The Economics of Trauma: Naomi Klein on “Disaster Capitalism,” #1 of 3

5/13/09

This is the first of three consecutive posts I am devoting to entries I made in my philosophical journal last October on Naomi Klein’s ideas about what she calls “disaster capitalism.”  I want to thank my colleague Dr. Lucy McGuffey, who teaches political science at the University of Colorado at Denver, for calling my attention to Klein’s work.  

 

Sunday, October 12, 2008

Naomi Klein, The Shock Doctrine:  The Rise of Disaster Capitalism (New York;  Picador, 2007).  [Milton] Friedman, the Chicago School, and “the Chicago Boys”–how, in effect, they liberated the economy from anything political, and turned it over to what Friedman himself called “shock” capitalism, where “liberal market economies” are imposed either as a result of disasters that happen to occur (economic and/or otherwise), letting power be concentrated in the hands of the “free market” ideologues as necessary “because” of the crisis, or, more and more frequently, as triggered by these economist-ideologues themselves.  So, for example, on “the Chicago Boys in Chile” (note on p. 257–in a chapter on how  South Africa was screwed during the supposed transition to ANC rule, but where the “model” of Chile earlier was applied), [she argues that the Chicago Boys] “rigged the constitution and the courts [under Pinochet, before Chile was allowed to return to “democracy”] so it was legally next to impossible to reverse their revolutionary changes . . . or, as Pinochet’s young minister José Piñera put it, ensuring ‘insulation [of the economy] from politics.’ ”

Fits well with [Michel] Henri’s critique [in Du communism au capitalism] of capitalism in its modern, “techno-economic” form, where the economy is cut loose from its grounding in life itself, where Marx saw it  grounded, according to Henry.  Hence a world in which goods are over-produced everywhere, but  poverty gets exponentially worse, as those who need those very goods are denied the money to buy them.  [Also relevant is Henry’s remark, on page 108 of the same book, that “the only conceivable and real equality” that is possible is that “which exists between individuals ineluctably different.”  The global economicization at issue in Friedman and the Chicago Scool of economics militates against all such equality–and against any “politics” that would work to establish it.]

 

Earlier (p. 174), Klein notes that it was Friedman himself who formulated the shock doctrine as follows, in a quote she attributes to him:  “Only a crisis–actual  or perceived–produces real change.  When that crisis occurs, the actions that are taken depend on the ideas that are lying around.  That, I believe, is our [that is, Chicago School economists’] basic function:  to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”

Prescient!  Given, that is, the $700 billion corporate bank bailout just recently rammed through Congress [by the Bush administration] to address the current financial crisis.

It would be important carefully to compare and, above all, contrast Friedman on that to [Thomas] Kuhn on “scientific revolutions.”

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