Book Review, Part II

Liberty, Debt and Capitalism Gone Wild

By John Taylor; 2008 March 13, 12 Ala, 164 BE

Naomi Klein, "The Shock Doctrine: the rise of disaster capitalism," Knopf Canada, 2007

I continue to wade through Naomi Klein's history of market materialism, as propounded by Uncle Milty. Yesterday I denounced how he and other globalist, capitalist economists twisted greedy superstition into scientific language, thereby furnishing an ideology and excuse to rape assets in nations rich and poor around the world, all for the short-term profit of a few. I am not the first Baha'i to look at this issue. The Guardian described the insidious march of what he called "crass materialism" in detail.

"Parallel with this, and pervading all departments of life -- an evil which the nation, and indeed all those within the capitalist system, though to a lesser degree, share with that state (i.e. the USSR) and its satellites regarded as the sworn enemies of that system -- is the crass materialism, which lays excessive and ever-increasing emphasis on material well-being, forgetful of those things of the spirit on which alone a sure and stable foundation can be laid for human society. It is this same cancerous materialism, born originally in Europe, carried to excess in the North American continent, contaminating the Asiatic peoples and nations, spreading its ominous tentacles to the borders of Africa, and now invading its very heart, which Baha'u'llah in unequivocal and emphatic language denounced in His Writings, comparing it to a devouring flame and regarding it as the chief factor in precipitating the dire ordeals and world-shaking crises that must necessarily involve the burning of cities and the spread of terror and consternation in the hearts of men. Indeed a foretaste of the devastation which this consuming fire will wreak upon the world, and with which it will lay waste the cities of the nations participating in this tragic world-engulfing contest, has been afforded by the last World War, marking the second stage in the global havoc which humanity, forgetful of its God and heedless of the clear warnings uttered by His appointed Messenger for this day, must, alas, inevitably experience. It is this same all-pervasive, pernicious materialism against which the voice of the Center of Baha'u'llah's Covenant was raised, with pathetic persistence, from platform and pulpit, in His addresses to the heedless multitudes, which, on the morrow of His fateful visit to both Europe and America, found themselves suddenly swept into the vortex of a tempest which in its range and severity was unsurpassed in the world's history." (Shoghi Effendi, Citadel of Faith, 124-125)

The Guardian may have been influenced by Edward Gibbon's famous verdict on the dark ages in Europe that came hard upon the decline of Rome: "I have described the triumph of barbarism and religion." That is, the erstwhile socially-concerned religion of Christianity was corrupted when its leaders entered into alliance with Roman Imperialism. None of this is new, for this happens wherever the interests of a few take over from the interests of all -- the form of government that Aristotle called polity, rule on behalf of the entire body politic. Really, there are only two kinds of leadership, real and corrupt, and governance is either robbery or polity.

I am reading a very recent history of the late Roman and early Islamic period that compares the ubiquitous, formulaic mutterings about the monophysite or dual nature of Christ that were on the lips of Roman Christians just before the coming of Muhammad to what is happening right now. These sterile debates about angels on heads of pins were very like the stock market quotes that are the subject of conversation and endless debate among the new capitalists around the world. Klein makes a similar comparison to fundamentalist believers in her history of market capitalism gone wild.

"Like the religious fundamentalist who has a grudging respect for fundamentalists of other faiths and for avowed atheists but disdains the casual believer, the Chicagoans declared war on these mix-and-match (Keynesian) economists. What they wanted was not a revolution exactly but a capitalist Reformation: a return to uncontaminated capitalism." (Shock Doctrine, 61)

 This seemingly bloodless academic discussion had a sinister shadow. A few stood to gain from quick and massive profits, and they were not likely to gain consent from the majority who owned these assets. The only way Uncle Milty's ideas were ever going to be implemented was by cowing the majority into submission, and by suppressing democracy and rule of law. Ideas have consequences,

 "The Chicago Boys' first adventure in the seventies should have served as a warning to humanity: theirs are dangerous ideas. By failing to hold the ideology accountable for the crimes committed in the first laboratory, this subculture of unrepentant ideologues was given immunity, freed to scour the world for its next conquest. These days, we are once again living in an era of corporatist massacres, with countries suffering tremendous military violence alongside organized attempts to remake them into model `free market' economies: disappearances and torture are back with a vengeance. And once again the goals of building free markets, and the need for such brutality, are treated as entirely unrelated." (Shock Doctrine, 152)

 The fact that academia did not boot these little men with their absurd perversion of freedom out of their midst, and the fact that there is no publicly-owned world press to publicize the process, obscured and legitimized the use of unsubtle instruments of torture, intimidation and violence. The road from Pinochet to Guantanamo Bay is a short and direct one.

