Full Version: Milton Friedman and "Disaster Capitalism."
Was Milton Friedman the major economic and political figure in the post 2nd world war world? Naomi Klein thinks so. Below is a great thought piece about Friedman and his influence although in some ways a little too historically tidy for my taste. Did this convivial little economist who was an advocate for free markets and individual liberty unleash a dark side that found a home in a land of terror and totalitarians. See what you think from this very interesting interview between Naomi and Amy Goodman of Democracy Now. There is a fairly extensive introduction so you will need to scroll down a bit if you want to get directly into the interview.
http://www.democracynow.org/article.pl?sid=07/09/17/1411235
Questions for discussion:
Do you buy Naomi Klein's thesis that a free market society requires the element of disaster to bring it about. Explain your agreement or disagreement.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
http://www.democracynow.org/article.pl?sid=07/09/17/1411235
QUOTE
Economist Milton Friedman once said, "Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. " Naomi Klein examines some of what she considers the most dangerous ideas -- Friedmanite economics -- and exposes how catastrophic events are both extremely profitable to corporations and have also allowed governments to push through what she calls "disaster capitalism."
Klein writes in the introduction to "The Shock Doctrine" that "The history of the contemporary free market was written in shocks." She argues that "Some of the most infamous human rights violations of the past thirty-five years, which have tended to be viewed as sadistic acts carried out by anti-democratic regimes, were in fact either committed with the deliberate intent of terrorizing the public or actively harnessed to prepare the ground for the introduction of radical free-market reforms."
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NAOMI KLEIN: Friedman understood that just as prisoners are softened up for interrogation by the shock of their capture, massive disasters could serve to soften us up for his radical free-market crusade. He advised politicians that immediately after a crisis, they should push through all the painful policies at once, before people could regain their footing. He called this method “economic shock treatment.” I call it “the shock doctrine.”
Take a second look at the iconic events of our era, and behind many you will find its logic at work. This is the secret history of the free market. It wasn't born in freedom and democracy; it was born in shock.
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I mentioned how Donald Rumsfeld was a student of Milton Friedman’s in the ’60s, actually, and the thing about Donald Rumsfeld is he really went beyond his mentor, because Milton Friedman, as I said earlier, he believed that the only acceptable role for government was policing, was the military. That was the only thing he really thought the government should do; every thing else should be privatized. Donald Rumsfeld studied with Friedman, saw him as a mentor, celebrated his birthday every year with him, but he really took this one step further, because Rumsfeld believed that, actually, the work of policing and of war fighting could also be privatized and outsourced. And he made this very clear.
Klein writes in the introduction to "The Shock Doctrine" that "The history of the contemporary free market was written in shocks." She argues that "Some of the most infamous human rights violations of the past thirty-five years, which have tended to be viewed as sadistic acts carried out by anti-democratic regimes, were in fact either committed with the deliberate intent of terrorizing the public or actively harnessed to prepare the ground for the introduction of radical free-market reforms."
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NAOMI KLEIN: Friedman understood that just as prisoners are softened up for interrogation by the shock of their capture, massive disasters could serve to soften us up for his radical free-market crusade. He advised politicians that immediately after a crisis, they should push through all the painful policies at once, before people could regain their footing. He called this method “economic shock treatment.” I call it “the shock doctrine.”
Take a second look at the iconic events of our era, and behind many you will find its logic at work. This is the secret history of the free market. It wasn't born in freedom and democracy; it was born in shock.
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I mentioned how Donald Rumsfeld was a student of Milton Friedman’s in the ’60s, actually, and the thing about Donald Rumsfeld is he really went beyond his mentor, because Milton Friedman, as I said earlier, he believed that the only acceptable role for government was policing, was the military. That was the only thing he really thought the government should do; every thing else should be privatized. Donald Rumsfeld studied with Friedman, saw him as a mentor, celebrated his birthday every year with him, but he really took this one step further, because Rumsfeld believed that, actually, the work of policing and of war fighting could also be privatized and outsourced. And he made this very clear.
Questions for discussion:
Do you buy Naomi Klein's thesis that a free market society requires the element of disaster to bring it about. Explain your agreement or disagreement.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
Do you buy Naomi Klein's thesis that a free market society requires the element of disaster to bring it about. Explain your agreement or disagreement.
It depends on the nature of the original society. Obviously the transition of a society already under authoritarian leadership of any kind...from a Socialist to Fascist, isn't going to be overturned and ease up on its talons quickly and readily. They didn't obtain the power easily in the first place. Nazi Germany, the land without unemployment and total government control of industry, was built on the backs of thousands of concentration camp workers. Soviet Russia was built on the blood of millions after a terrible series of revolutions. I'd say of all types of societies, free market ones are generally the least bloody, the least 'disaster catalyzed' to build and maintain.
I must add...Naomi Klein expects me to believe that Tianamen square massacre was a government induced disaster intended to set up sweat shops? Oh, brother! So in order to enact Democratic and Capitalist reforms (which Naomi seems to believe it wanted), it was necessary to massacre citizens who were actively demonstrating for those very reforms?
