Naomi Klein Helping Me UnLearn What I Learned in Business School

[Joanne98]

I’m less than a third of the way through Naomi Klein’s brilliant book, The Shock Doctrine: The Rise of Disaster Capitalism, but it’s already giving me a new perspective on my years of graduate work in business school.

Klein talks about the argument made by Nobel-prize-winning economist Milton Friedman, that free-unfettered capitalism is the key to bringing all economic indicators in line, leading to a humming economy. Part of the allure of all economic theories, of course, is their ability to express their theories in terms of mathematical formulas. We have a tendency in the West, to think that numbers bestow reality on assertions. But Klein points out that Friedman implied that his free market theories had the strength of natural law.


In the early 1980’s, I was seduced by that very argument. As the daughter of a biologist, in my early 20’s, it was an especially appealing one for me. I was further pushed towards the search for such a comforting world view, by my experiences in the world of social work and government funding. Coming straight out of a very (in both senses of the word) liberal arts college, and armed with the latest psychological theories, it was a rude awakening to my idealistic sensibilities.

My journey to business school started with my training in Gestalt theories of psychology and therapy. The Gestalt method applied principles of learning and perception, as well as some Eastern notions of mind-body integration, to group dynamics and self-actualization. Some Gestalt-types were applying their Gestalt training to Organizational Development, so I followed their example by pursuing graduate degrees in business schools.

When I began to take the required Economics courses, the elegance and security provided by the likes of Friedman was like a breath of fresh air. Finally, a sense of order, in the wake of my messy experience in the real world. I was hooked.

I’ve long since become critical of my economics lessons, as they - as the “dismal science” is famous for - were based on some stringent assumptions. To my mind, the most important assumption was the free and equal access to information by both sides of a supply-demand negotiation. Obviously, that never happens - consumers and employees in particular never have as much information as the large corporations that hire them and sell them goods and services.

What Naomi Klein made me realize, was the fallacy of the “natural science” analogy. It’s so tempting to think about natural laws as applying to the economy, and Friedman convinced the world that he, alone, had the secret for managing those laws. Of course, like televangelists who reserve for themselves the power to interpret scripture, Friedman reserved for himself the power to determine which inputs and outputs would be acknowledged, and which would be invisible. As Klein emphasizes, the pain of the vast majority of people in a host of countries was given short shrift. More broadly, as RFK famously pointed out:

"Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product ... if we should judge America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

"Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans."

Similarly, Marilyn Waring has made the astute observation that so many of the most crucial inputs into our economy - the work done by the women of the world - are not counted in economic models, and treated as somehow not work.
Lofty and elegant theories are attractive to those of us who have spent much time in academia. Klein makes a good argument that Keynesian economics - which reigned supreme after the Great Depression and had so much influence over FDR - is a practical mix of private enterprise and government responsibility, that minimizes the pain of the masses.

neoconmind.blogspot.com

The author received her Ph.D. in the field of Organizational Behavior, which she now applies to her political writing. She's been an advocate for church-state separation and other civil liberties issues. She writes on the neoconservative mind, women's issues, media, veganism and the Religious Right.

http://www.opednews.com/articles/Naomi-Klein-Helping-Me-UnL-by-Amy-Fried-080723-220.html

[The Magistrate]

1. An Excellent Article, Ma'am, Thank You For Sharing It!

[Joanne98]

12. You're welcome.

[gateley]

2. K&R! Thanks for posting, Joanne98! nt

[Sanity Claws]

3. I have also become disillusioned about my education

I went to law school and practiced for over 20 years. I'm at the point where I pretty much believe that the law simply embodies rules that favor the rich and allow them to keep their riches. The whole system is rigged. I shake my head everytime I think about how hard I worked for that kind of bullshit.
Well, it's late but at least I opened my eyes.

[Tandalayo_Scheisskopf]

5. Perhaps a shift in practice...

To aiding those who most need your expertise as an advocate? Not white-shoe work, but then most white-shoe work is ugly work with better accessorization and furniture.

My friend, the country lawyer, has been paid in cases of lettuce. Really.

[sandnsea]

7. Like that Consumer Credit Counseling

There needs to be a national non-profit legal chain. Most people wouldn't end up at CCC if they had reasonable access to a lawyer. Pro bono isn't enough. Maybe you could do that.

[Sanity Claws]

10. Thanks but I'm burned out

I did employment litigation, representing workers. I thought I'd make a difference that way. Unfortunately the system is rigged. The law has evolved so that it has become more unfavorable against workers. On top of that, you have more pro-business judiciary. You might as well bang your head against the law, as to continue practicing law for workers.
I'm trying to get out of law entirely and work in the non-profit arena, perhaps in advocacy. I'd like to see fundamental changes made in the law.

[sandnsea]

11. Oh, I get what you mean

It's like when you have two people who have done the exact same thing, oh maybe used money from a nonprofit to buy a car - and one has no problem because they know the correct way to set it up as an expense because they're, maybe, the national Red Cross director; and the other is accused of fraud because they didn't organize correctly. What's right and wrong, legal and illegal, so much of it is the mindset you bring to it and a lot of people don't see that at all. I can see where that would be very difficult.

