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Disaster Capitalism: Privatize or Die

Post on November 13, 2007 by Steve Turner 27 Comments »

If even 25% of Naomi Klein's new book is accurate, then Milton Friedman ought to be ashamed of the evil that his been done in his name.

Klein's book, The Shock Doctrine: The Rise of Disaster Capitalism, "explodes the myth that the global free market triumphed democratically." Klein defines disaster capitalism as orchestrated raids on the public sphere in the wake of catastrophic events (military coups, natural disasters, debt crises, and yes…terrorist attacks). Disaster capitalists see these events, not as tragic, but as exciting market opportunities.

She outlines in great detail the violence that accompanied, or more accurately was required, in order to "liberate" world markets in Friedman's name. From Chile and Argentina to Tiananmen Square; from Poland and the Soviet Union to South Africa and Southeast Asia; from 9/11 and the Department of Homeland Security to New Orleans and Iraq. It's all there. When disaster strikes the corporatists always have only one solution…privatize or die. And if you have to crack a few heads to crack open a few markets…well, that's the price you pay for economic freedom.

Is Naomi Klein right? I think so, but read the book and decide for yourself. What is more relevant to this blog, though, is another observation she makes. Read this:

"I am not arguing that all forms of market systems are inherently violent. It is eminently possible to have a market-based economy that requires no such brutality and demands no such 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–like 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 government to tax and redistribute wealth so that the sharp inequalities that mark the corporatist state are reduced. Markets need not be fundamentalist."

Read that last sentence again…slowly.

Markets…Need…Not…Be…Fundamentalist.

Virtually every policy discussion we have here is a tug-of-war over this simple concept. As long as our free-market friends demand ideological purity, it will be difficult to find areas of mutual benefit regarding public policy.

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Where does he find the time?

Mooreâ€™s Missteps

Comments (Closed):26

Pirate
November 14, 2007 at 9:54 am
I can’t believe you people can honestly believe that freedom is evil and socialism is good after everything that happened in the 20th century. Oh wait, you guys also support public education which ignores things like history and civics thanks to your ol’ buddy John Dewey.
Rob Schofield
November 14, 2007 at 11:11 am
Nice post, Steve. I had seen some other reviews of Klein’s book and will have to check it out.

It seems to me that she is on to something here that a lot of modern Americans keep forgetting — namely that for all of its incredible attributes when it comes to promoting productivity and efficiency, the “market” (i.e. a greed-based economy) is not an infallible or divine creation. Indeed, it is not even an end, in and of itself. Rather, it is a means to an end — a tool that humans ought to employ (along with several others like democratic institutions, guarantees of individual freedom and human rights, stewardship of the planet) — in order to help bring about an abundant and sustainable existence for the species.

Or something like that.
Max
November 14, 2007 at 11:20 am
Yikes, you ought to be reading Hernando de Soto and Douglass North before Naomi Klein. It’s not so much privatize or die as “give me basic institutions (like property) or give me death” the latter of which failed states seem to dole out in spades.
http://redclaycitizen.typepad.com/redclay/2007/11/naomi-klein.html
sturner
November 14, 2007 at 12:03 pm
Naomi Klein has the same vision, Rob. She advocates a “Keynesian” model of a mixed, regulated economy with compromises, checks, and balances.
Brian Mullis
November 14, 2007 at 12:11 pm
Other than the death statistics, does Klein use any data in the book?

Are you able to explain how there can be a “free-market” in consumer goods, if the production and supply of a “large segment of the economy” is set by government? The statement is logically inconsistent.

Socialism/collectivism has failed throughout time because there is no ethical basis to rob Peter and Paul to pay Mary. How is it that you have missed the transformations of post-communist societies to modern standards of living? The proof in the pudding is that human institutions are fallible, and many of the deaths that Klein attributes to the free-market are actually a result of institutional failures (Katrina is the easiest one to point out).

Thus, the dispassionate observer must conclude that less power should be given to such failing institution, yet “statists” such as Klein and yourself believe that I should cede more of my liberty to these failing agents. What market principles are you able to find in this logic?

Finally, while this is a perverted comparison to make, estimated victims of centrally-planned societies are as follows (from Dr. Bradley Birzer): Soviet Union: between roughly 40 and 60 million individuals; communist China: between roughly 35 and 65 million individuals; National Socialist Germany: roughly 20 million individuals; Taiwan: 10 million individuals.

Furthermore it is estimated that of the preceding deaths, less than 40 million were soldiers killed in battle, and between 170 and 200 million deaths were individuals killed by their governments.

Today, since the fall of the Soviet Union, modern socialist governments murder approximately 160,000 Christian each year.

It seems to me that big-gov’t liberals, faced with the historical successes of free-markets and failures of centrally-planned societies, have decided to co-opt the language that the overwhelming majority of Americans identify with vibrant existences. As such, you dress up antiquated notions of central planning in the garb of freedom and liberty, and hope that our society will be foolish enough to aspire to your utopian world-view, because this time government angels will be our messiahs.
Brian
November 14, 2007 at 12:35 pm
So-called corporatists “cracked heads” to “privatize” New Orleans? A claim that Friedman advocated the use of violence to achieve freer markets?
This is a bizarre post – even for you Turner.

