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Capitalism's catastrophe

David Floyd talks to Naomi Klein about her new book The Shock Doctrine

Very few politicians have run for election promising mass unemployment, much lower wages and a long period of economic chaos for most people, coupled with grotesque enrichment for a small elite.

Once in power, though, many leaders elected over the last 40 years across the globe have chosen to follow economic strategies that they have known to be almost certain to deliver those things. Most of them have pretty much got away with it.

How have they managed it? According to Canadian journalist Naomi Klein, it's often as a result of The Shock Doctrine.

Klein, who first came to prominence on a global scale following the publication in 2000 of her deconstruction of brand culture No Logo is in London to promote her new book The Shock Doctrine: The Rise of Disaster Capitalism.

It's a rigorous 446-page - plus 60 more pages of notes - challenge to the official history of the rise of the neo-liberal economic model pioneered by the economist Milton Friedman and his followers at the University of Chicago and put in practice by a rogues' gallery of right-wingers stretching from Indonesian dictator General Suharto to our own Margaret Thatcher.

The "shock" bit of Shock Doctrine refers to the implementation of neo-liberal economic reforms at the point where the population of the country being "reformed" is too disorientated by crisis to prevent it.

Klein believes that crisis is almost essential to enable wide-ranging neo-liberal reforms.

"I don't think you can go all the way without some enabling crisis," she says.

"You can impose these policies in half measure, but to go the whole hog on the programme there has to be some kind of crisis.

"Now, the crisis doesn't have to be violence. It can be an economic meltdown, but there does have to be some kind of repression, particularly of the labour movement."

The crises examined in the book range from those actively created by political and corporate forces with a neoliberal agenda - such as Pinochet's military coup in Chile - to natural disasters which are used as an opportunity for economic transformation, such as the Asian tsunami in 2004.

One of Klein's starting points was a documentary charting the success of Friedmanite policies across the globe.

"Commanding Heights - a three-part documentary series that was on BBC and Public Broadcasting a few years ago - was the official triumphant story of the spread of Friedrich von Hayek and Milton Friedman's ideas. I'm looking at some of the episodes that they chose to highlight - Bolivia, Poland, Russia."

While she acknowledges that, in cases such as Chile, neo-liberal thinkers condemned the undemocratic means used to deliver their economic policies, that certainly isn't true in every case.

"I was watching Commanding Heights and looking at this interview with Goni, the former president of Bolivia. He said that our real breakthrough was that we did this in a democracy and then he just said in a off-hand way: 'Well, of course there was the state of siege' and I was like: 'State of siege, what?' And so, I just started researching what actually happened in Bolivia in that period."

Klein is determined to disentangle the now almost automatic linkage, particularly in the West, of freedom and democracy with the neoliberal free market economy.

"The goal of this book is to fill in some of the holes in that history, to put the violence and the shocks back into the story. And so that we understand that this was contested, you know, it wasn't a clean sweep."

Shock Doctrine tells the story of the market liberalisation process from the point of view of the people who experienced it, providing unexpected angles on events such as the Tiananmen Square massacre and Boris Yeltsin's battle with the Russian parliament.

Klein also details the crushing of the co-operative ideals of Poland's Solidarity movement thanks to the advice of Harvard economist Jeffrey Sachs.

"Really, this is the second draft of history. The journalists got the first draft and now the second draft is emerging and I'm connecting the dots - from the Polish academics that helped me with the Polish chapter to the new wave of thinkers in China who are emerging and giving their interpretations of events."

When it comes to the war in Iraq, though, even the official view of events now accepts that there is crisis. Klein, however, firmly rejects the conventional view that things went wrong due to a lack of planning, pointing out bluntly: "They knew exactly what they were gonna do next."

According to Klein, the US administration tried to turn post-Saddam Iraq into some kind of free-market utopia, although "free market" in this case meant that the vast majority of business would be going to US defence contractors.

