http://www.zmag.org/content/showarticle.cfm?SectionID=10&ItemID=13725There's a school of thought that free markets and democracy go hand in hand and together they make people free and prosperous. You're arguing that free-market ideology has triumphed around the world not because people have embraced the market but because the ideology has been imposed on them, often in moments of distress. Furthermore, these moments of distress have sometimes been created by governments as a pretext to bring in free-market policies. To top it all off, the policies haven't really worked. They've just enriched the people who introduced them. How's that for a summary?
That's pretty good. I would quibble with a few things. I don't know that there are examples of the governments themselves creating the crises.
Okay. Is violence inherent in capitalism or is that something that's recently mutated out of capitalism as it's been practised over the last several hundred years?
I think you can make that argument. But the book is really looking at a war between different kinds of capitalism. It's about a battle of ideas between Keynesianism -- a mixed economy, which is what we have in this country -- and what I describe as a fundamentalist strain of capitalism which has an objection to the very idea of mixed economy. When these sort of fundamentalist capitalists get their way what is constructed is not capitalism at all, it's actually corporatism, China being one example ...
Give me the attributes of fundamentalist capitalism.
They're almost the attributes of every fundamentalist: the desire for purity, a belief in a perfect balance, and every time there are problems identified they are attributed to perversions, distortions within what would otherwise be a perfect system. I think you see this from religious fundamentalists and from Marxist fundamentalists, and I would argue that
Hayek and Friedman shared this dream of the pure system. These are brilliant mathematicians, in many cases, so it looks perfect in their modelling. But I think anyone who falls in love with a system is dangerous, because the world doesn't comply and then you get angry at the world.
So you have these economists advocating for this pure form of capitalism -- what is the attraction of disasters to these people?
Well, disasters are moments where people are blasted out of the way, where they are in a state of shock, whether they're scattered -- as after a hurricane hits in New Orleans -- or just picking up the pieces after having been bombed, or their entire world view has just been shattered -- as after Sept. 11. These are malleable political moments. And there is an awareness that disasters create these opportunities, so you have a whole movement -- much of it standing at the ready within the think-tank infrastructure. I think of these think tanks as sort of idea-warmers -- they keep the ideas ready for when the disaster hits. Milton Friedman said that only a crisis, real or perceived, produces real change, and when that crisis hits, the change that occurs depends on the ideas that are lying around.
Let's talk about Chile. This is a country that ... when was it, about 1970, Allende was elected. He was a social democrat, socialist, comes into power but doesn't get along with the United States, is seen to be friendly to Castro and the Soviet Union, and successive American presidents are highly suspicious of him.
It was Nixon and Kissinger together. I end the book with a quote from a declassified letter from Kissinger to Nixon where he says that the threat of Allende was not about any of the things they were publicly saying at the time -- that he was cozying up to the Soviet Union, that he was only pretending to be a democrat and that he was going to turn Chile into a totalitarian system. Kissinger writes the real threat is the problem of social democracy spreading. The Soviet Union was a convenient bogeyman. It was easy to hate Stalin, but what was always more of a threat was the idea of democratic socialism, a third way between totalitarian Communism and capitalism.
And you think they feared that more than they feared the Soviet Union in the context of the Cold War?
Well, if you follow the coups, the overthrow of Mossadegh in Iran, Arbenz in Guatemala -- these are the first two CIA coups in the '50s -- these were democratic nationalists, and it was always the same pattern of setting up this bogeyman of it's really a Soviet regime in disguise. So if we follow the coups, what we see is a desire to stomp out, systematically, this idea of a middle democratic ground. And they are a threat to U.S. foreign investment, there's no doubt.
So Allende's overthrown by Pinochet, Pinochet has a great deal of support from the United States and from the economists of the Chicago School, and is well-known to have engaged in mass murders and various forms of brutality against his opposition, and you see that as an integral part of the program, really, of installing this new economics in Chile?
The idea that you could turn Chile into a laboratory for extreme Chicago School economics is a little like thinking you could launch a revolution against capitalism in Beverly Hills. It was deeply inhospitable for these ideas. But in this collaboration between Pinochet and the economists who'd gone to the University of Chicago on grants from the U.S. State Department, Chile was a laboratory for all these ideas that to this day have not been implemented in the United States, like a flat tax -- a 15 per cent flat tax -- charter schools, labour laws that essentially made it illegal for unions to be involved in any political activity. Straight out of the handbook, you know? It was like they took Friedman's manifesto and just turned it into law. The idea that this could happen in Chile at this point in history when there was so much support for developmentalism of course required force.
You talk a lot about torture and brutality and the shock of massive change and what it does to populations, and you see it as part of the mindset of the economists, that that was the only way -- to severely shock and disorient people -- to get them to change their behaviour and accept a new ideology.
There was, and continues to be, an understanding that unless there is a massive crisis that makes the alternative look even worse, then people just don't give up things that make their lives better, whether it's unemployment insurance or public housing. I mean, look at New Orleans. People wouldn't have given up their homes if there hadn't been a natural disaster. Now, they didn't plan the natural disaster but I can tell you I was in New Orleans a week after the hurricane hit, while it was still half under water, and the newspapers were quoting a Republican congressman saying, "We couldn't clean out the housing projects but God did....Continued>>>>>
http://www.zmag.org/content/showarticle.cfm?SectionID=10&ItemID=13725
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
