would be exclusively with corporate
What happened in the period of mass disorientation after the attacks was, in retrospect, a domestic form of economic shock therapy. The Bush team, Friedmanite to the core, quickly moved to exploit the shock that gripped the nation to push through its radical vision of a hollow government in which everything from war fighting to disaster response was a for-profit venture.
It was a bold evolution of shock therapy. Rather than the 90s approach of selling off existing public companies, the Bush team created a whole new framework for its actions - the war on terror - built to be private from the start. This feat required two stages. First, the White House used the omnipresent sense of peril in the aftermath of 9/11 to dramatically increase the policing, surveillance, detention and war-waging powers of the executive branch - a power-grab that the military historian Andrew Bacevich has termed “a rolling coup”. Then those newly enhanced and richly funded functions of security, invasion, occupation and reconstruction were immediately outsourced, handed over to the private sector to perform at a profit.
Although the stated goal was fighting terrorism, the effect was the creation of the disaster capitalism complex - a fully fledged new economy in homeland security, privatised war and disaster reconstruction tasked with nothing less than building and running a privatised security state, both at home and abroad. The economic stimulus of this sweeping initiative proved enough to pick up the slack where globalisation and the dotcom booms had left off. Just as the internet had launched the dotcom bubble, 9/11 launched the disaster capitalism bubble. “When the IT industry shut down, post-bubble, guess who had all the money? The government,” said Roger Novak of Novak Biddle Venture Partners, a venture capitalism firm that invests in homeland security companies. Now, he says, “Every fund is seeing how big the trough is and asking, ‘How do I get a piece of that action?’”
It was the pinnacle of the counter-revolution launched by Friedman. For decades, the market had been feeding off the appendages of the state; now it would devour the core.
Bizarrely, the most effective ideological tool in this process was the claim that economic ideology was no longer a primary motivator of
And so, in November 2001, just two months after the attacks, the department of defence brought together what it described as “a small group of venture capitalist consultants” with experience in the dotcom sector. The mission was to identify “emerging technology solutions that directly assist in the
The department of homeland security, as a brand-new arm of the state created by the Bush regime, is the clearest expression of this wholly outsourced mode of government. As Jane Alexander, deputy director of the research wing of the department of homeland security, explained, “We don’t make things. If it doesn’t come from industry, we are not going to be able to get it.”
Another is Counterintelligence Field Activity (Cifa), a new intelligence agency created under Donald Rumsfeld that is independent of the CIA. This parallel spy agency outsources 70% of its budget to private contractors; like the department of homeland security, it was built as a hollow shell. As Ken Minihan, former director of the National Security Agency, explained, “Homeland security is too important to be left to the government.” Minihan, like hundreds of other Bush administration staffers, has already left his government post to work in the burgeoning homeland security industry, which, as a top spy, he helped create.
Every aspect of the way the Bush administration has defined the parameters of the war on terror has served to maximise its profitability and sustainability as a market - from the definition of the enemy to the rules of engagement to the ever-expanding scale of the battle. The document that launched the department of homeland security declares, “Today’s terrorists can strike at any place, at any time, and with virtually any weapon,” which conveniently means that the security services required must protect against every imaginable risk in every conceivable place at every possible time. And it’s not necessary to prove that a threat is real for it to merit a full-scale response - not with Cheney’s famous “1% doctrine”, which justified the invasion of
Through all its various name changes - the war on terror, the war on radical Islam, the war against Islamofascism, the third world war, the long war, the generational war - the basic shape of the conflict has remained unchanged. It is limited by neither time nor space nor target. From a military perspective, these sprawling and amorphous traits make the war on terror an unwinnable proposition. But from an economic perspective, they make it an unbeatable one: not a flash-in-the-pan war that could potentially be won but a new and permanent fixture in the global economic architecture.
That was the business prospectus that the Bush administration put before corporate
In a remarkably short time, the suburbs ringing Washington, DC became dotted with grey buildings housing security “start-ups” and “incubator” companies, hastily thrown together operations where, as in late-90s Silicon Valley, the money came in faster than the furniture could be assembled. Whereas in the 90s the goal was to develop the killer application, the “next new new thing”, and sell it to Microsoft or Oracle, now it was to come up with a new “search and nail” terrorist-catching technology and sell it to the department of homeland security or the Pentagon. That is why, in addition to the start-ups and investment funds, the disaster industry also gave birth to an army of new lobby firms promising to hook up new companies with the right people on Capitol Hill - in 2001, there were two such security-oriented lobby firms, but by mid-2006 there were 543. “I’ve been in private equity since the early 90s,” Michael Steed, managing director of the homeland security firm Paladin told Wired, “and I’ve never seen a sustained deal flow like this.”
Like the dotcom bubble, the disaster bubble is inflating in an ad-hoc and chaotic fashion. One of the first booms for the homeland security industry was surveillance cameras, 30m of which have been installed in the
This development created another problem, because facial recognition software can really make positive IDs only if people present themselves front and centre to the cameras, which they rarely do while rushing to and from work. So another market was created for digital image enhancement. Salient Stills, a company that sells software to isolate and enhance video images, started by pitching its technology to media companies, but it turned out that there was more potential revenue from the FBI and other law-enforcement agencies. And with all the snooping going on - phone logs, wire-tapping, financial records, mail, surveillance cameras, web surfing - the government is drowning in data, which has opened up yet another massive market in information management and data mining, as well as software that claims to be able to “connect the dots” in this ocean of words and numbers and pinpoint suspicious activity.
In the 90s, tech companies endlessly trumpeted the wonders of the borderless world and the power of information technology to topple authoritarian regimes and bring down walls. Today, inside the disaster capitalism complex, the tools of the information revolution have been flipped to serve the opposite purpose. In the process, mobile phones and web surfing have been turned into powerful tools of mass state surveillance by increasingly authoritarian regimes, with the cooperation of privatised phone companies and search engines, whether it’s Yahoo assisting the Chinese government to pinpoint the location of dissidents or AT&T helping the US National Security Agency to wiretap its customers without a warrant (a practice that the Bush administration claims it has discontinued). The dismantling of borders, the great symbol and promise of globalisation, has been replaced with the exploding industry of border surveillance, from optical scanning and biometric IDs to the planned hi-tech fence on the border between
As hi-tech firms have jumped from one bubble to another, the result has been a bizarre merger of security and shopping cultures. Many technologies in use today as part of the war on terror - biometric identification, video surveillance, web tracking, data mining - had been developed by the private sector before September 11 as a way to build detailed customer profiles, opening up new vistas for micromarketing. When widespread discomfort about big-brother technologies stalled many of these initiatives, it caused dismay to both marketers and retailers. September 11 loosened this log jam in the market: suddenly the fear of terror was greater than the fear of living in a surveillance society. So now, the same information collected from cash cards or “loyalty” cards can be sold not only to a travel agency or the Gap as marketing data but also to the FBI as security data, flagging a “suspicious” interest in pay-as-you-go mobile phones and Middle Eastern travel.
As an exuberant article in the business magazine Red Herring explained, one such program “tracks terrorists by figuring out if a name spelled a hundred different ways matches a name in a homeland security database. Take the name Mohammad. The software contains hundreds of possible spellings for the name, and it can search terabytes of data in a second.” Impressive, unless they nail the wrong Mohammad, which often seems to happen, from
This potential for error is where the incompetence and greed that have been the hallmark of the Bush years, from
Anyone can be blocked from flying, denied an entry visa to the
If the suspect is taken, as a result, to Guantánamo, he may well end up in the new 200-person maximum-security prison constructed by Halliburton. If he is a victim of the CIA’s “extraordinary rendition” programme, kidnapped off the streets of
Once the prisoners arrive at the destination, they face interrogators, some of whom will not be employed by the CIA or the military but by private contractors. According to Bill Golden, who runs the job website IntelligenceCareers.com, “Over half of the qualified counter-intelligence experts in the field work for contractors.” If these freelance interrogators are to keep landing lucrative contracts, they must extract from prisoners the kind of “actionable intelligence” their employers in
Then there is the low-tech version of this application of market “solutions” to the war on terror - the willingness to pay top dollar to pretty much anyone for information about alleged terrorists. During the invasion of
Soon enough, the cells of Bagram and Guantánamo were overflowing with goat herders, cab drivers, cooks and shopkeepers - all lethally dangerous, according to the men who turned them over and collected the rewards.
According to the Pentagon’s own figures, 86% of the prisoners at Guantánamo were handed over by Afghan and Pakistani fighters or agents after the bounties were announced. As of December 2006, the Pentagon had released 360 prisoners from Guantánamo (out of 759 held between 2001 and the end of 2006). The Associated Press was able to track down 245 of them; 205 had been freed or cleared of all charges when they returned to their home countries. It is a track record that is a grave indictment of the quality of intelligence produced by the administration’s market-based approach to terrorist identification.
In just a few years, the homeland security industry, which barely existed before 9/11, has exploded to a size that is now significantly larger than either
When new economies emerged in the past, from the Fordist revolution to the IT boom, they sparked a flood of analysis and debate about how such seismic shifts in the production of wealth were also altering the way we as a culture worked, the way we travelled, even the way our brains process information. The new disaster economy has been subject to none of this kind of far-reaching discussion. There have been and are debates, of course - about the constitutionality of the Patriot Act, about indefinite detention, about torture and extraordinary rendition - but discussion of what it means to have these functions performed as commercial transactions has been almost completely avoided. What passes for debate is restricted to individual cases of war profiteering and corruption scandals, as well as the usual hand-wringing about the failure of government to adequately oversee private contractors - rarely about the much broader and deeper phenomenon of what it means to be engaged in a fully privatised war built to have no end.
Part of the problem is that the disaster economy sneaked up on us. In the 80s and 90s, new economies announced themselves with great pride and fanfare. The tech bubble in particular set a precedent for a new ownership class inspiring deafening levels of hype - endless media lifestyle profiles of dashing young CEOs beside their private jets, their remote-controlled yachts, their idyllic
Peter Swire, who served as the
Democracy NOW
AMY GOODMAN: The State Department is coming under criticism this week for refusing to allow a prominent South African social scientist to enter the country. Adam Habib was scheduled to speak at the annual meeting of the American Sociological Association in New York this past weekend, but the government refused to give him a visa.
Ironically, the theme of this year's sociology conference was "Is Another World Possible?" At the conference, the ASA planned a series of sessions to assess the potential for progressive social change both in the US and in the world and to invite a serious discussion of "economic globalization" and its consequences.
One of the most highly anticipated sessions was to feature Jeffrey Sachs, an internationally known economist and a former special advisor to UN Secretary General Kofi Annan, versus Naomi Klein, the Canadian journalist and author. But shortly before the ASA conference opened, Sachs pulled out. Unclear if it was related to the fact that Naomi Klein takes him on in her forthcoming book, The Shock Doctrine: The Rise of Disaster Capitalism. The theme of her talk was "Lost Worlds." This is Naomi Klein.
NAOMI KLEIN: As we think about reaching this other possible world, I want to be very clear that I don't believe the problem is a lack of ideas. I think we’re swimming in ideas: universal healthcare; living wages; cooperatives; participatory democracy; public services that are accountable to the people who use them; food, medicine and shelter as a human right. These aren't new ideas. They’re enshrined in the UN Charter. And I think most of us still believe in them.
I don't think our problem is money, lack of resources to act on these basic ideas. Now, at the risk of being accused of economic populism, I would just point out that in this city, the employees of Goldman Sachs received more than $16 billion in Christmas bonuses last year, and ExxonMobil earned $40 billion in annual profits, a world record. It seems to me that there’s clearly enough money sloshing around to pay for our modest dreams. We can tax the polluters and the casino capitalists to pay for alternative energy development and a global social safety net. We don't lack ideas. Neither are we short on cash.
And unlike Jeffrey Sachs, I actually don't believe that what is lacking is political will at the highest levels, cooperation between world leaders. I don't think that if we could just present our elites with the right graphs and PowerPoint presentations -- no offense -- that we would finally convince them to make poverty history. I don't believe that. I don't believe we could do it, even if that PowerPoint presentation was being delivered Angelina Jolie wearing a (Product) Red TM Gap tank top and carrying a (Product) Red cell phone. Even if she had a (Product) Red iPhone, I still don't think they would listen. That’s because elites don't make justice because we ask them to nicely and appealingly. They do it when the alternative to justice is worse. And that is what happened all those years ago when the income gap began to close. That was the motivation behind the New Deal and the Marshall Plan. Communism spreading around the world, that was the fear. Capitalism needed to embellish itself. It needed to soften its edges. It was in a competition. So ideas aren't the problem, and money is not the problem, and I don't think political will is ever the problem.