 "Though always cloaked in the language of math and science, Friedman's vision coincided precisely with the interests of large multi-nationals, which by nature hunger for vast new unregulated markets. In the first stage of capitalist expansion that kind of ravenous growth was provided by colonialism -- by `discovering' new territories and grabbing land without paying for it, then extracting riches from the earth without compensating local populations. Friedman's war on the `welfare state' and `big government' held out the promise of a new font of rapid riches -- only this time, rather than conquering new territory, the state itself would be the new frontier, its public services and assets auctioned off for far less than they were worth." (Shock Doctrine, 66)

 Klein stated in an interview that her object in writing this book was to offer an alternative to the conspiracy theories that futilely try to explain the seemingly inexorable triumph of shock capitalism. No, she says, none of this is planned, and mistakes are made. For example, the fall of the USSR allowed local elites, especially Boris Yeltsin and his family, to steal from the robbers, to get in first in the crisis and take most of the huge profits for themselves, using the already well developed ideas and techniques of shock capitalism. The poor big corporations were largely shut out, which is why they have been so aggressive and determined in the wake of the Iraq invasion, and why they are positively drooling over Iran.

 "In much of the Southern Hemisphere, neo-liberalism is frequently spoken of as `the second colonial pillage': in the first pillage riches were seized from the land, and in the second they were stripped from the state. After every one of these profit frenzies come the promises: next time, there will be firm laws in place before a country's assets are sold off, and the entire process will be watched over by eagle-eyed regulators and investigators with unimpeachable ethics. Next time there will be `institution building' before privatizations (to use the post-Russia parlance). But calling for law and order after the profits have all been moved offshore is really not a way of legalizing the theft ex post facto, much as the European colonizers locked in their land grabs with treaties. Lawlessness on the frontier, as Adam Smith understood, is not the problem but the point, as much a part of the game as the contrite hand-wringings, the pledges to do better next time." (The Shock Doctrine, 294)

 The actual assets stolen are not the least of the crime. The Pinochet experiment proved that by taking over a government, you can perpetrate an even more egregious theft. Every robber knows that the easiest mark is a baby, being completely without defenses; as the saying goes, like stealing candy from a baby. Shock capitalism regresses an entire population into crying, fearful confused babies. But the robber in power learns that you can steal from an even more defenseless mark: babies yet to be born. If a nation that has been robbed by a despot is held responsible for the despot's theft, then the spoils are almost unlimited. That is what the debt crisis is all about.

 Reading Klein's history of how corporatist elites learned to take over governments, run up huge debts, then pass power back to the people and stick them with the bill in the form of huge national debts, I often am reminded of a book I read back in the 1980's, Naylor's "Hot Money and the Politics of Debt," I think it was called. This went to the real root of the problem, the existence of so-called "off-shore banking." If it were not possible to hide money in these banks, it would not have been possible for these new billionaires, formerly and more accurately called robber barons, to hide their loot. That is, a world currency whose transactions are traced through a world banking authority would end the criminality and the resultant debt crisis in a stroke.

 The roots of this debt crisis run even deeper than offshore banks, though. Baha'is know that the root is a pernicious materialism that is in the Guardian's unforgettable phrase "eating into the vitals of society." Debt is the direct result of materialism, which makes a god of greed. Over an entire generation a philosophy that made selfishness into a virtue brought on irresponsible lending, rampant speculation and open promotion of raw greed. Right now the king of them all, the American economy, is staggering and threatening to set the whole world's economy into free fall. Recession, maybe even another great depression, threatens. The causes are not hard to find. Both governments and individuals spend freely and avoid saving or investing in infrastructure. In other words, they deny God, the life to come, and even this life.

