http://scoop.epluribusmedia.org/story/2007/11/13/122829/92An armed conflict between nations horrifies us. But the economic war is no better than an armed conflict. An economic war is prolonged torture. And its ravages are no less terrible than those depicted in the literature on war properly so called. ...The movement against war is sound. I pray for its success. But I cannot help the gnawing fear that the movement will fail if it does not touch the root of all evil⎯human greed." M.K. Gandhi, "Non-Violence⎯The Greatest Force." 1926. (Quoted on page 129 of Naomi Klein's "The Shock Doctrine".
Frank Rich entitled his Sunday piece "A Coup at Home".
http://www.nytimes.com/2007/11/11/op... On September 16th, John McLaughlin on "The McLaughlin Report asked his panel if a "soft coup d'etat had happened while discussing the Petraeus testimony. As I read the chapters on Bolivia, South Africa, Poland, China, and Russia in Naomi Klein's "The Shock Doctrine", I got that "gnawing fear" that Gandhi talks about. Could what happened in those places be happening here? Could the gospel of greed aka Sacred Friedmanomics be at the center of a soft coup here?'
Each week, sometimes each day, the question is asked here; "Why isn't Congress doing anything? How could our congress critters cave on so many issues from timetables for withdrawing troops from Iraq to no-brainers like taking a strong stand on renouncing torture by not confirming Mulkasey for Attorney General? Did we miss the coup? Are we "clinically depressed" as Frank Rich says?
Maybe the answers can be found in Naomi Klein's book. In my last diary I wrote about the first five scary chapters in which the old blank slate theory was trotted out once again, this time in the 1950's by Ewen Cameron. You know, shocking people into a a "pure" or "blank" state so that you could build them up again. Didn't we try this with the Native Americans before that even? Um, didn't it fail? As Klein says, "People don't reboot." We are very good at tearing things down, but not so good at the building up part.
(Enter Stage Right: Milton Friedman also during this time concocts a "new" theory of blankness and purity.) In order to rid capitalism of mongrels like Keynes, you must administer shock therapy to the economy so that pure free capitalism can flourish. You must literally shock and awe the citizens. Although Friedman denied advocating violence, dictators in countries influenced by his Chicago school found that if the populace wasn't limp enough from high prices and loss of jobs, then a little violence would do the trick. Klein chronicles professors, doctors, nurses, musicians, soup-kitchen workers being tortured and killed in Chile and Argentina. In the end, some people got very rich, but most people got a whole lot poorer.
So what could possibly get scarier? The chilly chapter on the Iron Lady, Margaret Thatcher, who was able to crush striking coal miners, set the stage for much worse things to come when the Chicago Boys, as the followers of Milton Friedman were called, slithered into governments throughout the world. Bolivia, South Africa, Poland, China, and Russia would see their citizens thrown into turmoil for the sake of an idea. A bad idea. Thousands would die either from bullets or gradually through hunger and neglect as their elected governments succumbed to the enticements of the evangelists of radical capitalism. Dreams of democracy that were spread by social democrats, developmentalists and students of Keynes were dashed all over the world by these Chicago boys some of whom were true believers and some who saw a chance to make a killing as state assets were sold off for a song.
Friedmanites wanted no part of "mongrel Keynesian compromise"; "an ugly hodgepodge of capitalism" where crazy ideas like state ownership of essential services were working quite well for most, but not making the rich into the super-rich. It was annoying. But mostly it was unclean and impure. It was messy; not neat and tidy. For a great many people order is what they prefer. But when taken to a neurotic, even psychotic extreme, we get Utopians and purists who lack either the capacity or the will to get into other's shoes. These are people who will not compromise in what I call their science of selfishness.
The next chapter called "The New Doctor Shock: Economic Warfare Replaces Dictatorship" , filled me with dread. Its tale of a backroom deal in Bolivia between supposed democrats and right wing neo-liberals eerily reminded me of what could be going on here in Washington.
Bolivia had an election in 1985 where the results were very close. The former dictator , Hugo Banzer, declared victory. But the former president Victor Paz Estenssoro wasn't giving up.
(Enter Stage Right: Jeffrey Sachs who Klein calls the "New Doctor Shock" with his shock therapy to rid Bolivia of its hyperinflation.)
He laid out his plans to Banzer. He told him to impose "government austerity" with a series of budget cuts and also to increase "the price of oil tenfold". Then he went back to Harvard.
"Since the final decision about who would be named president was up to Congress, this was a period of high-stakes backroom negotiations and horsetrading between the parties, the Congress and the Senate. One newly elected senator ended up playing a pivotal role: Gonzalo Sanchez de Lozada (known in Bolivia as Goni)."
Turns out that Goni not only owned the second largest mine in Bolivia, but he went to the University of Chicago and although he wasn't an economist he was influenced by....you guessed it, Milton Friedman. So he just loved Sachs' ideas.
The details of the backroom negotiations have never been disclosed, but the results are clear enough. On August 6, 1985, it was Paz who was sworn in as president of Bolivia. Only four days later, Paz appointed Goni to head up a top-secret bipartisan emergency economic team charged with radically restructuring the economy.
The secret plan called for taking away food subsidies, dropping price controls, freezing government wages, letting unrestricted imports in, raising the price of oil by 300 percent, and "called for a downsizing of state companies, the precursor to privatization." "Pillage and shrinkage", Klein calls it.