The real problem, I want to argue today, is confidence, our confidence, the confidence of people who gather at events like this under the banner of building another world, a kinder more sustainable world. I think we lack the strength of our convictions, the guts to back up our ideas with enough muscle to scare our elites. We are missing movement power. That’s what we’re missing. “The best lacked all convictions,” Yeats wrote, “while the worst are full of passionate intensity.” Think about it. Do you want to tackle climate change as much as Dick Cheney wants Kazakhstan’s oil? Do you? Do you want universal healthcare as much as Paris Hilton wants to be the next new face of Estee Lauder? If not, why not? What is wrong with us? Where is our passionate intensity?
What is at the root of our crisis of confidence? What drains us of our conviction at crucial moments when we are tested? At the root, I think it’s the notion that we have accepted, which is that our ideas have already been tried and found wanting. Part of what keeps us from building the alternatives that we deserve and long for and that the world needs so desperately, like a healthcare system that doesn't sicken us when we see it portrayed on film, like the ability to rebuild New Orleans without treating a massive human tragedy like an opportunity for rapid profit-making for politically connected contractors, the right to have bridges that don't collapse and subways that don't flood when it rains. I think that what lies at the root of that lack of confidence is that we’re told over and over again that progressive ideas have already been tried and failed. We hear it so much that we accepted it. So our alternatives are posed tentatively, almost apologetically. “Is another world possible?” we ask.
This idea of our intellectual and ideological failure is the dominant narrative of our time. It’s embedded in all the catchphrases that we’ve been referring to. “There is no alternative,” said Thatcher. “History has ended,” said Fukuyama. The Washington Consensus: the thinking has already been done, the consensus is there. Now, the premise of all these proclamations was that capitalism, extreme capitalism, was conquering every corner of the globe because all other ideas had proven themselves disastrous. The only thing worse than capitalism, we were told, was the alternative.
Now, it’s worth remembering when these pronouncements were being made that what was failing was not Scandinavian social democracy, which was thriving, or a Canadian-style welfare state, which has produced the highest standard of living by UN measures in the world, or at least it did before my government started embracing some of these ideas. It wasn't the so-called Asian miracle that had been discredited, which in the ’80s and ’90s built the Asian “tiger” economies in South Korea and Malaysia using a combination of trade protections to nurture and develop national industry, even when that meant keeping American products out and preventing foreign ownership, as well as maintaining government control over key assets, like water and electricity. These policies did not create explosive growth concentrated at the very top, as we see today. But record levels of profit and a rapidly expanding middle class, that is what has been attacked in these past thirty years.
What was failing and collapsing when history was declared over was something very specific in 1989, when Francis Fukyama made that famous declaration, and when the Washington Consensus was declared, also in 1989. What was collapsing was centralized state communism, authoritarian, anti-democratic, repressive. Something very specific was collapsing, and it was a moment of tremendous flux.
And it was in that moment of flux and disorientation that several very savvy people, many of them in this country, seized on that moment to declare victory not only against communism, but against all ideas but their own. Now, this was the Fukuyama chutzpah, when he actually said -- and it seems so strange to read it now -- in his famous 1989 speech, that the significance of that moment was not that we were reaching an end of ideology, as some were suggesting, or a convergence between capitalism and socialism, as Gorbachev was suggesting, it was not that ideology had ended, but that history as such had ended. He argued that deregulated markets in the economic sphere combined with liberal democracy in the political sphere represented the endpoint of mankind's ideological evolution and the final form of human government.
Now, what was interesting and never quite stated in this formulation was that you basically had two streams: you had democracy, which you can use to vote for your leaders, and then you had a single economic model. Now, the catch was that you couldn't use your vote, you couldn't use your democracy to reshape your economy, because all of the economic decisions had already been decided. There was only -- it was the final endpoint of ideological evolution. So you could have democracy, but you couldn't use it to change the basics of life, you couldn’t use it to change the economy. This moment was held up as a celebration of victory for democracy, but that idea, that democracy cannot affect the economy, is and remains the single most anti-democratic idea of our time.
Now, I was drawn to the slogan that was chosen for this year's ASA gathering, because I think, as many of you know and have read in the program, it comes from the World Social Forum. And I was at the first World Social Forum six-and-a-half years ago -- more than six-and-a-half years ago in January 2001 in Porto Alegre, Brazil. I was one of only a handful of North Americans who attended. And we gathered under that same slogan, but I think it’s significant and interesting that it wasn't posed as a question back then. There was a proud exclamation mark at the end of the sentence: “Another world is possible!”
I wrote a feature article for The Nation when I came back from Brazil, trying to explain to readers in the US -- the event wasn't covered at all in this country, although it was covered very heavily in the international press -- what it felt like to be there with 10,000 other people. And a lot of people were saying that they felt like we were making history. And what I wrote was that what it really felt like was the end of the end of history. That's what it felt like to be in that room. It was this powerful gust of wind that you could suddenly breathe more deeply. You were free to imagine. Our minds were unleashed.
And it wasn’t just Porto Alegre, because Porto Alegre was the culmination of these types of spontaneous -- often spontaneous uprisings that were happening around the world whenever world leaders were gathering to advance the so-called Washington Consensus, whether it was in Seattle at the WTO meeting in 1999, whether it was the IMF/World Bank meetings a few years later in Washington, then in Genoa during the G8. And, of course, the Zapatistas and the MST in Brazil were at the forefront.
And the theme in Porto Alegre was democracy. That was the -- it was about redefining democracy to include the economy: deep democracy, participatory democracy. And it was a challenge to this idea that these two streams could not intersect. The right to land as a form of democracy, the right to biodiversity, to independent media. But what was most extraordinary about Porto Alegre was that -- you know, certainly there were some politicians there, there were some big NGOs there, but the people who were at the podiums, who were shaping the discussion, were the people who were the casualties of this economic model, who were themselves discarded, made landless, forced to occupy pieces of land, chop down fences and plant food and make decisions democratically.
So, you know, Jeffery Sachs talks about these model villages that he’s building in Africa. And many of them, you know, are making tremendous progress. But I can't help thinking back to these field trips that we made in Porto Alegre to MST villages, where it was the people themselves, the landless people themselves, who were showing us their own model villages and were asking for our solidarity. And I think as sociologists, you understand this key distinction, that it was the actors who were the protagonists of their history, and that was what was historic. It was breaking the charity model in a very real way.
Now, I look at where we are now, six-and-a-half years later, and it does feel that we have moved backwards in many areas. Talk of fixing the world has become an astonishingly elite affair. Davos -- now, Porto Alegre was in rebellion against the Davos Summit every year in January. This was the anti-Davos. Davos has been re-legitimized, and now solving the world's problems appears to be a matter between CEOs and super-celebrities. And the idea that we don't need to challenge these mass disparities, what we need is sort of noblesse oblige on a mass scale, that is very different than what we were talking about in Porto Alegre those years ago.
Now, we know what closed that window of possibility, that freedom that opened up in 2001, and it was September 11th in this country. And the window didn't close everywhere, but it did close, at least temporarily, in North America, that sense of possibility, that putting these issues and the people affected by these policies at the center of the political debate. Now, the shock of those attacks, I think we can see with some hindsight, was harnessed by leaders in this country and their allies around the world to abruptly end the discussion of global justice that was exploding around the world. There was a door that had opened, and it was suddenly slammed shut. We heard that phrase again and again: 9/11 changes everything. And one of the first things we were told that it had changed was that trade, privatization, labor rates, all the things we were fighting for just so recently no longer mattered. It was Year Zero. Wipe the slate clean. And it was another one of these rebooting history moments. History was apparently starting all over again from scratch, and nothing we knew before mattered. It was all relegated to pre-9/11 thinking.
Now, the Bush administration justified this by saying that all that mattered was security and the war on terror. And in Canada, we were told that -- by the US ambassador -- that security trumps trade. That became the new slogan, that before 9/11 it was economic priorities that drove the US administration, but post-9/11 the only thing that mattered was security. So talk of economic justice, corporate greed, the loss of the public sphere, the talk of Porto Alegre, was suddenly retro, so 2001.
Now, the irony that we can now see is that, while denying the importance of this economic project, the Bush administration used the dislocation of 9/11 to pursue the very same pre-9/11 radical capitalist project, now with a furious vengeance, under the cover of war and natural disasters. So forget negotiating trade deals at the World Trade Organization. When the US invaded Iraq, Bush sent in Paul Bremer to seize new markets on the battlefields of his preemptive war. He didn’t have to negotiate with anyone. He just rewrote the country's entire economic architecture in one swoop. But, of course, if you said that the war had anything to do with economics, you were dismissed as naïve. It was, of course, about security, about liberating Iraqis from Saddam.
AMY GOODMAN: Journalist Naomi Klein. We’ll be back with her speech in a minute.
[break]
AMY GOODMAN: We return to journalist Naomi Klein.
NAOMI KLEIN: Meanwhile, at home the administration quickly moved to exploit the shock that gripped the nation to push through a radical vision of hollow government, in which everything from waging wars to reconstructing from those wars to disaster response became an entirely for-profit venture. This was a bold evolution of market logic. Rather than the ’90s approach of selling off existing public companies, like water and electricity, the Bush team was creating a whole new framework for its actions. That framework was and is the war on terror, which was built to be private, privately managed from the start. The Bush administration played the role of a kind of a venture capitalist for the startup security companies, and they created an economic boom on par with the dotcom boom of the 1990s. But we didn’t talk about it, because we were too busy talking about security.
Now, this feat required a kind of two-stage process, which was using 9/11, of course, to radically increase the surveillance and security powers of the state, concentrated in the executive branch, but at the same time to take those powers and outsource them to a web of private companies, whether Blackwater, Boeing, AT&T, Halliburton, Bechtel, the Carlyle Group. Now, in the ’80s, the goal of privatization -- and in the ’90s -- was devouring the appendages of the state. But what was happening now is it was the core that was being devoured, because what is more central to the very definition of a state of a government than security and disaster response? Now, this is one of the great ironies of the war on terror, is that it proved such an effective weapon to furthering the corporate agenda precisely because it denied that it has, and continues to deny that it has, a corporate agenda at all.
Now, it had another benefit, too, which was the ability to pay anyone who opposed this system as aligned with potential terrorists and so on. So our movement, which was already facing extreme repression before 9/11, was put on notice as traitorous. Looking back, it’s clear that the shock, the disorientation caused by the attacks, was used to reassert this economic agenda, to reassert that consensus that never really was. The window that was opened at the end of the ’90s in the movement known as the anti-globalization movement, but which was always a pro-democracy movement, was slammed shut, at least in North America. And it was terror that slammed it shut. The alternatives started to disappear.
Now, I want to use the rest of my time just to say that this was not the first time, that this -- if we look back at the past thirty-five years, we see this slamming of the door on alternatives just as they are emerging repeating again and again. Many of you were here for the opening address from Ricardo Lagos, the former president of Chile, who talked about another September 11th, which was another one of those moments, a far more significant one, when a very important democratic alternative, the real third way, not Tony Blair's third way, but the real third way between totalitarian communism and extreme capitalism was being forged in Chile. And that was the great threat.
And we know that now through all of the declassified documents. There’s a really revealing one: a correspondence between Henry Kissinger and Nixon, in which Kissinger says very bluntly that the problem with Allende’s election is not what they were saying publicly, which was that he was aligned with the Soviets, that he was only pretending to be democratic, but that he was really going to impose a totalitarian system in Chile. That was the spin at the time. What he actually wrote was, “The example of a successful elected Marxist government in Chile would surely have an impact on -- and even precedent value for -- other parts of the world…The imitative spread of similar phenomena elsewhere would in turn significantly affect the world balance and our own position in it.” So that alternative, that other world, had to be blasted out of the way, and extreme violence was used in order to accomplish that.
Now, this kind of preemptive attack on our democratic alternatives, the persistent dream of a third way, of a real third way, has come up again and again. And this is what I discuss at length in the book, but I want to mention a couple of examples -- unless I’m totally out of time? OK -- examples of moments where there was a similar sense of effervescent possibility of being able to breathe more and dream more fully.
