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Samenleving en economie

Voorkant Klein 'The Shock Doctrine' Naomi KLEIN
The shock doctrine - The rise of disaster capitalism
New York: Henry Holt & Cie / Metropolitan Books, 2007; 565 blzn.
[In het Nederlands vertaald als De shockdoctrine - De opkomst van het rampenkapitalisme; Breda: De Geus, 2007; ISBN-13: 978 40 4450 9182]

[Boek van de Canadese schrijfster / onderzoeksjournaliste Naomi Klein. Ze is ook activiste voor de vrede en ageert tegen een neoliberaal dogmatisch kapitalisme in het algemeen en tegen de kritiekloze globalisering van het kapitalisme in het bijzonder.]

[Concreet laat ze zien hoe het neoliberale economische denken van Milton Friedman en de Chicago School de laatste 40 jaar is uitgepakt. Dat denken is dogmatisch over de vrije markt, over laissez faire, over een kleine overheid, en is daarmee uit op totale privatisering van de industrie en van maatschappelijke taken, op een bedrijfsleven dat niet belemmerd wordt, en op een afbraak van sociale voorzieningen. Ze toont aan dat het zijn kans kreeg in crisissituaties, vanaf de staatsgreep in Chili via die in Irak tot aan orkaan Katrina in de VS zelf. Met desastreuze resultaten, behalve voor een rijke elite.]

[Vandaar de term 'disaster capitalism': het bewust aangrijpen van catastrofes en rampen en de geslagenheid en ellende bij de betrokken burgers om de publieke sfeer af te breken in het voordeel van marktwerking en het private bedrijfsleven. Terwijl de term 'shock doctrine' slaat op de drievoudige schok die zoveel mensen de laatste veertig jaar hebben moeten doorstaan: de schok van een catastrofe, de schok daarna van keiharde neoliberaal kapitalistische maatregelen, en de letterlijke - vaak elektrische - schok wanneer je je daartegen verzette (denk aan de terreur en de foltering onder Pinochet in Chili en onder de andere junta's in Zuid-Amerika, de Abu Graibh-gevangenis in Irak, en zo verder. ]

[Het is een geweldig boek. Ik kan er hier niet genoeg over zeggen. Ik zal er een weblogstukje over schrijven. Het gevolg is wel dat ik erg veel meer citaten heb overgenomen dan ik normaal doe.]

(3) Introduction - Blank is beautiful - Three decades of erasing and remaking the world

De overstromingen van New Orleans en omgeving door de orkaan Katrina werden door Republikeinse politici, vastgoedmagnaten en door econoom Milton Friedman aangegrepen voor het 'met een schone lei beginnen' ('clean sheet') en het afbreken van sociale woningbouw, openbaar onderwijs, en andere sociale voorzieningen die tot dan toe door de overheid in stand waren gehouden. De catastrofe werd door die groepen aangegrepen ('big opportunities') om de meest dogmatische vorm van kapitalisme door te zetten waarin de overheid naar de achtergrond gedrongen werd en de markt en het bedrijfsleven hun gang konden gaan.

"One of those who saw opportunity in the floodwaters of New Orleans was Milton Friedman, grand guru of the movement for unfettered capitalism and the man credited with writing the rulebook for the contemporary, hypermobile global economy."(4)

"A network of right-wing think tanks seized on Friedman's proposal and descended on the city after the storm. The administration of George W. Bush backed up their plans with tens of millions of dollars to convert New Orleans schools into 'charter schools', publicly funded institutions run by private entities according to their own rules. Charter schools are deeply po­ larizing in the United States, and nowhere more than in New Orleans, where they are seen by many African-American parents as a way of reversing the gains of the civil rights movement, which guaranteed all children the same standard of education. For Milton Friedman, however, the entire con­cept of a state-run school system reeked of socialism. In his view, the state's sole functions were "to protect our freedom both from the enemies outside our gates and from our fellow-citizens: to preserve law and order, to enforce private contracts, to foster competitive markets." In other words, to supply the police and the soldiers —anything else, including providing free educa­tion, was an unfair interference in the market.
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. Within nineteen months, with most of the city's poor residents still in exile, New Or­leans' public school system had been almost completely replaced by pri­vately run charter schools. Before Hurricane Katrina, the school board had run 123 public schools; now it ran just 4. Before that storm, there had been 77 charter schools in the city; now there were 31. New Orleans teachers used to be represented by a strong union; now the union's contract had been shredded, and its forty-seven hundred members had all been fired. Some of the younger teachers were rehired by the charters, at reduced salaries; most were not."(5)

Dit is wat Klein 'rampenkapitalisme' (disaster capitalism') noemt: het bewust aangrijpen van catastrofes en rampen en de geslagenheid en ellende bij de betrokken burgers om de publieke sfeer af te breken in het voordeel van marktwerking en private bedrijfsleven.

Die aanpak van 'economische shocktherapie' (door Klein de 'shockdoctrine' genoemd) in de lijn van Milton Friedman en de Chicago School (economisch denken waarin een ongehinderd kapitalisme centraal staat) bestaat al zo'n veertig jaar. Hij werd bijvoorbeeld gebruikt toen Pinochet in Chili aan de macht kwam na de coup - onder Amerikaanse invloed - waarin de Allende-regering werd afgezet (1973).

Friedman was adviseur van Pinochet. En veel economen in Chili uit de rijkere families - die onder Pinochet weer hun kans kregen - hadden aan de Chicago School hun opleiding gehad en dachten er dus precies hetzelfde over. Zoals later in New Orleans werden sociale voorzieningen afgebroken in het voordeel van het bedrijfsleven. Wie het er niet mee eens was werd simpelweg in de gevangenis gegooid of verdween. De shockdoctrine werd ook door andere oligarchische regimes gebruikt zoals in Sri Lanka (na de tsunami daar), (weer door de Amerikanen) in Irak, in Argentinië (ten tijde van de junta's in de 70-er jaren), Rusland, China, UK, Joegoslavië, en zo verder. En ook daar werd verzet met harde hand onderdrukt. Dezelfde aanpak werd gekoppeld aan steun door de WTO en het IMF. Uiteindelijk werd na de aanslagen van 11 september 2001 dezelfde doctrine in de USA doorgezet door de regering van Bush.

"The three trademark demands - privatization, government deregulation and deep cuts to social spending - tended to be extremely unpopular with citizens, but when the agreements were signed there was still at least the pretext of mutual consent between the governments doing the negotiating, as well as a consensus among the supposed experts. Now the same ideological program was being imposed via the most baldly coercive means possible: under foreign military occupation after an invasion, or im­mediately following a cataclysmic natural disaster. September 11 appeared to have provided Washington with the green light to stop asking countries if they wanted the U.S. version of 'free trade and democracy' and to start im­posing it with Shock and Awe military force."(9)

"Seen through the lens of this doctrine, the past thirty-five years look very different. Some of the most infamous human rights violations of this era, which have tended to be viewed as sadistic acts carried out by antidemo­cratic regimes, were in fact either committed with the deliberate intent of terrorizing the public or actively harnessed to prepare the ground for the introduction of radical free-market 'reforms'."(9-10)

"Many of these countries were democracies, but the radical free-market transformations were not imposed democratically. Quite the opposite: as Friedman under­stood, the atmosphere of large-scale crisis provided the necessary pretext to overrule the expressed wishes of voters and to hand the country over to eco­nomic 'technocrats'."(10)

"To kick-start the disaster capitalism complex, the Bush administration out­sourced, with no public debate, many of the most sensitive and core func­tions of government - from providing health care to soldiers, to interrogating prisoners, to gathering and 'data mining' information on all of us. The role of the government in this unending war is not that of an administrator man­aging a network of contractors but of a deep-pocketed venture capitalist, both providing its seed money for the complex's creation and becoming the biggest customer for its new services. "(12)

"Amid the weapons trade, the private soldiers, for-profit reconstruction and the homeland security industry, what has emerged as a result of the Bush ad­ministration's particular brand of post-September 11 shock therapy is a fully articulated new economy. It was built in the Bush era, but it now exists quite apart from any one administration and will remain entrenched until the cor­porate supremacist ideology that underpins it is identified, isolated and chal­lenged. The complex is dominated by U.S. firms, but it is global, with British companies bringing their experience in ubiquitous security cameras, Israeli firms their expertise in building high-tech fences and walls, the Canadian lumber industry selling prefab houses that are several times more expensive than those produced locally, and so on."(14)

"In the attempt to relate the history of the ideological crusade that has culmi­nated in the radical privatization of war and disaster, one problem recurs: the ideology is a shape-shifter, forever changing its name and switching identities. Friedman called himself a 'liberal', but his U.S. followers, who associated liberals with high taxes and hippies, tended to identify as 'conservatives', 'clas­sical economists', 'free marketers', and, later, as believers in 'Reaganomics' or 'laissez-faire'. In most of the world, their orthodoxy is known as 'neoliberalism', but it is often called 'free trade' or simply 'globalization'.
Only since the mid-nineties has the intellectual movement, led by the right-wing think tanks with which Friedman had long associations - Heritage Foundation, Cato Institute and the American Enterprise Institute - called itself 'neoconservative', a worldview that has harnessed the full force of the U.S. military machine in the service of a corporate agenda. All these incarnations share a commitment to the policy trinity - the elimination of the public sphere, total liberation for corporations and skeletal social spending - but none of the various names for the ideology seem quite adequate.
Friedman framed his movement as an attempt to free the market from the state, but the real-world track record of what happens when his purist vision is realized is rather different. In every country where Chicago School policies have been applied over the past three decades, what has emerged is a powerful ruling alliance between a few very large corporations and a class of mostly wealthy politicians - with hazy and evershifting lines between the two groups.(...) Far from free­ing the market from the state, these political and corporate elites have simply merged, trading favors to secure the right to appropriate precious resources previously held in the public domain ... (...)
A more accurate term for a system that erases the boundaries between Big Government and Big Business is not liberal, conservative or capitalist but corporatist. Its main characteristics are huge transfers of public wealth to private hands, often accompanied by exploding debt, an ever-widening chasm be­ tween the dazzling rich and the disposable poor and an aggressive national­ism that justifies bottomless spending on security. For those inside the bubble of extreme wealth created by such an arrangement, there can be no more profitable way to organize a society. But because of the obvious drawbacks for the vast majority of the population left outside the bubble, other features of the corporatist state tend to include aggressive surveillance (once again, with government and large corporations trading favors and contracts), mass incar­ceration, shrinking civil liberties and often, though not always, torture."(14-15)

"Any attempt to hold ideologies accountable for the crimes committed by their followers must be approached with a great deal of caution. It is too easy to assert that those with whom we disagree are not just wrong but tyrannical, fascist, genocidal. But it is also true that certain ideologies are a danger to the public and need to be identified as such. These are the closed, fundamen­talist doctrines that cannot coexist with other belief systems; their followers deplore diversity and demand an absolute free hand to implement their per­fect system. The world as it is must be erased to make way for their purist in­vention. Rooted in biblical fantasies of great floods and great fires, it is a logic that leads ineluctably toward violence. The ideologies that long for that im­possible clean slate, which can be reached only through some kind of cata­clysm, are the dangerous ones."(19)

"I am not arguing that all forms of market systems are inherently violent. It is eminently possible to have a market-based economy that requires no such brutality and demands no such ideological purity. A free market in con­sumer products can coexist with free public health care, with public schools, with a large segment of the economy—like a national oil company—held in state hands. It's equally possible to require corporations to pay decent wages, to respect the right of workers to form unions, and for governments to tax and redistribute wealth so that the sharp inequalities that mark the corporatist state are reduced. Markets need not be fundamentalist. Keynes proposed exactly that kind of mixed, regulated economy after the Great Depression, a revolution in public policy that created the New Deal and transformations like it around the world. It was exactly that system of compromises, checks and balances that Friedman's counterrevolution was launched to methodically dismantle in country after country. Seen in that light, the Chicago School strain of capitalism does indeed have something in common with other dangerous ideologies: the signature desire for unattain­able purity, for a clean slate on which to build a reengineered model society."(20)

(23) Part 1 - Two doctor shocks - Research and development

(25) Chapter 1 - The torture lab - Ewen Cameron, the CIA, and the maniacal quest to erase and remake the human mind

Ewen Cameron was een Amerikaans psychiater - werkzaam in Montreal, Canada, waar hij verbonden was aan het Allan Memorial Institute van de McGill University - die in de 1950er jaren in het geheim experimenteerde met electroshocks (ECT) en andere speciale verhoormethoden (drugs als LSD, etc.) bij zijn patiënten en waarvoor hij door de CIA en de Canadese regering betaald werd. Cameron was er van overtuigd dat hij bij zijn patiënten 'een schone lei' moest zien te bereiken voordat hij weer een gezonde persoonlijkheid kon opbouwen. Hij publiceerde daar ook gewoon over. Zijn patiënten kregen echter allen maar meer problemen en hij slaagdce er nooit in die gezonde persoonlijkheid op te bouwen dan wel die patiënten te genezen.

De Koude Oorlog woedde en de CIA was bijzonder geïnteresseerd in Cameron's methoden van 'mind control' en hersenspoeltechnieken. Het CIA-project kreeg achtereenvolgens namen als Project Bluebird, Project Artichoke, MKUltra. Tachtig instituten, waaronder 44 universiteiten en 12 ziekenhuizen, deden er aan mee. Waaronder dus de McGill University met Cameron.

"Like the free-market economists who are convinced that only a large-scale disaster - a great unmaking - can prepare the ground for their 'reforms', Cameron believed that by inflicting an array of shocks to the human brain, he could unmake and erase faulty minds, then rebuild new personalities on that ever-elusive clean slate."(29)

De CIA gebruikte de resultaten in het 'verhoor' van allerlei 'onwillige' gevangenen. Klein wijst er op dat de term 'marteling' ('torture') in alle stukken vermeden wordt en vervangen wordt door 'verhoortechnieken' en dergelijke. De CIA stelde er een heel handboek mee op (Kubark Counterintelligence Interrogation genoemd).

"The manual is dated 1963, the final year of the MKUltra program and two years after Cameron's CIA-funded experiments came to a close. The handbook claims that if the techniques are used properly, they will take a re­sistant source and "destroy his capacity for resistance". This, it turns out, was the true purpose of MKUltra: not to research brainwashing (that was a mere side project), but to design a scientifically based system for extracting infor­mation from 'resistant sources'. In other words, torture."(39)

"Though sanctioned by successive administrations in Washington, the U.S. role in these dirty wars had to be covert, for obvious reasons. Torture, whether physical or psychological, clearly violates the Geneva Conventions' blanket ban on 'any form of torture or cruelty', as well as the U.S. Army's own Uniform Code of Military Justice barring 'cruelty' and 'oppression' of prisoners."(42)

"That is what makes the Bush regime different: after the attacks of September 11, it dared to demand the right to torture without shame. That left the administration subject to criminal prosecution - a problem it dealt with by changing the laws."(43)

"Thousands of other prisoners being held in U.S.-run prisons - who, unlike Padilla, are not U.S. citizens - have been put through a similar torture regimen, with none of the public accountability of a civilian trial. Many languish in Guantánamo. Mamdouh Habib, an Australian who was incarcerated there, has said that "Guantánamo Bay is an experiment. . . and what they experiment in is brainwashing". Indeed, in the testimonies, reports and photographs that have come out of Guantánamo, it is as if the Allan Memorial Institute of the 1950s had been transported to Cuba. "(44)

"Disaster capitalists share this same inability to distinguish between de­struction and creation, between hurting and healing."(47)

(49) Chapter 2 - The other doctor shock - Milton Friedman and the search for a laissez-faire laboratory

Over Milton Friedman en de Chicago School of Economics die ook in 1950-er jaren opkwamen. Men dacht daar over economie in termen van econmische natuurwetten, de balans van de markt, enz.

