Naomi Klein 'The Shock Doctrine' - El Modelo is Finito & Neo-Liberalism Sucks

Transcript: [confirm audio, for quotation purposes] [transcript directly below via Big Think channel YouTube - LINK] https://www.youtube.com/watch?v=sKTmwu3ynOY Naomi Klein on Global Neoliberalism Published on 23 Apr 2012 Naomi Klein on the end of "El Modelo" Question: Why did you write The Shock Doctrine? Naomi Klein: It came out of reporting that I was doing in Iraq after the invasion the first year of occupation. But I guess it dates back earlier than that. I happen to have been in Argentina making a documentary film when the war in Iraq began. And it was a really amazing time to be in Latin America. This was 2002, 2003. And this was, I guess, the beginning of what we now think of as this pink tide that has swept Latin America. But it was a moment in Latin American history -- certainly a moment in Argentinian history -- where the economic model that Latin Americans call neo-Liberalism, Americans call the free market. But these policies of privatization; free trade . . . the so-called free trade deregulation in the interest of corporations; deep cuts to social spending; healthcare and education cuts; things like that, in Argentina they actually just call this "el modelo" -- the model. Everybody knows what the model is. It's the so-called Washington Consensus. It's the policies that have been imposed on Latin America first through military dictatorships, then as conditions attached to loans that were needed during economic crises . . . the so-called "debt crisis" of the 1980s. When I was in Argentina the model was collapsing, and Argentinians overthrew five presidents in three weeks. So it was this moment of incredible tumult and political excitement because people were trying to figure out what would come next. But it went beyond Argentina. In Bolivia they hadn't yet elected Evo Morales, but they had these huge protests against water privatization. And Bechtel had just been thrown out of Bolivia. And in Brazil they had just elected Lula. And of course Chavez was already in power in Venezuela, but he had successfully overcome a coup attempt. He had been brought back to power. So there were all of these things going on in Latin America that were all connected in this rejection of this economic model. So to be in Latin America when the invasion of Iraq began was a really unique vantage point from which to watch the war. I'm very grateful to have had that experience to have been able to watch that through the eyes of my Latin American friends who saw the war so differently from . . . from the way it was seen, I think, by so many of us in North America. They saw a real connection between their rejection of these economic policies and the fact that the same economic program was being imposed in Iraq through tremendous violence. And you really saw and felt those connections in Latin America. You know Bechtel just thrown out of Bolivia suddenly shows up in Baghdad with the exclusive contract to rebuild their water system. And what it felt like was that . . . was that there was a change going on; that this model that had been imposed coercively though peacefully through the International Monetary Fund, through the World Bank, through the World Trade Organization -- that that wasn't working anymore. People were rejecting it that the legacy of these policies . . . the legacy of inequality was so dramatic that the sales pitch of "Just wait for the trickledown" wasn't working anymore. And so now there was this new phase. And it wasn't even asking, and it wasn't negotiating. It was just imposing through raw violence. And that's where I came up with the thesis for the book, which is we have entered this new phase that I'm calling "disaster capitalism"; or The Shock Doctrine using a shock -- in this case the shock and awe invasion of Iraq -- to impose what economists call "economic shock therapy". So I think it was . . . It was definitely that experience of seeing it from Latin America -- a continent in revolt against these policies -- that made it easier to identify this as a new phase. And once I identified that I started to see these patterns recurring. After the Asian tsunami there was a very similar push to use the shock of that natural disaster to push through, once again, these same policies. Water privatization, electricity privatization, labor market [flexibilisation]..., displacing poor people on the coasts with hotel developers. So a sort of social re-engineering of societies in the interest of corporations, which I think is what we've been doing under the banner of free trade. But now it's under the banner of post-disaster reconstruction. [above transcript, via Big Think channel YouTube - LINK] https://www.youtube.com/watch?v=sKTmwu3ynOY -------/\/\/ Continued: Further (DIY) transcript beginning at 4:48 [of 14:24]  [confirm audio, for quotation purposes] 4:47 - Is shock necessary for imposing neo-liberal economic policies? Naomi Klein Well, if we look at the history of the advancement of this really quite radical economic model of privatising key state assets, deep cuts to these key social spending areas that people tend to protect, like healthcare and eduction, or these reform to labour laws that take away protections, take away pensions, take away the safety net. What we know is that when politicians try to do this during normal circumstances, people tend to organise and resist, because they like their healthcare systems and they actually like, you know, having labour protections. So the use of crisis for political ends has been a part of the advancement of this ideology in many lesser ways. You know, in my country -- in Canada -- we have a public healthcare system, we have a pretty strong social safety net. This is really how we distinguish ourselves from the United States. We lost a lot of these protections in the mid-1990s.  