News for you, Ms Klein....China was already the land of sweatshops at that time....sweatshops under government dictatorship, the very worst kind.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
No. I think one of the reasons for invasion was to have a strong western-friendly presence in the ME, to secure the oil supply. It was an attempt to ultimately buy oil without simultaneously supporting a government that either covertly or overtly hates us and plots against us (more the rule than the exception right now). That wasn't the reason for the invasion, it was a reason.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
No. Privatization of the military is the direct result of trying to cut expenses by downsizing. There simply aren't enough boots on the ground to do the jobs that must be done, so they are contracted out. Something tells me that Ms Klein was likely very much in favor of this downsizing when it happened...unfortunately, you can't eat your cake and have it too.
It depends on the nature of the original society. Obviously the transition of a society already under authoritarian leadership of any kind...from a Socialist to Fascist, isn't going to be overturned and ease up on its talons quickly and readily. They didn't obtain the power easily in the first place. Nazi Germany, the land without unemployment and total government control of industry, was built on the backs of thousands of concentration camp workers. Soviet Russia was built on the blood of millions after a terrible series of revolutions. I'd say of all types of societies, free market ones are generally the least bloody, the least 'disaster catalyzed' to build and maintain.
I must add...Naomi Klein expects me to believe that Tianamen square massacre was a government induced disaster intended to set up sweat shops? Oh, brother! So in order to enact Democratic and Capitalist reforms (which Naomi seems to believe it wanted), it was necessary to massacre citizens who were actively demonstrating for those very reforms?
News for you, Ms Klein....China was already the land of sweatshops at that time....sweatshops under government dictatorship, the very worst kind. Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
No. I think one of the reasons for invasion was to have a strong western-friendly presence in the ME, to secure the oil supply. It was an attempt to ultimately buy oil without simultaneously supporting a government that either covertly or overtly hates us and plots against us (more the rule than the exception right now). That wasn't the reason for the invasion, it was a reason.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
No. Privatization of the military is the direct result of trying to cut expenses by downsizing. There simply aren't enough boots on the ground to do the jobs that must be done, so they are contracted out. Something tells me that Ms Klein was likely very much in favor of this downsizing when it happened...unfortunately, you can't eat your cake and have it too.
Do you buy Naomi Klein's thesis that a free market society requires the element of disaster to bring it about. Explain your agreement or disagreement.
Buy it? She can't even sell it. This is quite a convenient theory once you jump through multiple hoops and can conquer those large leaps in logic. I mean first of all, she completely misinterprets Milton Friedman's words into something that is not even close to what he meant. I mean Milton Friedman was an advocate of freedom. He was an advocate of choice and of limited government intervention. And it is Klein's thesis that in order to bring about this freedom, that a government would stage (or perpetuate or...i do not know what she was implying) a disaster in order to bring about free markets is preposterous. That these disasters were intended to "soften" the people up for the introduction of free markets is almost near laughable. I do not understand how any person could defend this thesis even if they were social democrat. The only disasters that bring about a switch to free markets, are the ones that occur after socialism has run its course and produced terrible results. Not just economically, but socially. The fall of the USSR and the end of the Iron Curtain. The hyperinflation in South America. The disaster was government centralization of the economy and thats what forced them to open up their markets.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
Use Iraq as a guinea pig? Like in some grand experiment? Why would this even be necessary? Free markets work in countries all over the world. Asia, Africa, and even the Middle East have some country who supports markets instead of centralized economies. Systems that work do not need guinea pigs. Furthermore, why should any country care whether Iraq's oil was privatized or not? Under Saddam it wouldnt have made a difference.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
Um no. The military remains the strongest element of American power in the world. It is not being privatized nor will it ever be privatized.
Buy it? She can't even sell it. This is quite a convenient theory once you jump through multiple hoops and can conquer those large leaps in logic. I mean first of all, she completely misinterprets Milton Friedman's words into something that is not even close to what he meant. I mean Milton Friedman was an advocate of freedom. He was an advocate of choice and of limited government intervention. And it is Klein's thesis that in order to bring about this freedom, that a government would stage (or perpetuate or...i do not know what she was implying) a disaster in order to bring about free markets is preposterous. That these disasters were intended to "soften" the people up for the introduction of free markets is almost near laughable. I do not understand how any person could defend this thesis even if they were social democrat. The only disasters that bring about a switch to free markets, are the ones that occur after socialism has run its course and produced terrible results. Not just economically, but socially. The fall of the USSR and the end of the Iron Curtain. The hyperinflation in South America. The disaster was government centralization of the economy and thats what forced them to open up their markets.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
Use Iraq as a guinea pig? Like in some grand experiment? Why would this even be necessary? Free markets work in countries all over the world. Asia, Africa, and even the Middle East have some country who supports markets instead of centralized economies. Systems that work do not need guinea pigs. Furthermore, why should any country care whether Iraq's oil was privatized or not? Under Saddam it wouldnt have made a difference. Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
Um no. The military remains the strongest element of American power in the world. It is not being privatized nor will it ever be privatized.