"Friedman's mission, like Cameron's, rested on a dream of reaching back to a state of 'natural' health, when all was in balance, before human inter­ferences created distorting patterns. Where Cameron dreamed of returning the human mind to that pristine state, Friedman dreamed of depatterning societies, of returning them to a state of pure capitalism, cleansed of all interruptions - government regulations, trade barriers and entrenched inter­ests. Also like Cameron, Friedman believed that when the economy is highly distorted, the only way to reach that prelapsarian state was to deliberately in­ flict painful shocks: only 'bitter medicine' could clear those distortions and bad patterns out of the way. Cameron used electricity to inflict his shocks; Friedman's tool of choice was policy - the shock treatment approach he urged on bold politicians for countries in distress. "(50)

Alleen moest Friedman 20 jaar wachten voordat hij zijn ideeën kon toepassen.

"Unable to test their theories in central banks and ministries of trade, Friedman and his colleagues had to settle for elaborate and ingenious mathematical equations and computer mod­els mapped out in the basement workshops of the social sciences building. A love of numbers and systems is what had led Friedman to economics."(51)

"Like all fundamentalist faiths, Chicago School economics is, for its true believers, a closed loop. The starting premise is that the free market is a per­fect scientific system, one in which individuals, acting on their own self-interested desires, create the maximum benefits for all. It follows ineluctably that if something is wrong within a free-market economy—high inflation or soaring unemployment—it has to be because the market is not truly free. There must be some interference, some distortion in the system. The Chicago solution is always the same: a stricter and more complete applica­tion of the fundamentals."(51)

"For this reason, Chicagoans did not see Marxism as their true enemy. The real source of the trouble was to be found in the ideas of the Keynesians in the United States, the social democrats in Europe and the developmentalists in what was then called the Third World. These were believers not in a Utopia but in a mixed economy, to Chicago eyes an ugly hodgepodge of cap­italism for the manufacture and distribution of consumer products, social­ism in education, state ownership for essentials like water services, and all kinds of laws designed to temper the extremes of capitalism. 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 economists. What they wanted was not a revolution exactly but a capitalist Reformation: a return to uncontaminated capitalism."(53)

Friedrich Hayek was Friedman's persoonlijke goeroe.

"By the 1950s, the developmentalists, like the Keynesians and social demo­crats in rich countries, were able to boast a series of impressive success sto­ries. The most advanced laboratory of developmentalism was the southern tip of Latin America, known as the Southern Cone: Chile, Argentina, Uruguay and parts of Brazil. (...) Developmentalism was so staggeringly successful for a time that the Southern Cone of Latin America became a potent symbol for poor countries around the world: here was proof that with smart, practical poli­cies, aggressively implemented, the class divide between the First and Third World could actually be closed. All this success for managed economies - in the Keynesian north and the developmentalist south - made for dark days at the University of Chicago's Economics Department."(55)

"For the heads of U.S. multinational corporations, contending with a dis­tinctly less hospitable developing world and with stronger, more demanding unions at home, the postwar boom years were unsettling times. The econ­omy was growing fast, enormous wealth was being created, but owners and shareholders were forced to redistribute a great deal of that wealth through corporate taxes and workers' salaries. Everyone was doing well, but with a re­turn to the pre-New Deal rules, a few people could have been doing a lot better. The Keynesian revolution against laissez-faire was costing the corporate sector dearly. Clearly what was needed to regain lost ground was a counter­ revolution against Keynesianism, a return to a form of capitalism even less regulated than before the Depression. (...)
The enormous benefit of having corporate views funneled through academic, or quasi-academic, institutions not only kept the Chicago School flush with donations but, in short order, spawned the global network of right-wing think tanks that would churn out the counterrevolution's foot soldiers world­ wide."(56)

"Within the three-part formula of deregulation, privatization and cutbacks, Friedman had plenty of specifics. Taxes, when they must exist, should be low, and rich and poor should be taxed at the same flat rate. Corporations should be free to sell their products anywhere in the world, and governments should make no effort to protect local industries or local ownership. All prices, including the price of labor, should be determined by the market. There should be no minimum wage. For privatization, Friedman offered up health care, the post office, education, retirement pensions, even national parks. (...)
Though always cloaked in the language of math and science, Friedman's vision coincided precisely with the interests of large multinationals, 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."(57)

Al in de 1950-er jaren kwam er een beweging op gang tegen het developmentalisme. Uiteraard intern van de kant van rijke grootgrondbezitters die macht en rijkdom moesten inleveren, maar ook extern van de kant van bedrijven die bv. in de ontwikkelingslanden in Zuid-Amerika niet meer hun gang konden gaan zoals voorheen. De angst voor het communisme werd misbruikt om een angst te creëren voor de ontwikkelingslanden. In de USA waren John Foster Dulles (Eisenhower's 'Secretary of State') en zijn broer Allen Dulles (hoofd CIA) op dat punt van invloed. Ze organiseerden coups in landen die ze wilden beïnvloeden (1953: Iran; 1954 - Guatemala; 1964 - Brazilië; 1965 - Indonesië).

Chili en andere landen werden aangepakt door vanaf 1956 educatieve beurzen te verlenen aan studenten uit die landen, zodat ze de Friedman-ideologie konden leren aan met name de Chicago School. Het project liep tot 1970 en werd mede betaald door Ford. Al gauw begonnen ze ook in eigen land economie-faculteiten te stichten waar die ideologie werd uitgedragen. Het werkte alleen niet zoals de conservatieven hoopten, omdat die jonge economen geen politieke invloed hadden in hun land.

"In the early sixties, the main economic debate in the Southern Cone was not about laissez-faire capitalism versus developmentalism but about how best to take developmentalism to the next stage. Marxists argued for exten­sive nationalization and radical land reforms; centrists argued that the key was greater economic cooperation among Latin American countries, with the goal of transforming the region into a powerful trading bloc to rival Eu­rope and North America. At the polls and on the streets, the Southern Cone was surging to the left. "(62-63)

En nationalisatie van buitenlandse bedrijven - bv. de kopermijnen van Amerikaanse eigenaars in Chili - stond vaak op de agenda. Met name in Chili - waar Allende de verkiezingen van 1970 had gewonnen - was dat een mogelijkheid en ook het voornemen. Amerikaanse bedrijven (waaronder ITT die in Chili 70% had van de communicatie via telefoon etc.) besloten alles te doen om Chili economisch kapot te maken. Hin invloed op de regering van de USA (Kissinger, Nixon) was aanzienlijk. Dat alles werd in 1973 ontdekt en aan de kaak gesteld en het plan leed dus min of meer schipbreuk.

"Shortly after Allende was elected, his opponents inside Chile began to imi­tate the Indonesia approach with eerie precision. The Catholic University, home of the Chicago Boys, became ground zero for the creation of what the CIA called 'a coup climate'. Many students joined the fascist Patria y Libertad and goose-stepped through the streets in open imitation of Hitler Youth. In September 1971, a year into Allende's mandate, the top business leaders in Chile held an emergency meeting in the seaside city of Vina del Mar to develop a coherent regime-change strategy. According to Orlando Saenz, president of the National Association of Manufacturers (generously funded by the CIA and many of the same foreign multinationals doing their own plotting in Washington), the gathering decided that "Allende's govern­ment was incompatible with freedom in Chile and with the existence of private enterprise, and that the only way to avoid the end was to overthrow the government". The businessmen formed a 'war structure', one part of which would liaise with the military; another, according to Saenz, would "prepare specific alternative programs to government programs that would systemati­cally be passed on to the Armed Forces"."(70)

"Their five-hundred-page bible - a detailed economic program that would guide the junta from its earliest days - came to be known in Chile as 'The Brick'. (...) Eight of the ten principal authors of 'The Brick' had studied economics at the University of Chicago."(71)

"Chile's coup, when it finally came, would feature three distinct forms of shock, a recipe that would be duplicated in neighboring countries and would reemerge, three decades later, in Iraq. The shock of the coup itself was immediately followed by two additional forms of shock. One was Milton Friedman's capitalist 'shock treatment', a technique in which hundreds of Latin American economists had by now been trained at the University of Chicago and its various franchise institutions. The other was Ewen Cameron's shock, drug and sensory deprivation research, now codified as torture techniques in the Kubark manual and disseminated through exten­sive CIA training programs for Latin American police and military."(71)

(73) Part 2 - The first test - Birth pangs

(75) Chapter 3 - States of shock - The bloody birth of the counterrevolution

Meer details over de coup van 11 september 1973 in Chili en de wat er daarna gebeurde.

"In the years leading up to the coup, U.S. trainers, many from the CIA, had whipped the Chilean military into an anti-Communist frenzy, persuad­ing them that socialists were de facto Russian spies, a force alien to Chilean society - a homegrown 'enemy within'. In fact, it was the military that had become the true domestic enemy, ready to turn its weapons on the popula­tion it was sworn to protect. (...) The generals knew that their hold on power depended on Chileans being truly terrified, as the people had been in In­donesia. In the days that followed, roughly 13,500 civilians were arrested, loaded onto trucks and imprisoned, according to a declassified CIA report."(76)

Het economische plan in 'The Brick' van de 'Chicago Boys' kon nu uitgevoerd gaan worden. En dat gebeurde vanaf de eerste dag na de coup. De Chicago Boys werkten daartoe intens samen met generaal Pinochet. De resultaten waren desastreus en niet de 'natuurlijke balans van economische krachten'.

"In 1974, inflation reached 375 percent - the highest rate in the world and almost twice the top level under Allende. The cost of basics such as bread went through the roof. At the same time, Chileans were being thrown out of work because Pinochet's experiment with 'free trade' was flooding the country with cheap imports. Local businesses were closing, unable to com­pete, unemployment hit record levels and hunger became rampant. The Chicago School's first laboratory was a debacle."(79-80)

"In that year and a half, many of the country's business elite had had their fill of the Chicago Boys' adventures in extreme capitalism. The only people benefiting were foreign companies and a small clique of financiers known as the 'piranhas', who were making a killing on speculation. The nuts-and-bolts manufacturers who had strongly supported the coup were getting wiped out. Orlando Saenz - the president of the National Association of Manufacturers, who had brought the Chicago Boys into the coup plot in the first place - declared the results of the experiment "one of the greatest failures of our economic history". The manufacturers hadn't wanted Allende's socialism but had liked a managed economy just fine. "(80)

" In March 1975, Milton Friedman and Arnold Har­berger flew to Santiago at the invitation of a major bank to help save the ex­periment."(80)

De ideeën van de Chicago School werden nog extremer doorgezet. Chili belandde door Friedman's 'shock therapy' heel snel in een recessie: de economie kromp met 15%, de werkloosheid nam toe van 3 naar 20%. Dat 30 jaar later van 'het economisch wonder van Chili' gesproken werd zegt alles over de mythevorming onder bepaalde groepen. Het ging pas in de 1980-er jaren beter met Chili, maar juist omdat Pinochet door de slechte economie gedwongen was Friedman's uitgangspunten los te laten.

"The situation was so unstable that Pinochet was forced to do exactly what Allende had done: he nationalized many of these companies. In the face of the debacle, almost all the Chicago Boys lost their influential government posts, including Sergio de Castro. Several other Chicago graduates held prominent posts with the piranhas and came under investigation for fraud, stripping away the carefully cultivated facade of scientific neutrality so central to the Chicago Boy identity. The only thing that protected Chile from complete economic collapse in the early eighties was that Pinochet had never privatized Codelco, the state copper mine company nationalized by Allende. That one company generated 85 percent of Chile's export revenues, which meant that when the financial bubble burst, the state still had a steady source of funds."(85)

Het corporatisme - de samenwerking tussen een totalitair regime en een economische elite ten koste van arbeiders en het volk - was mislukt.

" By 1988, when the economy had stabilized and was growing rap­idly, 45 percent of the population had fallen below the poverty line. The richest 10 percent of Chileans, however, had seen their incomes increase by 83 percent. Even in 2007, Chile remained one of the most unequal soci­eties in the world - out of 123 countries in which the United Nations tracks inequality, Chile ranked 116th, making it the 8th most unequal country on the list. If that track record qualifies Chile as a miracle for Chicago school econo­mists, perhaps shock treatment was never really about jolting the economy into health. Perhaps it was meant to do exactly what it did - hoover wealth up to the top and shock much of the middle class out of existence."(86)

"And that is why the financial world did not re­spond to the obvious contradictions of the Chile experiment by reassessing the basic assumptions of laissez-faire. Instead, it reacted with the junkie's logic: Where is the next fix?"(87)

Dat werden in de 1970-er jaren Brazilië, Uruguay, Argentinië.

"That meant that Argentina, Chile, Uruguay and Brazil - the countries that had been showcases of developmentalism - were now all run by U.S.-backed military governments and were living laborato­ries of Chicago School economics."(87)

De junta's voerden alle de economische maatregelen door die de Chicago School adviseerde met dezelfde slechte resultaten voor het volk. Terreur, verdwijningen, en martelingen - waarvan de methoden door Amerikanen / de CIA werden onderwezen - om elke oppositie de kop in te drukken waren dan ook aan de orde van de dag.

"Since those wanted by the various juntas often took refuge in neighboring countries, the regional governments collaborated with each other in the noto­rious Operation Condor. Under Condor, the intelligence agencies of the Southern Cone shared information about 'subversives' - aided by a state-of-the-art computer system provided by Washington - and then gave each other's agents safe passage to carry out cross-border kidnappings and torture, a system eerily resembling the CIA's 'extraordinary rendition' network today."(91)

"The exact number of people who went through the Southern Cone's tor­ture machinery is impossible to calculate, but it is probably somewhere be­tween 100,000 and 150,000, tens of thousands of them killed."(94)

(98) Chapter 4 - Cleaning the slate - Terror does its work

Orlando Letelier was opgevoed in het denken van de Chicago School. Maar hij stapte daar van af toen hij - tijdens zijn werk als ambassadeur in Chili - zag wat de gevolgen waren. Omdat hij zijn kritiek ook uitsprak onder Pinochet werd hij er prompt gevangen gezet. Hij wist vrij te komen en vluchtte naar de VS terug.

"In 1976, Orlando Letelier was back in Washington, D.C., no longer as an ambassador but as an activist with a progressive think tank, the Institute for Policy Studies. Haunted by thoughts of the colleagues and friends still facing torture in junta camps, Letelier used his newly recovered freedom to expose Pinochet's crimes and to defend Allende's record against the CIA propa­ganda machine."(98)

Dat leidde wereldwijd weliswaar tot kritiek op het regime van Pinochet, maar niet op de economische shocktherapie die in Chili en in andere landen toegepast werd. In 1976 schreef hij over de relatie tussen die economische aanpak en de terreur die er mee gepaard ging. Nog geen maand later maakte een bom in zijn auto een eind aan zijn leven.

"An FBI investigation revealed that the bomb had been the work of Michael Townley, a senior member of Pinochet's secret police, later con­victed in a U.S federal court for the crime. The assassins had been admitted to the country on false passports with the knowledge of the CIA."(99-100)

"Since the fall of Communism, free markets and free people have been packaged as a single ideology that claims to be humanity's best and only defense against repeating a history filled with mass graves, killing fields and torture chambers. Yet in the Southern Cone, the first place where the con­temporary religion of unfettered free markets escaped from the basement workshops of the University of Chicago and was applied in the real world, it did not bring democracy; it was predicated on the overthrow of democracy in country after country. And it did not bring peace but required the systematic murder of tens of thousands and the torture of between 100,000 and 150,000 people."(102)

Er was simpelweg sprake van genocide op politieke tegenstanders, op iedereen met andere waarden en normen.