One of them was in Poland in 1989. June 4th was the day of the historic elections in Poland that elected Solidarity as the new government. They hadn't had elections there in decades. And this was the event that really set off the domino -- what’s now referred to as the domino effect in Eastern Bloc countries -- and ultimately resulting in the breaking apart of the Soviet Union. But it’s worth remembering what it actually looked like in June of 1989. In Poland, people didn’t think that history was over, because they had just elected Solidarity as their government. They thought that history was just beginning and that they were finally going to be able to implement what the movement, which was a labor movement, had always seen as the third way, the third way not taken. Now, Solidarity's vision was not a rejection of socialism. They said that they were calling for “real socialism,” as socialists often do, and it was a rejection of the Communist party. They were everything that the party was not: dispersed where it was centralized, democratic where it was authoritarian, participatory where it was bureaucratic. And Solidarity had ten million members, which gave them the power to completely shut down the state.
So when people went to the polls and elected a Solidarity government, what were they voting for? What did they think they were voting for? Did they think that they were voting to become a free market economy on the model that Francis Fukuyama was talking about? No, they didn't. They thought they were voting for the labor party that they had helped to build.
And I just want to read you a short passage from Solidarity’s economic program, which was passed democratically in 1981. They said, “The socialized enterprise should be the basic organizational unit in the economy. It should be controlled by the workers’ council representing the collective” and should be operated -- cooperatively run by a director appointed through competition, recalled by the council, workers’ cooperatives. So the idea was to get the party out of control of the economy, to decentralize it and have the people who were doing the work actually control their workplaces. And they believed that they could make them more sustainable.
Now, did they get the chance to try that, to act on that vision of a worker cooperative economy as the centerpiece of the economy, to have democratic elections but still have socialism? Did they get that chance when they voted for Solidarity? No, they didn't. What they got was an inherited debt, and they were told that the only way that they would get any relief from that debt and any aid is if they followed a very radical shock therapy program. Now, I would be remiss if I didn't point out that the person who prescribed that shock therapy program was Jeffery Sachs. And I -- no, I say that because I really had hoped that we could debate these different worlds, because there are differences, there are real differences that we must not smooth over.
Now, in 2006, 40% of young workers in Poland were unemployed, 40%, last year. That’s twice the EU average. And Poland is often held up as a great success story of transition. In 1989, 15% of the Poland’s population was living below the poverty line. In 2003, 59% of Poles had fallen below the line. That’s that opening of that gap. That’s what these economic policies do. And then, we can say we’re very, very worried about the people at the bottom, let's bring them up, but let’s be clear about what we’re talking about. These jarring levels of inequality and economic exclusion are now feeding a resurgence of chauvinism, racism, anti-Semitism, misogyny, rampant homophobia in Poland. And I think we can see, actually, that it’s inevitable that this would be the case, because they tried communism, they tried capitalism, they tried democratic socialism, but they got shock therapy instead. After you’ve tried all that, there really isn't a whole lot left but fascism. It’s dangerous to suppress democratic alternatives when people invest their dreams in them. It’s risky business.
Another one of these powerful dreams was Tiananmen Square, and it’s a sort of a very sad fluke of history that on the same day that Solidarity won those historic elections and that dream was betrayed, what they voted for was betrayed, tanks rolled in Tiananmen Square, and that was the day of the massacre: June 4, 1989. It was another bloody end to a moment of effervescent possibility.
Now, the way those protests were always reported on in the West was that students in Beijing just wanted to live like in the United States. And they, you know, put a goddess to democracy that looked a lot like the Statue of Liberty. So it was reported on CNN as just kind of pro-American–style democracy protests.
But in recent years, an alternative analysis of those events has emerged. And what we’re starting to hear from what’s being called China's New Left, and people like Wang Hui, who’s a wonderful academic, is that this was a vast oversimplification of what was driving the pro-democracy movement in 1989 in China. What was driving it was that the government of Deng Xiaoping was radically restructuring the economy along with the lines that had been prescribed by Milton Friedman -- economic shock therapy -- and people were seeing their quality of life devalued. Workers were losing their rights. And they were taking to the streets and demanding democratic control over the economic transition.
So democracy wasn't an abstract idea. It wasn't just “We want to vote.” It was, “We want to control this transition. We want to have a say in it.” It was a direct challenge to the Fukuyama formulation, which, by the way, was made that same year: the idea that you would have these two streams and that they wouldn't intersect.
I just want to read one other thing, which is another one of these paths not taken, because we know how that one ended in Tiananmen Square: that dream was crushed. Another historic moment of possibility, when we look back on our recent history, was 1994, when the ANC government won landslide elections in South Africa. That was a victory for people power. That was one of the most hopeful days that I can remember.
I think we should remember what South Africans thought they were voting for in those historic elections. You know, it was just portrayed as something very simple: it was an end to apartheid. But what did an end to apartheid mean to South Africans? And we can get an answer from that actually from Nelson Mandela, who wrote a little note two weeks before he was released from prison. And he wrote this note because there was a growing concern that he had been in prison so long that he had forgotten the promise of liberation, which was not just to have elections, but to change the economy of the country and redistribute the wealth. And Mandela was under so much pressure that he had to release this very short statement just to clarify this point. And what he said was, "The nationalization of the mines, banks and monopoly industry is the policy of the ANC and a change or modification of our views in this regard is inconceivable in our situation. State control of certain sectors of the economy is unavoidable.” And this was a reiteration of South Africa’s Freedom Charter, which is the platform of the ANC, which calls for the national wealth of South Africa, the heritage of the country, to be restored for the people, the mineral wealth and so on.
Now, I say this because this was one of those worlds that wasn't chosen, one of those paths that wasn't chosen. And I spent the past four years pulling these stolen and betrayed alternatives out of the dustbin of our recent history, because I think it matters. I think it matters that we had ideas all along, that there were always alternatives to the free market. And we need to retell our own history and understand that history, and we have to have all the shocks and all the losses, the loss of lives, in that story, because history didn't end. There were alternatives. They were chosen, and then they were stolen. They were stolen by military coups. They were stolen by massacres. They stolen by trickery, by deception. They were stolen by terror.
We who say we believe in this other world need to know that we are not losers. We did not lose the battle of ideas. We were not outsmarted, and we were not out-argued. We lost because we were crushed. Sometimes we were crushed by army tanks, and sometimes we were crushed by think tanks. And by think tanks, I mean the people who are paid to think by the makers of tanks. Now, most effective we have seen is when the army tanks and the think tanks team up. The quest to impose a single world market has casualties now in the millions, from Chile then to Iraq today. These blueprints for another world were crushed and disappeared because they are popular and because, when tried, they work. They're popular because they have the power to give millions of people lives with dignity, with the basics guaranteed. They are dangerous because they put real limits on the rich, who respond accordingly. Understanding this history, understanding that we never lost the battle of ideas, that we only lost a series of dirty wars, is key to building the confidence that we lack, to igniting the passionate intensity that we need.
source and Audio download:
http://www.democracynow.org/article.pl?sid=07/08/15/1432250
The shock doctrine
I met Jamar Perry in September 2005, at the big Red Cross shelter in Baton Rouge, Louisiana. Dinner was being doled out by grinning young Scientologists, and he was standing in line. I had just been busted for talking to evacuees without a media escort and was now doing my best to blend in, a white Canadian in a sea of African- American southerners. I dodged into the food line behind Perry and asked him to talk to me as if we were old friends, which he kindly did.Born and raised in New Orleans, he'd been out of the flooded city for a week. He and his family had waited forever for the evacuation buses; when they didn't arrive, they had walked out in the baking sun. Finally they ended up here, a sprawling convention centre now jammed with 2,000 cots and a mess of angry, exhausted people being patrolled by edgy National Guard soldiers just back from Iraq.
The news racing around the shelter that day was that the Republican Congressman Richard Baker had told a group of lobbyists, "We finally cleaned up public housing in New Orleans. We couldn't do it, but God did." Joseph Canizaro, one of New Orleans' wealthiest developers, had just expressed a similar sentiment: "I think we have a clean sheet to start again. And with that clean sheet we have some very big opportunities." All that week Baton Rouge had been crawling with corporate lobbyists helping to lock in those big opportunities: lower taxes, fewer regulations, cheaper workers and a "smaller, safer city" - which in practice meant plans to level the public housing projects. Hearing all the talk of "fresh starts" and "clean sheets", you could almost forget the toxic stew of rubble, chemical outflows and human remains just a few miles down the highway.
Over at the shelter, Jamar could think of nothing else. "I really don't see it as cleaning up the city. What I see is that a lot of people got killed uptown. People who shouldn't have died."
He was speaking quietly, but an older man in line in front of us overheard and whipped around. "What is wrong with these people in Baton Rouge? This isn't an opportunity. It's a goddamned tragedy. Are they blind?" A mother with two kids chimed in. "No, they're not blind, they're evil. They see just fine."
One of those who saw opportunity in the floodwaters of New Orleans was the late Milton Friedman, grand guru of unfettered capitalism and credited with writing the rulebook for the contemporary, hyper-mobile global economy. Ninety-three years old and in failing health, "Uncle Miltie", as he was known to his followers, found the strength to write an op-ed for the Wall Street Journal three months after the levees broke. "Most New Orleans schools are in ruins," Friedman observed, "as are the homes of the children who have attended them. The children are now scattered all over the country. This is a tragedy. It is also an opportunity."
Friedman's radical idea was that instead of spending a portion of the billions of dollars in reconstruction money on rebuilding and improving New Orleans' existing public school system, the government should provide families with vouchers, which they could spend at private institutions.
In sharp contrast to the glacial pace with which the levees were repaired and the electricity grid brought back online, the auctioning-off of New Orleans' school system took place with military speed and precision. Within 19 months, with most of the city's poor residents still in exile, New Orleans' public school system had been almost completely replaced by privately run charter schools.
The Friedmanite American Enterprise Institute enthused that "Katrina accomplished in a day ... what Louisiana school reformers couldn't do after years of trying". Public school teachers, meanwhile, were calling Friedman's plan "an educational land grab". I call these orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities, "disaster capitalism".
Privatising the school system of a mid-size American city may seem a modest preoccupation for the man hailed as the most influential economist of the past half century. Yet his determination to exploit the crisis in New Orleans to advance a fundamentalist version of capitalism was also an oddly fitting farewell. For more than three decades, Friedman and his powerful followers had been perfecting this very strategy: waiting for a major crisis, then selling off pieces of the state to private players while citizens were still reeling from the shock.
In one of his most influential essays, Friedman articulated contemporary capitalism's core tactical nostrum, what I have come to understand as "the shock doctrine". He observed that "only a crisis - actual or perceived - produces real change". When that crisis occurs, the actions taken depend on the ideas that are lying around. Some people stockpile canned goods and water in preparation for major disasters; Friedmanites stockpile free-market ideas. And once a crisis has struck, the University of Chicago professor was convinced that it was crucial to act swiftly, to impose rapid and irreversible change before the crisis-racked society slipped back into the "tyranny of the status quo". A variation on Machiavelli's advice that "injuries" should be inflicted "all at once", this is one of Friedman's most lasting legacies.
Friedman first learned how to exploit a shock or crisis in the mid-70s, when he advised the dictator General Augusto Pinochet. Not only were Chileans in a state of shock after Pinochet's violent coup, but the country was also traumatised by hyperinflation. Friedman advised Pinochet to impose a rapid-fire transformation of the economy - tax cuts, free trade, privatised services, cuts to social spending and deregulation.
It was the most extreme capitalist makeover ever attempted anywhere, and it became known as a "Chicago School" revolution, as so many of Pinochet's economists had studied under Friedman there. Friedman coined a phrase for this painful tactic: economic "shock treatment". In the decades since, whenever governments have imposed sweeping free-market programs, the all-at-once shock treatment, or "shock therapy", has been the method of choice.
I started researching the free market's dependence on the power of shock four years ago, during the early days of the occupation of Iraq. I reported from Baghdad on Washington's failed attempts to follow "shock and awe" with shock therapy - mass privatisation, complete free trade, a 15% flat tax, a dramatically downsized government. Afterwards I travelled to Sri Lanka, several months after the devastating 2004 tsunami, and witnessed another version of the same manoeuvre: foreign investors and international lenders had teamed up to use the atmosphere of panic to hand the entire beautiful coastline over to entrepreneurs who quickly built large resorts, blocking hundreds of thousands of fishing people from rebuilding their villages. By the time Hurricane Katrina hit New Orleans, it was clear that this was now the preferred method of advancing corporate goals: using moments of collective trauma to engage in radical social and economic engineering.