QUOTE
Questions for discussion:
Do you buy Naomi Klein's thesis that a free market society requires the element of disaster to bring it about. Explain your agreement or disagreement
. Do you buy Naomi Klein's thesis that a free market society requires the element of disaster to bring it about. Explain your agreement or disagreement
Not at all – in fact here ideas are so outrageous I cannot see how anyone could buy this. Certainly no sane psychologist would agree. She statts with “electric shock theropy” fronm the 50s:
Scientists have developed a new technology to cure mentally ill adults. With the use of electroshocks
"Remaking people, shocking them into obedience. This is a story about that powerful idea. In the 1950s, it caught the attention of the CIA. The agency funded a series of experiments. Out of them was produced a secret handbook on how to break down prisoners. The key was using shock to reduce adults to a childlike state."
And then tries to tell us that “But these techniques don't only work on individuals”. they can work on whole societies"??????
After which she tries to demonize Friedman and Capitalism with this:
Milton Friedman. Friedman believed in a radical vision of society in which profit and the market drive every aspect of life, from schools to healthcare, even the army.
Friedman understood that just as prisoners are softened up for interrogation by the shock of their capture, massive disasters could serve to soften us up for his radical free-market crusade. He advised politicians that immediately after a crisis, they should push through all the painful policies at once, before people could regain their footing.
This is a ludicrous analogy backed up by absolutely nothing I could see in the interview. Pure far left jabbering by a woman who has been a leader in the anti-globalization movement.
QUOTE
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
Privatize what? Oil is privatized now – and in the US has never been a “state” anything for oil. So exactly what are you getting at.
QUOTE
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
No we have used private security organizations for decades. Backwater did not spring up out of nowhere with this administration.
We need them in Iraq because we do not have all the troops needed to do the fighting and handle many security details like guarding truck convoys and civilians.
Do you buy Naomi Klein's thesis that a free market society requires the element of disaster to bring it about. Explain your agreement or disagreement.
Frankly I'm not sure. Friedman clearly was disappointed by his efforts in the US and seized the opportunity to apply his principles in the case of the Chilean coup. It's at that point that I think Naomi Klein makes her strongest case. I presented her thesis as an interesting thought piece and yes, like Mrs. P, I was scratching my head over the Tienamen Square business as being some sort of stalking horse for free markets. Maybe she spells it out better in her book, although I'm at a loss to imagine what kind of argument she could come up with.
One thing that surprises me is that she refuses to go back before the 20th century in making her case. What about folks like Cortez and Pizarro and the rest of that imperial vanguard? Weren't they using shock and awe in the new world to shatter old cultures and turn them into an early version of the "free market?" Why don't we hear the name of Adam Smith as an early echo of Friedman's free market imperialism if you like. It seems to me she missed an opportunity to give some historical legs to her thesis.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
I think it's quite possible. Earlier Naomi Klein wrote an article for the Nation expounding extensively on this thesis and I think made it an argument you could seriously bring to the table(I suspect the article is now member only but if not I'll try to offer a link). This is the most ideological administration I've experienced in my life time. Even if the president isn't that clued in he appears to have advisers who are.
Bremer and his crew were apparently all about privatizing traditional Iraqi government enterprises to the point of putting them out to international bidding.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
I believe the statistics are that in Gulf War 1 the ratio between soldiers and private security was 13-1. In our present war it's 3-1. I realize that may be an apples and oranges comparison but is there any historical precedent for such a low ratio? NK is on the record as saying Rumsfeld as a matter of stated belief felt that the military as much as possible should be privatized, however she didn't supply a quote. That would be a matter worth exploring further.
Frankly I'm not sure. Friedman clearly was disappointed by his efforts in the US and seized the opportunity to apply his principles in the case of the Chilean coup. It's at that point that I think Naomi Klein makes her strongest case. I presented her thesis as an interesting thought piece and yes, like Mrs. P, I was scratching my head over the Tienamen Square business as being some sort of stalking horse for free markets. Maybe she spells it out better in her book, although I'm at a loss to imagine what kind of argument she could come up with.
One thing that surprises me is that she refuses to go back before the 20th century in making her case. What about folks like Cortez and Pizarro and the rest of that imperial vanguard? Weren't they using shock and awe in the new world to shatter old cultures and turn them into an early version of the "free market?" Why don't we hear the name of Adam Smith as an early echo of Friedman's free market imperialism if you like. It seems to me she missed an opportunity to give some historical legs to her thesis.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
I think it's quite possible. Earlier Naomi Klein wrote an article for the Nation expounding extensively on this thesis and I think made it an argument you could seriously bring to the table(I suspect the article is now member only but if not I'll try to offer a link). This is the most ideological administration I've experienced in my life time. Even if the president isn't that clued in he appears to have advisers who are.
