Shocking

I'm half-way through the audiobook version of Naomi Klein's The Shock Doctrine. This excellent work (well summarized here) demolishes the economic mythos promulgated by Milton Friedman, who argued that political freedom depends on rolling back New Deal reforms in this country, and on undercutting similar reforms in other countries. Friedmanites attempt to win this argument through the technique of loud and repeated assertion, through the manipulation of data, and (as Klein documents) through more underhanded means.

As we shall see, real-world experiment has not been kind to their doctrine.

My vision is not keen enough to distinguish Friedmanist economic views from those of the Libertarians. This confluence is the reason why I consider the Ron Paul movement such a danger. Paul remains wedded to an ideology which has repeatedly failed -- indeed, the thing collapses even as we speak.

When the dictator Pinochet applied Friedmanism in Chile, even that country's business community, which had supported Allende's ouster, barked in pain. To quote from the afore-cited review:

Pinochet bought it along with a team of Chicago School alumni called “technos.” They embarked on a free market binge with disastrous results. In the first year, inflation hit 375%, thousands of Chileans lost jobs, the country was flooded with cheap imports, local businesses closed and hunger grew along with public and small business discontent in this free market “paradise.” In desperation, “it was time to call in the big guns” with Milton Friedman coming to Santiago to reinforce his message that for things to improve they first had to get worse. It was classic shock treatment and Chicago School baloney with Friedman preaching patience and promising an “economic miracle” if his prescription was followed.

Pinochet agreed, and slash and burn followed with visions of paradise at the end of the rainbow. It was pure untested fantasy, and the results showed it. After one year of hardened shock therapy, Chile’s economy contracted 15%, unemployment rocketed to 20%, and contrary to Friedman’s rosy scenario it lasted for years with no social safety net help for desperate Chileans.

Klein notes Chile today is still cited as a model that free market “Friedmanism” works in spite of the clear evidence it doesn’t.

Now we hear similar agonized barking from many sectors of the American business community. A surprising number of corporations have come to support socialized health insurance. The dollar nose-dives, stagflation looms, belts tighten, and America doesn't make much of anything.

Yet the Friedmanites and Libertarians refuse to concede an inch. They have achieved the beatific vision. They know the One Answer To Everything: End all government regulation of business; end public funding of schools and retirement; spend public monies only on the military and the enforcement of private contracts, even when those contracts favor the powerful over the weak.

A few days ago, a Libertarian visitor to Air America traced the Savings and Loan crisis of the 1990s to the creation of the FDIC, while exonerating Reagan's deregulation of the industry. Friedman himself relied on an ultra-deceptive argument in order to blame the Depression on FDR. A really clever sophist can find reason to blame "gummint regulation" for your cat's hairballs. Fact does not matter; history does not matter; environmental crisis does not matter; human misery does not matter; reality itself does not matter. Only the One Answer matters.

In the past I've said that Libertarianism (or Friedmanism) failed in a massive experiment called the 19th century. It also failed in Pinochet's Chile and Yeltsin's Russia and George Bush's Iraq. Nevertheless, the defenders of Libertarianism -- like the die-hard defenders of Communism -- will forever tell us: "Our ideology has never failed, because our ideology has never been properly tried. All previous attempts to implement this system did not go far enough." The ideological robots programmed to repeat this formulation remind me of Medieval doctors devoted to the idea of using leeches. If the patient did not improve, they kept applying the leeches, because they knew that the trick should work.

In theory.

In theory, Friedmanism/Libertarianism will always advance the cause of individual liberty. Yet in every instance when Friedmanism has made headway, individual rights have suffered. Witness Pinochet, his police state, his mass executions. Witness Operation Condor. Witness Yeltsin and the rise of the "Family" and the oligarchs. Witness the Holocaust revisionists attracted to the cause of Ron Paul.

And witness George W. Bush, who is certainly more wedded to Friedmanism than were Eisenhower and Kennedy. Do we have more liberty -- more privacy, more freedom of movement -- now than in the days of Ike and JFK? Did Truman, LBJ or even Nixon ever attempt to legalize torture?

Despite this record of failure, the Friedmanist spell continues to enchant millions of Americans. Despite an impressive record of success (and despite the fact that they fund us), the mixed economies of Western and Northern Europe continue to disgust millions of Americans. The disgust they feel for the European model (nationalized health insurance, social welfare, strong unions, regulation of large corporations) is more visceral than is the animus felt toward Soviet-style communism. When was the last time you heard right-wingers mount an ideological argument against China or Vietnam? Oh, they'll make the effort if forced to do so, but their hearts won't be in the job. Bring up Sweden, Germany or France, and watch the fires of true hatred ignite in the right-wing soul.

My problem with Klein's book concerns her side-trips into the work done by the notorious Ewen Cameron at McGill University’s Allan Memorial Institute. Klein's fascination with these ghastly experiments, funded by the CIA's MKULTRA program, is understandable. She is a Canadian feminist. Cameron worked in Canada and most of his victims were female. Alas, these sections of her book have only a tenuous connection to her critique of Friedmanism -- a link dependant on the double-meaning of the word "shock." Sorry, but economic shock and electroshock are two different things.

Klein has thus produced a strange and schizophrenic work. The end result feels as though someone has spliced pages from a Rachel Ray recipe book into a history of Athens, on the grounds that both Ray and Pericles have Greek blood. (Then again, books now carry such hefty price tags that I can't complain too much about getting two volumes for the price of one.)

The Cameron material seems to be getting the lion's share of reviewer attention. I think that this dark and frightening episode is one those tales destined to be retold every twenty or thirty years. The library in which I sit right now has several books about Cameron on its shelves -- including a little-known work which defends the monster. But few have read those books, and many who once knew the story have forgotten it. Thus, Naomi Klein's latest work carries the shock -- pardon the expression -- of the new.

Dan Brown's The Da Vinci Code provides another example of this "twenty-to-thirty years" phenomenon: It espouses a theory which seemed fresh to an audience too young to recall the furor over The Holy Blood and the Holy Grail. When the Code is forgotten (2030 or thereabouts), the same theory will inspire yet another bestseller, and the game will begin again. In that very same period, readers who are now but teenagers will learn for the first time of the evil wrought by Ewen Cameron, and they will ask why nobody told them this story before. I hope that Klein's work will then receive a reprinting and an update.