Most people who survive a disaster want the opposite of a clean slate: they want to salvage whatever they can and begin repairing what was not destroyed. "When I rebuild the city I feel like I'm rebuilding myself," said Cassandra Andrews, a resident of New Orleans' heavily damaged Lower Ninth Ward, as she cleared away debris after the storm. But disaster capitalists have no interest in repairing what once was. In Iraq, Sri Lanka and New Orleans, the process deceptively called "reconstruction" began with finishing the job of the original disaster by erasing what was left of the public sphere.
When I began this research into the intersection between super-profits and mega-disasters, I thought I was witnessing a fundamental change in the way the drive to "liberate" markets was advancing around the world. Having been part of the movement against ballooning corporate power that made its global debut in Seattle in 1999, I was accustomed to seeing business-friendly policies imposed through arm-twisting at WTO summits, or as the conditions attached to loans from the IMF.
As I dug deeper into the history of how this market model had swept the globe, I discovered that the idea of exploiting crisis and disaster has been the modus operandi of Friedman's movement from the very beginning - this fundamentalist form of capitalism has always needed disasters to advance. What was happening in Iraq and New Orleans was not a post-September 11 invention. Rather, these bold experiments in crisis exploitation were the culmination of three decades of strict adherence to the shock doctrine.
Seen through the lens of this doctrine, the past 35 years look very different. Some of the most infamous human rights violations of this era, which have tended to be viewed as sadistic acts carried out by anti-democratic regimes, were in fact either committed with the intent of terrorising the public or actively harnessed to prepare the ground for radical free-market "reforms". In China in 1989, it was the shock of the Tiananmen Square massacre and the arrests of tens of thousands that freed the Communist party to convert much of the country into a sprawling export zone, staffed with workers too terrified to demand their rights. The Falklands war in 1982 served a similar purpose for Margaret Thatcher: the disorder resulting from the war allowed her to crush the striking miners and to launch the first privatisation frenzy in a western democracy.
The bottom line is that, for economic shock therapy to be applied without restraint, some sort of additional collective trauma has always been required. Friedman's economic model is capable of being partially imposed under democracy - the US under Reagan being the best example - but for the vision to be implemented in its complete form, authoritarian or quasi-authoritarian conditions are required.
Until recently, these conditions did not exist in the US. What happened on September 11 2001 is that an ideology hatched in American universities and fortified in Washington institutions finally had its chance to come home. The Bush administration, packed with Friedman's disciples, including his close friend Donald Rumsfeld, seized upon the fear generated to launch the "war on terror" and to ensure that it is an almost completely for-profit venture, a booming new industry that has breathed new life into the faltering US economy. Best understood as a "disaster capitalism complex", it is a global war fought on every level by private companies whose involvement is paid for with public money, with the unending mandate of protecting the US homeland in perpetuity while eliminating all "evil" abroad.
In a few short years, the complex has already expanded its market reach from fighting terrorism to international peacekeeping, to municipal policing, to responding to increasingly frequent natural disasters. The ultimate goal for the corporations at the centre of the complex is to bring the model of for-profit government, which advances so rapidly in extraordinary circumstances, into the ordinary functioning of the state - in effect, to privatise the government.
In scale, the disaster capitalism complex is on a par with the "emerging market" and IT booms of the 90s. It is dominated by US firms, but is global, with British companies bringing their experience in security cameras, Israeli firms their expertise in building hi-tech fences and walls. Combined with soaring insurance industry profits as well as super profits for the oil industry, the disaster economy may well have saved the world market from the full-blown recession it was facing on the eve of 9/11.
In the torrent of words written in eulogy to Milton Friedman, the role of shocks and crises to advance his world view received barely a mention. Instead, the economist's passing, in November 2006, provided an occasion for a retelling of the official story of how his brand of radical capitalism became government orthodoxy in almost every corner of the globe. It is a fairytale history, scrubbed clean of the violence so intimately entwined with this crusade.
It is time for this to change. Since the collapse of the Soviet Union, there has been a powerful reckoning with the crimes committed in the name of communism. But what of the crusade to liberate world markets?
I am not arguing that all forms of market systems require large-scale violence. It is eminently possible to have a market-based economy that demands no such brutality or ideological purity. A free market in consumer products can coexist with free public health care, with public schools, with a large segment of the economy - such as a national oil company - held in state hands. It's equally possible to require corporations to pay decent wages, to respect the right of workers to form unions, and for governments to tax and redistribute wealth so that the sharp inequalities that mark the corporatist state are reduced. Markets need not be fundamentalist.
John Maynard Keynes proposed just that kind of mixed, regulated economy after the Great Depression. It was that system of compromises, checks and balances that Friedman's counter-revolution was launched to dismantle in country after country. Seen in that light, Chicago School capitalism has something in common with other fundamentalist ideologies: the signature desire for unattainable purity.
This desire for godlike powers of creation is precisely why free-market ideologues are so drawn to crises and disasters. Non-apocalyptic reality is simply not hospitable to their ambitions. For 35 years, what has animated Friedman's counter-revolution is an attraction to a kind of freedom available only in times of cataclysmic change - when people, with their stubborn habits and insistent demands, are blasted out of the way - moments when democracy seems a practical impossibility. Believers in the shock doctrine are convinced that only a great rupture - a flood, a war, a terrorist attack - can generate the kind of vast, clean canvases they crave. It is in these malleable moments, when we are psychologically unmoored and physically uprooted, that these artists of the real plunge in their hands and begin their work of remaking the world.
Torture: the other shock treatment
From Chile to China to Iraq, torture has been a silent partner in the global free-market crusade. Chile's coup featured three distinct forms of shock, a recipe that would re-emerge three decades later in Iraq. The shock of the coup prepared the ground for economic shock therapy; the shock of the torture chamber terrorized anyone thinking of standing in the way of the economic shocks.
But torture is more than a tool used to enforce unwanted policies on rebellious peoples; it is also a metaphor of the shock doctrine's underlying logic. Torture, or in CIA parlance, "coercive interrogation", is a set of techniques developed by scientists and designed to put prisoners into a state of deep disorientation.
Declassified CIA manuals explain how to break "resistant sources": create violent ruptures between prisoners and their ability to make sense of the world around them. First, the senses are starved (with hoods, earplugs, shackles), then the body is bombarded with overwhelming stimulation (strobe lights, blaring music, beatings). The goal of this "softening-up" stage is to provoke a kind of hurricane in the mind, and it is in that state of shock that most prisoners give their interrogators whatever they want.
The shock doctrine mimics this process precisely. The original disaster - the coup, the terrorist attack, the market meltdown - puts the entire population into a state of collective shock. The falling bombs, the bursts of terror, the pounding winds serve to soften up whole societies. Like the terrorised prisoner who gives up the names of comrades and renounces his faith, shocked societies often give up things they would otherwise fiercely protect.
=====
As George Bush and his cabinet took up their posts in January 2001, the need for new sources of growth for US corporations was an urgent matter. With the tech bubble now officially popped and the DowJones tumbling 824 points in their first two and half months in office, they found themselves staring in the face of a serious economic downturn. John Maynard Keynes had argued that governments should spend their way out of recessions, providing economic stimulus with public works. Bush's solution was for the government to deconstruct itself - hacking off great chunks of the public wealth and feeding them to corporate America, in the form of tax cuts on the one hand and lucrative contracts on the other. Bush's budget director, the think-tank ideologue Mitch Daniels, pronounced: "The general idea - that the business of government is not to provide services, but to make sure that they are provided - seems self-evident to me." That assessment included disaster response. Joseph Allbaugh, the Republican party operative whom Bush put in charge of the Federal Emergency Management Agency (Fema) - the body responsible for responding to disasters, including terrorist attacks - described his new place of work as "an oversized entitlement programme".
Then came 9/11, and all of a sudden having a government whose central mission was self-immolation did not seem like a very good idea. With a frightened population wanting protection from a strong, solid government, the attacks could well have put an end to Bush's project of hollowing out government just as it was beginning.
For a while, that even seemed to be the case."September 11 has changed everything," said Ed Feulner, old friend of Milton Friedman, the guru of unfettered capitalism and president of the Heritage Foundation, 10 days after the attack, making him one of the first to utter the fateful phrase. Many naturally assumed that part of that change would be a re-evaluation of the radical anti-state agenda that Feulner and his ideological allies had been pushing for three decades, at home and around the world. After all, the nature of the September 11 security failures exposed the results of more than 20 years of chipping away at the public sector and outsourcing government functions to profit-driven corporations. Much as the flooding of New Orleans exposed the rotting condition of public infrastructure, the attacks pulled back the curtain on a state that had been allowed to grow dangerously weak: radio communications for the New York City police and firefighters broke down in the middle of the rescue operation, air-traffic controllers didn't notice the off-course planes in time, and the attackers had passed through airport security checkpoints staffed by contract workers, some of whom earned less than their counterparts at the food court.
The first major victory of the Friedmanite counter-revolution in the United States had been Ronald Reagan's attack on the air-traffic controllers' union and his deregulation of the airlines. Twenty years later, the entire air transit system had been privatised, deregulated and downsized, with the vast majority of airport security work performed by underpaid, poorly trained, non-union contractors. After the attacks, the inspector general of the department of transportation testified that the airlines, which were responsible for security on their flights, had skimped significantly to keep costs down.
On September 10, as long as flights were cheap and plentiful, none of that seemed to matter. But on September 12, putting $6-an-hour contract workers in charge of airport security seemed reckless. Then, in October, envelopes with white powder were sent to lawmakers and journalists, spreading panic about the possibility of a major anthrax outbreak. Once again, 90s privatisation looked very different in this new light: why did a private lab have the exclusive right to produce the vaccine against anthrax? Had the federal government signed away its responsibility to protect the public from a major public health emergency? Furthermore, if it was true, as media reports kept claiming, that anthrax, smallpox and other deadly agents could be spread through the mail, the food supply or the water systems, was it really such a good idea to be pushing ahead with Bush's plans to privatise the postal service? And what about all those laid-off food and water inspectors - could somebody bring them back?
The backlash against the pro-corporate consensus only deepened in the face of new scandals such as that of Enron. Three months after the 9/11 attacks, Enron declared bankruptcy, leading thousands of employees to lose their retirement savings while executives acting on insider knowledge cashed in. The crisis contributed to a general plummeting of faith in private industry to perform essential services, especially when it came out that it was Enron's manipulation of energy prices that had led to the massive blackouts in California a few months earlier. Friedman, aged 90, was so concerned that the tides were shifting back toward Keynesianism that he complained that "businessmen are being presented in the public as second-class citizens".
While CEOs were falling from their pedestals, unionised public sector workers - the villains of Friedman's counter-revolution - were rapidly ascending in the public's estimation. Within two months of the attacks, trust in government was higher than it had been since 1968 - and that, remarked Bush to a crowd of federal employees, is "because of how you've performed your jobs". The uncontested heroes of September 11 were the blue-collar first responders - the New York firefighters, police and rescue workers, 403 of whom lost their lives as they tried to evacuate the towers and aid the victims. Suddenly, America was in love with its men and women in all kinds of uniforms, and its politicians - slapping on NYPD and FDNY baseball caps with unseemly speed - were struggling to keep up with the new mood.
When Bush stood with the firefighters and rescue workers at Ground Zero on September 14 he was embracing some of the very unionised civil servants that the modern conservative movement had devoted itself to destroying. Of course, he had to do it (even Dick Cheney put on a hard hat in those days), but he didn't have to do it so convincingly. Through some combination of genuine feeling on Bush's part and the public's projected desire for a leader worthy of the moment, these were the most moving speeches of Bush's political career.
For weeks after the attacks, the president went on a grand tour of the public sector - state schools, firehouses and memorials, the Centres for Disease Control and Prevention - embracing and thanking civil servants for their contributions and humble patriotism. He praised not only emergency services personnel but teachers, postal employees and healthcare workers. At these events, he treated work done in the public interest with a level of respect and dignity that had not been seen in the US in four decades. Cost-cutting was suddenly off the agenda, and in every speech the president gave, he announced some ambitious new public programme.
But far from shaking their determination to weaken the public sphere, the security failures of 9/11 reaffirmed in Bush and his inner circle their deepest ideological (and self-interested) beliefs - that only private firms possessed the intelligence and innovation to meet the new security challenge. Although it was true that the White House was on the verge of spending huge amounts of taxpayer money to launch a new deal, it would be exclusively with corporate America, a straight-up transfer of hundreds of billions of public dollars a year into private hands. The deal would take the form of contracts, many offered secretively, with no competition and scarcely any oversight, to a sprawling network of industries: technology, media, communications, incarceration, engineering, education, healthcare.