 Here are some more of my favorite passages from Naomi Klein's fascinating book:

 "The movement that Milton Friedman launched in the 1950s is best  understood as an attempt by multinational capital to recapture the highly profitable, lawless frontier that Adam Smith, the intellectual forefather of today's neo-liberals, so admired -- but with a twist. Rather than journeying through Smith's "savage and barbarous nations" where there was no Western Law, this movement set out to systematically dismantle existing regulations to recreate the earlier lawlessness. And where Smith's colonists earned their record profits by seizing what he described as `waste lands' for `but a trifle,' today's multinationals see government programs, public assets and everything that is not for sale as terrain to be conquered and seized -- the post office, national parks, schools, social security, disaster relief and anything else that is publicly administered.
 "Under Chicago School economics, the state acts as the colonial frontier, which corporate conquistadors pillage with the same ruthless determination and energy as their predecessors showed when they hauled home the gold and silver of the Andes. Where Smith saw fertile green fields turned into profitable farmlands on the pampas and the prairies, Wall Street saw `green field opportunities' in Chile's phone system, Argentina's airline, Russia's oil fields, Bolivia's water system, the United States' public airwaves, Poland's factories -- all built with public wealth, then sold for a trifle.
 "Then there are the treasures created by enlisting the state to put a patent and a price tag on life forms and natural resources never dreamed of as commodities -- seeds, genes, carbon in the earth's atmosphere. By relentlessly searching for new profit frontiers in the public domain, Chicago School economists are like the mapmakers of the colonial era, identifying new waterways through the Amazon, marking off the location of a hidden cache of gold inside an Inca temple.
 "Corruption has been as much a fixture on these contemporary frontiers as it was during the colonial gold rushes. Since the most significant privatization deals are always signed amid the tumult of an economic or political crisis, clear laws and effective regulators are never in place -- the atmosphere is chaotic, the prices are flexible and so are the politicians. What we have been living for three decades is frontier capitalism, with the frontier constantly shifting location from crisis to crisis, moving on as soon as the law catches up." (The Shock Doctrine, 290-291)

 "The debate about whether "human rights" can ever truly be separated from politics and economics is not unique to Latin America; these are questions that surface whenever states use torture as a weapon of policy. Despite the mystique that surrounds it, and the understandable impulse to treat it as aberrant behaviour beyond politics, torture is not particularly complicated or mysterious.
 "A tool of the crudest kind of coercion, it crops up with great predictability whenever a local despot or a foreign occupier lacks the consent needed to rule: Marcos in the Philippines, the shah in Iran, Saddam in Iraq, the French in Algeria, the Israelis in the occupied territories, the U.S. in Iraq and Afghanistan. The list could stretch on and on.
 "The widespread abuse of prisoners is a virtually foolproof indication that politicians are trying to impose a system -- whether political, religious or economic -- that is rejected by large numbers of the people they are ruling. Just as ecologists define ecosystems by the presence of certain `indicator species' of plants and birds, torture is an indicator species of a regime that is engaged in a deeply anti-democratic project, even if that regime happens to have come to power through elections." (The Shock Doctrine, 149)

 "One of the most moving testimonies on this question comes from Sergio Tomasella, a tobacco farmer and secretary general of Argentina's Agrarian Leagues, who was tortured and imprisoned for five years, as were his wife and many friends and family members. In May, 1990, Tomasella took the overnight bus to Buenos Aires from the rural province of Corrientes in order to add his voice to the Argentine Tribunal against Impunity, which was hearing testimony on human rights abuses during the dictatorship. Tomasella's testimony was different from the others. He stood before the urban audience in his farming clothes and workboots and explained that he was the casualty of a long war, one between poor peasants who wanted pieces of land to form co-operatives and the all-powerful ranchers who owned half the land in his province. "The line is continuous -- those who took the land from the Indians continue to oppress us with their feudal structures."
 "He insisted that the abuse he and his fellow members of the Agrarian Leagues suffered could not be isolated from the huge economic interests served by the breaking of their bodies and destruction of their activist networks. So instead of naming the soldiers who abused him, he chose to name the corporations, both foreign and national, that profit from Argentina's continued economic dependence. `Foreign monopolies impose crops on us, they impose chemicals that pollute our earth, impose technology and ideology. All this through the oligarchy which owns the land and controls the politics. But we must remember -- the oligarchy is also controlled, by the very same monopolies, the very same Ford Motors, Monsanto, Philip Morris. It is the structure we have to change. This is what I have come to denounce. That's all.'"
 "The auditorium erupted in applause. Tomasella concluded his testimony with these words: `I believe that truth and justice will eventually triumph. It will take generations. If I am to die in the fight, then so be it. But one day we will triumph. In the meantime, I know who the enemy is, and the enemy knows who I am, too.'"  (The Shock Doctrine, 151-152)