Now for the Real Shock Doctrine

Worth A Look, Role of Government, Frontier Centre

As is now well known, Barack Obama’s new Chief of Staff, Rahm Emanuel, told a Wall Street Journal conference last week that, “You never want a serious crisis to go to waste.” He added, his eye on the worsening financial environment, that “This crisis provides the opportunity for us to do things that you could not do before.” President-elect Obama appears to be taking the crisis strategy to heart. Announcing his economic team yesterday, Mr. Obama spoke of an economic crisis of “historic proportions” that requires immediate response: “If we do not act swiftly and boldly, most experts believe we could lose millions of jobs next year.”

The crisis mentality, the idea that disasters should be seized and used as springboards for the imposition of radical ideas, appears to be gaining favour in all circles. In an economic and financial meltdown, it’s time to bring in those languishing policy ideas — radical labour reform, ratchet up government spending, nationalize industries, roll-out energy controls, re-regulate banking and industry, socialize health care, turn the economy over to the carbon police. “Now is the time to confront the challenge of [carbon emissions and climate change] once and for all,” said Mr. Obama last week. “Delay is no longer an option. Denial is no longer acceptable.”

But wait a minute. Haven’t we heard all this before? Isn’t cashing in on crisis supposed to have been George W. Bush’s game, with the evil Dick Cheney at his side and propped up by the crisis-mongering cabal of capitalist free-market running dogs from the Chicago School, the Milton Friedmanites? Isn’t this Naomi Klein’s The Shock Doctrine actually being implemented — not by the right but by the left?

Looks like it to me, which is perhaps why we haven’t heard too much criticism from the left on the emergence of Barack Obama as the world’s leading practitioner of the art of disasterism. Ms. Klein reached hard to paint President Bush as a ruthless crisis monger. He invaded Iraq after 9/11 because it was something his administration’s key advisors (and his father?) always wanted to do. The War on Terror was a pretext for privatization and security controls. Hurricane Katrina turned into a great opportunity to roll-back labour standards, close public housing and privatize schools in New Orleans. Free trade was foisted on Americans by politicians during economic turmoil.

All that was deplorable when the Bush administration seemed to be doing it, but it’s OK on the left now when their man is talking about turning the current economic crisis into an open pit for every policy intervention sitting in the filing cabinets of liberal think-tanks and Democrats in Congress. It’s apparently just fine to cash in on a crisis if the initiatives are the ones you want.

In the wildest reaches of her shock doctrine theories, Ms. Klein seemed to be saying that the capitalists almost deliberately created crises so that they could turn them into vehicles for market reforms, free trade and privatization. “The fundamentalist form of capitalism has always needed disasters to advance.”

But the idea that capitalism creates its own disasters to advance its cause seems to fall apart in the wake of the current economic meltdown. The very strategy Ms. Klein pinned on the late Nobel economist Milton Friedman and capitalism turns out instead to be the modus operandi of the Obama interventionists. She said of Mr. Friedman, as the creator of the “disaster capitalism complex,” that his aim was to overthrow the Keynesian policies and welfare structures that pushed government deeper and deeper into economic control. “Some people stockpile canned goods and water in preparation for major disasters; Friedmanites stockpile free-market ideas.”

As it turns out, the Friedmanites warehouse of market ideas — privatization, deregulation, market forces — currently look to be no match for the massive underground Doctor No storehouse of liberal, leftist and socialist schemes being hauled to the surface by the Obamaites.

Americans don’t like to have the word “socialism” attached to their governments; that’s for lesser, backwater nations like Canada, France, Peru and the old Yugoslavia. The United States, as CNN likes to see it, is a capitalist country, even as its politicians rush to bring in a rash of Keynesian interventions and state controls.

If socialism is defined as a centrally planned economy in which the government controls all means of production, America isn’t there yet. But the Obama agenda, from health care to energy policy to the auto industry, is certainly built around the idea that government control of the means of production is the answer to America’s economic and social ills.

Even under President Bush, as the financial crisis deepened, little thought appears to have been given to the government’s creeping nationalization of banks and the financial markets, which continued yesterday with the bailout of Citigroup. Mr. Bush speaks proudly of his dedication to free markets and capitalism, but he clearly — contrary to the nonsense claims of Ms. Klein — has never been in the business of promoting Friedmanite capitalism.

As we are now witnessing, Klein’s disaster capitalist complex is a mythical creation, the shock doctrine of disaster capitalism an artificial construct. Disaster capitalism never got off the ground. From Russia to Canada to Europe and the United States under Franklin D. Roosevelt’s New Deal, there isn’t a country in the world that hasn’t undergone the experience of a political takeover by the left on the wave of a crisis.

What is unfolding before us is a classic enactment of disaster socialism.