Naomi Klein on Chile's History

Too often after tragedies strike we tend to see some major media outlets result to coverage that can be described as "disaster porn". Once the rubble has settled and amazing rescue stories have passed, the attention of these news outlets often goes on to the next sensational story.

I appreciate those who dig deeper into the histories of these countries and into the mitigating factors that will contribute to the rebuilding efforts.

This is why I want to highlight Naomi Klein's latest piece on the recent earthquake in Chile and history's impact on the state of the nation. The entire piece is worth reading, but here are a few clips:

Just two days after Chile was struck by a devastating earthquake, Wall Street Journal columnist Bret Stephens informed his readers that Milton Friedman’s “spirit was surely hovering protectively over Chile” because, “thanks largely to him, the country has endured a tragedy that elsewhere would have been an apocalypse…. It’s not by chance that Chileans were living in houses of brick—and Haitians in houses of straw—when the wolf arrived to try to blow them down.”

[...]

As for the argument that Friedmanite policies are the reason Chileans live in “houses of brick” instead of “straw,” it’s clear that Stephens knows nothing of pre-coup Chile. The Chile of the 1960s had the best health and education systems on the continent, as well as a vibrant industrial sector and rapidly expanding middle class. Chileans believed in their state, which is why they elected Allende to take the project even further.

After the coup and the death of Allende, Pinochet and his Chicago Boys did their best to dismantle Chile’s public sphere, auctioning off state enterprises and slashing financial and trade regulations. Enormous wealth was created in this period but at a terrible cost: by the early eighties, Pinochet’s Friedman-prescribed policies had caused rapid de-industrialization, a ten-fold increase in unemployment and an explosion of distinctly unstable shantytowns. They also led to a crisis of corruption and debt so severe that, in 1982, Pinochet was forced to fire his key Chicago Boy advisors and nationalize several of the large deregulated financial institutions. (Sound familiar?)

The Shock Doctrine and it's Continued Implementation

Journalist Naomi Klein came out with her novel "The Shock Doctrine: The Rise of Disaster Capitalism" in September of 2007. In this book Klein labels "The Shock Doctrine" as what happens when populations go through a collective shock--wars, floods, an economic crisis--and in the immediate aftermath, governments push through public policies that would otherwise be unpopular. Examples that she outlines in the book range from Pinochet's coup in 1973 to the closing of public housing and public schooling after Hurricane Katrina, to the massive privatization of the so-call "War on Terror". The implementation of the "Shock Doctrine" traces its roots back to the belief by economists like Milton Friedman who believed that "Only a crisis real or perceived, produces real change."

It is this belief that forms the historical context for the "Shock doctrine" as well as the idea that when such "opportunities" arise in the form of natural disasters or wars, it is the ideas and policies that are lying around that can be implemented in the immediate aftermath. Also relevant to the discussion of the "Shock Doctrine" is the longstanding belief that the global market has triumphed democratically. Instead, it is shown in the book how the expansion of the global market has often been a violent and un-democratic process in order to push through policies that would otherwise be rejected by the public.

Given this brief background to the basic concept of the "Shock Doctrine" I will move on to a recent interview that Naomi Klein gave on Decomcracy Now! Klein begins with discussion of how the "shock doctrine" has become much more relevant even in the last 10 months since her book originally came out. She makes the current oil crisis into a prime example for what she discusses in the book. Klein states:

There is a clear political strategy, and has been for several decades, to exploit these moments when people are desperate for quick-fix solutions and more inclined to believe in a kind of a magical cure, to push through very, very unpopular policies that don’t actually solve the crisis at hand, that don’t actually help people, but are incredibly profitable for multinational corporations.

Klein goes on to apply this to the current oil crisis and with President Bush lifting the Federal Ban on Offshore Drilling. She states that President Bush is "holding the country at ransom" by failing to address any long-term solution to our dependence on oil and by demanding that Congress pass a law to allow oil companies to drill off the American coast. Klein states that the President is "selling a myth" because most experts agree that oil would not flow from newly established rigs for another 7-10 years and would not cause any significant change in our current oil prices. Many of the proponents of offshore drilling as well as drilling in ANWR claim that just the announcement of drilling for more oil will drive prices down, but in addition to the realization that after Bush's announcement, the price of oil went up, Klein states:

There’s a speculative bubble going on right now, and this market is being played. I mean, I think this is really the new bubble. Actually, it’s replacing the housing bubble. And, you know, any time anything bad happens in the world, that’s the indication for speculators to drive the price up. It happened yesterday. Bush announced that he would be opening up to offshore oil drilling, but at the same time, there was an oil strike in Brazil, so the price of oil went up. So everything drives the price of oil up. I think it’s really a classic bubble. Certainly, there are some supply issues, but I actually don’t think that that is the main reason why the price of oil is going up.

Implementation of policies that are often unpopular among the population, but preferential to corporate interests during times of distress and crisis; we are seeing the Shock Doctrine in its current form and it is essential that the public realizes they are being "shocked" and push back against the massive media campaign that is being rolled out by the big oil and gas companies.