Not because the Canadians wanted to.  In fact they had just elected a Liberal government that ran on the platform slogan "Jobs, Jobs, Jobs."  But we ended up getting an austerity budget with deep cuts to a lot of the social protections because there was a debt crisis.  That's another kind of a shock, and it was really hyped in the media.  If we think back, it's true in the United States, as well, this endless rhetoric that, you know, our countries are going to go bankrupt unless we do deep, deep, welfare reform or reform of unemployment insurance. So, what I do in The Shock Doctrine is that I take another look at 35 years of history in which this economic model has swept the globe, from former Eastern bloc countries, China, Latin America, Africa, and North America.  And I look at how crisis -- various different kinds of crises have facilitated the advancement of this ideology -- have prepared the ground. What I'm arguing in the book is that the shocks are getting bigger, that a debt crisis no longer does the trick, that a hyperinflation crisis isn't enough to disorient a whole society ... or convince them to accept their bitter medicine; that there needs to be something more disorienting and, so, what we are seeing now is that bigger shocks are being harnessed. But I do believe that crisis is required to rationalise policies that would be rejected under normal circumstances. It's not a secret that people do protect those policies that make their lives easier. 7:34 How do you reconcile this with China & India's development? Naomi Klein: My argument is not that no-one benefits. My argument is that the legacy of this economic system is tremendous inequality. It's an opening up of a gap -- a gaping gap -- between the haves and the have nots. And that's certainly the case in China.  That's certainly the case in India.  And in both countries, you have governments that have identified inequality as their greatest political challenges to, what the Chinese call, 'social stability'; because when you have such a dramatic gap between a peasant still living on $1 a day and the super rich, who are part of the Davos stratosphere, it creates a tremendous amount of resentment and instability within a country.  So, in China, they're seeing unprecedented levels of protest for this era, that had 87,000 [comment:  what?  error?  that's abt. 280 a day] protests a year ... starting in 2005 and the number of protests have been going up and up, which has required more and more surveillance, more and more repression, particularly in the run-up to the Beijing Olympics, a lot of concern about this instability. So, I think the difficulty, really, about this economic model of free trade is generalising the idea that you can just talk about 'Is it good for China?' or 'Is it good for India?' It's definitely --  it's good for a lot of people in India, it's good for a lot of people in China. It's brutal for a lot of people in both of those countries, because part of these policies require displacement in the name of mega-projects, in the name of building a new export processing zone. So a huge part of this economic model requires displacing millions of people from where they live. So then they become migrants.   Where do they go?  Well, they go to the cities first and move to the slums. And, so, the flip side of this economic model of the sort of dazzling version where the world is flat is the explosion of slum dwellers, with the projections that one in three people in the world will be living in slums within the next decade. So, you really can't make these generalisations.  And that's what we know from having lived with these economic policies now for some three decades.  I think in the early stages of this economic transformation, it was possible to just use the language of 'GDP', you know, 'growth' is going to 'trickle-down', and all the promises that were a part of the first phase of this expansion.  But now you have all these parts of the world that have actually tried it.  Right? And the legacy in Latin America is this legacy of following the rules. In countries like Argentina, which were held up as the model students of the 1990s -- the model students of the International Monetary Fund --  and then so much inequality, so much capital flight, that 60% of the population fell into poverty. So that's why the model's in crisis:  the model's in crisis because people have a track record and they can measure the rhetoric against the reality. 10:59 - What system works? Naomi Klein: I think that mixed economies work better than a fundamentalist market system. I'm not a utopian and I don't believe it's perfect:  there's still going to be violence, there's still going to be repression, there's still going to be poor people -- but acceptable to UN measures of standard of living. What we see is that countries which have a mixed economy -- ie have markets, so that people are able to go shopping, so I'm not talking about a totalitarian Communist state -- but also have social protections that identify areas that are too important to leave to the market, whether it's education, healthcare -- the minimal standards of life that everybody must have. There are countries that really commit themselves to that vision of a mixed economy. The Scandinavian countries are the obvious example. Canada, before this restructuring that I'm referring to, in the 1990s was another. But it's certainly, in comparison to the United States and Britain, it continues to be. Germany as well, before their transformation.  