[Demeter]

15. Then You Are Destined for Public Office

You can make a real difference in the legislature...and attract more people like you into office as allies.

[mrreowwr_kittty]

4. Great article. Thanks for posting this.

I'll be forwarding this to many people I know.

[AllieB]

6. Thank you for posting.

Notice my signature below. ;-)

[whistle]

8. The Milton Friedman argument in support of free-unfettered capitalism through

...monetary policy has been total bullshit refuted by Karl Marx over 160 years ago. Every economy needs money as a way to streamline and simplify trade and allocate resources, but to make maximization of profits the exclusive driver of an economy is complete folly.

<snip>
On the Question of Free Trade
by Karl Marx


<snip to last paragraphs>

If the free-traders cannot understand how one nation can grow rich at the expense of another, we need not wonder, since these same gentlemen also refuse to understand how within one country one class can enrich itself at the expense of another.

Do not imagine, gentlemen, that in criticizing freedom of trade we have the least intention of defending the system of protection.

One may declare oneself an enemy of the constitutional regime without declaring oneself a friend of the ancient regime.

Moreover, the protectionist system is nothing but a means of establishing large-scale industry in any given country, that is to say, of making it dependent upon the world market, and from the moment that dependence upon the world market is established, there is already more or less dependence upon free trade. Besides this, the protective system helps to develop free trade competition within a country. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain protective duties. They serve the bourgeoisie as weapons against feudalism and absolute government, as a means for the concentration of its own powers and for the realization of free trade within the same country.

But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade.
<MORE>

http://www.cooperativeindividualism.org/marx_freetrade.html

[Dr.Phool]

16. Why most economists are full of shit any way.

It's all based on discredited, obsolete, inaccurate science.

I remembered seeing this article in Scientific American.

http://www.sciam.com/article.cfm?id=the-economist-has-no-clothes


The 19th-century creators of neoclassical economics—the theory that now serves as the basis for coordinating activities in the global market system—are credited with transforming their field into a scientific discipline. But what is not widely known is that these now legendary economists—William Stanley Jevons, Léon Walras, Maria Edgeworth and Vilfredo Pareto—developed their theories by adapting equations from 19th-century physics that eventually became obsolete. Unfortunately, it is clear that neoclassical economics has also become outdated. The theory is based on unscientific assumptions that are hindering the implementation of viable economic solutions for global warming and other menacing environmental problems.

The physical theory that the creators of neoclassical economics used as a template was conceived in response to the inability of Newtonian physics to account for the phenomena of heat, light and electricity. In 1847 German physicist Hermann von Helmholtz formulated the conservation of energy principle and postulated the existence of a field of conserved energy that fills all space and unifies these phenomena. Later in the century James Maxwell, Ludwig Boltzmann and other physicists devised better explanations for electromagnetism and thermodynamics, but in the meantime, the economists had borrowed and altered Helmholtz’s equations.

The strategy the economists used was as simple as it was absurd—they substituted economic variables for physical ones. Utility (a measure of economic well-being) took the place of energy; the sum of utility and expenditure replaced potential and kinetic energy. A number of well-known mathematicians and physicists told the economists that there was absolutely no basis for making these substitutions. But the economists ignored such criticisms and proceeded to claim that they had transformed their field of study into a rigorously mathematical scientific discipline.

Strangely enough, the origins of neoclassical economics in mid-19th century physics were forgotten. Subsequent generations of mainstream economists accepted the claim that this theory is scientific. These curious developments explain why the mathematical theories used by mainstream economists are predicated on the following unscientific assumptions:

(snip) more

[eppur_se_muova]

9. SPOILER warning! ;^)

If you find the book too despressing at points (and that is a very real risk), rest assured that the ending is hopeful.

[madmusic]

13. Cool website: naomiklein.org

http://www.naomiklein.org/shock-doctrine

[eshfemme]

14. Great article! This is why I really love the concept

of a Gross National Happiness as proposed by Bhutan. Although it is a small country and hency why such an index works, it is still a worthy idea that is not given nearly as much importance as stuff like GNP is. Yes, so what if America's wealth seems to increase? But whose wealth is increasing? And from the recent failures plaguing us, it looks like even the rich elite can't enjoy an eternal Shrangri-la as their source of easy wealth has a limit: US. You would think they would realize that if you consume all the resources, the ones who actually need them are also necessary to produce the resources that is needed. It's kinda hard to harvest the crops if the crops needed to feed the farmer have already been gobbled up and the farmer starves and is unable to produce more.

[mrsjefferson]

17. great article...thank you for posting n/t

[bulloney]

18. The problem with economic theories is just that--they're theories.

These free-market, deregulated capitalism theories assume that an economy can operate in a vacuum.

As long as there are parties in an economy with more money and power than other parties, the ones who have it will use it (or abuse it) to their advantage. Capitalism by nature is cannibalistic. Big fish eat small fish until you have a monopolistic or oligopolistic economy where one or a few control the whole market. And when that happens, you don't really have capitalism anymore.

Unfortunately, there are a lot of economists who really believe that totally deregulated economies exist and work for the benefit of consumers. And they peddle their drivel on their students who become ignorant politicians and business managers who spend most of their time bitching about taxes and regulations.