What happened in the period of mass disorientation after the attacks was, in retrospect, a domestic form of economic shock therapy. The Bush team, Friedmanite to the core, quickly moved to exploit the shock that gripped the nation to push through its radical vision of a hollow government in which everything from war fighting to disaster response was a for-profit venture.
It was a bold evolution of shock therapy. Rather than the 90s approach of selling off existing public companies, the Bush team created a whole new framework for its actions - the war on terror - built to be private from the start. This feat required two stages. First, the White House used the omnipresent sense of peril in the aftermath of 9/11 to dramatically increase the policing, surveillance, detention and war-waging powers of the executive branch - a power-grab that the military historian Andrew Bacevich has termed "a rolling coup". Then those newly enhanced and richly funded functions of security, invasion, occupation and reconstruction were immediately outsourced, handed over to the private sector to perform at a profit.
Although the stated goal was fighting terrorism, the effect was the creation of the disaster capitalism complex - a fully fledged new economy in homeland security, privatised war and disaster reconstruction tasked with nothing less than building and running a privatised security state, both at home and abroad. The economic stimulus of this sweeping initiative proved enough to pick up the slack where globalisation and the dotcom booms had left off. Just as the internet had launched the dotcom bubble, 9/11 launched the disaster capitalism bubble. "When the IT industry shut down, post-bubble, guess who had all the money? The government," said Roger Novak of Novak Biddle Venture Partners, a venture capitalism firm that invests in homeland security companies. Now, he says, "Every fund is seeing how big the trough is and asking, 'How do I get a piece of that action?'"
It was the pinnacle of the counter-revolution launched by Friedman. For decades, the market had been feeding off the appendages of the state; now it would devour the core.
Bizarrely, the most effective ideological tool in this process was the claim that economic ideology was no longer a primary motivator of US foreign or domestic policy. The mantra "September 11 changed everything" neatly disguised the fact that for free-market ideologues and the corporations whose interests they serve, the only thing that changed was the ease with which they could pursue their ambitious agenda. Now the Bush White House could use the patriotic alignment behind the president and the free pass handed out by the press to stop talking and start doing. As the New York Times observed in February 2007, "Without a public debate or formal policy decision, contractors have become a virtual fourth branch of government."
And so, in November 2001, just two months after the attacks, the department of defence brought together what it described as "a small group of venture capitalist consultants" with experience in the dotcom sector. The mission was to identify "emerging technology solutions that directly assist in the US efforts in the global war on terrorism". By early 2006, this informal exchange had become an official arm of the Pentagon: the Defence Venture Catalyst Initiative (DeVenCI), a "fully operational office" that continually feeds security information to politically connected venture capitalists, who, in turn, scour the private sector for start-ups that can produce new surveillance and related products. "We're a search engine," explains Bob Pohanka, director of DeVenCI. According to the Bush vision, the role of government is merely to raise the money necessary to launch the new war market, then buy the best products that emerge out of that creative cauldron, encouraging industry to even greater innovation. In other words, the politicians create the demand, and the private sector supplies all manner of solutions.
The department of homeland security, as a brand-new arm of the state created by the Bush regime, is the clearest expression of this wholly outsourced mode of government. As Jane Alexander, deputy director of the research wing of the department of homeland security, explained, "We don't make things. If it doesn't come from industry, we are not going to be able to get it."
Another is Counterintelligence Field Activity (Cifa), a new intelligence agency created under Donald Rumsfeld that is independent of the CIA. This parallel spy agency outsources 70% of its budget to private contractors; like the department of homeland security, it was built as a hollow shell. As Ken Minihan, former director of the National Security Agency, explained, "Homeland security is too important to be left to the government." Minihan, like hundreds of other Bush administration staffers, has already left his government post to work in the burgeoning homeland security industry, which, as a top spy, he helped create.
Every aspect of the way the Bush administration has defined the parameters of the war on terror has served to maximise its profitability and sustainability as a market - from the definition of the enemy to the rules of engagement to the ever-expanding scale of the battle. The document that launched the department of homeland security declares, "Today's terrorists can strike at any place, at any time, and with virtually any weapon," which conveniently means that the security services required must protect against every imaginable risk in every conceivable place at every possible time. And it's not necessary to prove that a threat is real for it to merit a full-scale response - not with Cheney's famous "1% doctrine", which justified the invasion of Iraq on the grounds that if there is a 1% chance that something is a threat, it requires that the US respond as if the threat is a 100% certainty. This logic has been a particular boon for the makers of various hi-tech detection devices: for instance, because we can conceive of a smallpox attack, the department of homeland security has handed out half a billion dollars to private companies to develop and install detection equipment.
Through all its various name changes - the war on terror, the war on radical Islam, the war against Islamofascism, the third world war, the long war, the generational war - the basic shape of the conflict has remained unchanged. It is limited by neither time nor space nor target. From a military perspective, these sprawling and amorphous traits make the war on terror an unwinnable proposition. But from an economic perspective, they make it an unbeatable one: not a flash-in-the-pan war that could potentially be won but a new and permanent fixture in the global economic architecture.
That was the business prospectus that the Bush administration put before corporate America after September 11. The revenue stream was a seemingly bottomless supply of tax dollars to be funnelled from the Pentagon ($270bn in 2005 to private contractors, a $137bn increase since Bush took office), US intelligence agencies and the newest arrival, the department of homeland security. Between September 11 2001 and 2006, the Department of Homeland Security handed out $130bn to contractors - money that was not in the private sector before and that is more than the GDP of Chile or the Czech Republic.
In a remarkably short time, the suburbs ringing Washington, DC became dotted with grey buildings housing security "start-ups" and "incubator" companies, hastily thrown together operations where, as in late-90s Silicon Valley, the money came in faster than the furniture could be assembled. Whereas in the 90s the goal was to develop the killer application, the "next new new thing", and sell it to Microsoft or Oracle, now it was to come up with a new "search and nail" terrorist-catching technology and sell it to the department of homeland security or the Pentagon. That is why, in addition to the start-ups and investment funds, the disaster industry also gave birth to an army of new lobby firms promising to hook up new companies with the right people on Capitol Hill - in 2001, there were two such security-oriented lobby firms, but by mid-2006 there were 543. "I've been in private equity since the early 90s," Michael Steed, managing director of the homeland security firm Paladin told Wired, "and I've never seen a sustained deal flow like this."
Like the dotcom bubble, the disaster bubble is inflating in an ad-hoc and chaotic fashion. One of the first booms for the homeland security industry was surveillance cameras, 30m of which have been installed in the US, shooting about 4bn hours of footage a year. That created a problem: who's going to watch 4bn hours of footage? So a new market emerged for "analytic software" that scans the tapes and creates matches with images already on file.
This development created another problem, because facial recognition software can really make positive IDs only if people present themselves front and centre to the cameras, which they rarely do while rushing to and from work. So another market was created for digital image enhancement. Salient Stills, a company that sells software to isolate and enhance video images, started by pitching its technology to media companies, but it turned out that there was more potential revenue from the FBI and other law-enforcement agencies. And with all the snooping going on - phone logs, wire-tapping, financial records, mail, surveillance cameras, web surfing - the government is drowning in data, which has opened up yet another massive market in information management and data mining, as well as software that claims to be able to "connect the dots" in this ocean of words and numbers and pinpoint suspicious activity.
In the 90s, tech companies endlessly trumpeted the wonders of the borderless world and the power of information technology to topple authoritarian regimes and bring down walls. Today, inside the disaster capitalism complex, the tools of the information revolution have been flipped to serve the opposite purpose. In the process, mobile phones and web surfing have been turned into powerful tools of mass state surveillance by increasingly authoritarian regimes, with the cooperation of privatised phone companies and search engines, whether it's Yahoo assisting the Chinese government to pinpoint the location of dissidents or AT&T helping the US National Security Agency to wiretap its customers without a warrant (a practice that the Bush administration claims it has discontinued). The dismantling of borders, the great symbol and promise of globalisation, has been replaced with the exploding industry of border surveillance, from optical scanning and biometric IDs to the planned hi-tech fence on the border between Mexico and the US, worth up to $2.5bn for Boeing and a consortium of other companies.
As hi-tech firms have jumped from one bubble to another, the result has been a bizarre merger of security and shopping cultures. Many technologies in use today as part of the war on terror - biometric identification, video surveillance, web tracking, data mining - had been developed by the private sector before September 11 as a way to build detailed customer profiles, opening up new vistas for micromarketing. When widespread discomfort about big-brother technologies stalled many of these initiatives, it caused dismay to both marketers and retailers. September 11 loosened this log jam in the market: suddenly the fear of terror was greater than the fear of living in a surveillance society. So now, the same information collected from cash cards or "loyalty" cards can be sold not only to a travel agency or the Gap as marketing data but also to the FBI as security data, flagging a "suspicious" interest in pay-as-you-go mobile phones and Middle Eastern travel.
As an exuberant article in the business magazine Red Herring explained, one such program "tracks terrorists by figuring out if a name spelled a hundred different ways matches a name in a homeland security database. Take the name Mohammad. The software contains hundreds of possible spellings for the name, and it can search terabytes of data in a second." Impressive, unless they nail the wrong Mohammad, which often seems to happen, from Iraq to Afghanistan to the suburbs of Toronto.
This potential for error is where the incompetence and greed that have been the hallmark of the Bush years, from Iraq to New Orleans, becomes harrowing. One false identification coming out of any of these electronic fishing expeditions is enough for an apolitical family man, who sort of looks like someone whose name sort of sounds like his (at least to someone with no knowledge of Arabic or Muslim culture), to be flagged as a potential terrorist. And the process of putting names and organisations on watch lists is also now handled by private companies, as are the programs to crosscheck the names of travellers with the names in the data bank. As of June 2007, there were half a million names on a list of suspected terrorists kept by the National Counterterrorism Centre. Another program, the Automated Targeting System (ATS), made public in November 2006, has already assigned a "risk assessment" rating to tens of millions of travellers passing through the US. The rating, never disclosed to passengers, is based on suspicious patterns revealed through commercial data mining - for instance, information provided by airlines about "the passenger's history of one-way ticket purchase, seat preferences, frequent-flyer records, number of bags, how they pay for tickets and even what meals they order". Incidents of supposedly suspicious behaviour are tallied up to generate each passenger's risk rating.
Anyone can be blocked from flying, denied an entry visa to the US or even arrested and named as an "enemy combatant" based on evidence from these dubious technologies - a blurry image identified through facial recognition software, a misspelled name, a misunderstood snippet of a conversation. If "enemy combatants" are not US citizens, they will probably never even know what it was that convicted them, because the Bush administration has stripped them of habeas corpus, the right to see the evidence in court, as well as the right to a fair trial and a vigorous defence.
If the suspect is taken, as a result, to Guantánamo, he may well end up in the new 200-person maximum-security prison constructed by Halliburton. If he is a victim of the CIA's "extraordinary rendition" programme, kidnapped off the streets of Milan or while changing planes at a US airport, then whisked to a so-called black site somewhere in the CIA's archipelago of secret prisons, the hooded prisoner will likely fly in a Boeing 737, designed as a deluxe executive jet, retrofitted for this purpose. According to the New Yorker, Boeing has been acting as the "CIA's travel agent" - blocking out flightplans for as many as 1,245 rendition voyages, arranging ground crews and even booking hotels. A Spanish police report explains that the work was done by Jeppesen International Trip Planning, a Boeing subsidiary in San Jose. In May 2007, the American Civil Liberties Union launched a lawsuit against the Boeing subsidiary; the company has refused to confirm or deny the allegations.
Once the prisoners arrive at the destination, they face interrogators, some of whom will not be employed by the CIA or the military but by private contractors. According to Bill Golden, who runs the job website IntelligenceCareers.com, "Over half of the qualified counter-intelligence experts in the field work for contractors." If these freelance interrogators are to keep landing lucrative contracts, they must extract from prisoners the kind of "actionable intelligence" their employers in Washington are looking for. It's a dynamic ripe for abuse: just as prisoners under torture will usually say anything to make the pain stop, contractors have a powerful economic incentive to use whatever techniques are necessary to produce the sought-after information, regardless of its reliability.
