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Title: Exclusive excerpt from The Shock Doctrine
Source:
Globe and Mail
URL Source: http://www.theglobeandmail.com/serv ... .wshock0908/BNStory/Front/home
Published: Sep 9, 2007
Author: Naomi Klein
Post Date: 2007-09-09 10:10:16 by Zipporah
Keywords: None
Views: 147
Comments: 10
In Naomi Klein's The Shock Doctrine: The Rise of Disaster Capitalism, she argues that an idea that began with Chicago School economist Milton Friedman has determined much of the course of recent history – that a time of crisis, whether a war or a hurricane, offers a strategic opportunity to overwrite the resulting “blank slate” with market privatization and corporatism. Ms. Klein traces the application of such “shock treatment” to Chile in the 1970s, Russia in the 1990s and elsewhere. She argues that “disaster capitalism” has exploited Sept. 11, Hurricane Katrina and Iraq. In this section, she considers the aftermath of George W. Bush's “anti-Marshall Plan”: Rather than help Iraqis rebuild their own economy, as the U.S. did in Germany in Japan in the 1940s, she says, they would permit Western corporations to remake Iraq in their own image. Things did not go as planned. But were some of those goals achieved? On my flight leaving Baghdad, every seat was filled by a foreign contractor fleeing the violence. It was April, 2004, and both Fallujah and Najaf were under siege; 1,500 contractors pulled out of Iraq that week alone. Many more would follow. At the time, I was convinced that we were seeing the first full-blown defeat of the corporatist crusade. Iraq had been blasted with every shock weapon short of a nuclear bomb, and yet nothing could subdue this country. The experiment, clearly, had failed. Naomi Klein The Shock Doctrine: The Rise of Disaster Capitalism Naomi Klein, author of No Logo, and Alfonso Cuaron, director of Children of Men, present a short film from Klein's new book Now I'm not sure. On one level, there is no question that parts of the project were a disaster. [Former Iraq administrator Paul] Bremer was sent to Iraq to build a corporate utopia; instead, Iraq became a ghoulish dystopia where going to a simple business meeting could get you lynched, burned alive or beheaded. By May, 2007, more than 900 contractors had been reported killed and “more than 12,000 wounded in battle or injured on the job,” according to a New York Times analysis. The investors Bremer had done so much to attract had never showed up – not HSBC, or Procter & Gamble, which put its joint venture on hold, as did General Motors. New Bridge Strategies, the company that had gushed about how “a Wal-Mart could take over the country,” conceded that “McDonald's is not opening any time soon.” Bechtel's reconstruction contracts did not roll easily into long-term contracts to run the water and electricity systems. And by late 2006, the privatized reconstruction efforts that were at the centre of the anti–Marshall Plan had almost all been abandoned on the ground – and some rather dramatic policy reversals were in evidence. Stuart Bowen, U.S. special inspector general for Iraq reconstruction, reported that in the few cases where contracts were awarded directly to Iraqi firms, “it was more efficient and cheaper. And it has energized the economy because it puts the Iraqis to work.” It turns out that funding Iraqis to rebuild their own country is more efficient than hiring lumbering multinationals who don't know the country or the language, surround themselves with $900-a-day mercenaries and spend as much as 55 per cent of their contract budgets on overhead. Jon C. Bowersox, who worked as the health adviser at the U.S. embassy in Baghdad, offered this radical observation: The problem with Iraq's reconstruction, he said, was its desire to build everything from scratch. “We could have gone in and done low-cost rehabs, and not tried to transform their health-care system in two years.” An even more dramatic about turn came from the Pentagon. In December, 2006, it announced a new project to get Iraq's state-owned factories up and running – the same ones that Bremer had refused to supply with emergency generators because they were Stalinist throwbacks. Now the Pentagon realized that instead of buying cement and machine parts from Jordan and Kuwait, it could be purchasing them from languishing Iraqi factories, putting tens of thousands to work and sending revenue to surrounding communities. […] Army Lieutenant-General Peter W. Chiarelli, the top U.S. field commander in Iraq, explained that “we need to put the angry young men to work. … A relatively small decrease in unemployment would have a very serious effect on the level of sectarian killing going on.” He couldn't help adding, “I find it unbelievable after four years that we haven't come to that realization. … To me, it's huge. It's as important as just about any other part of the campaign plan.” Do these about-turns signal the death of disaster capitalism? Hardly. By the time U.S. officials came to the realization that they didn't need to rebuild a shiny new country from scratch, that it was more important to provide Iraqis with jobs and for their industry to share in the billions raised for reconstruction, the money that would have financed such an undertaking had already been spent. The oil grab Meanwhile, in the midst of the wave of neo-Keynesian epiphanies, Iraq was hit with