Paz's party knew nothing about this plan, neither did his own cabinet. When he unveiled it, he locked the doors of the cabinet room and had the plan read to them. He said that if they didn't agree to it, they must resign.
And so the "Bolivian Miracle" was born. Sachs became a huge hero especially to neo-liberals because he had tamed inflation and imposed Friedman shock therapy in a democratic country right after an election.
He proved that a country could radically change its economic structure while democracy advanced. Trouble was, Klein writes, this whole story of democracy and Chicago style capitalism advancing arm in arm into the era of progress just "isn't true". Yes, they had elections. But it wasn't true that the "miracle" was free of the repressive tactics of a Pinochet. When people took to the streets to protest, Paz rolled out tanks to patrol the streets. Hundreds of union leaders were loaded on to airplanes and dropped in the jungle and only returned when striking workers went back to work. "Political assemblies and marches were forbidden, and state permission was required to hold meetings."
So why did I not remember any of this? Klein says that the riots, the tanks, the disappearings were reported as just another generic Latin American protest. Oh yes, rioting in Latin America again. Must be those commies again.
But it wasn't the "commies". It was the workers who were laid off as part of the shock therapy who would eventually become the poor living in tents with malnourished children. It was the voters who had been betrayed by Paz. It was the citizens who now saw oil go up 300 percent and price controls taken away. Instead of the developmentalist or Keynesian policies of everybody, workers and employers, sharing in the pain as a nation fights its way out of an economic crisis, it was clear that the working people were now taking the brunt of this lovely new form of feudal-fascism called Friedman "freedom" economics. Shades of things to come in Iraq.
Not so many years later Boris Yeltsin would use many of the same tactics.
In this way, Bolivia provided a blueprint for a new, more palatable kind of authoritarianism, a civilian coup d'etat, one carried out by politicians and economists in business suits rather than soldiers in military uniforms--all unfolding within the official shell of a democratic regime.
No one ever found out why Paz made that backroom deal although the ambassador to Bolivia, Edwin Corr, remembers it might have been the oodles of cash in the form of U.S. aid that was promised. Yes, greed was a most likely culprit.
So did Congress cut a backroom deal in January 2007? South Africa offers another possibility. Were our Congress critters,in the euphoria of victory, concentrating so hard on gaining and distributing power that they missed the big picture? Did they not get that they were being hoodwinked by first class snake oil salesmen?
After decades of struggle, the African National Congress finally negotiated an end to apartheid. Two separate negotiations went on. One was about political power and the other which got little attention was economic negotiations. In these two parallel negotiations, the ANC received political power but later realized that they had lost control of their economic freedom. They lost the ability to redistribute the land as promised in their charter. They lost the ability to nationalize the mines. The economist Vishnu Padayachee who had advocated a central bank controlled by the government, was asked by Naomi Klein:
if he thought the negotiators realized how much they had lost, after some hesitation, he replied, "Frankly, no." It was simple horse-trading: "In the negotiations, something had to be given, and our side gave those things--I'll give you this, you give me that.
From Padayachee's point of view, none of this happened because of some grand betrayal on the part of ANC leaders but simply because they were outmaneuvered on a series of issues that seemed less than crucial at the time--but turned out to hold South Africa's lasting liberation in the balance.
But the activist and now investigative journalist, William Gumede had a different take. He told Klein that "We missed it. We missed the real story." He said that since the transition time was filled with violence and that they were continually on the edge of a civil war,
"I was focusing on the politics--mass action...But that was not the real struggle.--the real struggle was over economics. And I am disappointed in myself for being so naive. I thought I was politically mature enough to understand the issues. How did I miss this?"
Since then Grumede has written a book to try and make up for his "lack of attention". It's about the battle for the soul of his party. Sound familiar?
So what's going on? Have our congress critters cut back room deals a la Bolivia signing on to privatize and then pillage our nation and somehow rationalizing it? Or like the ANC, were they so busy horse trading for power that they found themselves,like Gulliver, being tied down by moral pygmies, common but cunning hucksters, smart but cold hearted economists and their own naivete` and immaturity? Or are they like Tom and Daisy Buchanan from "The Great Gatsby"?
"They were careless people, Tom and Daisy- they smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made."
Careless? Cynical? Corrupt? Confused? Greedy? Stupid? Lazy?"Everybody's doing it" rationalizers? You decide. Me, I'm rallying with the mongrel capitalists because I have that old fashioned, tried-and-true American idea that we all do better when we all do better. We all may not end up with yachts, but at least we all get a boat and not just an instruction manual on "How to Swim".
It may be that we are too late for the United States. The coup may have already happened. This ship of state may be sinking and we are trying to make it to land. But it looks like there are beacons of light coming from, of all places, South America where shock therapy started and they learned their lessons the hard way. There the ugly but comforting mongrel of a system put together by "mix and match economists" is making a comeback. Real freedom is emerging. Real independence from American banks is beginning to rise.
I do think we have a slim chance of salvaging something from the wreckage here, but only if we roll up our sleeves and get to work. There are a lot of great ideas just lying around. And they come from all kinds of people from every walk of life. But I daresay most of the best ideas can be found outside of the Beltway. And unlike the stuck up Friedmanites who want something akin to puree, let's make us some gumbo.
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