Then there is the low-tech version of this application of market "solutions" to the war on terror - the willingness to pay top dollar to pretty much anyone for information about alleged terrorists. During the invasion of Afghanistan, US intelligence agents let it be known that they would pay anywhere from $3,000 to $25,000 for al-Qaida or Taliban fighters handed over to them. "Get wealth and power beyond your dreams," stated a typical flyer handed out by the US in Afghanistan, introduced as evidence in a 2002 US federal court filing on behalf of several Guantánamo prisoners. "You can receive millions of dollars helping the anti-Taliban forces...This is enough money to take care of your family, your village, your tribe for the rest of your life."
Soon enough, the cells of Bagram and Guantánamo were overflowing with goat herders, cab drivers, cooks and shopkeepers - all lethally dangerous, according to the men who turned them over and collected the rewards.
According to the Pentagon's own figures, 86% of the prisoners at Guantánamo were handed over by Afghan and Pakistani fighters or agents after the bounties were announced. As of December 2006, the Pentagon had released 360 prisoners from Guantánamo (out of 759 held between 2001 and the end of 2006). The Associated Press was able to track down 245 of them; 205 had been freed or cleared of all charges when they returned to their home countries. It is a track record that is a grave indictment of the quality of intelligence produced by the administration's market-based approach to terrorist identification.
In just a few years, the homeland security industry, which barely existed before 9/11, has exploded to a size that is now significantly larger than either Hollywood or the music business. Yet what is most striking is how little the security boom is analysed and discussed as an economy, as an unprecedented convergence of unchecked police powers and unchecked capitalism, a merger of the shopping mall and the secret prison. When information about who is or is not a security threat is a product to be sold as readily as information about who buys Harry Potter books on Amazon or who has taken a Caribbean cruise and might enjoy one in Alaska, it changes the values of a culture. Not only does it create an incentive to spy, torture and generate false information, but it creates a powerful impetus to perpetuate the fear and sense of peril that created the industry in the first place.
When new economies emerged in the past, from the Fordist revolution to the IT boom, they sparked a flood of analysis and debate about how such seismic shifts in the production of wealth were also altering the way we as a culture worked, the way we travelled, even the way our brains process information. The new disaster economy has been subject to none of this kind of far-reaching discussion. There have been and are debates, of course - about the constitutionality of the Patriot Act, about indefinite detention, about torture and extraordinary rendition - but discussion of what it means to have these functions performed as commercial transactions has been almost completely avoided. What passes for debate is restricted to individual cases of war profiteering and corruption scandals, as well as the usual hand-wringing about the failure of government to adequately oversee private contractors - rarely about the much broader and deeper phenomenon of what it means to be engaged in a fully privatised war built to have no end.
Part of the problem is that the disaster economy sneaked up on us. In the 80s and 90s, new economies announced themselves with great pride and fanfare. The tech bubble in particular set a precedent for a new ownership class inspiring deafening levels of hype - endless media lifestyle profiles of dashing young CEOs beside their private jets, their remote-controlled yachts, their idyllic Seattle mountain homes. That kind of wealth is being generated by the disaster complex today, though we rarely hear about it. While the CEOs of the top 34 defence contractors saw their incomes go up an average of 108% between 2001 and 2005, chief executives at other large American companies averaged only 6% over the same period.
Peter Swire, who served as the US government's privacy counsellor during the Clinton administration, describes the convergence of forces behind the war on terror bubble like this: "You have government on a holy mission to ramp up information gathering and you have an information technology industry desperate for new markets." In other words, you have corporatism: big business and big government combining their formidable powers to regulate and control the citizenry.
The erasing of Iraq
It's a tried-and-tested torture technique: strike fear into your victims, deprive them of cherished essentials and then eradicate their memories. In 2003, the US applied this on an enormous scale for its invasion of Iraq. And then, after Saddam's regime crumbled, Washington set out to rebuild the traumatised country through a disastrous programme of privatisation and unfettered capitalism, as Naomi Klein shows in this exclusive extract from her new book
When the Canadian citizen Maher Arar was grabbed by US agents at JFK airport in 2002 and taken to Syria, a victim of extraordinary rendition, his interrogators engaged in a tried-and-tested torture technique. "They put me on a chair, and one of the men started asking me questions ... If I did not answer quickly enough, he would point to a metal chair in the corner and ask, 'Do you want me to use this?' I was terrified, and I did not want to be tortured. I would say anything to avoid torture." The technique Arar was being subjected to is known as "the showing of the instruments," or, in US military lingo, "fear up". Torturers know that one of their most potent weapons is the prisoner's own imagination - often just showing fearsome instruments is more effective than using them.
As the day of the invasion of Iraq drew closer, US news media outlets were conscripted by the Pentagon to "fear up" Iraq. "They're calling it 'A-Day'," began a report on CBS News that aired two months before the war began. "A as in airstrikes so devastating they would leave Saddam's soldiers unable or unwilling to fight." Viewers were introduced to Harlan Ullman, an author of the Shock and Awe doctrine, who explained that "you have this simultaneous effect, rather like the nuclear weapons at Hiroshima, not taking days or weeks but in minutes". The anchor, Dan Rather, ended the telecast with a disclaimer: "We assure you this report contains no information that the Defense Department thinks could help the Iraqi military." He could have gone further: the report, like so many others in this period, was an integral part of the Department of Defense's strategy - fear up.
Iraqis, who picked up the terrifying reports on contraband satellites or in phone calls from relatives abroad, spent months imagining the horrors of Shock and Awe. The phrase itself became a potent psychological weapon. Would it be worse than 1991? If the Americans really thought Saddam had weapons of mass destruction, would they launch a nuclear attack?
One answer was provided a week before the invasion. The Pentagon invited Washington's military press corps on a special field trip to Eglin Air Force Base in Florida to witness the testing of the Moab, which officially stands for Massive Ordnance Air Blast, but which everyone in the military calls the "Mother of All Bombs". At 21,000lb, it is the largest non-nuclear explosive ever built, able to create, in the words of CNN's Jamie McIntyre, "a 10,000ft-high mushroom-like cloud that looks and feels like a nuclear weapon".
In his report, McIntyre said that even if it was never used, the bomb's very existence "could still pack a psychological wallop" - a tacit acknowledgement of the role he himself was playing in delivering that wallop. Like prisoners in interrogation cells, Iraqis were being shown the instruments. "The goal is to have the capabilities of the coalition so clear and so obvious that there's an enormous disincentive for the Iraqi military to fight," Secretary of Defense Donald Rumsfeld explained on the same programme.
When the war began, the residents of Baghdad were subjected to sensory deprivation on a mass scale. One by one, the city's sensory inputs were cut off; the ears were the first to go.
On the night of March 28 2003, as US troops drew closer to Baghdad, the ministry of communication was bombed and set ablaze, as were four Baghdad telephone exchanges, with massive bunker-busters, cutting off millions of phones across the city. The targeting of the phone exchanges continued - 12 in total - until, by April 2, there was barely a phone working in all of Baghdad. During the same assault, television and radio transmitters were also hit, making it impossible for families in Baghdad, huddling in their homes, to pick up even a weak signal carrying news of what was going on outside their doors.
Many Iraqis say that the shredding of their phone system was the most psychologically wrenching part of the air attack. The combination of hearing and feeling bombs going off everywhere while being unable to call a few blocks away to find out if loved ones were alive, or to reassure terrified relatives living abroad, was pure torment. Journalists based in Baghdad were swarmed by desperate local residents begging for a few moments with their satellite phones or pressing numbers into the reporters' hands along with pleas to call a brother or an uncle in London or Baltimore. "Tell him everything is OK. Tell him his mother and father are fine. Tell him hello. Tell him not to worry." By then, most pharmacies in Baghdad had sold out of sleeping aids and anti-depressants, and the city was completely cleaned out of Valium.
Next to go were the eyes. "There was no audible explosion, no discernible change in the early-evening bombardments, but in an instant, an entire city of 5 million people was plunged into an awful, endless night," the Guardian reported on April 4. Darkness was "relieved only by the headlights of passing cars". Trapped in their homes, Baghdad's residents could not speak to each other, hear each other or see outside. Like a prisoner destined for a CIA black site, the entire city was shackled and hooded.
Next it was stripped. In hostile interrogations, the first stage of breaking down prisoners is stripping them of their own clothes and any items that have the power to evoke their sense of self - so-called comfort items. Often objects that are of particular value to a prisoner, such as the Qur'an or a cherished photograph, are treated with open disrespect. The message is "You are no one, you are who we want you to be," the essence of dehumanisation. Iraqis went through this unmaking process collectively, as they watched their most important institutions desecrated, their history loaded on to trucks and disappeared.
The bombing badly injured Iraq, but it was the looting, unchecked by occupying troops, that did the most to erase the heart of the country that was.
"The hundreds of looters who smashed ancient ceramics, stripped display cases and pocketed gold and other antiquities from the National Museum of Iraq pillaged nothing less than records of the first human society," reported the Los Angeles Times. "Gone are 80% of the museum's 170,000 priceless objects." The national library, which contained copies of every book and doctoral thesis ever published in Iraq, was a blackened ruin. Thousand-year-old illuminated Qur'ans had disappeared from the Ministry of Religious Affairs, which was left a burned-out shell. "Our national heritage is lost," pronounced a Baghdad high-school teacher. A local merchant said of the museum, "It was the soul of Iraq. If the museum doesn't recover the looted treasures, I will feel like a part of my own soul has been stolen." McGuire Gibson, an archaeologist at the University of Chicago, called it "a lot like a lobotomy. The deep memory of an entire culture, a culture that has continued for thousands of years, has been removed".
Thanks mostly to the efforts of clerics who organised salvage missions in the midst of the looting, a portion of the artefacts has been recovered. But many Iraqis were, and still are, convinced that the memory lobotomy was intentional - part of Washington's plans to excise the strong, rooted nation that was and replace it with their own model. "Baghdad is the mother of Arab culture," 70-year-old Ahmed Abdullah told the Washington Post, "and they want to wipe out our culture."
As the war planners were quick to point out, the looting was done by Iraqis, not foreign troops. And it is true that Rumsfeld did not plan for Iraq to be sacked - but he did not take measures to prevent it from happening either, or to stop it once it had begun. These were failures that cannot be dismissed as mere oversights.
During the 1991 Gulf war, 13 Iraqi museums were attacked by looters, so there was every reason to believe that poverty, anger at the old regime and the general atmosphere of chaos would prompt some Iraqis to respond in the same way (especially given that Saddam had emptied the prisons several months earlier). The Pentagon had been warned by leading archaeologists that it needed to have an airtight strategy to protect museums and libraries before any attack, and a March 26 Pentagon memo to coalition command listed "in order of importance, 16 sites that were crucial to protect in Baghdad". Second on the list was the museum. Other warnings had urged Rumsfeld to send an international police contingent in with the troops to maintain public order -another suggestion that was ignored.
Even without the police, however, there were enough US soldiers in Baghdad for a few to be dispatched to the key cultural sites, but they weren't sent. There are numerous reports of US soldiers hanging out by their armoured vehicles and watching as trucks loaded with loot drove by - a reflection of the "stuff happens" indifference coming straight from Rumsfeld. Some units took it upon themselves to stop the looting, but in other instances, soldiers joined in. The Baghdad International Airport was completely trashed by soldiers who, according to Time, smashed furniture and then moved on to the commercial jets on the runway: "US soldiers looking for comfortable seats and souvenirs ripped out many of the planes' fittings, slashed seats, damaged cockpit equipment and popped out every windshield." The result was an estimated $100m worth of damage to Iraq's national airline - which was one of the first assets to be put on the auction block in an early and contentious partial privatisation.
Some insight into why there was so little official interest in stopping the looting has since been provided by two men who played pivotal roles in the occupation - Peter McPherson, the senior economic adviser to Paul Bremer, and John Agresto, director of higher education reconstruction for the occupation. McPherson said that when he saw Iraqis taking state property - cars, buses, ministry equipment - it didn't bother him. His job, as Iraq's top economic shock therapist, was to radically downsize the state and privatise its assets, which meant that the looters were really just giving him a jump-start. "I thought the privatisation that occurs sort of naturally when somebody took over their state vehicle, or began to drive a truck that the state used to own, was just fine," he said. A veteran bureaucrat of the Reagan administration and a firm believer in Chicago School economics, McPherson termed the pillage a form of public-sector "shrinkage".