"By the sixties and early seventies in Latin America, the left was the dominant mass culture - it was the poetry of Pablo Neruda, the folk music of Victor Jara and Mercedes Sosa, the liberation theology of the Third World Priests, the emancipatory theater of Augusto Boal, the radical pedagogy of Paulo Freire, the revolutionary jour­nalism of Eduardo Galeano and Walsh himself. It was legendary heroes and martyrs of past and recent history from José Gervasio Artigas to Simon Boli­var to Che Guevara. When the juntas set out to defy Allende's prophecy and pull up socialism by its roots, it was a declaration of war against this entire culture. (...) In Chile, Argentina and Uruguay, the juntas staged massive ideological cleanup operations, burning books by Freud, Marx and Neruda, closing hundreds of newspapers and magazines, occupying universities, banning strikes and political meetings."(104)

Ook het onderwijs werd gezuiverd, te beginnen met de professoren en leraren met andere dan Chicago School - ideeën over economie. En natuurlijk ook de vakbonden.

"Foreign corporations did more than thank the juntas for their fine work; some were active participants in the terror campaigns. In Brazil, several multinationals banded together and financed their own privatized torture squads. In mid-1969, just as the junta entered its most brutal phase, an extralegal police force was launched called Operation Bandeirantes, known as OBAN. Staffed with military officers, OBAN was funded, accord­ing to Brazil: Never Again, "by contributions from various multinational cor­porations, including Ford and General Motors". Because it was outside official military and police structures, OBAN enjoyed "flexibility and impunity with regard to interrogation methods", the report states, and quickly gained a reputation for unparalleled sadism.
It was in Argentina, however, that the involvement of Ford's local sub­sidiary with the terror apparatus was most overt. The company supplied cars to the military, and the green Ford Falcon sedan was the vehicle used for thousands of kidnappings and disappearances. (...)
While Ford supplied the junta with cars, the junta provided Ford with a service of its own —ridding the assembly lines of troublesome trade unionists."(108)

(116) Chapter 5 - "Entirely unrelated" - How an ideology was cleansed of its crimes

De kritiek op Friedman en de Chicago School groeide. Maar in 1976 kreeg Friedman desondanks de Nobelprijs voor economie.

"Friedman used his Nobel address to argue that economics was as rigorous and objective a scientific discipline as physics, chemistry and medicine, reliant on an impartial examination of the facts available. He conveniently ignored the fact that the central hypothesis for which he was receiving the prize was being graphically proven false by the breadlines, typhoid outbreaks and shuttered factories in Chile, the one regime ruthless enough to put his ideas into practice."(117-118)

Het jaar daarna kreeg Amnesty International de Nobel Vredesprijs voor zijn acties voor de mensenrechten in Chili etc. Het sugereerde weer eens dat het een (de economie) niets met het ander (een totalitair regime dat alle mensenrechten negeerde) te maken had.

"But by focusing purely on the crimes and not on the reasons behind them, the human rights movement also helped the Chicago School ideology to es­cape from its first bloody laboratory virtually unscathed."(118)

"Amnesty's position, emblematic of the human rights movement as a whole at that time, was that since human rights violations were a univer­sal evil, wrong in and of themselves, it was not necessary to determine why abuses were taking place but to document them as meticulously and credi­bly as possible (...) The narrow scope is most problematic in Amnesty International's 1976 report on Argentina, a breakthrough account of the junta's atrocities and worthy of its Nobel Prize. Yet for all its thoroughness, the report sheds no light on why the abuses were occurring. (...)
In another major omission, Amnesty presented the conflict as one re­stricted to the local military and the left-wing extremists. No other players are mentioned - not the U.S. government or the CIA; not local landowners; not multinational corporations. Without an examination of the larger plan to impose 'pure' capitalism on Latin America, and the powerful interests behind that project, the acts of sadism documented in the report made no sense at all - they were just random, free-floating bad events, drifting in the political ether, to be condemned by all people of conscience but impossible to understand."(119-120)

"Scrubbed clean of references to the rich and the poor, the weak and strong, the North and the South, this way of explaining the world, so popular in North America and Europe, simply asserted that everyone has the right to a fair trial and to be free from cruel, inhuman and degrading treatment. It didn't ask why, it just asserted that."(121)

"The refusal to connect the apparatus of state terror to the ideological project it served is characteristic of almost all the human rights literature from this period. Although Amnesty's reticence can be understood as an attempt to re­main impartial amid Cold War tensions, there was, for many other groups, another factor at play: money. By far the most significant source of funding for this work was the Ford Foundation, then the largest philanthropic organi­zation in the world. In the sixties, the organization spent only a small portion of its budget on human rights, but in the seventies and eighties, the founda­tion spent a staggering $30 million on work devoted to human rights in Latin America. With these funds, the foundation backed Latin American groups like Chile's Peace Committee as well as new U.S.-based groups, including Americas Watch."(121)

Wat dus dezelfde organisatie is die de educatie van de Chicago Boys betaalde en de junta's op allerlei manieren - financieel en niet-financieel - steunde.

"In the Southern Cone, the contradictions were surreal: the philanthropic legacy of the very company most intimately associated with the terror apparatus - accused of having a secret torture facility on its property and of helping to disappear its own workers - was the best, and often the only, chance of putting an end to the worst of the abuses. Through its funding of human rights campaigners, the Ford Foundation saved many lives in those years. And it deserves at least part of the credit for persuading the U.S. Con­gress to cut military support to Argentina and Chile, gradually forcing the juntas of the Southern Cone to scale back the most brutal of their repressive tactics. But when Ford rode to the rescue, its assistance came at a price, and that price was - consciously or not - the intellectual honesty of the human rights movement. The foundation's decision to get involved in human rights but "not get involved in politics" created a context in which it was all but im­possible to ask the question underlying the violence it was documenting: Why was it happening, in whose interests?"(124)

"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."(125)

"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 its 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."(127-128)

(129) Part 3 - Surviving democracy - Bombs made of laws

(131) Chapter 6 - Saved by a war - Thatcherism and its useful enemies

Over de Britse premier Thatcher die het goed kon vinden met Hayek - de mentor van Friedman en Pinochet. Maar ze was niet populair, haar economische resultaten waren slecht, en de verkiezingen kwamen er aan. Ze kon - met andere woorden - op dat moment geen neoliberale, Friedmaniaanse aanpak doorzetten in de UK, al zou ze - met haar ideeën over een maatschappij van eigenaars - wel willen. Ze kreeg haar kans toen Argentinië op 2 april 1982 de Falkland-eilanden bezette.

"sessment. The Southern Cone's experiment had generated such spectacular profits, albeit for a small number of players, that there was tremendous ap­petite from increasingly global multinationals for new frontiers—and not just in developing countries but in rich ones in the West too, where states controlled even more lucrative assets that could be run as for-profit interests: phones, airlines, television airwaves, power companies. If anyone could have championed this agenda in the wealthy world, it would surely have been ei­ther Thatcher in England or the American president at the time, Ronald Reagan."(132)

"Nixon's tenure was a stark lesson for Friedman. The University of Chicago professor had built a movement on the equation of capitalism and freedom, yet free people just didn't seem to vote for politicians who followed his advice. Worse, dictatorships - where freedom was markedly absent - were the only governments who were ready to put pure free-market doctrine into practice. So while they griped about being betrayed at home, Chicago School luminaries junta-hopped their way through the seventies. Almost everywhere that right-wing military dictatorships were in power, the Univer­sity of Chicago's presence could be felt. (...) Indeed, in the early eighties, there was not a single case of a multiparty democracy going full-tilt free market."(133-134)

"Across the Atlantic, Thatcher was attempting an English version of Friedmanism by championing what has become known as 'the ownership soci­ety'."(135)

Intussen kregen allerlei autoritaire regimes het in de 1980-er jaren moeilijk (Iran, Nicaragua, Ecuador, Peru, Bolivia), wat de kansen voor het neoliberalisme / de Chicago School - aanpak een stuk kleiner maakte.

"From a military standpoint, the eleven-week battle [de Falkland-oorlog] appears to have almost no historic significance. Overlooked, however, was the war's impact on the free-market project, which was enormous: it was the Falklands War that gave Thatcher the political cover she needed to bring a program of radical capitalist transformation to a Western liberal democracy for the first time."(137)

"Thatcher used the enormous popularity afforded her by the victory to launch the very corporatist revolution she had told Hayek was impossible before the war. When the coal miners went on strike in 1984, Thatcher cast the standoff as a continuation of the war with Ar­gentina, calling for similarly brutal resolve."(138)

"In Britain, Thatcher parlayed her victory in the Falklands and over the miners into a major leap forward for her radical economic agenda. Between 1984 and 1988, the government privatized, among others, British Telecom, British Gas, British Airways, British Airport Authority and British Steel, while it sold its shares in British Petroleum."(139)

Vanaf dat moment werd de 'crisishypothese' in de Chicago School populair. Je hoefde geen coup te hebben om neoliberale ideeen door te zetten, als er maar sprake was van een immense crisis die grote delen van de bevolking raakte en onzeker maakte. De kunst was om er klaar voor te zijn.

"They [Chicago School-mensen] painstakingly built up a new network of right-wing think tanks, including Heritage and Cato, and produced the most significant vehicle to disseminate Friedman's views, the ten-part PBS miniseries Free to Choose - underwritten by some of the largest corporations in the world, including Getty Oil, Firestone Tire & Rubber Co., PepsiCo, General Motors, Bechtel and General Mills. When the next crisis hit, Friedman was determined that it would be his Chicago Boys who would be the ones ready with their ideas and their solutions."(141)

(142) Chapter 7 - The new doctor shock - Economic warfare replaces dictatorship

Over de economische crisis in Bolivia van 1985 waarbij advies gevraagd werd aan Harvard-econoom Jeffrey Sachs.

"Although Sachs shared Keynes's belief in the power of economics to fight poverty, he was also a product of Reagan's America, which was, in 1985, in the midst of a Friedman-inspired backlash against all that Keynes repre­sented. Chicago School precepts about the supremacy of the free market had rapidly become the unquestioned orthodoxy in Ivy League economics departments, including Harvard's, and Sachs was definitely not immune. "(144)

Tegen de wensen van de kiezers in en zelfs onbekend voor zijn kabinet werd door Pax samen met anderen in het geheim een economische shocktherapie in de lijn van het neoliberalisme uitgewerkt (het document D.S. 21060 bevatte een immens groot aantal van 220 nieuwe wetten die ineens zouden moeten worden ingevoerd). Het kabinet werd gepaaid met de toegezegde financiële ondersteuning door de VS als de plannen werden doorgezet. De plannen werden doorgezet. De economische resultaten waren desastreus voor het grootste deel van de bevolking, maar niet voor de kleine groep van rijken.

"One immediate result of this resolve [dat de neoliberale plannen ondanks de slechte resultaten werden doorgezet, naar het advies van Sachs] was that many of Bolivia's desper­ately poor were pushed to become coca growers, because it paid roughly ten times as much as other crops (somewhat of an irony since the original eco­nomic crisis was set off by the U.S.-funded siege on the coca farmers.) "(150)

Allerlei tijdschriften als The Economist waren kritiekloos enthousiast over wat Sachs bereikt zou hebben, en zo verder. Bolivia werd - met voorbijgaan aan alle feiten - beschreven als een succesverhaal van wat de vrije markt kon opleveren, als het eerste voorbeeld waarbij neoliberalisering niet samenging 'met de bajonet' maar democratie.

[Er zijn inderdaad twee constanten die steeds weer terugkomen: het op een volkomen onterechte manier gebruiken van de metafoor ziekte, therapie, en zo verder. En de kritiekloze juichpartijen van de belangrijke - waarschijnlijk Amerikaanse - media over het neoliberalisme waarin de ellende van het volk geen plaats heeft en alle aandacht uitgaat naar de rijke elite die als enige profiteert van die vrije markt.]

"'Bolivia's Miracle' gave Sachs immediate star status in powerful financial circles and launched his career as the leading expert on crisis-struck economies, sending him on to Argentina, Peru, Brazil, Ecuador and Venezuela in the coming years."(151)

"The story of the Bolivian miracle has been told and retold, in newspaper and magazine articles, in profiles of Sachs, in Sachs's own best-selling book, and in documentary productions such as PBS's three-part series Command­ing Heights: The Battle for the World Economy. There is one major problem: it isn't true. Bolivia did show that shock therapy could be imposed in a coun­try that had just had elections, but it did not show that it could be imposed democratically or without repression - in fact, it proved, once again, that the opposite was still the case."(152)

Sterker nog: de 'bajonet' was as wel degelijk - wanneer er protesten kwamen werd de staat van beleg afgekondigd, werden mensen tijdelijk ontvoerd, werd op die manier chantage gepleegd, en zo verder. Het ging minder gepaard met terreur en foltering dan voorheen onder de Zuid-Amerikaanse regimes, maar je kunt toch moeilijk volhouden dat alles verliep met democratische instemming: de repressie was groot.

"In this way, Bolivia provided a blueprint for a new, more palatable kind of authoritarianism, a civilian coup d'éétat, one carried out by politicians and economists in business suits rather than soldiers in military uniforms - all unfolding within the official shell of a democratic regime."(154)

(155) Chapter 8 - Crisis works - The packaging of shock therapy

Crises - als de hyperinflatie in Bolivia - konden dus aangegrepen worden om draconische economische maatregelen door te drukken.

"There was no shortage of such opportunities in the eighties. In fact, much of the developing world, but particularly Latin America, was at that very moment spiraling into hyperinflation. The crisis was the result of two main factors, both with roots in Washington financial institutions. The first was their insistence on passing on illegitimate debts accumulated under dictatorships to new democracies. The second was the Friedman-inspired decision at the U.S. Federal Reserve to allow interest rates to soar, which massively increased the size of those debts overnight."(156)

In Zuid-Amerikaanse landen bijvoorbeeld hadden de junta's hun nationale schulden bij IMF, World Bank, VS-banken enorm verhoogd, om wapens te kopen, om het leger en de politie uit te breiden, om prestige-objecten te bouwen, om zichzelf en vriendjes te verrijken, en zo verder (Argentinië: van $7.9 miljard naar $45 miljard; Uruguay: $0,5 miljard naar $5 miljard; Brazilië van $3 miljard naar $103 miljard). Uit transcripties van officiële gesprekken (bv. met Kissinger) is gebleken dat men in de VS heel goed op de hoogte was van waar al dat geld naar toe ging (vaak naar Zwitserse bankrekeningen en zo). Desondanks stelden ze daar de eis dat de nieuwe democratische regeringen van die landen de nationale schulden moesten aflossen.

"At the time of the transitions to democracy, powerful arguments were made, both moral and legal, that these debts were 'odious' and that newly liberated people should not be forced to pay the bills of their oppressors and tormentors. The case was especially strong in the Southern Cone because so much of the foreign credit had gone straight to the military and police dur­ing the dictatorship years - to pay for guns, water cannons and state-of-the-art torture camps."(157)

"The remainder of the national debt was mostly spent on interest pay­ ments, as well as shady bailouts for private firms. In 1982, just before Ar­gentina's dictatorship collapsed, the junta did one last favor for the corporate sector. Domingo Cavallo, president of Argentina's central bank, announced that the state would absorb the debts of large multinational and domestic firms that had, like Chile's piranhas, borrowed themselves to the verge of bankruptcy. The tidy arrangement meant that these companies continued to own their assests and profits, but the public had to pay off between $15 and $20 billion of their debts; among the companies to receive this generous treatment were Ford Motor Argentina, Chase Manhattan, Citibank, IBM and Mercedes-Benz. (...) The transcript proves that the U.S. government approved loans to the junta knowing they were being used in the midst of a campaign of terror. In the early eighties, it was these odious debts that Washington insisted Ar­gentina's new democratic government had to repay."(158)

Een ander element van schok ontstond toen voorzitter Volcker van de Amerikaanse Federal Reserve de rentepercentages op leningen ongelimiteerd liet stijgen. Dat leidde in de VS zelf tot allerlei faillisementen, maar werd nog eens een extra probleem voor de nieuwe democratische regeringen in Zuid-Amerika met hun nationale schulden aan Amerikaanse banken. De schukden namen dus toe, terwijl vaak tegelijkertijd de prijzen van exportartikelen daalden.