Bremer and his crew were apparently all about privatizing traditional Iraqi government enterprises to the point of putting them out to international bidding.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
I believe the statistics are that in Gulf War 1 the ratio between soldiers and private security was 13-1. In our present war it's 3-1. I realize that may be an apples and oranges comparison but is there any historical precedent for such a low ratio? NK is on the record as saying Rumsfeld as a matter of stated belief felt that the military as much as possible should be privatized, however she didn't supply a quote. That would be a matter worth exploring further.
QUOTE(Dingo @ Sep 21 2007, 07:59 PM) 
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
I believe the statistics are that in Gulf War 1 the ratio between soldiers and private security was 13-1. In our present war it's 3-1. I realize that may be an apples and oranges comparison but is there any historical precedent for such a low ratio? NK is on the record as saying Rumsfeld as a matter of stated belief felt that the military as much as possible should be privatized, however she didn't supply a quote. That would be a matter worth exploring further.
I believe the statistics are that in Gulf War 1 the ratio between soldiers and private security was 13-1. In our present war it's 3-1. I realize that may be an apples and oranges comparison but is there any historical precedent for such a low ratio? NK is on the record as saying Rumsfeld as a matter of stated belief felt that the military as much as possible should be privatized, however she didn't supply a quote. That would be a matter worth exploring further.
I doubt there is historical precedent for that number, but I do think it's important to keep in mind that there isn't historical precedent for the ratio of combat to support troops either. That has dropped precipitously and is now less than 1 to seven. Are some of those private contractors mercenaries? Undeniably the answer is yes (though it's my understanding that those are not hired by our government, but privately), but when you are looking at one warrior per seven support the number of 'private soldiers' as we would define them is relatively low.
I love Milton Friedman's works- think they are great. There is some element to truth in what she says- but the overall lie is what kills it. Looking at some small details, she may be right, but looking at the overall picture- it falls apart.
I must also say- Milton Friedman, though a libertarian hero- had most of his theories on capitalism= freedom destroyed by Singapore and Chile'. Those are both totalitarian regimes, and Pinochet adopted Milton Friedman's books like they were the bible- but he was still totalitarian.
BUt his theories were held up with shining colors in Estonia- and the architect behind that former Kleptocracy to a free market economy and economic prosperity on par with western countries said that was the only economic book he read or followed.
Though Milton Friedman often said his most proud moment in affecting US policies was his work on ending the draft (thought the REAL credit for that goes to Mike Gravel, who single handedly ACTUALLY ended the draft
) - his greatest shame would be for not repudiating Pinochet.
and Milton Friedman recognized the need for some goverment monopolies- such as the mail, and only to the degree it is today (a hybird of public/private) he also recognized that some functions are uniquely goverment in mission- such as the military- which is the anti-thesis of freedom in the organization itself.
What makes me admire him so much is how he tried so hard to define "freedom" and what it entails.
Milton Friedman's economic models were not based on disaster economies- but rather, small business dominating the market- as they do in the US today.
I must also say- Milton Friedman, though a libertarian hero- had most of his theories on capitalism= freedom destroyed by Singapore and Chile'. Those are both totalitarian regimes, and Pinochet adopted Milton Friedman's books like they were the bible- but he was still totalitarian.
BUt his theories were held up with shining colors in Estonia- and the architect behind that former Kleptocracy to a free market economy and economic prosperity on par with western countries said that was the only economic book he read or followed.
Though Milton Friedman often said his most proud moment in affecting US policies was his work on ending the draft (thought the REAL credit for that goes to Mike Gravel, who single handedly ACTUALLY ended the draft
) - his greatest shame would be for not repudiating Pinochet. and Milton Friedman recognized the need for some goverment monopolies- such as the mail, and only to the degree it is today (a hybird of public/private) he also recognized that some functions are uniquely goverment in mission- such as the military- which is the anti-thesis of freedom in the organization itself.
What makes me admire him so much is how he tried so hard to define "freedom" and what it entails.
Milton Friedman's economic models were not based on disaster economies- but rather, small business dominating the market- as they do in the US today.
QUOTE(Mrs. Pigpen @ Sep 22 2007, 11:32 AM)
Are some of those private contractors mercenaries? Undeniably the answer is yes (though it's my understanding that those are not hired by our government, but privately), but when you are looking at one warrior per seven support the number of 'private soldiers' as we would define them is relatively low.
Isn't Blackwater in the business of providing mercs? There may be a few lucky Iraqis like Chalabi who can employ their own extra security, but I think the majority of mercs operating in Iraq and Afghanistan are employed by the U.S. government.
Last year, Congress instructed the Defense Department to draw up rules to bring the tens of thousands of contractors in Iraq under the American laws that apply to the military, but the Pentagon so far has not acted. Thus the thousands of heavily armed private soldiers in Iraq operate with virtual immunity from Iraqi and American law.
QUOTE(Lesly @ Sep 22 2007, 12:00 PM)
QUOTE(Mrs. Pigpen @ Sep 22 2007, 11:32 AM)
Are some of those private contractors mercenaries? Undeniably the answer is yes (though it's my understanding that those are not hired by our government, but privately), but when you are looking at one warrior per seven support the number of 'private soldiers' as we would define them is relatively low.