I mean, by UN rankings, these are the best countries in the world to live in. And the countries that are trying to resist liberalism -- this economic model -- are being vilified as tyrannical, Communist and all the ways that Hugo Chavez is being vilified right now in the United States.  If you actually look what the economic program is, it's pretty Keynesian.  And it's really just a recovering of some of these principles that the state can have a role in the redistribution of wealth. And these ideas are treated as very radical, when they're coming from poorer countries that have traditionally played an economic role of straight extraction ... they've just straight supplied, whether raw resources, labour.  And that's a very profitable relationship for a North American and European multinational, so when those countries challenge that and say, "Actually, we'd like an economic system more like yours," right, then there's tremendous push-back. But, historically, if we follow the US military coups -- the CIA backed coups, starting with Mosaddegh in Iran, Arbenz in Guatemala -- you have this pattern of presenting developing world leaders as much more radical than they actually are. Mosaddegh in Iran, Arbenz in Guatemala (these were the first two CIA coups in 1953 and 1954):  they were economic nationalists who were trying to build mixed economies and their attempts to build those mixed economies stepped on the toes of some powerful multinationals. In the case of Mosaddegh, it was BP, and in the case of Arbenz, it was the United Fruit Company. That is actually what led to the blow-back. -- 14:15 - end audio -- -------/\/\/ https://en.wikipedia.org/wiki/1953_Iranian_coup_d'%C3%A9tat https://en.wikipedia.org/wiki/1954_Guatemalan_coup_d'%C3%A9tat Bechtel Bechtel Corporation -- largest construction and civil engineering company in USA -- ranking as 4th-largest privately owned company in USA -- HQ, San Francisco -- f. 1898, Warren A. Bechtel, construction of railroads w. team of mules -- series of railroad contracts during the early 1900s -- incorporated 1925, as leading construction company Western USA -- worked w/ California Standard Oil Company building pipelines & refineries -- 1931 - joined consortium contractors Hoover Dam - won bid. -- Warren Bechtel died unexpectedly in Moscow on business 1933. -- Hoover dam was finished 1935, Bechtel's first megaproject -- got rich building WWII x60 cargo ships with no prior cargo experience -- worked pipeline Yukon to Alaska for US Dept. of War -- expanded abroad; turnkey projects (concept pioneered by Stephen Bechtel -- 1940 Venezuela Mene Grande pipeline - first project abroad -- 1947 - Trans-Arabian Pipeline, Saudi Arabia + Jordan + Syria, ending Lebanon -- expansion 1940s Middle East -- 1949 - working w. nuclear power:  Experimental Breeder Reactor I Idaho -- built Dresden Generation Station, first commercial nuke for Illinois 1957 -- Trans Mountain Pipeline in 1952 (Canada) -- preliminary study for the English Channel (1957) -- Bay Area Rapid Transit (BART) system (1959) -- 1960s & 1970s, Bechtel involved in constructing 40% USA nuke plants -- 1972 - Bechtel involved in abt. 20% of all US new power-generating capacity -- by end 1970s moved from nukes construction to nukes clean-up projects -- clean-ups incl. Three Mile Island 1979 -- built the Ankara-Gerede Motorway in Turkey (part network of roads Europe & Turkey) -- project management:  undersea tunnel linking the UK and France (Channel Tunnel) -- recession 1980 ->> goes environmental clean-up + alternative energy projects -- Gulf war, Bechtel - extinguishing oil well fires in Kuwait in 1991 -- part of rebuild the infrastructure of Kuwait -- numerous other big projects abroad -- Bolivia:   2000, after a protest against water prices being raised by Bechtel owned co. -- Bechtel owned company pulls out of Bolivia & sues for $25 million in losses -- settled claim 2006 for $0.30 GOOD LUCK DOING THAT UNDER THE AMERICAN FREE TRADE CORPORATE SLAVE GIVE UP NATIONAL SOVEREIGNTY AGREEMENTS - NO CHANCE -- 2003, Bechtel won a $680 million contract -- rebuilding infrastructure in Iraq for U.S. Agency for International Development WHAT A RORT -- ILLEGALLY DESTROY THE COUNTRY & THEN GIVE U.S. COMPANIES CONTRACTS TO REBUILD     https://en.wikipedia.org/wiki/Bechtel https://www.youtube.com/watch?v=sKTmwu3ynOY ---------------------- ---------------------- COMMENT This was a random video selection. Deregulated trade sounds:  crap. Just as I thought, everyone will be in slums. Why don't governments make the bulk of capital non-transferrable, to prevent companies starving the poor when they decide they've had enough of bleeding one location, in preference for bleeding another for greater profit?   India and China are creating a massive gap between the wealthy and poor, and they're supposed to be socialists of some kind.  That's just not right.  Everyone should suffer equally.  ;)  No, I mean it.  :) America's a complete write-off and an appalling disgrace.  It's oligarchs' paradise with no safety nets and no anything, but modern-day slavery at an Amazon warehouse.   Nations that enslave their populations have no right to lecture the world on human rights, democracy, freedom, women's rights or whatever else these oligarch-serving politicians and their oligarch-funded NGO echo-chambers use as pretexts to open new slave markets abroad. The US masses are beyond help.  It must be some amazing kind of brainwashing that has kept the masses down, self-flagellating ... wearing a 'kick me' sign, begging to remain oligarch-enslaved.  That's quite an education and media indoctrination achievement.  Wow.  I'm impressed. I've not read Klein's book.  I'm just ranting whatever comes to mind. Once the US free trade agreements are signed up, we're all f*cked ... and we can look forward to living in slums.