While the world’s bankers, Central Bankers, and Governments wrestle with a financial crisis so large it has threatened – if it is not contained – to become a systemic crisis of capitalism, the rest of us watch and wait, and wonder what the effects will be.
We recognise the need for action, but we note the irony of vast public funds being made available to rescue the same financial capitalists who habitually advocate the for the ‘reform’ of policy to take away safety nets for the poor and to expose ordinary people to the disciplines of “the market”.
Whether or not the latest rescue package succeeds, there will be economic aftershocks, and we should be wary. In her book The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein documents how moments of crisis have been exploited since the 1970s to push unpopular – and otherwise politically impossible – ‘free market’ policies (more accurately, policies favouring the interests of corporate – especially U.S. – capitalism) onto shocked and disoriented publics.
The rest of the world should not expect an Obama Presidency (if it comes to pass) to make much difference to this – it has been a behaviour persistent through changing U.S. Administrations over the decades.
The Shock Doctrine
The original ‘shock doctrine’ is an idea about how to conduct radical free-market reforms, originating with Milton Friedman and the infamous ‘Chicago School’ of economics. It is simply this:
…waiting for a major crisis, then selling off pieces of the state to private players while citizens were still reeling from the shock, then quickly making the ‘reforms’ permanent. (p.6, Naomi Klein, The Shock Doctrine, 2007)
In itself, this would be coldly immoral and opportunistic, but as Klein documents, in chilling detail, in a number of cases it was transformed (as a deliberate part of U.S foreign policy) into something much worse by the use of methods to generate and sustain shock – such as political coups followed by the widespread use of torture and murder. The mechanism is that people and societies are pliable and suggestible in the moment of shock after trauma, when their world is shattered and they haven’t yet regathered their sense of self, and don’t have a narrative available with which to make sense of events.
I am deliberately choosing here to present the Shock Doctrine methods as blandly and genericly as possible. It’s not bland: it is horrible – but I want to focus here on the positive message of the book, mainly contained in the last chapter, which, I suspect, many people never get to, being too overwhelmed: perhaps an unintended shock effect all of its own.
Shock Wears off
The first piece of good news is that – in most cases – shock wears off. As torturers know, the moment of suggestibility is limited and can be very brief.
Scat still stinks
The second piece of good news (from a green/left point of view) is that policies implemented by this doctrine rarely, if ever, have popular support – that’s part of the reason why they have to be introduced this way: using surprise, coercion, and violence (And as for the notion that: ‘You don’t know whats’ good for you’ – I refer you to GDAE’s studies of the economic impact of such policies on Latin America).
The third positive message (drawn mainly from Latin American experience) Klein provides is that there are things movements and societies can do to protect themselves, from shocks. There are two basic methods:
Suggestions from Klein’s book include:
Military: Countries should minimise or avoid links with U.S. Military and security services. These have a proven track record in training torturers and as a breeding ground of anti-democratic movements & military coups. Likewise, when leases for U.S. military bases come up for renewal, ask them to leave.
Market: Look at ways to avoid the flight of capital or to minimise it’s impact (e.g. worker-owned businesses). End or minimise dependence on & links with IMF, World Bank. Minimise shocks from commodity price movements, gain some distance from WTO (e.g. barter arrangements, fair-trade agreements).
Cultural/Intellectual: Promote wider social awareness of shock tactics. Promote wider social awareness of political and economic history.
Social/Political: Avoid ‘movement beheading’ by promoting decentralisation of movements and grassroots leadership. Mobilise communities to meet crises themselves and ‘take power into their own hands’.
Do it yourself:
Klein’s examples are based in the actual experiences of peoples and movements (mainly but not only in Latin America) responding to shocks and the application of the shock doctrine. It is really positive to read those examples, and I’d encourage readers to reflect on how those methods might be applied locally and what other methods might be valuable in local circumstances.
I quickly came up with a few ideas for New Zealand:
Military: keep our military small and focused on peace-keeping. Maintain a defence orientation at some remove from Washington.
Market: develop policies to deal with our curent account deficit and overseas debt. Encourage savings and local financial institutions. Recognise that given our trade-pattern our long-term trade interests are not with the rich industrialised world but with low and middle income commodity producing nations.
Cultural/Intellectual: Promote telling our own stories and hearing the stories of others in ways not mediated by the corporate mass media. Promote links with activist movements and intellectual currents in the non English speaking world (and especially Latin America). Promote adult education, especially as it relates to awareness of social issues and ability to critically engage with news and advertising. Develop powerful ideas for the green-left: encourage learning, reflection, dislogue, & critical thinking in the movement.
Social/Political: Be extremely wary of methods of political and movement action that require (or appear to require) competing on the terms of others and that encourage centralisation (e.g. political strategies depending on fundraising for triennial mass-media based campaigns).
Right, so let’s go do it!
P.S. A few interesting proposals and ideas regarding the current financial crisis here.