Mises exposed your mentality and desires correctly in 1956 when he wrote: “There is no such thing as a mixed economy, a system that would stand midway between capitalism and socialism. …This third system that the economists call interventionism does not combine, as its champions claim, some of the features of capitalism with some of socialism. It is something entirely different from each of them. …The economists who declare that intervenionism does not attain those ends which its supporters want to attain, but makes things worse … merely describe the inevitable consequences of interventionism….
When Marx and Engels in the Communist Manifesto advocated definite interventionist measures… they themselves described these measure as ‘economically insufficient and untenable,’ and asked for them only … as a means of entirely revolutionizing the mode of production. (i.e. as a necessary stop on the route to full-blown socialism)”
Jack Schofield
November 14, 2007 at 12:35 pm
Can we all just agree that people die regardless of what side of the fiscal policy spectrum we are on? The point here is that people shouldn’t have to die in the name of money just as they shouldn’t have to die in the name of imperialism. And Brian, seriously, way to cite your numbers. At least Turner was reading a book when he was making his point (which had nothing to do with supporting “socialism” btw).
sturner
November 14, 2007 at 2:00 pm
I see both Brian’s are playing the “socialist” and “communist” cards. Very predictable. A perfect illustration of how they are blinded by their need for ideological purity.

Brian, why don’t you try reading the book? It’s long…466 pages (with 60 additional pages of footnotes, unlike Ann Coulter’s books with which you may be familiar). Normally, I know, you like to link to talking points from Heritage and AEI, so if it’s too much for you I understand.
Max
November 14, 2007 at 3:10 pm
Tut tut, everyone. Let’s keep it civil. We’re all capable of it.
anglico
November 14, 2007 at 5:26 pm
Right. We’re all capable of it.

“If boiling people alive best served the interests of the American people, then it would neither be moral or immoral.” Max Borders, Civitas Institute
Pirate
November 15, 2007 at 10:07 am
Jack said – “The point here is that people shouldnâ€™t have to die in the name of money just as they shouldnâ€™t have to die in the name of imperialism.”

The difference is that in a capitalist society the free market is a tool for dealing with a horrible event. The capitalism comes after the tragedy and is instrumental in rebuilding that which has been destroyed. In a socialist society, it is the government that is responsible for the death and misery of its citizens. The government itself is the cause of tragedy.
Brian
November 15, 2007 at 10:23 am
sturner, I see you still can’t restrain from petty personal comments. (Oh I get it, I guess he is trying to say I can’t read long books – ha, ha! What a comedian) Keep it up, every time you do it you expose the fact that you need to retreat behind personal and irrelevant insults to cover your ignorance of the topic.

If you feel the need to reply to someone else’s comments, try actually addressing what was said rather than go on some childlike rant. If our responses are so “predictable” it should be easy for your to refute – unfortunately you make no attempt to do so. It is really quite sad that you are incapable of engaging in civil discourse.
sturner
November 15, 2007 at 10:54 am
Brian…You overestimate my interest in having a civil discourse with you. My initial invitation still stands…skip my posts, refrain from commenting, and read my colleagues. How hard is that?

As long as we’re “talking,” though, I wish you would make a list for me of all the nations where Milton Friedman’s economic theories are practiced with the purity that arouses you. And since you’ve quoted someone who says there is “no such thing as a mixed economy,” what exactly would you label the US economy?
Pirate
November 16, 2007 at 10:20 am
The US is a welfare state. Over 63% of the federal budget is redistributive in nature – meaning that property was seized from one citizen and given to another who had no moral claim to the property. The main purpose of the federal government is no longer to protect life, liberty and property. The US government of the 21st century exists to control human behavior, subvert liberty, and determine who benefits from the fruits of labor.
Brian
November 16, 2007 at 10:43 am
I guess I missed your “invitation” to skip your posts and refrain from commenting. The translation, of course, is that your ideas can not stand up to any scrutiny. BTW, I didn’t know you worked with Ms. Klein – as you apparently refer to her as one of your “colleagues.” My comments directly addressed your post, not the book – so there’s no need to play the “read the book” card.
Unlike you, I will actually address your questions. Making a “list of all the nations where Milton Friedman’s economic theories are practiced with the purity that arouses you” is missing the point. If I were to merely look at what currently exists, that would be embracing the status quo, something you are apparently content with, but something I would like to see changed. But as a point of reference, there are many studies easily available that measure “economic liberty” akin to Friedman’s ideas. Or, if you want to save time, just think about the nations that have the highest levels of prosperity and you will basically have your list.