Isn't Blackwater in the business of providing mercs? There may be a few lucky Iraqis like Chalabi who can employ their own extra security, but I think the majority of mercs operating in Iraq and Afghanistan are employed by the U.S. government.
Last year, Congress instructed the Defense Department to draw up rules to bring the tens of thousands of contractors in Iraq under the American laws that apply to the military, but the Pentagon so far has not acted. Thus the thousands of heavily armed private soldiers in Iraq operate with virtual immunity from Iraqi and American law.
Yes, Blackwater is in the business of providing mercs. No, not every person provided by Blackwater is a merc. No, I don't think that mercs are provided by the US government nor did I read anything in your link to indicate that. Businesses often higher mercs to protect construction work in violent areas, convoys, ect. Obviously they have to do so or else, for instance, a village out in a remote area of Iraq could never get its water-tank...don't you think?
A tremendous amount of money that has been slated to construction projects has gone towards protecting the convoys of supplies, construction itself, ect. This has been documented. We don't have enough soldiers to defend individual private construction sites against sabotage.
I have an issue with the way the current debate has framed the term mercenary to mean security contractor=merc. Some may argue that it is only a semantic difference, but the term mercenary has always until now meant a person or group of people employed to take offensive action against an employers foe.
mercenary
adjective
1. marked by materialism [syn: materialistic]
2. serving for wages in a foreign army; "mercenary killers"
3. profit oriented; "a commercial book"; "preached a mercantile and militant patriotism"- John Buchan; "a mercenary enterprise"; "a moneymaking business" [syn: mercantile]
noun
1. a person hired to fight for another country than their own
Contracted private security, on the other hand in Iraq and Afghanistan, are passive protection. They are not patrolling the streets, they do not conduct raids, ambushes, or clearing operations. They fire when fired at (though there have been instances where this was in doubt in Iraq). Using the term in this sense now makes all bodyguards, executive security and Wackenhut guards mercenaries.
mercenary
adjective
1. marked by materialism [syn: materialistic]
2. serving for wages in a foreign army; "mercenary killers"
3. profit oriented; "a commercial book"; "preached a mercantile and militant patriotism"- John Buchan; "a mercenary enterprise"; "a moneymaking business" [syn: mercantile]
noun
1. a person hired to fight for another country than their own
Contracted private security, on the other hand in Iraq and Afghanistan, are passive protection. They are not patrolling the streets, they do not conduct raids, ambushes, or clearing operations. They fire when fired at (though there have been instances where this was in doubt in Iraq). Using the term in this sense now makes all bodyguards, executive security and Wackenhut guards mercenaries.
QUOTE(Dontreadonme @ Sep 22 2007, 12:26 PM)
Contracted private security, on the other hand in Iraq and Afghanistan, are passive protection. They are not patrolling the streets, they do not conduct raids, ambushes, or clearing operations. They fire when fired at (though there have been instances where this was in doubt in Iraq). Using the term in this sense now makes all bodyguards, executive security and Wackenhut guards mercenaries.
You're absolutely right. In the above context, private security forces in Iraq are not mercs in any respect...any more than other body guards or personal/ property protection agents anywhere else would be. I stand corrected.
QUOTE(Mrs. Pigpen @ Sep 22 2007, 12:13 PM)
Yes, Blackwater is in the business of providing mercs. No, not every person provided by Blackwater is a merc.
If Blackwater and a slew of other private security companies aren't beholden to U.S. or Iraqi law, what are they but mercs? They certainly aren't rent-a-cops and they provide a security niche the military can't, but should, while it's policing a state.
QUOTE(Mrs. Pigpen @ Sep 22 2007, 12:13 PM)
No, I don't think that mercs are provided by the US government nor did I read anything in your link to indicate that.
Would an AlterNet article calling them mercs make a difference?
During the 1991 Gulf War, the ratio of troops to private contractors was about 60 to 1. Today, it is the contractors who outnumber U.S. forces in Iraq. As of July 2007, there were more than 630 war contracting companies working in Iraq for the United States. Composed of some 180,000 individual personnel drawn from more than 100 countries, the army of contractors surpasses the official U.S. military presence of 160,000 troops.
In all, the United States may have as many as 400,000 personnel occupying Iraq, not including allied nations' militaries. The statistics on contractors do not account for all armed contractors. Last year, a U.S. government report estimated there were 48,000 people working for more than 170 private military companies in Iraq. "It masks the true level of American involvement," says Ambassador Wilson.
The single largest U.S. contract for private security in Iraq was a $293 million payment to the British firm Aegis Defence Services, headed by retired British Lt. Col. Tim Spicer, who has been dogged by accusations that he is a mercenary because of his private involvement in African conflicts. The Texas-based DynCorp International has been another big winner, with more than $1 billion in contracts to provide personnel to train Iraqi police forces, while Blackwater USA has won $750 million in State Department contracts alone for "diplomatic security."
QUOTE(Mrs. Pigpen @ Sep 22 2007, 12:13 PM)
Businesses often higher mercs to protect construction work in violent areas, convoys, ect.
