Many Americans have been led to
believe that our country’s economic values have been adopted by other countries
without force or coercion. In actuality,
many economic changes are made after a disaster strikes, through force, either
covertly or overtly. Naomi Klein
acknowledges this and uses this idea as the main thesis in her book, The Shock Doctrine. Klein says that “we have been sold a
fairy tale about how these radical policies have swept the globe; that they
haven’t swept the globe on the backs of freedom and democracy, but they have
needed shocks, they have needed crises…they have needed states of emergency.” No other person understood this idea more
than Milton Friedman, who taught at the University of Chicago. Friedman believed in a free market with
little to no government intervention. He
believed that the government should not have a large role in the economy and if
left up to the people, the economy would correct itself. Countries such as Chile, England, and the
United States have used economic policy to dictate political policies upon
their people. A good example of this would be Chile’s resistance to the United
States and President Nixon’s demands for their economy to mirror the United States,’
basically hoping for some sort if crisis that would lead to economic reform,
similar to the way the United States became an economic super power after World
War II.
In
order to initiate a change in Chile’s economy, the University of Chicago
sponsored students from Chile’s Catholic University to come and study under
Milton Friedman. After the students
received their education about Friedman economics, they were sent back to
Chile. Meanwhile, despite efforts by
President Nixon and the CIA to stop Salvador Allende from being elected
President of Chile, he was indeed elected.
Allende’s economic views were far different from those of Milton
Friedman. Allende was in favor of
government control over corporations, and was known as a Marxist. President Nixon ordered for the head of the
CIA to “make the economy scream.” He
wanted to create disaster in Chile, which would make a change seem
necessary. The United States tried to
create instability in Chile’s economy, and finally staged an attack on the
President. The society in Chile went
from peaceful to violent, and looked largely like a battlefield. The tactics used were much like the “shock
and awe” tactics used in the American military.
President Allende was soon killed, and Friedman and his colleagues
presented their economic views to government officials in Chile. Any people who disagreed with the change were
captured, and some were even tortured.
This created an environment that would make it possible for those people
to have their views erased from their memory, and the new beliefs could then be
introduced. Klein notes this with a
quote, “From Chile to China to Iraq, torture has been a silent partner in the
global free-market crusade,” (pg.19).
Years later proved that Friedman’s views failed in Chile, and only
helped to make the rich richer and the poor poorer. However, Friedman continued to call it a
success, even going so far as to call it a “miracle.” While it may not have been the economic
success that the Chicago economists wanted, they did succeed in using shock to
create change.
Friedman
continued to push the idea that capitalism and freedom were in direct
correlation with one another. When
Margaret Thatcher became Prime Minister of England, she adopted Friedman’s
economic views. Around the same time,
Ronald Regan was elected President of the United States, using Friedman’s
economic views also. They had the same
goals in place; to bring inflation down, and to privatize corporations. However, shortly after Thatcher took power
inflation and unemployment rose dramatically, and she became widely
unpopular. Thatcher realized that the
only way to gain back popularity would be to take advantage of a disaster that
would shock society. She realized that
using Friedman’s shock tactics could help her re-gain political power in
England. The ideal moment came when
Argentina invaded British territory.
Thatcher comforted the public by assuring them that they would fight
back, and she became known as the “Iron Lady.”
When England won the war, Thatcher won back her popularity, and she was
re-elected for a second time. She then
used the economic shock therapy used by Milton Friedman, and closed the largest
mining union in England. Immediately
afterwards she privatized virtually all corporations, and the University of
Chicago’s system of economics was finally in place, exactly as she had planned from
the beginning. She continued to use
economics as a tool to enforce public policy even though the gap between the
rich and the poor increased drastically, just as it had in Chile. By lending her support for unions in Poland,
she helped to bring the University of Chicago’s economic policies to all of
Eastern Europe. “It was exactly that
system of compromises checks and balances that Friedman’s counterrevolution was
launched to methodically dismantle in country after country,” (Klein, pg.
25). By creating instability there was
shock, and the slate could be wiped clean, allowing new ideas to form. President Regan was enforcing the same
policies in the United States, saying that Friedman’s policies would lead “the
march of freedom and democracy....,” leaving Marxism behind.
When
Hurricane Katrina hit New Orleans, it devastated the entire United States. The shock of what had happened left many
citizens vulnerable, and they were willing to do anything necessary to survive
the catastrophe. Friedman realized that
this disaster was a huge opportunity to privatize and reform the school systems
in New Orleans. Friedman acknowledged
that “Most New Orleans schools are in ruins.”
He went on to say more about how a disaster can provide
opportunity. “The children are now
scattered all over the country. This is
a tragedy. It is also an opportunity to
radically reform the educational system,” (Friedman, pg. 5). Once again, with Friedman’s influence,
leaders were able to work the system to achieve a certain outcome. With a vision already in place, officials
were able to tear the school system apart and rebuild it. “In sharp contrast to the glacial pace with
which the levees were repaired and the electricity grid was brought back
online, the auctioning off of New Orleans’ school system took place with
military speed and precision,” (Klein, pg. 6).
Shortly after the hurricane, the school system in New Orleans was
completely privatized.
The
examples of economic shock therapy in Chile, England, and the United States
show how we can use shock to fix a situation.
Klein makes the argument that officials are always waiting for some
disaster to strike in order to change society and enforce public policy. When social pain is caused, confusion and
shock follow, creating an environment that makes people move toward change. When people encounter trauma, they are too
focused on survival to have any other concerns, and they accept situations that
they would not normally accept. In all
of the examples shown above, the plan was written even before the disaster
happened, and the people in those countries had no choice but to support the
changes being made. Friedman says that
“only a crisis-actual or perceived-produces real change,” (pg. 7). However, while change does follow from
disaster, it is not always for the better.
These tactics enable leaders to force their policies on to their people,
by connecting the discourse of the military with free market economics. In the event of more disasters in United
States and other countries, there may be no way to stop this cycle from
continuing. The leaders in the United
States and other countries will continue to use these economic shock tactics
for years to come.
References
Klein, Naomi. (2007). The Shock Doctrine: The Rise of Disaster
Capitalism. New York, N.Y: Henry Holt and Company.
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