"This is where Friedman's crisis theory became self-reinforcing. The more the global economy followed his prescriptions, with floating interest rates, deregulated prices and export-oriented economies, the more crisis-prone the system became, producing more and more of precisely the type of melt-downs he had identified as the only circumstances under which govern­ments would take more of his radical advice. In this way, crisis is built into the Chicago School model. When limitless sums of money are free to travel the globe at great speed, and speculators are able to bet on the value of everything from cocoa to currencies, the result is enormous volatility. And, since free-trade policies encourage poor countries to continue to rely on the export of raw resources such as coffee, copper, oil or wheat, they are particularly vulnerable to getting trapped in a vicious cir­cle of continuing crisis. A sudden drop in the price of coffee sends entire economies into depression, which is then deepened by currency traders who, seeing a country's financial downturn, respond by betting against its currency, causing its value to plummet. When soaring interest rates are added, and national debts balloon overnight, you have a recipe for potential economic mayhem.
Chicago School believers tend to portray the mid-eighties onward as a smooth and triumphant victory march for their ideology: at the same time that countries were joining the democratic wave, they had the collective epiphany that free people and unfettered free markets go hand in hand. That epiphany was always fictional. What actually happened is that just as citizens were finally winning their long-denied freedoms, escaping the shock of the torture chambers under the likes of the Philippines' Ferdinand Marcos and Uruguay's Juan Maria Bordaberry, they were hit with a perfect storm of financial shocks - debt shocks, price shocks and currency shocks - created by the increasingly volatile, deregulated global economy."(159-160)

" Having finally es­caped the darkness of dictatorship, few elected politicians were willing to risk inviting another round of U.S.-supported coups d'état by pushing the very policies that had provoked the coups of the seventies - especially when the military officials who had staged them were, for the most part, not in prison but, having negotiated immunity, in their barracks, watching. Understandably unwilling to go to war with the Washington institutions that owned their debts, crisis-struck new democracies had little choice but to play by Washington's rules. And then, in the early eighties, Washington's rules got a great deal stricter. That's because the debt shock coincided pre­cisely, and not coincidentally, with a new era in North-South relations, one that would make military dictatorships largely unnecessary. It was the dawn of the era of 'structural adjustment' - otherwise known as the dictatorship of debt."(161)

Belangrijk in dit verband is ook dat de IMF en de World Bank in de VS gevestigd waren en dat veel medewerkers Amerikaanse economen uit de Chicago School waren.

"Friedman may have opposed the institutions on philosophical grounds, but practically, there were no institutions better positioned to implement his crisis theory. When countries were sent spiraling into crisis in the eighties, they had nowhere else to turn but the World Bank and the IMF. When they did, they hit a wall of orthodox Chicago Boys, trained to see their economic catastrophes not as problems to solve but as precious opportunities to lever­age in order to secure a new free-market frontier. Crisis opportunism was now the guiding logic of the world's most powerful financial institutions. It was also a fundamental betrayal of their founding principles."(162)

"The colonization of the World Bank and the IMF by the Chicago School was a largely unspoken process, but it became official in 1989 when John Williamson unveiled what he called 'the Washington Consensus'. It was a list of economic policies that he said both institutions now considered the bare minimum for economic health —"the common core of wisdom em­braced by all serious economists". These policies, masquerading as techni­cal and uncontentious, included such bald ideological claims as all "state enterprises should be privatized" and "barriers impeding the entry of foreign firms should be abolished". When the list was complete, it made up nothing less than Friedman's neoliberal triumvirate of privatization, deregula­tion / free trade and drastic cuts to government spending. (...) When crisis-struck countries came to the IMF seeking debt relief and emergency loans, the fund responded with sweeping shock therapy programs, equivalent in scope to 'The Brick' drafted by the Chicago Boys for Pinochet and the 220-law decree cooked up in Goni's living room in Bolivia."(163)

(169) Part 4 - Lost in transition - While we wept, while we trembled, while we danced

(171) Chapter 9 - Slamming the door on history - A crisis in Poland, a massacre in China

Over Polen's Lech Walesa en de vrije vakbond Solidariteit in de 1980-er jaren.

"Tired of living in a country that worshipped an idealized working class but abused actual workers, Solidarity members denounced the corruption and brutality of the party functionaries who answered not to the people of Poland but to remote and isolated bu­reaucrats in Moscow. All the desire for democracy and self-determination suppressed by one-party rule was being poured into local Solidarity unions, sparking a mass exodus of members from the Communist Party."(172)

"Solidarity was forced underground, but during the eight years of police-state rule, the movement's legend only grew. In 1983, Walesa was awarded the No­bel Peace Prize, although his activities were still restricted and he could not accept the prize in person."(174)

"By 1988, the terror of the initial crackdown had eased, and Polish workers were once again staging huge strikes. This time, with the economy in free fall, and the new, moderate regime of Mikhail Gorbachev in power in Moscow, the Communists gave in."(174)

En weer was er sprake van een economische crisissituatie:

"As Latin Americans had just learned, authoritarian regimes have a habit of embracing democracy at the precise moment when their economic projects are about to implode. Poland was no exception. The Communists had been mismanaging the economy for decades, making one disastrous, expensive mistake after another, and it was at the point of collapse. "To our misfortune, we have won!" Walesa famously (and prophetically) declared. When Solidar­ity took office, debt was $40 billion, inflation was at 600 percent, there were severe food shortages and a thriving black market. Many factories were mak­ing products that, with no buyers in sight, were destined to rot in ware­houses. For Poles, the situation made for a cruel entry into democracy. Freedom had finally come, but few had the time or the inclination to cele­brate because their paychecks were worthless. They spent their days lining up for flour and butter if there happened to be any in the stores that week."(175)

"But as had been the case in Latin America, before anything else could happen, Poland needed debt relief and some aid to get out of its immediate crisis. In theory, that's the central mandate of the IMF: providing stabilizing funds to prevent economic catastrophes. If any government deserved that kind of lifeline it was the one headed by Solidarity, which had just pulled off the Eastern Bloc's first democratic ouster of a Communist regime in four de­cades. Surely, after all the Cold War railing against totalitarianism behind the Iron Curtain, Poland's new rulers could have expected a little help. No such aid was on offer. Now in the grips of Chicago School economists, the IMF and the U.S. Treasury saw Poland's problems through the prism of the shock doctrine. An economic meltdown and a heavy debt load, com­pounded by the disorientation of rapid regime change, meant that Poland was in the perfect weakened position to accept a radical shock therapy pro­gram. And the financial stakes were even higher than in Latin America: East­ern Europe was untouched by Western capitalism, with no consumer market to speak of. All of its most precious assets were still owned by the state - prime candidates for privatization. The potential for rapid profits for those who got in first was tremendous."(176)

Jeffrey Sachs werd adviseur van de Poolse regering en Solidariteit. En daarmee werd de neolibrale koers ingezet.

"It was an even more radical course than the one imposed on Bolivia: in addition to eliminating price controls overnight and slashing subsidies, the Sachs Plan advocated selling off the state mines, shipyards and factories to the private sector. It was a direct clash with Solidarity's economic program of worker ownership, and though the movement's national leaders had stopped talking about the controversial ideas in that plan, they remained articles of faith for many Solidarity members. Sachs and Lipton wrote the plan for Poland's shock therapy transition in one night."(177)

" ... only two months after Poland announced that it would accept shock therapy, something happened that would change the course of history and invest Poland's experiment with global significance. In November 1989, the Berlin Wall was joyously dismantled, the city was turned into a festival of possibility and the MTV flag was planted in the rubble, as if East Berlin were the face of the moon. Suddenly it seemed that the whole world was living the same kind of fast-forward existence as the Poles: the Soviet Union was on the verge of breaking apart, apartheid in South Africa seemed on its last legs, authoritarian regimes continued to crumble in Latin America, Eastern Eu­rope and Asia, and long wars were coming to an end from Namibia to Lebanon. Everywhere, old regimes were collapsing, and the new ones rising in their place had yet to take shape."(181-182)

"In 1989, history was taking an exhilarating turn, entering a period of gen­uine openness and possibility. So it was no coincidence that Fukuyama, from his perch at the State Department, chose precisely that moment to at­ tempt to slam the history book shut. Nor was it a coincidence that the World Bank and the IMF chose that same volatile year to unveil the Washington Consensus - a clear effort to halt all discussion and debate about any economic ideas outside the free-market lockbox. These were democracy-containment strategies, designed to undercut the kind of unscripted self-determination that was, and always had been, the greatest single threat to the Chicago School crusade."(184)

"Fukuyama had claimed that democratic and 'free market reforms' were a twin process, impossible to pry apart. Yet in China, the government had done precisely that: it was pushing hard to deregulate wages and prices and expand the reach of the market - but it was fiercely determined to resist calls for elections and civil liberties. The demonstrators, on the other hand, demanded democracy, but many op­posed the government's moves toward unregulated capitalism, a fact largely left out of the coverage of the movement in the Western press. In China, democracy and Chicago School economics were not proceeding hand in hand; they were on opposite sides of the barricades surrounding Tiananmen Square."(184)

"Friedman's definition of freedom, in which political freedoms were inci­dental, even unnecessary, compared with the freedom of unrestricted com­merce, conformed nicely with the vision taking shape in the Chinese Politburo. The party wanted to open the economy to private ownership and consumerism while maintaining its own grip on power—a plan that ensured that once the assets of the state were auctioned off, party officials and their relatives would snap up the best deals and be first in line for the biggest prof­its. According to this version of 'transition', the same people who controlled the state under Communism would control it under capitalism, while en­ joying a substantial upgrade in lifestyle. The model the Chinese government intended to emulate was not the United States but something much closer to Chile under Pinochet: free markets combined with authoritarian political control, enforced by iron-fisted repression. From the start, Deng clearly understood that repression would be crucial."(185)

"The demonstrations were not against economic reform per se; they were against the specific Friedmanite nature of the reforms—their speed, ruthlessness and the fact that the process was highly antidemocratic. "(187)

"There will never be reliable estimates for how many people were killed and injured in those days. The party admits to hundreds, and eyewitness re­ports at the time put the number of dead at between two thousand and seven thousand and the number of injured as high as thirty thousand. The protests were followed by a national witch hunt against all regime critics and oppo­nents. Some forty thousand were arrested, thousands were jailed and many—possibly hundreds—were executed. As in Latin America, the gov­ernment reserved its harshest repression for the factory workers, who repre­sented the most direct threat to deregulated capitalism."(188)

"It was this wave of reforms that turned China into the sweatshop of the world, the preferred location for contract factories for virtually every multi­national on the planet. No country offered more lucrative conditions than China: low taxes and tariffs, corruptible officials and, most of all, a plentiful low-wage workforce that, for many years, would be unwilling to risk de­manding decent salaries or the most basic workplace protections for fear of the most violent reprisals. For foreign investors and the party, it has been a win-win arrangement. According to a 2006 study, 90 percent of China's billionaires (calculated in Chinese yuan) are the children of Communist Party officials. Roughly twenty-nine hundred of these party scions - known as 'the princelings' - control $260 billion. It is a mirror of the corporatist state first pioneered in Chile under Pinochet: a revolving door between corporate and political elites who combine their power to eliminate workers as an organized politi­cal force. "(190)

(194) Chapter 10 - Democracy born in chains - South Africa's constricted freedom

Over het Freedom Charter van 1955 van het ANC.

"The charter enshrines the right to work, to decent housing, to freedom of thought, and, most radically, to a share in the wealth of the richest country in Africa, containing, among other treasures, the largest goldfield in the world."(196)

"What was taken as a given by all factions of the liberation struggle was that apartheid was not only a political system regulating who was allowed to vote and move freely. It was also an economic system that used racism to enforce a highly lucrative arrangement: a small white elite had been able to amass enormous profits from South Africa's mines, farms and factories because a large black majority was prevented from owning land and forced to provide its labor for far less than it was worth—and was beaten and imprisoned when it dared to rebel. In the mines, whites were paid up to ten times more than blacks, and, as in Latin America, the large industrialists worked closely with the military to have unruly workers disappeared."(196)

"Since there was already widespread agree­ment that corporations shared responsibility for the crimes of apartheid, the stage was set for Mandela to explain why key sectors of South Africa's econ­omy needed to be nationalized just as the Freedom Charter demanded. He could have used the same argument to explain why the debt accumulated under apartheid was an illegitimate burden to place on any new, popularly elected government. There would have been plenty of outrage from the IMF, the U.S. Treasury and the European Union in the face of such undisciplined behavior, but Mandela was also a living saint - there would have been enormous popular support for it as well. We will never know which of these forces would have proved more power­ful. In the years that passed between Mandela's writing his note from prison and the ANC's 1994 election sweep in which he was elected president, some­thing happened to convince the party hierarchy that it could not use its grass­roots prestige to reclaim and redistribute the country's stolen wealth. So, rather than meeting in the middle between California and the Congo, the ANC adopted policies that exploded both inequality and crime to such a de­gree that South Africa's divide is now closer to Beverly Hills and Baghdad. To­day, the country stands as a living testament to what happens when economic reform is severed from political transformation. Politically, its people have the right to vote, civil liberties and majority rule. Yet economically, South Africa has surpassed Brazil as the most unequal society in the world."(198)

In het overleg na 1994 won het ANC politiek gezien op alle punten. Maar op economisch vlak slaagde De Klerk's NP erin het economisch beleid op het spoor van de Washington Consensus van IMF en World Bank te krijgen. Daarmee werd het vrijwel onmogelijk het beleid uit te voeren dat het ANC politiek gezien zo graag wilde.

"But, in a familiar story, weighed down by debt and under in­ternational pressure to privatize these services, the government soon began raising prices. After a decade of ANC rule, millions of people had been cut off from newly connected water and electricity because they couldn't pay the bills. At least 40 percent of the new phones lines were no longer in ser­vice by 2003. As for the 'banks, mines and monopoly industry' that Mandela had pledged to nationalize, they remained firmly in the hands of the same four white-owned megaconglomerates that also control 80 percent of the Johannesburg Stock Exchange. In 2005, only 4 percent of the compa­nies listed on the exchange were owned or controlled by blacks. Seventy percent of South Africa's land, in 2006, was still monopolized by whites, who are just 10 percent of the population. Most distressingly, the ANC gov­ernment has spent far more time denying the severity of the AIDS crisis than getting lifesaving drugs to the approximately 5 million people infected with HIV, though there were, by early 2007, some positive signs of progress. Per­haps the most striking statistic is this one: since 1990, the year Mandela left prison, the average life expectancy for South Africans has dropped by thir­teen years."(206)

"Of all the constraints on the new government, it was the market that proved most confining—and this, in a way, is the genius of unfettered capi­talism: it's self-enforcing. Once countries have opened themselves up to the global market's temperamental moods, any departure from Chicago School orthodoxy is instantly punished by traders in New York and London who bet against the offending country's currency, causing a deeper crisis and the need for more loans, with more conditions attached."(207)

"Mbeki convinced Mandela that what was needed was a definitive break with the past. The ANC needed a completely new economic plan - something bold, something shocking, something that would communicate, in the broad, dramatic strokes the market understood, that the ANC was ready to embrace the Washington Consensus. (...) In June 1996, Mbeki unveiled the results: it was a neoliberal shock ther­apy program for South Africa, calling for more privatization, cutbacks to government spending, labor 'flexibility', freer trade and even looser controls on money flows."(209)

"The fact that the ANC dismissed the Commission's call for corporate repara­tions is particularly unfair, Sooka pointed out, because the government con­tinues to pay the apartheid debt."(211)

"In the end, South Africa has wound up with a twisted case of reparations in reverse, with the white businesses that reaped enormous profits from black labor during the apartheid years paying not a cent in reparations, but the victims of apartheid continuing to send large paychecks to their former victimizers. And how do they raise the money for this generosity? By strip­ping the state of its assets through privatization—a modern form of the very looting that the ANC had been so intent on avoiding when it agreed to ne­gotiations, hoping to prevent a repeat of Mozambique. Unlike what hap­pened in Mozambique, however, where civil servants broke machinery, stuffed their pockets and then fled, in South Africa the dismantling of the state and the pillaging of its coffers continue to this day."(213)

(218) Chapter 11 - Bonfire of a young democracy - Russia chooses 'the Pinochet option'

Over Rusland na de val van de muur in 1989 en onder Gorbatsjov.