As to your next question, it was already answered in my previous post:
“This third system that the economists call interventionism…”

For a better understanding of this, I would encourage you to read some Mises, although I will warn you that his most famous work far exceeds 466 pages. (I can also give you an abridged summary off-line if you wish, to do so here would be too combersome for the other readers)

Futhermore, for a primer on Keynesian economics, try this book:
http://www.greenwood.com/catalog/C3778.aspx
gregflynn
November 19, 2007 at 8:09 pm
Absolut Mises:

There is simply no other choice than this: either to abstain from interference in the free play of the market, or to delegate the entire management of production and distribution to the government. Either capitalism or socialism: there exists no middle way.

Steve Turner:

As long as our free-market friends demand ideological purity, it will be difficult to find areas of mutual benefit regarding public policy.
sturner
November 19, 2007 at 9:48 pm
Greg…Thanks for doing the research I was too lazy to do.

It seems obvious to everyone but Brian and, apparently, Mises that of course we have a mixed economy in the US (a middle way).

Brian, call it what you want…interventionism or whatever…I hardly think that establishing (for instance) universal health care transforms the US economy into “a necessary stop on the route to full-blown socialism.”
Pirate
November 20, 2007 at 9:28 am
You guys want to nationalize a private industry and then claim it is not a step toward socialism? So we nationalize the health insurance industry to keep down medical costs, why not nationalize the nation’s oil companies to keep the cost of fuel down or perhaps nationalize the media to minimize the negativity in the upcoming election? I am sure it is only a matter of time before you start making these arguments…
gregflynn
November 20, 2007 at 11:09 am
Public health is not private industry. The Marshall Plan is a case of government intervention that allowed capitalism to flourish.

In many ways, the Marshall Plan satisfied both those who wanted our foreign policy to be generous and idealistic and those who demanded realpolitik; it helped feed the starving and shelter the homeless, and at the same time stopped the spread of communism and put the European economy back on its feet.
wafranklin
November 20, 2007 at 11:11 pm
YGTBSM! If you want an antidote for competitive market drivel and nonsense, read “The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer”, by Dean Baker (free on internet).

I cannot say enough about how good Naomi Klein really is. I also recommend “The End of America: Letter of Warning To A Young Patriot”. Add to that anything by Michael Perelman and David Harvey, both of whom describe the cheap and insulting lies which have been part of a forced 30 year rabid reactionary rightwing propaganda drive by the business community, dedicated at one thing: keep the price of labor low by any means, including slavery.

We have been screwed by Milton Friedman’s’ crap for far too long and listening to idiots from right on their corporately paid for soap boxes and apologizing for whatever they threw at us – to hell with them, we need to write our own story, not react to theirs. Government is good, as good as those who make it work. Starve it and of course you get bad government as a selfulfilling prophecy. Duh!!!

Dont sit on the sidelines, educate yourself and help defeat the forces of darkness and social-economic Darwinism, which wants your confused and dormant mind to stay that way. This is the crowd that brought you the current corrupt and totally incompetent government driven by religious zealots of the worse order and ignorance. They want corrupt hacks before any competence. They have to be wiped out, erased from the face of the earth. Have you any idea how much damage the wrecking machine has really done. Like the tip of the iceberg, we will be finding out its crimes and misdeeds for another 25 years, if the country lasts that long. I long for revenge, absolute and complete, such that the corporate rightists and right wing religious maniacs cringe in fear of their lives and property for real.

MILTON FRIEDMAN WAS ABSOLUTELY WRONG. HE WAS A SMALL MINDED GEEK ON A MISSION FROM GOD WITH HIS HAIR ON FIRE. A curse on him and his memory.

Government is good. Government is good. Government is good.
SocialistsUnite
November 21, 2007 at 8:56 am
Sieg heil! Sieg heil! Sieg heil!
SocialistsUnite
November 21, 2007 at 9:03 am
Greg, the health insurance industry is a private industry.

You guys want to talk about public health as if it is a license to regulate anything and everything. You can make an argument that public health is involved anytime you do anything that involves being around other people.
gregflynn
November 21, 2007 at 9:35 am
We don’t want to regulate everything and anything. Sliming anything other than an unfettered free market as socialism is a favorite lazy intellectual trick that’s gotten old. The health insurance industry is interwoven with government. Making sure that everyone can be covered does not nationalize private industry. Left to its own devices, private industry just does not cover everyone. Healthy young people swim in large pools with low premiums and high returns for industry. Older people and those with health problems find themselves redlined in shrinking pools with exhorbitant premiums. A single pool helps keep everyone afloat, sick, healthy, government and private industry.
Pirate
November 26, 2007 at 9:22 am
So in other words, you want to force me to subsidize your parent’s health insurance premiums in addition to paying for their Medicare benefits while I get nothing except raped by the government… No thanks. I’d rather keep my money and tend to my own needs and the needs of my loved ones.
gregflynn
November 26, 2007 at 9:46 am
When you do need help, we’ll be here. It’s healthy people who fall off ladders.
Pirate
November 28, 2007 at 9:29 am
Sounds like the healthy people are going to be kept off the ladders to me.