The Shock Doctrine: Turning a tsunami into a windfall—for some

[Joanne98]

Turning a tsunami into a windfall—for some
By New American Media
Updated Jan 9, 2008, 04:56 pm

Naomi Klein discusses disaster capitalism and its impact

The Christmas tsunami of 2004 left a devastating trail of destruction but for some it opened up huge business opportunities. It created a blank slate for what Naomi Klein calls “shock doctrine.” This is how shock doctrine works. First there is a disaster, a coup, a terrorist attack, a tsunami, a hurricane: the population goes into shock, the economy is in a shambles, it’s a perfect opportunity to push through unpopular economic shock therapy. This means privatizing resources and selling state assets. Naomi Klein (NK) traveled all over the world from Argentina in Chile, to South Africa and Iraq and to post-tsunami Sri Lanka to demonstrate how disaster capitalism works. This is an excerpt of an interview with Klein about her book “The Shock Doctrine: The Rise of Disaster Capitalism” on NAM’s radio show UpFront. The interview was conducted by New American Media’s Sandip Roy (SR).

SR: Now disasters, coups or tsunamis, are not new, but when did they first become an excuse to completely gut and remake a country?

NK: Different political movements have used shocks and crises to build their utopian societies. You could argue that the Bolsheviks did it. You could argue that Hitler did it. This book is an alternative history of the rise of the market fundamentalism that we are living with now. The first time that a coup or shock was used to push through this sort of extreme country makeover was Chile in 1973.

What happened in Chile in 1973 was unique because in the aftermath of the brutal coup that overthrew Salvador Allende, the president of Chile—there was a right wing revolution in that country and Augusto Pinochet the infamous dictator, led the military side of that coup, but there was an economic side as well and that was led by the so-called “Chicago Boys” who had trained at the University of Chicago under Milton Friedman, and Friedman himself acted as an advisor to Pinochet.

Friedman used the phrase “economic shock treatment” to describe what he was prescribing for the economy. That meant deep social cuts to health care and education, 30 percent reductions—eventually 50 percent—reductions in spending. Total free trade, privatization of massive parts of the economy—so it was this extreme country makeover phenomenon and Chile was the very first laboratory.

SR: But you don’t always need a coup. In your book you talk about natural disasters like Katrina or the tsunami. Could you explain what happened after them?

NK: In the book I explore what happens to societies in a state of shock. In fact I look at torture as a kind of metaphor to help us understand what happens to whole societies after they have experienced some kind of a crisis.

The reason crises are so useful to push through policies that don’t enjoy popular democratic support is that in the midst of a crisis people regress, they become fearful. They look to strong leaders, and they look to anyone that seems to have a magic cure. Most of all, they are distracted. You see this more and more because the shocks being harnessed are getting bigger. This is where the idea for the book came in—I noticed that crises had always been used to push through these unpopular policies but now it was (happening after) natural disasters.

After a natural disaster, governments desperately need any kind of foreign aid, especially if they are indebted countries already. They have this huge reconstruction job ahead and they are pretty much willing to do anything to get that aid money. This is a backdoor way of pushing through a “Structural Adjustment Program” precisely because the leverage of the lender is so high.

Second, the population is in a state of—if not fear or shock—then at least concentrated on the daily concerns, digging out their families putting the pieces back together—mourning the dead, and moving on. This is not a moment when there can be profound democratic debates about privatizing the electricity system.

The most dramatic example of this was the tsunami on Boxing Day (Dec. 26) 2004. Four days later, while the country is still in the grips of this disaster, 40,000 people had just died and the government in the capital of Colombo (had) prepared the ground for water privatization which is the more controversial piece of this economic program. That’s what I mean by disaster capitalism.

SR: You said when you went to Sri Lanka after the tsunami the fisher folk found that hotels looking for beachfront property had grabbed their land.

NK: I definitely saw that. People were moved to inland camps, about half a million people, in the name of safety and security and at the same time there was all this construction on by hotel developers. Really, it was a land grab.

The U.S. government was pushing that the tsunami was an opportunity for Sri Lanka to really launch its high-end eco-tourism market. The World Bank was very aggressive in pushing to adopt these policies in response to giving aid.

The NGOs we gave money to were giving aid to people in these inland camps which were holding pens which were keeping these people in a passive state while this theft was going on. There’s a lot of regret now of those on the ground in the tsunami-affected region who realize they were accomplices to the theft.

SR: So does that mean as people giving aid after natural disasters, we are accomplices in the theft? That’s scary.

NK: It is. The role of government and the UN is receding and the role of NGOs is becoming a quasi-governmental force around the world. We need to ask more of the agencies we give money to and as climate change accelerates and we see more of these disasters, we are going to see more of a politicization of charity. We just trust that our money is going to be used properly and we now know that it isn’t always. And the danger is that people won’t respond to disasters as they have in the past.

SR: What can people do?

NK: I was in New Orleans for a conference between Indian community organizers and survivors of the tsunami and community organizers in New Orleans talking about how disaster capitalism was playing out in their countries. What came up again and again was the need to keep NGOs accountable for the money they raise—not to you and me who send the money—but to the people in whose name they raise the money. People have to tell the NGOs what they need. They are in a much better position to define this than foreign NGOs who fly in with often really inappropriate ideas. In Sri Lanka some of them were building houses out of corrugated steel which were then called “microwave ovens.” People preferred to sleep outside.

SR: Your book demonstrates a lot about how the shock doctrine basically sells off state assets to private corporations. If you look at Yahoo being raked over the coals over human rights abuses, corporations can sometimes be held more accountable in ways that governments cannot. Couldn’t there be a good side to it in terms of accountability?

NK: We are holding corporations accountable for sweat shop abuses and environmental devastation. It isn’t a substitute for regulation. Hopping from one scandal to the next creates a wave of apology, a new code of conduct—you hire a public relations firm.

Now, we’re hearing the same rhetoric from oil companies in the face of peoples’ desires for real regulation to deal with climate change. The oil companies are saying we’ll deal with this voluntarily; we don’t need governments to put emissions caps on us. But, the stakes in this are so much higher we really have to stop deluding ourselves to think that we can have real self-monitoring just based on serial scandals that happen to come out.
http://www.finalcall.com/artman/publish/article_4271.shtml

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1. Other forms of a tsunami: World Bank and IMF. n/t