"By the beginning of the nineties, with his twin policies of glasnost (openness) and perestroïka (restructuring), Gorbachev had led the Soviet Union through a remarkable process of democratization: the press had been freed, Russia's parliament, local councils, president and vice president had been elected, and the constitutional court was independent. As for the economy, Gorbachev was moving toward a mixture of a free market and a strong safetynet, with key industries under public control - a process he predicted would take ten to fifteen years to be completed. His end goal was to build social democracy on the Scandinavian model, "a socialist beacon for all mankind"."(219)

Maar Gorbatsjov kreeg geen internationale econmische steun als hij niet ook overging tot de neoliberale shocktherapie.

"So what happened at the G7 meeting in 1991 was totally unexpected. The nearly unanimous message that Gorbachev received from his fellow heads of state was that, if he did not embrace radical economic shock therapy immediately, they would sever the rope and let him fall. "Their suggestions as to the tempo and methods of transition were astonishing," Gorbachev wrote of the event. Poland had just completed its first round of shock therapy under the IMF's and Jeffrey Sachs's tutelage, and the consensus among British prime minister John Major, U.S. president George H. W. Bush, Canadian prime minister Brian Mulroney and Japanese prime minister Toshiki Kaifu was that the Soviet Union had to follow Poland's lead on an even faster timetable. After the meeting, Gorbachev got the same marching orders from the IMF, the World Bank and every other major lending institution. Later that year, when Russia asked for debt forgiveness to weather a catastrophic economic crisis, the stern answer was that the debts had to be honored. (...)
What happened next - the dissolution of the Soviet Union, Gorbachev's eclipse by Yeltsin, and the tumultuous course of economic shock therapy in Russia - is a well-documented chapter of contemporary history. It is, however, a story too often told in the bland language of 'reform', a narrative so generic that it has hidden one of the greatest crimes committed against a democracy in modern history. Russia, like China, was forced to choose be­ tween a Chicago School economic program and an authentic democratic revolution. Faced with that choice, China's leaders had attacked their own people in order to prevent democracy from disturbing their free-market plans. Russia was different: the democratic revolution was already well under way - in order to push through a Chicago School economic program, that peaceful and hopeful process that Gorbachev began had to be violently interrupted, then radically reversed."(219-220)

Gorbatsjov was gematigd, maar moest het veld ruimen toen Yeltsin er in slaagde de USSR op te heffen in 1991. Yeltsin nam Sachs als economisch adviseur. En het Russische parlement gaf Yeltsin een jaar lang absolute volmacht om per decreet te regeren. Hij omgaf zich met economen die zich geschoold hadden in de opvattingen van Hayek en Friedman (Gaidar bv.). Skokov werd de baas van het leger en de veiligheidsdiensten voor de noodzakelijke repressie. Op Pinochet-achtige wijze werden de economische maatregelen in hoog tempo doorgezet, met financiële en organisatorische ondersteuning door de VS. De plannen waren in het geheim voorbereid en werden niet aan een democratisch debat onderworpen.

"As in Poland, Russians did, eventually, regain their bearings and began to demand an end to the sadistic economic adventure ("no more experiments" was a popular piece of graffiti in Moscow at the time). Under pressure from voters, the country's elected parliament - the same body that had supported Yeltsin's rise to power - decided it was time to rein in the president and his ersatz Chicago Boys. In December 1992, they voted to unseat Yegor Gaidar, and three months later, in March 1993, the parliamentarians voted to repeal the special powers they had given to Yeltsin to impose his economic laws by decree. The grace period had expired, and the results were abysmal; from now on, laws had to go through parliament, a standard measure in any lib­eral democracy and following the procedures set out in Russia's constitution. The deputies were acting within their rights, but Yeltsin had grown accustomed to his augmented powers and had come to think of himself less as a president and more as a monarch (he had taken to calling himself Boris I). He retaliated against the parliament's 'mutiny' by going on television and declaring a state of emergency, which conveniently restored his imperial powers. Three days later, Russia's independent Constitutional Court (the creation of which was one of Gorbachev's most significant democratic breakthroughs) ruled 9-3 that Yeltsin's power grab violated, on eight differ­ent counts, the constitution he had sworn to uphold. Until this point, it had still been possible to present 'economic reform' and democratic reform as part of the same project in Russia. But once Yeltsin declared a state of emergency, the two projects were on a collision course, with Yeltsin and his shock therapists in direct opposition to the elected parliament and the constitution.
Nevertheless, the West threw its weight behind Yeltsin, who was still cast in the role of a progressive "genuinely committed to freedom and democracy, genuinely committed to reform," in the words of then U.S. president Bill Clinton. The majority of the Western press also sided with Yeltsin against the entire parliament, whose members were dismissed as "communist hard­ liners" trying to roll back democratic reforms."(226)

Het IMF besloot zijn financiële steun in te trekken.

"What happened was that the day after the IMF leak, Yeltsin, confident that he had the West's support, took his first irreversible step toward what was now being openly referred to as the 'Pinochet option': he issued decree 1400, announcing that the constitution was abolished and parliament dissolved."(226)

"Some kind of armed conflict between Yeltsin and the parliament was now inevitable. Despite the fact that Russia's Constitutional Court once again ruled Yeltsin's behavior unconstitutional, Clinton continued to back him, and Congress voted to give Yeltsin $2.5 billion in aid. Emboldened, Yeltsin sent in troops to surround the parliament and got the city to cut off power, heat and phone lines to the White House parliament building."(227)

Door de salarissen van de militairen te verdubbelen verzekerde Yeltsin zich ook van hun steun en gebruikte die om in feite de net verworven democratie op te heffen. En de VS en de EU bléven hem daarin ondersteunen.

"Communism may have collapsed without the firing of a single shot, but Chicago-style capitalism, it turned out, required a great deal of gunfire to de­fend itself: Yeltsin called in five thousand soldiers, dozens of tanks and ar­mored personnel carriers, helicopters and elite shock troops armed with automatic machine guns - all to defend Russia's new capitalist economy from the grave threat of democracy."(228)

"But Russia wasn't a repeat of Chile —it was Chile in reverse order: Pinochet staged a coup, dissolved the institutions of democracy and then im­posed shock therapy; Yeltsin imposed shock therapy in a democracy, then could defend it only by dissolving democracy and staging a coup. Both sce­narios earned enthusiastic support from the West."(229)

De weergave in Westerse media was ook bijzonder eenzijdig pro-Yeltsin. De Russische 'Chicago Boys' en hun Westerse adviseurs konden nu hun gang gaan en wetgeving maken voor hun neoliberale economische hervormingen.

"In theory, all this wheeling and dealing was supposed to create the economic boom that would lift Russia out of desperation; in practice, the Communist state was simply replaced with a corporatist one: the beneficiaries of the boom were confined to a small club of Russians, many of them former Communist Party apparatchiks, and a handful of Western mutual fund managers who made dizzying returns investing in newly privatized Russian companies. A clique of nouveaux billionaires, many of whom were to become part of the group universally known as 'the oligarchs' for their imperial levels of wealth and power, teamed up with Yeltsin's Chicago Boys and stripped the country of nearly everything of value, moving the enormous profits offshore at a rate of $2 billion a month. "(231)

Het was snel over met de populariteit van Yeltsin. Dus startte hij in 1994 als afleiding de oorlog in Tsjetsjenië. Desondanks moest hij de verkiezingen van 1996 manipuleren om ze te kunnen 'winnen'.

"With the threat of a sudden change in government removed, the knockoff Chicago Boys were able to move to the most contentious, and most lucrative, part of their program: selling off what Lenin had once called 'the commanding heights'. Forty percent of an oil company comparable in size to France's Total was sold for $88 million (Total's sales in 2006 were $193 billion). Norilsk Nickel, which produced a fifth of the world's nickel, was sold for $170 million - even though its profits alone soon reached $1.5 billion annually. The massive oil company Yukos, which controls more oil than Kuwait, was sold for $309 million; it now earns more than $3 billion in revenue a year. Fifty-one percent of the oil giant Sidanko went for $130 million; just two years later that stake would be valued on the international market at $2.8 billion. A huge weapons factory sold for $3 million, the price of a vacation home in Aspen. The scandal wasn't just that Russia's public riches were auctioned off for a fraction of their worth - it was also that, in true corporatist style, they were purchased with public money. "(232-233)

"Just like his mentor Pinochet's, Yeltsin's own family grew ex­ceedingly rich, his children and several of their spouses appointed to top posts at large privatized firms. With oligarchs firmly in control of the key assets of the Russian state, they opened up their new companies to blue-chip multinationals, who snapped up large portions."(233)

"This points to a nagging and important question about free-market ideo­logues: Are they 'true believers', driven by ideology and faith that free mar­kets will cure underdevelopment, as is often asserted, or do the ideas and theories frequently serve as an elaborate rationale to allow people to act on unfettered greed while still invoking an altruistic motive? All ideologies are corruptible, of course (as Russia's apparatchiks made abundantly clear when, during the Communist era, they collected their abundant privileges), and there are certainly honest neoliberals. But Chicago School economics does seem particularly conducive to corruption. Once you accept that profit and greed as practiced on a mass scale create the greatest possible benefits for any society, pretty much any act of personal enrichment can be justified as a con­tribution to the great creative cauldron of capitalism, generating wealth and spurring economic growth - even if it's only for yourself and your colleagues."(235)

Het ging zo slecht met de Russische economie dat in 1999 weer afleidingen werden georganiseerd. Er werden appartementen opgeblazen en gesuggereerd werd dat de Tsjetsjenen daar achter zaten. Premier Poetin - die 17 jaar bij de KGB gewerkt had - organiseerde opnieuw aanvallen op Tsjetsjenië.

"With Yeltsin's alcoholism making him increasingly dysfunctional, Putin the pro­tector was perfectly positioned to succeed him as president. On December 31, 1999, with the war in Chechnya foreclosing serious debate, several oli­garchs engineered a quiet handover from Yeltsin to Putin, no elections nec­essary. Before he left power, Yeltsin took one last page out of the Pinochet playbook and demanded legal immunity for himself. Putin's first act as pres­ident was signing a law protecting Yeltsin from any criminal prosecution, whether for corruption or for the military's killing of pro-democracy demon­strators that took place on his watch."(237)

De gevolgen van dit alles waren desastreus. Niet alleen het aantal dodelijke slachtoffers was enorm. Faikllissementen, werkloosheid, armoede, alcohlisme, zelfmoorden, ziekte, criminaliteit steeg tot torenhoge proporties.

"This planned misery is made all the more grotesque because the wealth accumulated by the elite is flaunted in Moscow as nowhere else outside of a handful of oil emirates. In Russia today, wealth is so stratified that the rich and the poor seem to be living not only in different countries but in different centuries."(239)

"When the zeal for shock therapy in Russia was at its peak, its cheerleaders were absolutely convinced that only total destruction of every single institu­tion would create the conditions for a national rebirth - the dream of the blank slate that would recur in Baghdad."(239)

"When it was no longer possible to hide the failures of Russia's shock ther­apy program, the spin turned to Russia's "culture of corruption", as well as speculation that Russians "aren't ready" for genuine democracy because of their long history of authoritarianism. Washington's think-tank economists hastily disavowed the Frankenstein economy they helped create in Russia, deriding it as "mafia capitalism" - supposedly a phenomenon peculiar to the Russian character."(240)

(246) Chapter 12 - The capitalist ID - Russia and the new era of the boor market

Betreft een interview met Jeffrey Sachs over Rusland.

"It was in Russia, after the first year of shock therapy, that Sachs began his own transition, from global shock doctor to one of the world's most outspo­ken campaigners for increasing aid to impoverished countries. It is a transi­tion that, in the years since, has put him in conflict with many former colleagues and collaborators in orthodox economic circles. As far as Sachs is concerned, he isn't the one who changed - he was always committed to helping countries develop market-based economies bolstered by generous aid and debt forgiveness. For years he had found it possible to achieve these goals by working in partnership with the I M F and the U.S. Treasury. But by the time he was on the ground in Russia, the tenor of discussion had changed and he came up against a level of official indifference that shocked him and pushed him into a more confrontational stance with Washington's economic establishment."(247)

"Sachs, it must be said, has a notoriously selective memory when it comes to the draconian policies he pushed in both Poland and Russia. In our inter­view, he repeatedly glossed over his own calls for swift privatization and large cutbacks (in short, shock therapy, a phrase he now disavows, claiming he was referring only to narrow pricing policies, not wholesale country makeovers)."(248)

Sachs' probleem met Rusland was dat hij voor Yeltsin niet de miljarden kon binnenhalen - van het IMF, de World Bank of de VS zelf - die pasten in zijn neoliberale voorstellen en nodig waren om de schok te verzachten en de opbouw te stimuleren. De economische gevolgen waren dan ook nog desastreuzer dan elders. Zijn glansrol was uitgespeeld. Hij bleek politiek gezien ook bijzonder naïef te zijn geweest: de meeste Westerse regeringen / politici vonden het wel prettig dat de communistische wereld van de USSR / Rusland volkomen ten gronde ging. Daarmee was de concurrent van jaren Koude Oorlog volkomen uitgeschakeld. Die concurrentie had het Westen jaren gedwongen het economisch beleid te voorzien van een sociale kant. Het Marshall Plan moet ook gezien worden binnen dit perspectief.

"It was in this context that American industrialists grudgingly accepted FDR's New Deal. The edges of the market needed to be softened with pub­lic sector jobs and by making sure no one went hungry - the very future of capitalism was at stake. During the Cold War, no country in the free world was immune to this pressure. In fact, the achievements of mid-century capi­talism, or what Sachs calls 'normal' capitalism - workers' protections, pen­sions, public health care and state support for the poorest citizens in North America - all grew out of the same pragmatic need to make major conces­sions in the face of a powerful left."(251)

"When Yeltsin abolished the Soviet Union, the 'loaded gun' that had forced the development of the original plan was dis­armed. Without it, capitalism was suddenly free to lapse into its most savage form, not just in Russia but around the world. With the Soviet collapse, the free market now had a global monopoly, which meant all the 'distortions' that had been interfering with its perfect equilibrium were no longer required."(252)

"This liberation from all constraints is, in essence, Chicago School econom­ics (otherwise known as neoliberalism or, in the U.S., neoconservatism): not some new invention but capitalism stripped of its Keynesian appendages, cap­italism in its monopoly phase, a system that has let itself go - that no longer has to work to keep us as customers, that can be as antisocial, antidemocratic and boorish as it wants. As long as Communism was a threat, the gentlemen's agreement that was Keynesianism would live on; once that system lost ground, all traces of compromise could finally be eradicated, thereby fulfilling the purist goal Friedman had set out for his movement a half century earlier."(253)

"Russia, even more than Chile, was what this ideology looked like in practice, a foreshadowing of the get-rich-or-die-trying dystopia that many of these same players would create a decade later in Iraq."(253)

Andere voorbeelden van economische manipulaties, bijvoorbeeld die in Canada, 1993. En zoals zo vaak speelden de media een belangrijke negatieve rol in het versterken van het crisisgevoel.