Businesses may use money allocated for construction to hire mercs (or just Blackwater, if you prefer), but the bottom line is taxpayers pay for the security.
QUOTE(Mrs. Pigpen @ Sep 22 2007, 12:13 PM)
Obviously they have to do so or else, for instance, a village out in a remote area of Iraq could never get its water-tank...don't you think?
Yes, they need to, but the necessity underscores the untenable situation on the ground and doesn't change the fact that these guys seem to answer to corporate headquarters instead of a sovereign state.
QUOTE(Mrs. Pigpen @ Sep 22 2007, 12:13 PM)
A tremendous amount of money that has been slated to construction projects has gone towards protecting the convoys of supplies, construction itself, ect. This has been documented. We don't have enough soldiers to protect individual private construction sites.
We don't know exactly how much is spent on private security firms but I'll wager it's cheaper than enacting the draft. We get what we pay for.
QUOTE(Dontreadonme @ Sep 22 2007, 12:26 PM)
Contracted private security, on the other hand in Iraq and Afghanistan, are passive protection.
You're right. Any Iraqi lucky enough to afford his own private security doesn't automatically designate the employee as a merc. Their individual contrats are akin to rent-a-cops because of scale and duties. However, private security firms patrolled New Orleans and Iraq. They may provide other active forms of protection in the future if the budget doesn't scale back our contracts as we reduce our military presence in Iraq (if we ever do).
QUOTE(Lesly @ Sep 22 2007, 09:19 PM)
Would an AlterNet article calling them mercs make a difference?
I'll answer if I may. No. I'm not going to accuse Alternet of having an agenda, but they do specialize in reporting a certain....flavor...of news. They simply use the term mercenary as many other reporters, politicians and private citizens do in recent days......incorrectly.
The Alternet article speaks primarily to security contractors but lists for example, DynCorp, who does not fulfill any private security function in Iraq, but a training function, much of which takes place in Jordan. The article also lists a ratio of contractors to soldiers. But it doesn't specify, unless I missed it, if those numbers are taking into account just security contractors, or the multitude of support contractors such as Titan, KBR, CACI, etc.....
To be quite honest, I believe the 'problem' is being hyper-inflated due to a very small number of incidents that make the news. The measure of events where a PMC has been implicated in wrongdoing compared to the number of missions they undertake on a daily basis is smaller than the criticizing may warrant.
QUOTE(Dontreadonme @ Sep 22 2007, 02:11 PM)
The AlterNet article speaks primarily to security contractors but lists for example, DynCorp, who does not fulfill any private security function in Iraq, but a training function, much of which takes place in Jordan.
Is this story bogus?
DynCorp International, a Virginia-based military security firm, said it could train and deploy 1,000 private agents to the U.S.-Mexico border within 13 months, offering a quick surge of law enforcement officers to a region struggling to clamp down on illegal immigration.
Currently, the company manages an army of private security agents deployed across the world in support of U.S. missions, including several former Border Patrol agents hired to help secure the Iraqi border.
QUOTE(Dontreadonme @ Sep 22 2007, 02:11 PM)
To be quite honest, I believe the 'problem' is being hyper-inflated due to a very small number of incidents that make the news.
It may be a problem for others but not me. I think I've read more articles dealing with soldiers being charged with crimes than private security wrongdoings. My problem with private security firms is their allegiance to the bottom line. It doesn't matter whether hype reflects reality. In the minds of Iraqis perception in regards to Blackwater has been reality before the company temporarily lost its license. I would rather deal with a foreign military than foreign mercs. Their legal limbo status make private security personnel tempting targets.
QUOTE(Lesly @ Sep 22 2007, 10:27 PM)
Is this story bogus?
No, but it doesn't contradict what I said either. From DynCorp:
QUOTE
The United States Department of State has awarded DynCorp International a nine-month extension of its task order to support the training of police officers in Iraq. This extension is valued at more than $318 million and will expire on May 31, 2007. The Company has provided this service since April 2004 under the Department of State’s worldwide Civilian Police Program.
DynCorp International police mentors are assigned to the Civilian Police Advisory Training Team (CPATT), the component of the U.S. military Multinational Security Transition Command – Iraq (MNSTC-I) responsible for the U.S.-led effort to train and equip the 135,000-member Iraqi police service. DynCorp International is responsible for recruiting, training, equipping, and sustaining the 700-member U.S. contingent of trainers.
DynCorp International police mentors are assigned to the Civilian Police Advisory Training Team (CPATT), the component of the U.S. military Multinational Security Transition Command – Iraq (MNSTC-I) responsible for the U.S.-led effort to train and equip the 135,000-member Iraqi police service. DynCorp International is responsible for recruiting, training, equipping, and sustaining the 700-member U.S. contingent of trainers.
As I said, DynCorp is in Iraq, but in a training role, not an armed security role. When I see a source claim a number of 'contractors' in Iraq to make a point against PMC's, but fail to differentiate between supporters, trainers, and armed security, it leads me to believe a bias may be involved.
wow- I was hoping for more of a debate on Milt Friedman than whether or not mercs are in Iraq.
