http://www.inthesetimes.com/article/3406/the_new_road_to_serfdom/In the early ’80s, as Margaret Thatcher attempted to hack away at England’s substantial public sector, she found a frustrating degree of public resistance. The closer she got to the bone, the more the patient wriggled and withdrew. Thatcher doggedly persisted, yet her pace wasn’t fast enough for right-wing Austrian economist Friedrich von Hayek, her idol and ideological mentor. You see, in 1981, Hayek had traveled to Gen. Augusto Pinochet’s Chile, where, under the barbed restraints of dictatorship and with the guidance of University of Chicago-trained economists, Pinochet had gouged out nearly every vestige of the public sector, privatizing everything from utilities to the Chilean state pension program. Hayek returned gushing, and wrote Thatcher, urging her to follow Chile’s aggressive model more faithfully.
In her reply, Thatcher explained tersely that “in Britain, with our democratic institutions and the need for a higher degree of consent, some of the measures adopted in Chile are quite unacceptable. Our reform must be in line with our traditions and our Constitution. At times, the process may seem painfully slow.”
The Hayek/Thatcher exchange is one of many revealing historical nuggets unearthed in The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein’s ambitious history of neoliberalism. Hayek isn’t the star of The Shock Doctrine—that dubious honor goes to his protegé and fellow Nobel Laureate Milton Friedman. But Klein’s totemic, capacious and brilliant alternate history of the last three decades of global political economy can best be understood as a latter-day response to Hayek’s classic right-wing manifesto, The Road to Serfdom.
Written in exile, while Europe burned, The Road to Serfdom’s simple but powerful thesis was that the encroachment of the state into economic affairs inevitably leads to an encroachment in all spheres. For Hayek and his intellectual descendants—from Friedman (Milton) to Friedman (Thomas)—political freedom and economic freedom were inseparable and mutually reinforcing. And over the last 30 years, the adherents of the Friedman/Hayek School have pointed to two coincidental trends in global political economy to back this grand claim: First, the fall of command-and-control economies and the dismantling of welfare states. The second, the rise of democratic governance. With cunning aplomb, neoliberal writers and historians have packaged these two distinct phenomena together as one single story of progress and development. Look: Freedom’s on the march!
Klein resurrects Hayek’s argument and inverts it, showing how time and again, the “economic freedom” envisioned by Hayek and his ilk has been imposed at the expense of political freedom, often, Klein writes, “midwifed by the most brutal forms of coercion.” From Chile to Iraq, majorities empowered to choose their own government don’t start clamoring for flat taxes, privatized post offices and an end to controls on foreign capital. Instead, they often form unions or call for increased social spending. The Shock Doctrine is an encyclopedic catalog of the tactics that governments, corporations and economists have used to impose— usually over popular opposition—what Klein calls the “policy trinity” of the Chicago-School program: “the elimination of the public sphere, total liberation for corporations and skeletal social spending.”
Over the course of 500 pages, Klein documents the moments of chaos and disruption that allow a small coterie of experts to swoop in and administer what’s invariably called “bitter medicine,” “painful reforms” or “shock therapy.” “Only crisis,” she quotes Milton Friedman as once observing, “actual or perceived, produces real change.” While Klein calls this the “shock doctrine,” I prefer a phrase she quotes from former World Bank Chief Economist Joseph Stiglitz, who called those who imposed free-market “shock therapy” on Russia in the early ’90s “market Bolsheviks.” Like Lenin, these economic policy-makers saw opportunity in crisis, and were skeptical, even contemptuous of democratic pieties. They were convinced that only an enlightened vanguard would be able to take the painful, sometimes bloody steps necessary to bring about revolution. The most extreme of them also shared with Lenin the impulse to start anew, to wipe out history, to work off a blank slate. They held the perverse belief that a proposal’s ideological purity is directly proportional to the pain and disruption it causes.
Klein’s history begins in Chile in 1973 and ends....
http://www.inthesetimes.com/article/3406/the_new_road_to_serfdom/