His colleague John Agresto also saw a silver lining as he watched the looting of Baghdad on TV. He envisioned his job - "a never-to-be-repeated adventure" - as the remaking of Iraq's system of higher education from scratch. In that context, the stripping of the universities and the education ministry was, he explained, "the opportunity for a clean start," a chance to give Iraq's schools "the best modern equipment". If the mission was "nation creating," as so many clearly believed it to be, then everything that remained of the old country was only going to get in the way. Agresto was the former president of St John's College in New Mexico, which specialises in a Great Books curriculum [which emphasises an education based on broad reading]. He explained that although he knew nothing of Iraq, he had refrained from reading books about the country before making the trip so that he would arrive "with as open a mind as I could have". Like Iraq's colleges, Agresto would be a blank slate.
If Agresto had read a book or two, he might have thought twice about the need to erase everything and start all over again. He could have learned, for instance, that before the sanctions strangled the country, Iraq had the best education system in the region, with the highest literacy rates in the Arab world - in 1985, 89% of Iraqis were literate. By contrast, in Agresto's home state of New Mexico, 46% of the population is functionally illiterate, and 20% are unable do "basic math[s] to determine the total on a sales receipt". Yet Agresto was so convinced of the superiority of American systems that he seemed unable to entertain the possibility that Iraqis might want to salvage and protect their own culture and that they might feel its destruction as a wrenching loss.
This neo-colonialist blindness is a running theme in the war on terror. At the US-run prison at Guantánamo Bay, there is a room known as "the love shack". Detainees are taken there after their captors have decided they are not enemy combatants and will soon be released. Inside the love shack, prisoners are allowed to watch Hollywood movies and are plied with American junk food. Asif Iqbal, one of three British detainees known as the "Tipton Three," was permitted several visits there before he and his two friends were finally sent home. "We would get to watch DVDs, eat McDonald's, eat Pizza Hut and basically chill out. We were not shackled in this area ... We had no idea why they were being like that to us. The rest of the week we were back in the cages as usual ... On one occasion Lesley [an FBI official] brought Pringles, ice cream and chocolates; this was the final Sunday before we came back to England." His friend Rhuhel Ahmed speculated that the special treatment "was because they knew they had messed us about and tortured us for two and half years and they hoped we would forget it".
Ahmed and Iqbal had been grabbed by the Northern Alliance while visiting Afghanistan on their way to a wedding. They had been violently beaten, injected with unidentified drugs, put in stress positions for hours, sleep deprived, forcibly shaven and denied all legal rights for 29 months. And yet they were supposed to "forget it" in the face of the overwhelming allure of Pringles. That was actually the plan.
It's hard to believe - but then again, that was pretty much Washington's game plan for Iraq: shock and terrorise the entire country, deliberately ruin its infrastructure, do nothing while its culture and history are ransacked, then make it all OK with an unlimited supply of cheap household appliances and imported junk food. In Iraq, this cycle of culture erasing and culture replacing was not theoretical; it all unfolded in a matter of weeks.
Paul Bremer, appointed by Bush to serve as director of the occupation authority in Iraq, admits that when he first arrived in Baghdad, the looting was still going strong and order was far from restored. "Baghdad was on fire, literally, as I drove in from the airport. There was no traffic on the streets; there was no electricity anywhere; no oil production; no economic activity; there wasn't a single policeman on duty anywhere." And yet his solution to this crisis was to immediately fling open the country's borders to absolutely unrestricted imports: no tariffs, no duties, no inspections, no taxes. Iraq, Bremer declared two weeks after he arrived, was "open for business". Overnight, Iraq went from being one of the most isolated countries in the world, sealed off from the most basic trade by strict UN sanctions, to becoming the widest-open market anywhere.
While the pickup trucks stuffed with loot were still being driven to buyers in Jordan, Syria and Iran, passing them in the opposite direction were convoys of flatbeds piled high with Chinese TVs, Hollywood DVDs and Jordanian satellite dishes, ready to be unloaded on the sidewalks of Baghdad's Karada district. Just as one culture was being burned and stripped for parts, another was pouring in, prepackaged, to replace it.
One of the US businesses ready and waiting to be the gateway to this experiment in frontier capitalism was New Bridge Strategies, started by Joe Allbaugh, Bush's ex-head of Fema [Federal Emergency Management Agency]. It promised to use its top-level political connections to help US multinationals land a piece of the action in Iraq. "Getting the rights to distribute Procter & Gamble products would be a gold mine," one of the company's partners enthused. "One well-stocked 7-Eleven could knock out 30 Iraqi stores; a Wal-Mart could take over the country."
Like the prisoners in Guantánamo's love shack, all of Iraq was going to be bought off with Pringles and pop culture - that, at least, was the Bush administration's idea of a postwar plan.
Ewen Cameron was a psychiatrist who performed CIA-funded experiments on the effects of electric shock and sensory deprivation on patients, without their knowledge, in the 1950s. When I was researching what he did I came across an observation made by one of his colleagues, a psychiatrist named Fred Lowy. "The Freudians had developed all these subtle methods of peeling the onion to get at the heart of the problem," he said. "Cameron wanted to drill right through and to hell with the layers. But, as we later discovered, the layers are all there is." Cameron thought he could blast away all his patients' layers and start again; he dreamed of creating brand-new personalities. But his patients weren't reborn: they were confused, injured, broken.
Iraq's shock therapists blasted away at the layers too, seeking that elusive blank slate on which to create their new model country. They found only the piles of rubble that they themselves had created, and millions of psychologically and physically shattered people - shattered by Saddam, shattered by war, shattered by one another. Bush's in-house disaster capitalists didn't wipe Iraq clean, they just stirred it up. Rather than a tabula rasa, purified of history, they found ancient feuds, brought to the surface to merge with fresh vendettas from each new attack - on a mosque in Karbala, in Samarra, on a market, a ministry, a hospital. Countries, like people, don't reboot to zero with a good shock; they just break and keep on breaking.
Which, of course, requires more blasting - upping the dosage, holding down the button longer, more pain, more bombs, more torture. Former deputy secretary of state Richard Armitage, who had predicted that Iraqis would be easily marshalled from A to B, has since concluded that the real problem was that the US was too soft. "The humane way in which the coalition fought the war," he said, "actually has led to a situation where it is more difficult to get people to come together, not less. In Germany and Japan [after the second world war], the population was exhausted and deeply shocked by what had happened, but in Iraq it's been the opposite. A very rapid victory over enemy forces has meant we've not had the cowed population we had in Japan and Germany ... The US is dealing with an Iraqi population that is un-shocked and un-awed." By January 2007, Bush and his advisers were still convinced that they could gain control of Iraq with one good "surge". The report on which the surge strategy was based aimed for "the successful clearing of central Baghdad".
In the 70s, when the corporatist crusade began, it used tactics that courts ruled were overtly genocidal: the deliberate erasure of a segment of the population. In Iraq, something even more monstrous has happened - the erasure not of a segment of the population, but of an entire country; Iraq is disappearing, disintegrating. It began, as it often does, with the disappearance of women behind veils and doors, then the children disappeared from the schools - as of 2006, two-thirds of them stayed home. Next came the professionals: doctors, professors, entrepreneurs, scientists, pharmacists, judges, lawyers. An estimated 300 Iraqi academics have been assassinated by death squads since the US invasion, including several deans of departments; thousands more have fled. Doctors have fared even worse: by February 2007, an estimated 2,000 had been killed and 12,000 had fled. In November 2006, the UN High Commission for Refugees estimated that 3,000 Iraqis were fleeing the country every day. By April 2007, the organisation reported that 4 million people had been forced to leave their homes - roughly one in seven Iraqis. Only a few hundred of those refugees had been welcomed into the United States.
With Iraqi industry all but collapsed, one of the only local businesses booming is kidnapping. Over just three and a half months in early 2006, nearly 20,000 people were kidnapped in Iraq. The only time the international media pays attention is when a westerner is taken, but the vast majority of abductions are Iraqi professionals, grabbed as they travel to and from work. Their families either come up with tens of thousands in US dollars for the ransom money or identify their bodies at the morgue. Torture has also emerged as a thriving industry. Human rights groups have documented numerous cases of Iraqi police demanding thousands of dollars from the families of prisoners in exchange for a halt to torture. It is Iraq's own domestic version of disaster capitalism.
This was not what the Bush administration intended for Iraq when it was selected as the model nation for the rest of the Arab world. The occupation had begun with cheerful talk of clean slates and fresh starts. It didn't take long, however, for the quest for cleanliness to slip into talk into "pulling Islamism up from the root" in Sadr City or Najaf and removing "the cancer of radical Islam" from Fallujah and Ramadi - what was not clean would be scrubbed out by force.
That is what happens with projects to build model societies in other people's countries. The cleansing campaigns are rarely premeditated. It is only when the people who live on the land refuse to abandon their past that the dream of the clean slate morphs into its doppelgänger, the scorched earth - only then that the dream of total creation morphs into a campaign of total destruction.
The unanticipated violence that now engulfs Iraq is the creation of the lethally optimistic architects of the war - it was preordained in that original seemingly innocuous, even idealistic phrase, "a model for a new Middle East". The disintegration of Iraq has its roots in the ideology that demanded a tabula rasa on which to write its new story. And when no such pristine tableau presented itself, the supporter of that ideology proceeded to blast and surge and blast again in the hope of reaching that promised land.
A Burger King in al-Asad air base, 100 miles west of Baghdad.
On my flight leaving Baghdad, every seat was filled by a foreign contractor fleeing the violence. It was April 2004, and both Falluja and Najaf were under siege; 1,500 contractors pulled out of Iraq that week alone. Many more would follow. At the time, I was convinced that we were seeing the first full-blown defeat of the corporatist crusade. Iraq had been blasted with every shock weapon short of a nuclear bomb, and yet nothing could subdue this country. The experiment, clearly, had failed.
Now I am not sure. On one level, there is no question that parts of the project were a disaster. US chief envoy Paul Bremer was sent to Iraq to build a corporate utopia; instead, Iraq became a ghoulish dystopia where going to a simple business meeting could get you lynched, burned alive or beheaded. By May 2007, more than 900 contractors had been reported killed and "more than 12,000 wounded in battle or injured on the job", according to a New York Times analysis. The investors Bremer had done so much to attract had never showed up - neither HSBC, nor Procter & Gamble, which put its joint venture on hold, as did General Motors. New Bridge Strategies, the company that had gushed about how "a Wal-Mart could take over the country", conceded that "McDonald's is not opening any time soon". Bechtel's reconstruction contracts did not roll easily into long-term contracts to run the water and electricity systems. And by late 2006, the privatised reconstruction efforts that were at the centre of the "anti-Marshall Plan" [by which western corporations would remake Iraq in their own image rather than help Iraqis rebuild their own economy, as the US did in Germany after the second world war], had almost all been abandoned. And some rather dramatic policy reversals were in evidence.
Stuart Bowen, US special inspector general for the reconstruction of Iraq, reported that in the few cases where contracts were awarded directly to Iraqi firms, "it was more efficient and cheaper. And it has energised the economy because it puts the Iraqis to work". It turns out that funding Iraqis to rebuild their own country is more efficient than hiring lumbering multinationals who don't know the country or the language, surround themselves with $900- a-day mercenaries and spend as much as 55% of their contract budgets on overhead. Jon C Bowersox, who worked as the health adviser at the US embassy in Baghdad, offered this radical observation: the problem with Iraq's reconstruction, he said, was its desire to build everything from scratch. "We could have gone in and done low-cost rehabs, and not tried to transform their health-care system in two years."
An even more dramatic about-turn came from the Pentagon. In December 2006, it announced a new project to get Iraq's state-owned factories up and running - the same ones that Bremer had refused to supply with emergency generators because they were Stalinist throwbacks. Now the Pentagon realised that instead of buying cement and machine parts from Jordan and Kuwait, it could be purchasing them from languishing Iraqi factories, putting tens of thousands to work and sending revenue to surrounding communities. Paul Brinkley, US deputy under-secretary of defense for business transformation in Iraq, said, "We've looked at some of these factories more closely and found they aren't quite the rundown Soviet-era enterprises we thought they were", though he did admit that some of his colleagues had begun calling him a Stalinist.
Lieutenant General Peter W Chiarelli, the top US field commander in Iraq, explained that "we need to put the angry young men to work .... A relatively small decrease in unemployment would have a very serious effect on the level of sectarian killing going on." He couldn't help adding, "I find it unbelievable after four years that we haven't come to that realisation ...To me, it's huge. It's as important as just about any other part of the campaign plan."
Do these about-turns signal the death of disaster capitalism? Hardly. By the time US officials came to the realisation that they didn't need to rebuild a shiny new country from scratch, that it was more important to provide Iraqis with jobs and for their industry to share in the billions raised for reconstruction, the money that would have financed such an undertaking had already been spent.