the boldest attempt at crisis exploitation yet. In December, 2006, the bipartisan Iraq Study Group fronted by James Baker issued its long-awaited report. It called for the U.S. to “assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise” and to “encourage investment in Iraq's oil sector by the international community and by international energy companies.” Naomi Klein The Shock Doctrine: The Rise of Disaster Capitalism Naomi Klein, author of No Logo, and Alfonso Cuaron, director of Children of Men, present a short film from Klein's new book Most of the Iraq Study Group's recommendations were ignored by the White House, but not this one: The Bush administration immediately pushed ahead by helping to draft a radical new oil law for Iraq, which would allow companies like Shell and BP to sign 30-year contracts in which they could keep a large share of Iraq's oil profits, amounting to tens or even hundreds of billions of dollars – unheard of in countries with as much easily accessible oil as Iraq, and a sentence to perpetual poverty in a country where 95 per cent of government revenues come from oil. This was a proposal so wildly unpopular that even Paul Bremer had not dared make it in the first year of occupation. Yet it was coming up now, thanks to deepening chaos. Explaining why it was justified for such a large percentage of the profits to leave Iraq, the oil companies cited the security risks. In other words, it was the disaster that made the radical proposed law possible. Washington's timing was extremely revealing. At the point when the law was pushed forward, Iraq was facing its most profound crisis to date: The country was being torn apart by sectarian conflict with an average of one thousand Iraqis killed every week. Saddam Hussein had just been put to death in a depraved and provocative episode. Simultaneously, Bush was unleashing his “surge” of troops in Iraq, operating with “less restricted” rules of engagement. Iraq in this period was far too volatile for the oil giants to make major investments, so there was no pressing need for a new law – except to use the chaos to bypass a public debate on the most contentious issue facing the country. Many elected Iraqi legislators said they had no idea that a new law was even being drafted, and had certainly not been included in shaping its outcome. Greg Muttitt, a researcher with the oil-watch group Platform, reported: “I was recently at a meeting of Iraqi MPs and asked them how many of them had seen the law. Out of 20, only one MP had seen it.” According to Muttitt, if the law was passed, Iraqis “would lose out massively because they don't have the capacity at the moment to strike a good deal.” Iraq's main labour unions declared that “the privatization of oil is a red line that may not be crossed” and, in a joint statement, condemned the law as an attempt to seize Iraq's “energy resources at a time when the Iraqi people are seeking to determine their own future while still under conditions of occupation.” The law that was finally adopted by Iraq's cabinet in February, 2007, was even worse than anticipated: It placed no limits on the amount of profits that foreign companies can take from the country and placed no specific requirements about how much or little foreign investors would partner with Iraqi companies or hire Iraqis to work in the oil fields. Most brazenly, it excluded Iraq's elected parliamentarians from having any say in the terms for future oil contracts. Instead, it created a new body, the Federal Oil and Gas Council, which, according to The New York Times, would be advised by “a panel of oil experts from inside and outside Iraq.” This unelected body, advised by unspecified foreigners, would have ultimate decision-making power on all oil matters, with the full authority to decide which contracts Iraq did and did not sign. In effect, the law called for Iraq's publicly owned oil reserves, the country's main source of revenues, to be exempted from democratic control and run instead by a powerful, wealthy oil dictatorship, which would exist alongside Iraq's broken and ineffective government. It's hard to overstate the disgrace of this attempted resource grab. Iraq's oil profits are the country's only hope of financing its own reconstruction when some semblance of peace returns. To lay claim to that future wealth in a moment of national disintegration was disaster capitalism at its most shameless. Naomi Klein The Shock Doctrine: The Rise of Disaster Capitalism Naomi Klein, author of No Logo, and Alfonso Cuaron, director of Children of Men, present a short film from Klein's new book There was another, little-discussed, consequence of the chaos in Iraq: The longer it wore on, the more privatized the foreign presence became, ultimately forging a new paradigm for the way wars are fought and how human catastrophes are responded to. This is where the ideology of radical privatization at the heart of the Bush administration's anti-Marshall Plan paid off handsomely. The Bush administration's steadfast refusal to staff the war in Iraq – whether with troops or with civilian administrators under its control – had some very clear benefits for its other war, the one to outsource the U.S. government. This crusade, while it ceased to be the subject of the administration's public rhetoric, has remained a driving obsession behind the scenes, and it has been far more successful than