"The only solution, we were told, was to radically cut spend­ing on such programs as unemployment insurance and health care. Sure enough, the governing Liberal Party did just that, despite having just been elected on a platform of job creation (Canada's version of 'voodoo politics'). Two years after the deficit hysteria peaked, the investigative journalist Linda McQuaig definitively exposed that a sense of crisis had been carefully stoked and manipulated by a handful of think tanks funded by the largest banks and corporations in Canada, particularly the C. D. Howe Institute and the Fraser Institute (which Milton Friedman had always actively and strongly supported). Canada did have a deficit problem, but it wasn't caused by spending on unemployment insurance and other social programs. According to Statistics Canada, it was caused by high interest rates, which exploded the worth of the debt much as the Volcker Shock had ballooned the developing world's debt in the eighties."(257)

"By the time Canadians learned that the 'deficit crisis' had been grossly manipulated by the corporate-funded think tanks, it hardly mattered - the budget cuts had already been made and locked in. As a direct result, social programs for the country's unemployed were radically eroded and have never recovered, despite many subsequent surplus budgets."(258)

Dat corporaties, denktanks, en instellingen als IMF en World Bank graag crises organiseerden waardoor ze hun neoliberale maatregelen konden doordrukken is daarna vaker aangetoond.

"For years, there had been rumors that the international financial institutions had been dabbling in the art of 'pseudo-crisis', as Williamson put it, in order to bend countries to their will, but it was difficult to prove. The most exten­sive testimony came from Davison Budhoo, an IMF staffer turned whistle-blower, who accused the organization of cooking the books in order to doom the economy of a poor but strong-willed country."(260)

(263) Chapter 13 - Let it burn - The looting of Asia and "the fall of a second Berlin wall"

"So how was it possible that, in 1996, investors had seen fit to pour $100 billion into South Korea and then, the very next year, the country had a neg­ative investment of $20 billion - a discrepancy of $120 billion? What could explain this kind of monetary whiplash? It turned out that the countries were victims of pure panic, made lethal by the speed and volatility of globalized markets. What began as a rumor - that Thailand did not have enough dollars to back up its currency - triggered a stampede by the electronic herd. Banks called in their loans, and the real es­tate market, which had been growing so quickly that it had become a bub­ble, promptly popped. Construction ground to a halt on half-built malls, skyscrapers and resorts; motionless construction cranes loomed over Bangkok's crowded skyline. In a slower era of capitalism, the crisis might have stopped there, but because mutual fund brokers had marketed the Asian Tigers as part of a single investment package, when one Tiger went down, they all did: after Thailand, panic spread and money fled from In­donesia, Malaysia, the Philippines and even South Korea, the eleventh- largest economy in the world and a star in the globalization firmament. Asian governments were forced to drain their reserve banks in an effort to prop up their currencies, turning the original fear into a reality: now these countries really were going broke. The market responded with more panic. In one year, $600 billion had disappeared from the stock markets of Asia - wealth that had taken decades to build."(264-265)

"Asia's crisis was caused by a classic fear cycle, and the only move that might have arrested it was the same one that had rescued Mexico's currency during the so-called Tequila Crisis of 1994: a quick, decisive loan - proof to the market that the U.S. Treasury would simply not let Mexico fail. No such timely move was forthcoming for Asia. In fact, as soon as the crisis hit, a sur­prising array of heavy hitters from the financial establishment stepped for­ward with a unified message: Don't help Asia. Milton Friedman himself, now in his mid-eighties, made a rare appearance on CNN to tell the news anchor Lou Dobbs that he opposed any kind of bailout and that the market should be left to correct itself. "Well, Professor, I can't tell you what it means to have your support in this semantic discussion," said an embarassingly starstruck Dobbs. The let-them-sink position was echoed by Friedman's old friend Walter Wriston, former head of Citibank, and George Shultz, now working alongside Friedman at the right-wing Hoover Institution and a board member at the brokerage house Charles Schwab. The view was openly shared by one of Wall Street's premier investment banks, Morgan Stanley. Jay Pelosky, the firm's hotshot emerging-market strategist, told a conference in Los Angeles hosted by the Milken Institute (of junk bonds fame) that it was imperative that the I M F and the U.S. Treasury do nothing to lessen the pain of a crisis of 1930s proportions. "What we need now in Asia is more bad news. Bad news is needed to keep stimulating the adjustment process," Pelosky said. The Clinton administration took its cue from Wall Street. (...) As for the IMF, the world body created to prevent crashes like this one, it took the do-nothing approach that had become its trademark since Russia. It did, eventually, respond—but not with the sort of fast, emergency stabilization loan that a purely financial crisis demanded. Instead, it came up with a long list of demands, pumped up by the Chicago School certainty that Asia's catastrophe was an opportunity in disguise."(266)

"Malaysia, South Korea and Thailand still had highly pro­tectionist policies that barred foreigners from owning land and from buying out national firms. They had also maintained a significant role for the state, keeping sectors like energy and transportation in public hands. The Tigers had also blocked many foreign imports from Japan, Europe and North America, as they built up their own domestic markets. They were economic success stories unquestionably, but ones that proved that mixed, managed economies grew faster and more equitably than those following the Wild West Washington Consensus."(267)

En dat moest veranderern, dus onder druk van de VS en het Westen begon weer eens een grote uitverkoop van banken, bedrijven en zo verder.

"Several governments suggested that since the crisis was caused by the ease with which money could gush in and out of their coun­tries with nothing to slow down the flow, perhaps it made sense to put some barriers back up - the dreaded 'capital controls'. China had kept its controls up (ignoring Friedman's advice in this regard), and it was the only country in the region that was not being ravaged by the crisis. And Malaysia had put controls back up, and they seemed to be working. Fischer and the rest of the IMF team dismissed the idea out of hand. The IMF displayed no interest in what had actually caused the crisis. Instead, like a prison interrogator looking for a weakness, the fund was exclu­sively focused on how the crisis could be used as leverage. The meltdown had forced a group of strong-willed countries to beg for mercy; to fail to take advantage of that window of opportunity was, for the Chicago School econ­omists running the IMF, tantamount to professional negligence."(269)

"As far as the IMF was concerned, the crisis was going extremely well. In less than a year, it had negotiated the economic equivalent of extreme makeovers for Thailand, Indonesia, South Korea and the Philippines. It was finally ready for the defining moment in every makeover drama: the Reveal, the mo­ment when the nipped-and-tucked, coached-and-buffed subject is unveiled to the awestruck public - in this case, the global stock and currency markets. If all had gone smoothly, when the IMF pulled back the curtain on its newest creations, the hot money that had fled Asia the previous year would have come rushing back in to buy up the Tigers' now irresistible stocks, bonds and currencies. Something else happened; the market panicked. The reasoning went like this: if the fund thought that the Tigers were such hope­ less cases that they needed to be remade from scratch, then Asia was obvi­ously in much worse shape than anyone had previously feared. So rather than rushing back, traders responded to the IMF's big Reveal by promptly yanking out even more money and further attacking Asia's curren­cies. Korea was losing $1 billion a day and its debt was downgraded to junk bond status. The IMF's 'help' had turned crisis into catastrophe. (...) The human costs of the IMF's opportunism were nearly as devastating in Asia as in Russia."(272)

"The story of Asia's crisis usually ends there - the IMF tried to help; it didn't work. Even the IMF's own internal audit came to that conclusion. The fund's Independent Evaluation Office concluded that the structural adjust­ment demands were "ill-advised" and "broader than seemed necessary" as well as "not critical to resolving the crisis". It also warned that "crisis should not be used as an opportunity to seek a long agenda of reforms just because leverage is high, irrespective of how justifiable they may be on merits". A particularly forceful section of the internal report accused the fund of being so blinded by free-market ideology that even considering capital controls was institutionally unimaginable.
[voetnoot] * For some reason, that highly critical report did not come out until 2003, five years after the crisis. By then, it was a little late to be issuing warnings against crisis opportunism; the IMF was already structurally adjusting Afghanistan and drawing up plans for Iraq."(274)

Intussen was de economie in Azië wel zo verzwakt dat Amerikaanse banken en bedrijven voor weinig geld allerlei banken en bedrijven in Azië konden opkopen, tot veel plezier van Wallstreet. De multinationals kochten ook de sociale voorzieningen (water, energie, transport, en zo verder) nadat ze door de overheden geprivatiseerd werden.

"All told, there were 186 major mergers and acquisitions of firms in In­donesia, Thailand, South Korea, Malaysia and the Philippines by foreign multinationals in a span of only twenty months. Watching this sale unfold, Robert Wade, an LSE economist, and Frank Veneroso, an economic consul­tant, predicted that the IMF program "may even precipitate the biggest peacetime transfer of assets from domestic to foreign owners in the past fifty years anywhere in the world"."(276)

Het verschil met voorheen werd dat het IMF en de achterliggende Westerse en vooral Amerikaanse financiële wereld zichtbaarder moesten opereren. Daardoor ontstonden tegenbewegingen als de antiglobaliseringsbeweging die maakten dat ook in officiële overleggen ontwikkelingslanden zich als blok tegen de Westerse voorstellen keerden.

(281) Part 5 - Shocking times - The rise of the disaster capitalism complex

(283) Chapter 14 - Shock therapy in the U.S.A. - The homeland security bubble

Gaat voor een groot deel over Donald Rumsfeld en zijn operaties binnen en buiten het Department of Defence (DoD) van de VS.

"During the 1990s, many companies that had traditionally manufactured their own products and maintained large, stable workforces embraced what became known as the Nike model: don't own any factories, produce your products through an intricate web of contractors and subcontractors, and pour your resources into design and marketing. Other companies opted for the al­ternative, Microsoft model: maintain a tight control center of shareholder / em­ployees who perform the company's "core competency" and outsource everything else to temps, from running the mailroom to writing code. Some called the companies that underwent these radical restructurings "hollow cor­porations" because they were mostly form, with little tangible content left over."(284-285)

Rumsfeld - ook een Friedman-adept - deed iets dergelijks met het DoD en het leger.

"Where corporations unburdened themselves of geography-bound factories and full-time workers, Rumsfeld saw the army shedding large numbers of full-time troops in favor of a small core of staffers propped up by cheaper temporary soldiers from the Reserve and National Guard. Meanwhile, contractors from companies such as Blackwater and Halliburton would perform duties ranging from high-risk chauffeuring to prisoner interrogation to catering to health care. And where corporations poured their savings on labor into design and marketing, Rumsfeld would spend his savings from fewer troops and tanks on the latest satellite and nano-technology from the private sector."(285)

"The idea at the heart of Rumsfeld's forgotten speech [over de aanpak van de bureaucratie in het Pentagn en het uitbesteden van taken; vergetten want gehouden op de dag voor '9/11'] is nothing less than the central tenet of the Bush regime: that the job of government is not to govern but to subcontract the task to the more efficient and generally superior pri­vate sector. (...)
By the time the Bush team took office, the privatization mania of the eighties and nineties (fully embraced by the Clinton administration, as well as state and local governments) had successfully sold off or outsourced the large, publicly owned companies in several sectors, from water and electric­ity to highway management and garbage collection. After these limbs of the state had been lopped off, what was left was "the core" - those functions so intrinsic to the concept of governing that the idea of handing them to private corporations challenged what it meant to be a nation-state: the military, po­lice, fire departments, prisons, border control, covert intelligence, disease control, the public school system and the administering of government bu­reaucracies. The earlier stages of the privatization wave had been so prof­itable, however, that many of the companies that had devoured the appendages of the state were greedily eyeing these essential functions as the next source of instant riches."(288)

"At the vanguard of the push to create what can only be described as a privatized police state were the most powerful figures in the future Bush administration: Dick Cheney, Donald Rumsfeld and George W. Bush himself."(289)

En dat zijn alle drie mensen die flink geld verdiend hebben aan discutabele economische praktijken (Rumsfeld zat bv. in het bedrijf Gilead Sciences die AIDS-medicijnen patenteerden en andere uit de markt probeerden te drukken; Cheney werkte voor de firma Halliburton die op basis van lucratieve contracten ('cost plus') de organisatie van militaire missies van de VS op zich nam; terwijl Bush de privatisering van veiligheidstaken regelde en ook vond dat andere sociale voorzieningen geprivatiseerd konden worden.

"The future president's commitment to auctioning off the state, combined with Cheney's leadership in outsourcing the military and Rumsfeld's patent­ing of drugs that might prevent epidemics, provided a preview of the kind of state the three men would construct together - it was a vision of a perfectly hollow government."(294)

"Keynes had argued that gov­ernments should spend their way out of recessions, providing economic stimulus with public works. Bush's solution was for the government to de­construct itself - hacking off great chunks of the public wealth and feeding them to corporate America, in the form of tax cuts on the one hand and lu­crative contracts on the other."(295)

Maar toen kwam de aanval op het WTC op 11 september 2001 ('9/11').

"Much as the flooding of New Orleans exposed the rotting condition of public infrastructure, the attacks pulled back the curtain on a state that had been allowed to grow dangerously weak: radio communications for the New York City police and firefighters broke down in the middle of the rescue operation, air traffic controllers didn't notice the off-course planes in time, and the attackers had passed through airport security checkpoints staffed by contract workers, some of whom earned less than their counterparts at the food court."(295/296)

"The backlash against the pro-corporate consensus only deepened in the face of new scandals like that of Enron. Three months after the 9/11 attacks, Enron declared bankruptcy, leading thousands of employees to lose their re­tirement savings while executives acting on insider knowledge cashed out. The crisis contributed to a general plummeting of faith in private industry to perform essential services, especially when it came out that it was Enron's ma­nipulation of energy prices that had led to the massive blackouts in California a few months earlier. "(296)

"Public pronouncements and photo ops aside, Bush and his inner circle had no intention of converting to Keynesianism. Far from shaking their deter­mination to weaken the public sphere, the security failures of 9/11 reaf­firmed their deepest ideological (and self-interested) beliefs - that only private firms possessed the intelligence and innovation to meet the new se­curity challenge. Although it was true that the White House was on the verge of spending huge amounts of taxpayer money to stimulate the econ­omy, it most certainly was not going to be on the model of FDR. Rather, Bush's New Deal would be exclusively with corporate America, a straight-up transfer of hundreds of billions of public dollars a year into private hands. It would take the form of contracts, many offered secretively, with no competition and scarcely any oversight, to a sprawling network of indus­tries: technology, media, communications, incarceration, engineering, edu­cation, health care."(298)

"In the nineties, tech companies endlessly trumpeted the wonders of the borderless world and the power of information technology to topple author­itarian regimes and bring down walls. Today, inside the disaster capitalism complex, the tools of the information revolution have been flipped to serve the opposite purpose. (...) When widespread discomfort about big-brother technologies stalled many of these initiatives, it caused dismay to both marketers and re­tailers. September 11 loosened this logjam in the market: suddenly the fear of terror was greater than the fear of living in a surveillance society. (...) This potential for error is where the incompetence and greed that have been the hallmark of the Bush years, from Iraq to New Orleans, becomes har­rowing."(302-303)

"Anyone can be blocked from flying, denied an entry visa to the U.S. or even arrested and named as an "enemy combatant" based on evidence from these dubious technologies - a blurry image identified through facial recog­nition software, a misspelled name, a misunderstood snippet of a conversa­tion. If "enemy combatants" are not U.S. citizens, they will probably never even know what it was that convicted them, because the Bush administration has stripped them of habeas corpus, the right to see the evidence in court, as well as the right to a fair trial and a vigorous defense."(304)

"If these freelance interrogators are to keep landing lucrative contracts, they must extract from prisoners the kind of "actionable intelligence" their employers in Washington are looking for. It's a dynamic ripe for abuse: just as prisoners under torture will usually say anything to make the pain stop, contractors have a powerful economic in­ centive to use whatever techniques are necessary to produce the sought-after information, regardless of its reliability."(305)

"In just a few years, the homeland security industry, which barely existed be­ fore 9/11, has exploded to a size that is now significantly larger than either Hollywood or the music business. Yet what is most striking is how little the security boom is analyzed and discussed as an economy, as an unprece­dented convergence of unchecked police powers and unchecked capitalism, a merger of the shopping mall and the secret prison. When information about who is or is not a security threat is a product to be sold as readily as in­ formation about who buys Harry Potter books on Amazon or who has taken a Caribbean cruise and might enjoy one in Alaska, it changes the values of a culture. Not only does it create an incentive to spy, torture and generate false information but it creates a powerful impetus to perpetuate the fear and sense of peril that created the industry in the first place."(306)

(308) Chapter 15 - A corporatist state - Removing the revolving door, putting in an archway

Over de Defense Authorization Act die in 2006 onder Bush getekend werd.