Meanwhile, in the midst of the wave of neo-Keynesian epiphanies, Iraq was hit with the boldest attempt at crisis exploitation yet. In December 2006, the bipartisan Iraq Study Group fronted by James Baker issued its long-awaited report. It called for the US to "assist Iraqi leaders to reorganise the national oil industry as a commercial enterprise" and to "encourage investment in Iraq's oil sector by the international community and by international energy companies."
Most of the Iraq Study Group's recommendations were ignored by the White House, but not this one: the Bush administration immediately pushed ahead by helping to draft a radical new oil law for Iraq, which would allow companies such as Shell and BP to sign 30-year contracts in which they could keep a large share of Iraq's oil profits, amounting to tens or even hundreds of billions of dollars - unheard of in countries with as much easily accessible oil as Iraq, and a sentence to perpetual poverty in a country where 95% of government revenues come from oil. This was a proposal so wildly unpopular that even Bremer had not dared make it in the first year of occupation. Yet it was coming up now, thanks to deepening chaos. Explaining why it was justified for such a large percentage of the profits to leave Iraq, the oil companies cited the security risks. In other words, it was the disaster that made the proposed radical law possible.
Washington's timing was extremely revealing. At the point when the law was pushed forward, Iraq was facing its most profound crisis to date: the country was being torn apart by sectarian conflict with an average of 1,000 Iraqis killed every week. Saddam Hussein had just been put to death in a depraved and provocative episode. Simultaneously, Bush was unleashing his "surge" of troops in Iraq, operating with "less restricted" rules of engagement. Iraq in this period was far too volatile for the oil giants to make major investments, so there was no pressing need for a new law - except to use the chaos to bypass a public debate on the most contentious issue facing the country. Many elected Iraqi legislators said they had no idea that a new law was even being drafted, and had certainly not been included in shaping its outcome. Greg Muttitt, a researcher with the oil-watch group Platform, reported: "I was recently at a meeting of Iraqi MPs and asked them how many of them had seen the law. Out of 20, only one MP had seen it." According to Muttitt, if the law was passed, Iraqis "would lose out massively because they don't have the capacity at the moment to strike a good deal".
Iraq's main labour unions declared that "the privatisation of oil is a red line that may not be crossed" and, in a joint statement, condemned the law as an attempt to seize Iraq's "energy resources at a time when the Iraqi people are seeking to determine their own future while still under conditions of occupation". The law that was finally adopted by Iraq's cabinet in February 2007 was even worse than anticipated: it placed no limits on the amount of profits that foreign companies can take from the country and placed no specific requirements about how much or little foreign investors would partner with Iraqi companies or hire Iraqis to work in the oil fields.
Most brazenly, it excluded Iraq's elected parliamentarians from having any say in the terms for future oil contracts. Instead, it created a new body, the Federal Oil and Gas Council, which, according to the New York Times, would be advised by "a panel of oil experts from inside and outside Iraq". This unelected body, advised by unspecified foreigners, would have ultimate decision-making power on all oil matters, with the full authority to decide which contracts Iraq did and did not sign. In effect, the law called for Iraq's publicly owned oil reserves, the country's main source of revenues, to be exempted from democratic control and run instead by a powerful, wealthy oil dictatorship, which would exist alongside Iraq's broken and ineffective government.
It is hard to overstate the disgrace of this attempted resource grab. Iraq's oil profits are the country's only hope of financing its own reconstruction when some semblance of peace returns. To lay claim to that future wealth in a moment of national disintegration was disaster capitalism at its most shameless.
There was another, little discussed, consequence of the chaos in Iraq: the longer it wore on, the more privatised the foreign presence became, ultimately forging a new paradigm for the way wars are fought and how human catastrophes are responded to.
This is where the ideology of radical privitisation at the heart of the anti-Marshall Plan paid off handsomely. The Bush administration's steadfast refusal to staff the war in Iraq - whether with troops or with civilian administrators under its control - had some very clear benefits for its other war, the one to outsource the US government. This crusade, while it ceased to be the subject of the administration's public rhetoric, has remained a driving obsession behind the scenes, and it has been far more successful than all the administration's more public battles combined.
Because Rumsfeld designed the war as a just-in-time invasion, with soldiers there to provide only core combat functions, and because he eliminated 55,000 jobs in the Department of Defense and the Department of Veterans Affairs in the first year of the Iraq deployment, the private sector was left to fill in the gaps at every level. In practice, what this configuration meant was that, as Iraq spiralled into turmoil, an ever-more elaborate privatised war industry took shape to prop up the bare-bones army - whether on the ground in Iraq or back home treating soldiers at the Walter Reed Medical Centre in Washington.
Since Rumsfeld steadfastly rejected all solutions that required increasing the size of the army, the military had to find ways to get more soldiers into combat roles. Private security companies flooded into Iraq to perform functions that had previously been done by soldiers - providing security for top officials, guarding bases, escorting other contractors. Once they were there, their roles expanded further in response to the chaos. Blackwater's original contract in Iraq was to provide private security for Bremer, but a year into the occupation, it was engaging in all-out street combat. During the April 2004 uprising of Moqtada al-Sadr's rebel movement in Najaf, Blackwater actually assumed command over active-duty US marines in a day-long battle with the Mahdi Army, during which dozens of Iraqis were killed.
At the start of the occupation, there were an estimated 10,000 private soldiers in Iraq, already far more than during the first Gulf war. Three years later, a report by the US Government Accountability Office found that there were 48,000 private soldiers, from around the world, deployed in Iraq. Mercenaries represented the largest contingent of soldiers after the US military - more than all the other members of the "Coalition of the Willing" combined. The "Baghdad boom", as it was called in the financial press, took what was a frowned-upon, shadowy sector and fully incorporated it into the US and British war-fighting machines. Blackwater hired aggressive Washington lobbyists to erase the word "mercenary" from the public vocabulary and turn its company into an all-American brand. According to its CEO, Erik Prince, "This goes back to our corporate mantra: We're trying to do for the national security apparatus what FedEx did for the postal service."
When the war moved inside the jails, the military was so short of trained interrogators and Arabic translators that it could not get information out of its new prisoners. Desperate for more interrogators and translators, it turned to the defence contractor CACI International Inc. In its original contract, CACI's role in Iraq was to provide information technology services to the military, but the wording of the work order was vague enough that "information technology" could be stretched to mean interrogation. The flexibility was intentional: CACI is part of a new breed of contractor that acts as a temp agency for the federal government - it has ongoing, loosely worded contracts and keeps large numbers of potential workers on call, ready to fill whatever positions come up. Calling in CACI, whose workers did not need to meet the rigorous training and security clearances required of government employees, was as easy as ordering new office supplies; dozens of new interrogators arrived in a flash.
The corporation that gained most from the chaos was Halliburton. Before the invasion, it had been awarded a contract to put out oil fires set by Saddam's retreating armies. When those fires did not materialise, Halliburton's contract was stretched to include a new function: providing fuel for the entire nation, a job so big that "it bought up every available tanker truck in Kuwait, and imported hundreds more". In the name of freeing up soldiers for the battlefield, Halliburton took on dozens more of the army's traditional functions, including maintaining army vehicles and radios.
Even recruiting, long since seen as the job of soldiers, rapidly became a for-profit business as the war wore on. By 2006, new soldiers were being recruited by private headhunting firms such as Serco, or a division of the weapons giant L-3 Communications. The private recruiters, many of whom had never served in the military, were paid bonuses every time they signed up a soldier. One company spokesperson bragged, "If you want to eat steak, you have to put people in the army." Rumsfeld's reign also fuelled a boom in outsourced training: companies such as Cubic Defense Applications and Blackwater ran soldiers through live combat training and war games, bringing them to privately owned training facilities, where they practised house-to-house combat in simulated villages.
And thanks to Rumsfeld's privatisation obsession (as he first suggested in his speech on September 10 2001), when soldiers came home sick or suffering from post-traumatic stress, they were treated by private health care companies for whom the trauma-heavy war in Iraq generated windfall profits. One of these companies, Health Net, became the seventh-strongest performer in the Fortune 500 in 2005, owing largely to the number of traumatised soldiers returning from Iraq. Another was IAP Worldwide Services Inc, which won the contract to take over many of the services at the Walter Reed military hospital.
The greatly expanded role of private companies was never openly debated as a question of policy (much in the way Iraq's proposed oil law suddenly materialised). Rumsfeld did not have to engage in pitched battles with federal employees' unions or high-ranking generals. Instead, it all just happened on the fly in the field, in what the military describes as "mission creep". The longer the war wore on, the more it became a privatised war, and soon enough, this was simply the new way of war. Crisis was the enabler of the boom, just as it had been for so many before.
The numbers tell the dramatic story of corporate mission creep. During the first Gulf war in 1991, there was one contractor for every 100 soldiers. At the start of the 2003 Iraq invasion, the ratio had jumped to one contractor for every 10 soldiers. Three years into the US occupation, the ratio had reached 1:3. Less than a year later, with the occupation approaching its fourth year, there was one contractor for every 1.4 US soldiers. But that figure includes only contractors working directly for the US government, not for other coalition partners or the Iraqi government, and it does not account for the contractors based in Kuwait and Jordan who had farmed out their jobs to subcontractors.
British soldiers in Iraq are already far outnumbered by their countrymen working for private security firms at a ratio of 3:1.
When Tony Blair announced in February 2007 that he was pulling 1,600 soldiers out of Iraq, the press reported instantly that "civil servants hope 'mercenaries' can help fill the gap left behind", with the companies paid directly by the British government. At the same time, the Associated Press put the number of contractors in Iraq at 120,000, almost equivalent to the number of US troops. In scale, this kind of privatised warfare has already overshadowed the United Nations. The UN's budget for peacekeeping in 2006-2007 was $5.25bn (£2.6bn) -that is less than a quarter of the $20bn (£9.8bn) Halliburton got in Iraq contracts, and the latest estimates are that the mercenary industry alone is worth $4bn (£2bn).
So while the reconstruction of Iraq was certainly a failure for Iraqis and for US taxpayers, it has been anything but for the disaster capitalism complex. Made possible by the September 11 attacks, the war in Iraq represented nothing less than the violent birth of a new economy. This was the genius of Rumsfeld's "transformation" plan: since every possible aspect of both destruction and reconstruction has been outsourced and privatised, there is an economic boom when the bombs start falling, when they stop and when they start up again - a closed profit-loop of destruction and reconstruction, of tearing down and building up. For companies that are clever and far-sighted, such as Halliburton and the Carlyle Group, the destroyers and rebuilders are different divisions of the same corporations.
The Bush administration has taken several important and little-examined measures to institutionalise the privatised warfare model forged in Iraq, making it a permanent fixture of foreign policy. In July 2006, Bowen, the inspector general for Iraq reconstruction, issued a report on "lessons learned" from the various contractor debacles. It concluded that the problems stemmed from insufficient planning and called for the creation of "a deployable reserve corps of contracting personnel who are trained to execute rapid relief and reconstruction contracting during contingency operations" and to "pre-qualify a diverse pool of contractors with expertise in specialised reconstruction areas" - in other words, a standing contractor army. In his 2007 State of the Union address, Bush championed the idea, announcing the creation of a brand-new civilian reserve corps. "Such a corps would function much like our military reserve. It would ease the burden on the armed forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them," he said. "It would give people across America who do not wear the uniform a chance to serve in the defining struggle of our time."
A year and half into the Iraq occupation, the US State Department launched a new branch: the Office of Reconstruction and Stabilization. On any given day, it is paying private contractors to draw up detailed plans to reconstruct 25 different countries that may, for one reason or another, find themselves the target of US-sponsored destruction, from Venezuela to Iran. Corporations and consultants are lined up on "pre-signed contracts" so that they are ready to leap into action as soon as disaster strikes. For the Bush administration, it was a natural evolution: after claiming it had a right to cause unlimited pre-emptive destruction, it then pioneered pre-emptive reconstruction - rebuilding places that have not yet been destroyed.
So in the end, the war in Iraq did create a model economy - it was just not the "tiger on the Tigris" that the neo-cons had advertised. Instead, it was a model for privatised war and reconstruction - a model that quickly became export-ready. Until Iraq, the frontiers of the Chicago crusade had been bound by geography: Russia, Argentina, South Korea. Now a new frontier can open up wherever the next disaster strikes.
Earth's magnetic field:
0 Comments:
Post a Comment
<< Home