QUOTE(Dingo @ Sep 21 2007, 04:59 PM)
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
I believe the statistics are that in Gulf War 1 the ratio between soldiers and private security was 13-1. In our present war it's 3-1. I realize that may be an apples and oranges comparison but is there any historical precedent for such a low ratio? NK is on the record as saying Rumsfeld as a matter of stated belief felt that the military as much as possible should be privatized, however she didn't supply a quote. That would be a matter worth exploring further.
I believe the statistics are that in Gulf War 1 the ratio between soldiers and private security was 13-1. In our present war it's 3-1. I realize that may be an apples and oranges comparison but is there any historical precedent for such a low ratio? NK is on the record as saying Rumsfeld as a matter of stated belief felt that the military as much as possible should be privatized, however she didn't supply a quote. That would be a matter worth exploring further.
Well here is a little of that further exploration.
http://www.thenation.com/doc/20070402/scahill
QUOTE
"The topic today is an adversary that poses a threat, a serious threat, to the security of the United States of America," Rumsfeld thundered. "It disrupts the defense of the United States and places the lives of men and women in uniform at risk." He told his new staff, "You may think I'm describing one of the last decrepit dictators of the world.... [But] the adversary's closer to home," he said. "It's the Pentagon bureaucracy." Rumsfeld called for a wholesale shift in the running of the Pentagon, supplanting the old DoD bureaucracy with a new model, one based on the private sector. Announcing this major overhaul, Rumsfeld told his audience, "I have no desire to attack the Pentagon; I want to liberate it. We need to save it from itself."
----------------------------------------------------------------
The new Pentagon policy would emphasize covert actions, sophisticated weapons systems and greater reliance on private contractors. It became known as the Rumsfeld Doctrine. "We must promote a more entrepreneurial approach: one that encourages people to be proactive, not reactive, and to behave less like bureaucrats and more like venture capitalists," Rumsfeld wrote in the summer of 2002 in an article for Foreign Affairs titled "Transforming the Military."
----------------------------------------------------------------
The new Pentagon policy would emphasize covert actions, sophisticated weapons systems and greater reliance on private contractors. It became known as the Rumsfeld Doctrine. "We must promote a more entrepreneurial approach: one that encourages people to be proactive, not reactive, and to behave less like bureaucrats and more like venture capitalists," Rumsfeld wrote in the summer of 2002 in an article for Foreign Affairs titled "Transforming the Military."
Also some question was raised as to whether security outfits like Blackwater contracted directly with the government. That is also covered in this thread.
QUOTE
Its largest obtainable government contract is with the State Department, for providing security to US diplomats and facilities in Iraq. That contract began in 2003 with the company's $21 million no-bid deal to protect Iraq proconsul Paul Bremer. Blackwater has guarded the two subsequent US ambassadors, John Negroponte and Zalmay Khalilzad, as well as other diplomats and occupation offices. Its forces have protected more than ninety Congressional delegations in Iraq, including that of House Speaker Nancy Pelosi. According to the latest government contract records, since June 2004 Blackwater has been awarded $750 million in State Department contracts alone.
QUOTE
CR. wow- I was hoping for more of a debate on Milt Friedman than whether or not mercs are in Iraq.
Yeah, I'd like to see more of that too since he is put forward as the ideological center piece of Naomi Klein's "Disaster Capitalism" thesis. Why not go back to the first link and look at all her assertions about him and develop or challenge them as you wish. Well here it is to save you a scroll.
http://www.democracynow.org/article.pl?sid=07/09/17/1411235
I just came up with this video of NK. In this video Naomi lays out her views and the reason for those views and I must say I find her admirable for not hiding her socialist bias. It's a strong statement and oddly the political stake she has in these views doesn't detract from that. It's like if someone says, "okay I'm biased"; then you can move on to the topic itself.
http://www.thenation.com/doc/20071001/klei...apitalism_video
QUOTE(Dontreadonme @ Sep 22 2007, 03:37 PM)
QUOTE(Lesly @ Sep 22 2007, 10:27 PM)
Is this story bogus?
No, but it doesn't contradict what I said either. From DynCorp:
QUOTE
The United States Department of State has awarded DynCorp International a nine-month extension of its task order to support the training of police officers in Iraq. This extension is valued at more than $318 million and will expire on May 31, 2007. The Company has provided this service since April 2004 under the Department of State’s worldwide Civilian Police Program.
DynCorp International police mentors are assigned to the Civilian Police Advisory Training Team (CPATT), the component of the U.S. military Multinational Security Transition Command – Iraq (MNSTC-I) responsible for the U.S.-led effort to train and equip the 135,000-member Iraqi police service. DynCorp International is responsible for recruiting, training, equipping, and sustaining the 700-member U.S. contingent of trainers.