Klein thinks that the failure of the mainstream media to understand the political content to the catastrophic policies of Iraq's US administrator Paul Bremer is a symptom of a wider problem.

"It's just a question of what gets amplified. If you look at my endnotes, my sources are the Washington Post and the Wall Street Journal - it's mainstream news sources and it's all public information. It's just that most of it is either buried on the inside pages or it's presented as corruption and scandal," she says.

"The way that corruption is built into the model and, in fact, is the desired result of the model is never discussed. It's all about new, aberrant contractors as opposed to an analysis of how Iraq was deliberately turned into a wild west so that corporations could go and gorge on it."

Klein's detractors have suggested that this analysis of economic motives is a weakness of the book. This is an objection that she finds puzzling.

"One of the criticisms of the book is that I attribute motive in these situations," she says. "For some reason, it's much more comfortable to pretend that everything's just a series of mistakes and mismanagement, that there's never any plan. I don't know why so many people really want to believe that it's all haphazard."

Even the fact that both former defence secretary Donald Rumsfeld and Vice-President Dick Cheney retained strong links to the defence industry while in office seems to have slipped off the radar. Klein finds this frustrating.

"A few years ago, there was a wave of articles about Cheney's relationship with Halliburton, but then people got bored with the story. It seemed like such an obvious point that it wasn't even one that particularly interested me. But then I realised that this wasn't being written about.

"Ultimately, I added those chapters fairly late in the game, because I realised that, actually, we need to look at this."

The term "anti-capitalism" has barely been mentioned since the emergence of "terrorism" as the all-consuming threat to the neo-liberal consensus, but Klein believes that the anti-capitalist ideas that she raised in No Logo which were aired at protests in Seattle and elsewhere are actually growing stronger.

"It was always a global movement and, if we look at the targets of that movement, they were the multilateral institutions that were advancing neo-liberalism around the world - the World Trade Organisation (WTO), The International Monetary Fund (IMF), The World Bank and then trade agreements such as the Free Trade Area of the Americas (FTAA).

"The FTAA is in crisis and the WTO is also in crisis - talks have been derailed for four years. The IMF is in debt and the World Bank had to throw Paul Wolfowitz overboard to save itself."

Klein sees the desire of neo-liberals such as Rumsfeld and Cheney to impose their ideology on the chaos of Iraq as a symptom of the growing rejection of the policies in elections and within international institutions.

"I see a relationship between this and what I'm calling the rise of disaster capitalism because I think it's become increasingly difficult, precisely because of the opposition to these policies, to impose them under non-cataclysmic circumstances."

While accepting that the rejection of neo-liberalism is currently stronger in Latin America than in the West, Klein is cautiously optimistic about the possibilities for change in Britain.

"You know, Gordon Brown made an announcement yesterday that he couldn't increase public-sector salaries, even though the City bonuses were 14 billion dollars," she says.

"I think that most thinking people will look at that and go: 'Something isn't adding up. There are more choices than we are being allowed to believe.' The difference is that Britain is still in the grip of Thatcher's fateful proclamation that there is no alternative, while other parts of the world are shaking that off.

"I think Latin America's at the forefront of this change because Latin America's lived with these policies for longest."

The Shock Doctrine doesn't propose any specific remedy for disaster capitalism. For Klein, this is not the point. Her aim is to explain how we got where we are now so that, when the next crisis hits, the left is ready to fight back.

"The reason why I think this history is so important is because many of us on the left have accepted the idea that all of our ideas have been tried and failed.

"The message of the book isn't just that capitalism has required crisis. It's also that, in Poland, people voted for Solidarity and wanted co-operatives.

"In South Africa, they voted for the ANC and they wanted redistribution and they voted for Allende in Chile.

"We're told all the time that the only thing worse than capitalism is the alternative but we need to understand that these ideas were not tried and didn't fail - they were killed in the crib."

The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein (Allen Lane, £25)

This article originally appeared in The Morning Star (www.morningstaronline.co.uk)