"What role did industry interests play in shaping the specifics of the law? Perhaps none, but the question is worth asking. Similarly, and on a much wider scale, what role did the benefits to contractors such as Halliburton and Bechtel and oil companies such as ExxonMobil play in the Bush team's en­thusiasm for invading and occupying Iraq? These questions of motivation are impossible to answer with any precision, because the people involved are notorious for conflating corporate interests with the national interest, to the ex­tent that they themselves are seemingly incapable of drawing distinctions.
In his 2006 book Overthrow, the former New York Times correspondent Stephen Kinzer tries to get to the bottom of what has motivated the U.S. politicians who have ordered and orchestrated foreign coups d'état over the past century. Studying U.S. involvement in regime change operations from Hawaii in 1893 to Iraq in 2003, he observes that there is often a clear three-stage process that takes place. First, a U.S.-based multinational corporation faces some kind of threat to its bottom line by the actions of a foreign gov­ernment demanding that the company "pay taxes or that it observe labor laws or environmental laws. Sometimes that company is nationalized or is some­ how required to sell some of its land or its assets", Kinzer says. Second, U.S. politicians hear of this corporate setback and reinterpret it as an attack on the United States: "They transform the motivation from an economic one into a political or geo-strategic one. They make the assumption that any regime that would bother an American company or harass an American company must be anti-American, repressive, dictatorial, and probably the tool of some for­eign power or interest that wants to undermine the United States." The third stage happens when the politicians have to sell the need for intervention to the public, at which point it becomes a broadly drawn struggle of good versus evil, "a chance to free a poor oppressed nation from the brutality of a regime that we assume is a dictatorship, because what other kind of a regime would be bothering an American company?" Much of U.S. foreign policy, in other words, is an exercise in mass projection, in which a tiny self-interested elite conflates its needs and desires with those of the entire world. Kinzer points out that this tendency has been especially pronounced in politicians who move directly from the corporate world into public office."(309-310)

"As proto-disaster capitalists, the architects of the War on Terror are part of a different breed of corporate-politicians from their predecessors, one for whom wars and other disasters are indeed ends in themselves. When Dick Cheney and Donald Rumsfeld conflate what is good for Lockheed, Hal­liburton, Carlyle and Gilead with what is good for the United States and indeed the world, it is a form of projection with uniquely dangerous conse­quences. That's because what is unquestionably good for the bottom line of these companies is cataclysm - wars, epidemics, natural disasters and resource shortages - which is why all their fortunes have improved dramati­cally since Bush took office. What makes their acts of projection even more perilous is the fact that, to an unprecedented degree, key Bush officials have maintained their interests in the disaster capitalism complex even as they have ushered in a new era of privatized war and disaster response, allowing them to simultaneously profit from the disasters they help unleash."(311)

Zo weigerde Rumfeld openlijk om zijn belangen in de farmaceutische industrie (m.n. Gilead, het bedrijf van de TamiFlu) op te geven toen hij 'Secretary of Defense' werd, hoewel dat wettelijk verplicht was in de VS. En hij werd er een stuk rijker van. Hetzelfde geldt voor Cheney, die zijn belangen in Halliburton niet wilde opgeven en daar ook alle voordelen van had.

"Both Rumsfeld and Cheney could have taken simple measures to divest themselves completely of their disaster-related holdings, thereby eliminating any doubt about what role profit has played in their enthusiasm for disaster-producing situations. But then they would have missed the boom years in their own industries. Asked to choose between private profit and public life, again and again they chose profit, forcing the government ethics committees to adapt to their defiant stance.
During the Second World War, President Franklin D. Roosevelt spoke out strongly against war profiteers, saying, "I don't want to see a single war millionaire created in the United States as a result of this world disaster". One wonders what he would have made of Cheney, whose millions in war profits accumulated while he was a sitting vice president. Or Rumsfeld, who, in 2004, couldn't resist cashing in a few Gilead stocks, making an easy $5 million, according to his annual disclosure report, while he was defense secretary - a small taste of the profits that awaited him when he left office. In the Bush administration, the war profiteers aren't just clamoring to get ac­cess to government, they are the government; there is no distinction between the two."(314)

Tijdens Bush vertrokken opvallend regeringsfunctionarissen naar het bedrijfsleven (vaak eigen bedrijfjes), omdat ze daar snel rijk konden worden van het bemiddelen tussen hun vroegere werkgever en andere bedrijven (draaideur van regering naar bedrijfsleven).

"That is pretty much the philosophy: stay in government just long enough to get an impressive ti­tle in a department handing out big contracts and to collect inside informa­tion on what will sell, then quit and sell access to your former colleagues. Public service is reduced to little more than a reconnaissance mission for future work in the disaster capitalism complex."(315)

"Wherever it has emerged over the past thirty-five years, from Santiago to Moscow to Beijing to Bush's Washington, the alliance between a small cor­porate elite and a right-wing government has been written off as some sort of aberration - mafia capitalism, oligarchy capitalism and now, under Bush, "crony capitalism". But it's not an aberration; it is where the entire Chicago School crusade - with its triple obsessions privatization, deregulation and union-busting - has been leading. Rumsfeld's and Cheney's dogged refusals to choose between their disaster-connected holdings and their public duties were the first sign that a genuine corporatist state had arrived. There are many others."(316)

Bush gebruikte ook allerlei externe adviseurs bij wie de belangenverstrengeling vanaf het begin duidelijk was, zoals James Baker, George Shultz, Henry Kissinger, Richard Perle.

"Whenever members of this Washington clique are confronted with their economic interests in the wars they support, they invariably respond the way Perle did: the entire suggestion is preposterous, simple-minded, vaguely ter­rorist. The neocons - a group that includes Cheney, Rumsfeld, Shultz, Jack­son and, I would argue, Kissinger - take great pains to project themselves as egghead intellectuals or hawkish realists, driven by ideology and big ideas, not anything so worldly as profit."(322)

"Even their most committed critics tend to portray the neocons as true be­lievers, motivated exclusively by a commitment to the supremacy of Ameri­can and Israeli power that is so all-consuming they are prepared to sacrifice economic interests in favor of "security". This distinction is both artificial and amnesiac. The right to limitless profit-seeking has always been at the center of neocon ideology. Before 9/11, demands for radical privatization and attacks on social spending fuelled the neocon movement - Friedmanite to its core - at think tanks such as the American Enterprise Institute, Heritage and Cato. With the War on Terror, the neocons didn't abandon their corporatist economic goals; they found a new, even more effective way to achieve them. Of course these Washington hawks are committed to an imperial role for the United States in the world and for Israel in the Middle East. It is impossible, however, to separate that military project - endless war abroad, and a secu­rity state at home - from the interests of the disaster capitalism complex, which has built a multibillion-dollar industry based on these very assumptions. Nowhere has the merger of these political and profit-making goals been clearer than on the battlefields of Iraq."(322)

(323) Part 6 - Iraq, full circle - Overshock

(325) Chapter 16 - Erasing Iraq - In search of a 'model' for the Middle East

Mede gebaseerd op Klein's eigen ervaringen in Irak, die werd 'verkocht' als een oorlog tegen de massavernietigingswapens (WMD's) van Saddam Hoessein.

"There was little in­terest in the idea that war was a rational policy choice, that the architects of the invasion had unleashed ferocious violence because they could not crack open the closed economies of the Middle East by peaceful means, that the level of terror was proportional to what was at stake."(327)

"So what was it about this part of the world, they [de 'neocons' = 'neoconservatieven' in de VS] asked, that produced ter­rorism? Ideologically blinded from seeing either U.S. or Israeli policies as contributing factors, let alone provocations, they identified the true cause as something else - the region's deficit in free-market democracy."(328)

"Within the internal logic of this theory, fighting terrorism, spreading fron­tier capitalism and holding elections were bundled into a single unified project. The Middle East would be "cleaned out" of terrorists and a giant free-trade zone would be created; then it would all be locked in with after-the-fact elections - a sort of three-for-one special. George W. Bush later simplified this agenda to a single phrase: "spreading freedom in a troubled region", and many mistook the sentiment as a starry-eyed commitment to democracy. But it was always that other kind of freedom, the one offered to Chile in the seventies and to Russia in nineties - the freedom for Western multinationals to feed off freshly privatized states - that was at the center of the model theory."(328-329)

Het is niet veel anders dan 30 jaar eerder gebeurde in de Zuid-Amerikaanse landen.

"In the countries that suffered the political cleansings, there have been col­lective efforts to come to terms with this violent history - truth commissions, excavations of unmarked graves and the beginnings of war crimes trials for the perpetrators. But the Latin American juntas did not act alone: they were propped up before and after their coups by Washington, as has been amply documented. For instance, in 1976, the year of Argentina's coup, when thou­sands of young activists were snatched from their homes, the junta had full fi­nancial support from Washington. ("If there are things that have to be done, you should do them quickly," Kissinger had said.) That year, Gerald Ford was president, Dick Cheney was his chief of staff, Donald Rumsfeld was his secretary of defense, and Kissinger's executive assistant was an ambitious young man named Paul Bremer. These men faced no truth-and-justice pro­cess for their roles in supporting the juntas and went on to enjoy long and pros­perous careers. So long, in fact, that they would be around three decades later to implement a strikingly similar - if far more violent - experiment in Iraq."(330-331)

Heel Irak's geschiedenis werd weggebombardeerd, plunderaars mochten hun gang gaan in de musea, alle telefooncentrales en radio-/tv-zenders waren weggebombardeerd, en zo verder. En uiteraard werd de heropbouw voornamelijk gegund aan Amrikaanse bedrijven.

"It's hard to believe - but then again, that was pretty much Washington's game plan for Iraq: shock and terrorize the entire country, deliberately ruin its infrastructure, do nothing while its culture and history are ransacked, then make it all okay with an unlimited supply of cheap household appli­ances and imported junk food. In Iraq, this cycle of culture erasing and cul­ture replacing was not theoretical; it all unfolded in a matter of weeks."(339)

(341) Chapter 17 - Ideological blowback - A very capitalistic disaster

"When Bremer started issuing legal decrees in Baghdad, Joseph Stiglitz, the former World Bank chief economist, warned that Iraq was getting "an even more radical form of shock therapy than pursued in the former Soviet world". That was quite true. In the original Washington plan, Iraq was going to become a frontier just as Russia had been in the early nineties, but this time it would be U.S. firms - not local ones or European, Russian or Chinese competitors - that would be first in line for the easy billions. And noth­ing would deter even the most painful economic changes because, in contrast to the former Soviet Union, or Latin America and Africa, the transformation would not involve a mannered dance between IMF officials and quixotic local politicians while the U.S. Treasury called the shots from the suite down the hall. In Iraq, Washington cut out the middlemen: the IMF and the World Bank were relegated to supporting roles, and the U.S. was front and center. Paul Bremer was the government; as a top U.S. military of­ficial told the Associated Press, there was no point in negotiating with the lo­cal government because "at this point, we'd be negotiating with ourselves"."(343)

"So while Bremer may have stepped on plenty of toes, his mission never was to win Iraqi hearts and minds. Rather, it was to get the country ready for the launch of Iraq Inc. Seen in that light, his early, much-maligned decisions have an unmistakable logical coherence. After replacing the cautious general Jay Garner as the top U.S. envoy, Bre­mer spent his first four months in Iraq almost exclusively focused on economic transformation, passing a series of laws that together make up a classic Chicago School shock therapy program."(344-345)

"Next came the new economic laws. To entice foreign investors to take part in the privatization auction and to build new factories and retail outlets in Iraq, Bremer enacted a radical set of laws described by The Economist in glowing terms as "the wish-list that foreign investors and donor agencies dream of for developing markets". One law lowered Iraq's corporate tax rate from roughly 45 percent to a flat 15 percent (straight out of the Milton Friedman playbook). Another allowed foreign companies to own 100 per­cent of Iraqi assets - preventing a repeat of Russia, where the prizes went to the local oligarchs. Even better, investors could take 100 percent of the prof­its they made in Iraq out of the country; they would not be required to rein­vest, and they would not be taxed. The decree also stipulated that investors could sign leases and contracts that would last for forty years and then be el­igible for renewal, which meant that future elected governments would be saddled with deals signed by their occupiers. "(345)

"Bremer's laws, designed to create the conditions for an investor frenzy, were not exactly original—they were merely an accelerated version of what had been implemented in previous shock therapy experiments. But Bush's disaster capitalism cabinet was not content to wait for the laws to take effect. Where the Iraq experiment entered bold new terrain was that it transformed the invasion, occupation and reconstruction into an exciting, fully priva­tized new market. This market was created, just as the homeland security complex was, with a huge pot of public money. For reconstruction alone, the boom was kicked off with $38 billion from the U.S. Congress, $15 billion from other countries and $20 billion of Iraq's own oil money."(346)

"The Bush cabinet had in fact launched an anti-Marshall Plan, its mirror opposite in nearly every conceivable way. It was a plan guaranteed from the start to further undermine Iraq's badly weakened industrial sector and to send Iraqi unemployment soaring. Where the post-Second World War plan had barred foreign firms from investing, to avoid the perception that they were taking advantage of countries in a weakened state, this scheme did everything possible to entice corporate America (with a few bones tossed to corporations based in countries that joined the 'Coalition of the Willing'). It was this theft of Iraq's reconstruction funds from Iraqis, justified by unquestioned, racist assumptions about U.S. superiority and Iraqi inferiority - and not merely the generic demons of 'corruption' and 'inefficiency' - that doomed the project from the start. None of the money went to Iraqi factories so they could reopen and form the foundation of a sustainable economy, create local jobs and fund a social safety net. Iraqis had virtually no role in this plan at all."(347)

" In Iraq, there was not a single governmental function that was considered so 'core' that it could not be handed to a contractor, preferably one who provided the Re­publican Party with financial contributions or Christian foot soldiers during election campaigns. The usual Bush motto governed all aspects of the for­eign forces' involvement in Iraq: if a task could be performed by a private en­ tity, it must be."(348)