all the administration's more public battles combined. […] Corporate mission creep The longer the war wore on, the more it became a privatized war, and soon enough, this was simply the new way of war. Crisis was the enabler of the boom, just as it had been for so many before. The numbers tell the dramatic story of corporate mission creep. During the first Gulf War in 1991, there was one contractor for every hundred soldiers. At the start of the 2003 Iraq invasion, the ratio had jumped to one contractor for every 10 soldiers. Three years into the U.S. occupation, the ratio had reached 1 to 3. Less than a year later, with the occupation approaching its fourth year, there was one contractor for every 1.4 U.S. soldiers. But that figure includes only contractors working directly for the U.S. government, not for other coalition partners or the Iraqi government, and it doesn't account for the contractors based in Kuwait and Jordan who had farmed out their jobs to subcontractors. British soldiers in Iraq are already far outnumbered by their countrymen working for private security firms at a ratio of 3 to 1. When Tony Blair announced in February, 2007, that he was pulling sixteen hundred soldiers out of Iraq, the press reported instantly that “civil servants hope ‘mercenaries' can help fill the gap left behind,” with the companies paid directly by the British government. At the same time, The Associated Press put the number of contractors in Iraq at 120,000, almost equivalent to the number of U.S. troops. In scale, this kind of privatized warfare has already overshadowed the United Nations. The UN's budget for peacekeeping in 2006-2007 was $5.25-billion – that's less than a quarter of the $20-billion Halliburton got in Iraq contracts, and the latest estimates are that the mercenary industry alone is worth $4-billion. So while the reconstruction of Iraq was certainly a failure for Iraqis and for U.S. taxpayers, it has been anything but for the disaster-capitalism complex. Made possible by the Sept. 11 attacks, the war in Iraq represented nothing less than the violent birth of a new economy. This was the genius of [former secretary of defence Donald] Rumsfeld's “transformation” plan: Since every possible aspect of both destruction and reconstruction has been outsourced and privatized, there's an economic boom when the bombs start falling, when they stop and when they start up again – a closed profit-loop of destruction and reconstruction, of tearing down and building up. For companies that are clever and far-sighted, like Halliburton and the Carlyle Group, the destroyers and rebuilders are different divisions of the same corporations. The Bush administration has taken several important and little examined measures to institutionalize the privatized warfare model forged in Iraq, making it a permanent fixture of foreign policy. In July, 2006, Bowen, the inspector-general for Iraq reconstruction, issued a report on “lessons learned” from the various contractor debacles. It concluded that the problems stemmed from insufficient planning and called for the creation of “a deployable reserve corps of contracting personnel who are trained to execute rapid relief and reconstruction contracting during contingency operations” and to “pre-qualify a diverse pool of contractors with expertise in specialized reconstruction areas” – in other words, a standing contractor army. Naomi Klein The Shock Doctrine: The Rise of Disaster Capitalism Naomi Klein, author of No Logo, and Alfonso Cuaron, director of Children of Men, present a short film from Klein's new book In his 2007 State of the Union address, Bush championed the idea, announcing the creation of a brand-new civilian reserve corps. “Such a corps would function much like our military reserve. It would ease the burden on the armed forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them,” he said. “It would give people across America who do not wear the uniform a chance to serve in the defining struggle of our time.” A year and a half into the Iraq occupation, the U.S. State Department launched a new branch: the Office of Reconstruction and Stabilization. On any given day, it is paying private contractors to draw up detailed plans to reconstruct 25 different countries that may, for one reason or another, find themselves the target of U.S.-sponsored destruction, from Venezuela to Iran. Corporations and consultants are lined up on “pre-signed contracts” so that they are ready to leap into action as soon as disaster strikes. For the Bush administration, it was a natural evolution: After claiming it had a right to cause unlimited pre-emptive destruction, it then pioneered pre-emptive reconstruction – rebuilding places that have not yet been destroyed. So in the end, the war in Iraq did create a model economy – it was just not the Tiger on the Tigris that the neo-cons had advertised. Instead, it was a model for privatized war and reconstruction – a model that quickly became export-ready. Until Iraq, the frontiers of the Chicago crusade had been bound by geography: Russia, Argentina, South Korea. Now a new frontier can open up wherever the next disaster strikes.
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#8. To: Zipporah, REDPANTHER (#0)
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Here Klein speaks about her book.. part 1 of 6
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