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Latin America's Shock Resistance by NAOMI KLEIN http://www.thenation.com/doc/20071126/klein
In less than two years, the lease on the largest and most important US military base in Latin America will run out. The base is in Manta, Ecuador, and Rafael Correa, the country's leftist president, has pronounced that he will renew the lease "on one condition: that they let us put a base in Miami--an Ecuadorean base. If there is no problem having foreign soldiers on a country's soil, surely they'll let us have an Ecuadorean base in the United States."
Since an Ecuadorean military outpost in South Beach is a long shot, it is very likely that the Manta base, which serves as a staging area for the "war on drugs," will soon shut down. Correa's defiant stand is not, as some have claimed, about anti-Americanism. Rather, it is part of a broad range of measures being taken by Latin American governments to make the continent less vulnerable to externally provoked crises and shocks.
This is a crucial development because for the past thirty-five years in Latin America, such shocks from outside have served to create the political conditions required to justify the imposition of "shock therapy"--the constellation of corporate-friendly "emergency" economic measures like large-scale privatizations and deep cuts to social spending that debilitate the state in the name of free markets. In one of his most influential essays, the late economist Milton Friedman articulated contemporary capitalism's core tactical nostrum, what I call the shock doctrine. He observed that "only a crisis--actual or perceived--produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around."
Latin America has always been the prime laboratory for this doctrine. Friedman first learned how to exploit a large-scale crisis in the mid-1970s, when he advised Chilean dictator Gen. Augusto Pinochet. Not only were Chileans in a state of shock following Pinochet's violent overthrow of Socialist President Salvador Allende; the country was also reeling from severe hyperinflation. Friedman advised Pinochet to impose a rapid-fire transformation of the economy--tax cuts, free trade, privatized services, cuts to social spending and deregulation. It was the most extreme capitalist makeover ever attempted, and it became known as a Chicago School revolution, since so many of Pinochet's top aides and ministers had studied under Friedman at the University of Chicago. A similar process was under way in Uruguay and Brazil, also with the help of University of Chicago graduates and professors, and a few years later, in Argentina. These economic shock therapy programs were facilitated by far less metaphorical shocks--performed in the region's many torture cells, often by US-trained soldiers and police, and directed against those activists who were deemed most likely to stand in the way of the economic revolution.
In the 1980s and '90s, as dictatorships gave way to fragile democracies, Latin America did not escape the shock doctrine. Instead, new shocks prepared the ground for another round of shock therapy--the "debt shock" of the early '80s, followed by a wave of hyperinflation as well as sudden drops in the prices of commodities on which economies depended.
In Latin America today, however, new crises are being repelled and old shocks are wearing off--a combination of trends that is making the continent not only more resilient in the face of change but also a model for a future far more resistant to the shock doctrine.
When Milton Friedman died last year, the global quest for unfettered capitalism he helped launch in Chile three decades earlier found itself in disarray. The obituaries heaped praise on him, but many were imbued with a sense of fear that Friedman's death marked the end of an era. In Canada's National Post, Terence Corcoran, one of Friedman's most devoted disciples, wondered whether the global movement the economist had inspired could carry on. "As the last great lion of free market economics, Friedman leaves a void.... There is no one alive today of equal stature. Will the principles Friedman fought for and articulated survive over the long term without a new generation of solid, charismatic and able intellectual leadership? Hard to say."
It certainly seemed unlikely. Friedman's intellectual heirs in the United States--the think-tank neocons who used the crisis of September 11 to launch a booming economy in privatized warfare and "homeland security"--were at the lowest point in their history. The movement's political pinnacle had been the Republicans' takeover of the US Congress in 1994; just nine days before Friedman's death, they lost it again to a Democratic majority. The three key issues that contributed to the Republican defeat in the 2006 midterm elections were political corruption, the mismanagement of the Iraq War and the perception, best articulated by Jim Webb, a winning Democratic candidate for the US Senate, that the country had drifted "toward a class-based system, the likes of which we have not seen since the nineteenth century."
Nowhere, however, was the economic project in deeper crisis than where it had started: Latin America. Washington has always regarded democratic socialism as a greater challenge than totalitarian Communism, which was easy to vilify and made for a handy enemy. In the 1960s and '70s, the favored tactic for dealing with the inconvenient popularity of economic nationalism and democratic socialism was to try to equate them with Stalinism, deliberately blurring the clear differences between the worldviews. A stark example of this strategy comes from the early days of the Chicago crusade, deep inside the declassified Chile documents. Despite the CIA-funded propaganda campaign painting Allende as a Soviet-style dictator, Washington's real concerns about the Allende victory were relayed by Henry Kissinger in a 1970 memo to Nixon: "The example of a successful elected Marxist government in Chile would surely have an impact on--and even precedent value for--other parts of the world, especially in Italy; the imitative spread of similar phenomena elsewhere would in turn significantly affect the world balance and our own position in it." In other words, Allende needed to be taken out before his democratic third way spread.
But the dream Allende represented was never defeated. It was temporarily silenced, pushed under the surface by fear. Which is why, as Latin America now emerges from its decades of shock, the old ideas are bubbling back up--along with the "imitative spread" Kissinger so feared.
By 2001 the shift had become impossible to ignore. In the mid-'70s, Argentina's legendary investigative journalist Rodolfo Walsh had regarded the ascendancy of Chicago School economics under junta rule as a setback, not a lasting defeat, for the left. The terror tactics used by the military had put his country into a state of shock, but Walsh knew that shock, by its very nature, is a temporary state. Before he was gunned down by Argentine security agents on the streets of Buenos Aires in 1977, Walsh estimated that it would take twenty to thirty years until the effects of the terror receded and Argentines regained their footing, courage and confidence, ready once again to fight for economic and social equality. It was in 2001, twenty-four years later, that Argentina erupted in protest against IMF-prescribed austerity measures and then proceeded to force out five presidents in only three weeks.
"The dictatorship just ended!" people declared at the time. They meant that it had taken seventeen years of democracy for the legacy of terror to fade--just as Walsh had predicted.
In the years since, that renewed courage has spread to other former shock labs in the region. And as people shed the collective fear that was first instilled with tanks and cattle prods, with sudden flights of capital and brutal cutbacks, many are demanding more democracy and more control over markets. These demands represent the greatest threat to Friedman's legacy because they challenge his central claim: that capitalism and freedom are part of the same indivisible project.
The staunchest opponents of neoliberal economics in Latin America have been winning election after election. Venezuelan president Hugo Chávez, running on a platform of "Twenty-First-Century Socialism," was re-elected in 2006 for a third term with 63 percent of the vote. Despite attempts by the Bush Administration to paint Venezuela as a pseudo-democracy, a poll that year found 57 percent of Venezuelans happy with the state of their democracy, an approval rating on the continent second only to Uruguay's, where the left-wing coalition party Frente Amplio had been elected to government and where a series of referendums had blocked major privatizations. In other words, in the two Latin American states where voting had resulted in real challenges to the Washington Consensus, citizens had renewed their faith in the power of democracy to improve their lives.
Ever since the Argentine collapse in 2001, opposition to privatization has become the defining issue of the continent, able to make governments and break them; by late 2006...
http://www.thenation.com/doc/20071126/klein
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