"As is now well known, nothing about Bush's anti-Marshall Plan went as in­ tended. Iraqis did not see the corporate reconstruction as 'a gift'; most saw it as a modernized form of pillage, and U.S. corporations didn't wow anyone with their speed and efficiency; instead they have managed to turn the word 'reconstruction' into, as one Iraqi engineer put it, "a joke that nobody laughs at". Each miscalculation provoked escalating levels of resistance, answered with counterrepression by foreign troops, ultimately sending the country spiraling into an inferno of violence. As of July 2006, according to the most credible study, the war in Iraq had taken the lives of 655,000 Iraqis who would not have died had there been no invasion or occupation."(350)

"In fact, all the forces tearing Iraq apart today - rampant corruption, fero­cious sectarianism, the surge in religious fundamentalism and the tyranny of death squads - escalated in lockstep with the implementation of Bush's anti-Marshall Plan. After the toppling of Saddam Hussein, Iraq badly needed and deserved to be repaired and reunited, a process that could only have been led by Iraqis. Instead, at precisely that precarious moment, the country was transformed into a cutthroat capitalist laboratory - a system that pitted indi­viduals and communities against each other, that eliminated hundreds of thousands of jobs and livelihoods and that replaced the quest for justice with rampant impunity for foreign occupiers.
Iraq's current state of disaster cannot be reduced either to the incompetence and cronyism of the Bush White House or to the sectarianism or tribalism of Iraqis. It is a very capitalist disaster, a nightmare of unfettered greed unleashed in the wake of war. The 'fiasco' of Iraq is one created by a careful and faithful application of unrestrained Chicago School ideology. What follows is an ini­tial (and not exhaustive) account of the links between the 'civil war' and the corporatist project at the heart of the invasion. It is a process of ideology boomeranging on the people who unleashed it - ideological blowback."(351)

"Only someone deeply inclined to see government purely as a burden and public sector workers as dead wood could have made the choices Bremer did. That ideological blindness had three concrete effects: it damaged the pos­sibility of reconstruction by removing skilled people from their posts, it weakened the voice of secular Iraqis, and it fed the resistance with angry people."(352)

"That nonstop conveyor belt was part of what was so enraging to Iraqis about the U.S. insistence that they adapt to a strict free market, without state subsidies or trade protections. In one of his many lectures to Iraqi business-people, Michael Fleischer explained that "protected businesses never, never become competitive". He appeared to be impervious to the irony that Hal­liburton, Bechtel, Parsons, KPMG, RTI, Blackwater and all the other U.S. corporations that were in Iraq to take advantage of the reconstruction were part of a vast protectionist racket whereby the U.S. government had created their markets with war, barred their competitors from even entering the race, then paid them to do the work, while guaranteeing them a profit to boot - all at taxpayer expense. The Chicago School crusade, which emerged with the core purpose of dismantling the welfare statism of the New Deal, had finally reached its zenith in this corporate New Deal."(355)

(360) Chapter 18 - Full circle - From blank slate to scorched earth

Laat opnieuw zien dat 'shock capitalism' niet samengaat met democratie.

"So Washington abandoned its democratic promises and instead ordered increases in the shock levels in the hope that a higher dosage would finally do the trick. It was a decision that brought the crusade for a pure free market back full cir­cle to its roots in the Southern Cone of Latin America, when economic shock therapy was enforced by brutally suppressing democracy and by disap­pearing and torturing anyone who stood in the way."(362)

Het gevolg: de opkomst van een verzetsbeweging die door de buitenlandse machthebbers met geweld werd bestreden:

" In the first three and half years of occupation, an estimated 61,500 Iraqis were captured and imprisoned by U.S. forces, usually with methods designed to "maximize capture shock". Roughly 19,000 remained in custody in the spring of 2007. Inside the prisons, more shocks followed: buck­ets of freezing water; snarling, teeth-baring German shepherds; punching and kicking; and sometimes the shock of electrical currents running from live wires."(366)

"The Bush team had failed to shock Iraqis into obedience either with Shock and Awe or with economic shock therapy. Now the shock tactics be­ came more personal, using the Kubark interrogation manual's unmistakable formula for inducing regression."(368)

(383) Part 7 - The movable green zone - Buffer zones and blast walls

(385) Chapter 19 - Blanking the beach - 'The second tsunami'

Over wat er gebeurde na de tsunami in Sri Lanka van 26 december 2004. Ook die crisis werd aangegrepen om oude kapitalistische plannen voor exploitatie van de stranden door te zetten, in dit geval door de oorspronkelijke vissers te verjagen en niets in oude staat te reconstrueren. De overheid daar maakte weer gebruik van buitenlandse adviseurs en de World Bank en andere instanties speelden weer hun neoliberale rol.

"But before Sri Lanka could fulfill its destiny as a playground for the pluton­omy set, there were a few areas that needed some drastic improvements - fast. First off, to attract top-notch resorts, the government had to drop the barriers to private land ownership (roughly 80 percent of Sri Lanka's land was owned by the state). It needed more 'flexible' labor laws under which investors would staff their resorts. And it needed to modernize its infrastructure - highways, swank airports, better water and electricity systems. However, since Sri Lanka had driven itself deep into debt buying weapons, the government could not pay for all these rapid upgrades on its own. The usual deals were on offer: loans from the World Bank and IMF in exchange for agreements to open the econ­omy to privatization and 'public-private partnerships'."(393)

"Like all such shock therapy plans, Regaining Sri Lanka [het plan van 2003 waarin de zojuist genoemde zaken stonden opgenomen] demanded many sacrifices in the name of kick-starting rapid economic growth. Millions of peo­ple would have to leave traditional villages to free up the beaches for tourists and the land for resorts and highways. What fishing remained would be dom­inated by large industrial trawlers operating out of deep ports - not wooden boats that launch from the beaches. And of course, as has been the case in similar circumstances from Buenos Aires to Baghdad, there would be mass layoffs at state companies, and the prices of services would have to go up."(393)

Het plan werd echter verworpen. Totdat de tsunami kwam.

"In Colombo, the national government moved instantly to prove to the wealthy countries who control the aid dollars that it was ready to renounce its past. President Chandrika Kumaratunga, elected on an overtly antiprivatization platform, claimed that the tsunami had been, for her, a kind of reli­gious epiphany, helping her to see the free-market light. "(394)

"But Sri Lanka's president, under pressure from Washington lenders, decided that the planning could not be entrusted to her government's elected politicians. Instead, just one week after the tsunami leveled the coasts, she created a brand-new body called the Task Force to Rebuild the Nation. This group, and not Sri Lanka's Parliament, would have full power to develop and implement a master plan for a new Sri Lanka. The task force was made up of the country's most powerful business executives from banking and industry. "(396)

Soortgelijke zaken gebeurden na die tsumami in andere landen in de regio, zoals Thailand.

"Everywhere the Chicago School crusade has triumphed, it has created a permanent underclass of between 25 and 60 percent of the population. It is always a form of war. But when that warlike economic model of mass evic­tions and discarded cultures is imposed in a country that is already ravaged by disaster and scarred by ethnic conflict, the dangers are far greater. There are, as Keynes argued all those years ago, political consequences to this kind of punitive peace - including the outbreak of even bloodier wars."(405)

Chapter 20 - Disaster apartheid - A world of green zones and red zones

Over de situatie na orkaan Katrina in New Orleans in 2005.

"It occurred to me that this affable young doctor, and the spa-like medical care I had just received, were the embodiment of the culture that had made the horrors of Hurricane Katrina possible, the culture that had left New Or­leans' poorest residents to drown. As a graduate of a private medical school and then an intern at a private hospital, he had been trained simply not to see New Orleans' uninsured, overwhelmingly African-American residents as potential patients. That was true before the storm, and it continued to be true even when all of New Orleans turned into a giant emergency room: he had sympathy for the evacuees, but that didn't change the fact that he still could not see them as potential patients of his."(408)

"When Katrina hit, the sharp divide between the worlds of Ochsner Hos­pital and Charity Hospital suddenly played out on the world stage. The eco­nomically secure drove out of town, checked into hotels and called their insurance companies. The 120,000 people in New Orleans without cars, who depended on the state to organize their evacuation, waited for help that did not arrive, making desperate SOS signs or rafts out of their refrigerator doors. Those images shocked the world because, even if most of us had re­signed ourselves to the daily inequalities of who has access to health care and whose schools have decent equipment, there was still a widespread assumption that disasters were supposed to be different. It was taken for granted that the state - at least in a rich country - would come to the aid of the people during a cataclysmic event. The images from New Orleans showed that this general belief - that disasters are a kind of time-out for cut­-throat capitalism, when we all pull together and the state switches into higher gear - had already been abandoned, and with no public debate. There was a brief window of two or three weeks when it seemed that the drowning of New Orleans would provoke a crisis for the economic logic that had greatly exacerbated the human disaster with its relentless attacks on the public sphere."(408)

De ellende werd echter op dezelfde manier aangepakt als die in Irak en elders: de crisissituatie werd benut om allerlei neoliberale plannen door te zetten voor privatisering en zo verder.

"As in Iraq, government once again played the role of a cash machine equipped for both withdrawals and deposits. Corporations withdrew funds through massive contracts, then repaid the government not with reliable work but with campaign contributions and/or loyal foot soldiers for the next elections. (According to The New York Times, "the top 20 service contractors have spent nearly $300 million since 2000 on lobbying and have donated $23 million to political campaigns". The Bush administration, in turn, increased the amount spent on contractors by roughly $200 billion between 2000 and 2006.)"(412)

"The American Society of Civil Engineers said in 2007 that the U.S. had fallen so far behind in maintaining its public infrastructure - roads, bridges, schools, dams - that it would take more than a trillion and half dollars over five years to bring it back up to standard. Instead, these types of expenditures are being cut back. At the same time, public infrastructure around the world is facing unprecedented stress, with hurricanes, cyclones, floods and forest fires all increasing in frequency and intensity. It's easy to imagine a future in which growing numbers of cities have their frail and long-neglected infrastructures knocked out by disasters and then are left to rot, their core ser­vices never repaired or rehabilitated. The well-off, meanwhile, will withdraw into gated communities, their needs met by privatized providers."(415)

(423) Chapter 21 - Losing the peace incentive - Israel as warning

"The recent spate of disasters has translated into such spectacular profits that many people around the world have come to the same conclusion: the rich and powerful must be deliberately causing the catastrophes so that they can exploit them. (...) The truth is at once less sinister and more dangerous. An economic system that requires constant growth, while bucking almost all serious attempts at environmental regulation, generates a steady stream of disasters all on its own, whether military, ecological or financial. The appetite for easy, short-term profits offered by purely speculative investment has turned the stock, currency and real estate markets into crisis-creation machines, as the Asian financial crisis, the Mexican peso crisis and the dot-com collapse all demon­ strate. "(426)

"While the disaster capitalism complex does not deliberately scheme to cre­ate the cataclysms on which it feeds (though Iraq may be a notable exception), there is plenty of evidence that its component industries work very hard indeed to make sure that current disastrous trends continue unchallenged. Large oil companies have bankrolled the climate-change-denial movement for years; ExxonMobil has spent an estimated $16 million on the crusade over the past decade. While this phenomenon is well known, the interplay between disaster contractors and elite opinion-makers is far less understood. Several influential Washington think tanks - including the National Institute for Public Policy and the Center for Security Policy - are heavily funded by weapons and homeland security contractors, which profit directly from these institutes' ceaseless portrayal of the world as a dark and menacing place, its troubles re­sponsive only to force. The homeland security sector is also becoming increas­ingly integrated with media corporations, a development with Orwellian implications."(427)

"Like the global economy in general, Israel's political situation is, most agree, disastrous, but its economy has never been stronger, with 2007 growth rates rivaling those of China and India. (...) From a so­cial and political perspective, however, Israel should serve as something else - a stark warning. The fact that Israel continues to enjoy booming pros­perity, even as it wages war against its neighbors and escalates the brutality in the occupied territories, demonstrates just how perilous it is to build an economy based on the premise of continual war and deepening disasters."(428)

(443) Conclusion - Shock wears off - The rise of people's reconstruction

Friedman overleed in 2006. Maar al daarvoor begonnen er scheuren te komen in het neoliberale denken en in het succes ervan. Zo verloren de Republikeinen in de VS de verkiezingen. De resultaten van het rampenkapitalisme zijn er dan ook naar: welvaart wordt duidelijk niet gedeeld of gespreid.

"In December 2006, a month af­ter Friedman died, a UN study found that "the richest 2 percent of adults in the world own more than half of global household wealth". The shift has been starkest in the U.S., where CEOs made 43 times what the average worker earned in 1980, when Reagan kicked off the Friedmanite crusade. By 2005, CEOs earned 411 times as much."(444)

En er was nog meer aan de hand, gezien de vele gewelddadige, criminele en onwettige manieren waarop het neoliberalisme aan hele bevolkingen werd opgelegd:

"Throughout its thirty-five-year history, the Chicago School agenda has advanced through the intimate cooperation of powerful business figures, crusading ideologues and strong-arm political leaders. By 2006, key players from each camp were either in jail or up on charges."(445)

"Besides legal trouble, there was another cloud on the horizon. The effects of the shocks that had been so integral to creating the illusion of ideological consensus were beginning to wear off. "(446)

"In the years since, that wide-awake shock resistance has spread to many other former shock labs—Chile, Bolivia, China, Lebanon. And as people shed the collective fear that was first instilled with tanks and cattle prods, with sudden flights of capital and brutal cutbacks, many are demanding more democracy and more control over markets. "(447)

"The powerful rejection of what the French call 'savage capitalism' takes many different forms, including reactionary and racist ones. (...) With socialism still closely associated with the decades of brutality carried out in its name, public anger has few outlets for expression except national­ism and protofascism."(448-449)

Desondanks hebben de opvattingen en de praktijk van het democratisch socialisme - zoals onder Allende al - de beste papieren voor een vreedzame groei en verdeling van welvaart.

"Washington has always regarded democratic socialism as a greater threat than totalitarian Communism, which was easy to vilify and made for a handy enemy. In the sixties and seventies, the favored tactic for dealing with the inconvenient popularity of developmentalism and democratic socialism was to try to equate them with Stalinism, deliberately blurring the clear dif­ferences between the worldviews. (Conflating all opposition with terrorism plays a similar role today.)"(451)

"Latin America's most significant protection from future shocks (and therefore from the shock doctrine) flows from the continent's emerging independence from Washington's financial institutions, the result of greater integration among regional governments. "(456-457)

"The IMF, a pariah in so many countries where it has treated crises as profit-making opportunities, is start­ ing to wither away. The World Bank faces an equally grim future."(457)

"It stands to reason that the revolt against neoliberalism would be in its most advanced stage in Latin America - as inhabitants of the first shocklab, Latin Americans have had the most time to recover their bearings. Years of street protests have created new political groupings, eventually gaining the strength not just to take state power but to begin to change the power structures of the state. There are signs that other former shock laboratories are on the same path. In South Africa, 2005 and 2006 were the years that the long-neglected slums decisively abandoned their party loy­alty to the ANC and began protesting against the broken promises of the Freedom Charter. Foreign journalists commented that this kind of up­ heaval had not been seen since the townships rose up against apartheid. But the most remarkable mood change is taking place in China. For many years, the raw terror of the Tiananmen Square massacre succeeded in supressing popular anger at the erosion of workers' rights and deepening rural poverty. Not anymore. According to official government sources, in 2005 there were a staggering eighty-seven thousand large protests in China, involving more than 4 million workers and peasants. China's activist wave has been met with the most extreme state repression since 1989, but it has also resulted in several concrete victories: major new spending in ru­ral areas, better health care, pledges to eliminate education fees. China too is coming out of shock."(458)

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