DynCorp International police mentors are assigned to the Civilian Police Advisory Training Team (CPATT), the component of the U.S. military Multinational Security Transition Command – Iraq (MNSTC-I) responsible for the U.S.-led effort to train and equip the 135,000-member Iraqi police service. DynCorp International is responsible for recruiting, training, equipping, and sustaining the 700-member U.S. contingent of trainers.
As I said, DynCorp is in Iraq, but in a training role, not an armed security role. When I see a source claim a number of 'contractors' in Iraq to make a point against PMC's, but fail to differentiate between supporters, trainers, and armed security, it leads me to believe a bias may be involved.
I have dealt with DunCorp people in the US. What people have to realize is the “military” and “our government” often does not have the people, or often the skills to do all the jobs related to creating and running a high tech fighting force. The “systems” used are designed by private companies like Lockheed Martin, Northrop Grumman, Raytheon etc and then the government contracts out (in competitive bidding on the CBD) the other services needed.
Theses include training, program management, security, etc. DynCorp has many people managing military programs in the US. They work for all the services. They do not to my knowledge provide armed security in Iraq.
Some companies like Blackwater are more focused on security. If they “lose” this contract another firm would be selected.
But from what I have heard Blackwater is the best – is this your tale as well DTOM?
Do you buy Naomi Klein's thesis that a free market society requires the element of disaster to bring it about. Explain your agreement or disagreement.
To bring it about? No, I think the question is more geared towards opportunism and profiteering. This is what Naomi stressed in her interview. On a personal level I have tried to quantify the effects of trade on a modern society with a more primitive society. Joseph Stiglitz gives a good attempt at describing world trade (globalisation) and who benefits from it.
Friedman's approach was all about channeling money flows for trade and profit. He was the next step of interventionalist thought which started from Keynes. If you have an unlimited amount of money (fiat tied to how long you run the printing presses) you create the liquidity necessary to develop and social engineer at a no-holds-barred pace. Friedman had no qualms about opening up closed economies and the effects an aggressive approach (where Naomi's book begins) might have on a weaker people. Pay attention Friedman did not focus to whom profitted at the end of a trade. To look at his policies in a historical context you have to look back at Hayek and the originator of Austrian economics, Mises. You can learn alot of the Mises site.
I will refrain from further comments at this point because I have not read Naomi's book but have picked it up.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
Guinea pig? Not exactly. Unplugging the Iraqi national oil companies from their fields also unplugged Saddam from profitting on the Euros he switched to. Short answer, controlling the reserve currency had a hand but I still think George simply had a personal grudge with Saddam. Controlling who trades what in the American currency is very important to the futures market for three reasons.
One, such internvention prevents the revival of the long term capital contract which is seeing new life in latin america. These old school contracts deny the market oil volume because these are brokered agreements between two states. The oil is not sold to the highest bidder. Such action reduces the overall volume of oil and bids up the price.
Two, by denying control to the national oil companies the freedom to choose a currency there is less of a risk of flooding the market with dollars. Bonds, treasuries and the like get monetized (traded in for goods) no longer see the same level of circulation because of another currency. The dollar index drops thereby lowering its value - IE dollar goes down inflation goes up and things get more expensive.
Three, oil futures are the main driver of oil prices. That is what is known in the ground sets the price. If the market looks tight or if somebody overstated their reserves, the price on futures goes up. If a supply (intervention) can be assured then the price will level off at some point, this ties directly in with point one.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
I have a feeling we could get into many extended philosophical debates on the privatization of the military. I might take in some of Friedman's works as well before commenting further.
To bring it about? No, I think the question is more geared towards opportunism and profiteering. This is what Naomi stressed in her interview. On a personal level I have tried to quantify the effects of trade on a modern society with a more primitive society. Joseph Stiglitz gives a good attempt at describing world trade (globalisation) and who benefits from it.
Friedman's approach was all about channeling money flows for trade and profit. He was the next step of interventionalist thought which started from Keynes. If you have an unlimited amount of money (fiat tied to how long you run the printing presses) you create the liquidity necessary to develop and social engineer at a no-holds-barred pace. Friedman had no qualms about opening up closed economies and the effects an aggressive approach (where Naomi's book begins) might have on a weaker people. Pay attention Friedman did not focus to whom profitted at the end of a trade. To look at his policies in a historical context you have to look back at Hayek and the originator of Austrian economics, Mises. You can learn alot of the Mises site.
I will refrain from further comments at this point because I have not read Naomi's book but have picked it up.
Do you believe one of the reasons for the invasion was to use Iraq as a guinea pig to test out free market ideas by privatizing state enterprises including oil. Explain your agreement or objection.
Guinea pig? Not exactly. Unplugging the Iraqi national oil companies from their fields also unplugged Saddam from profitting on the Euros he switched to. Short answer, controlling the reserve currency had a hand but I still think George simply had a personal grudge with Saddam. Controlling who trades what in the American currency is very important to the futures market for three reasons.
One, such internvention prevents the revival of the long term capital contract which is seeing new life in latin america. These old school contracts deny the market oil volume because these are brokered agreements between two states. The oil is not sold to the highest bidder. Such action reduces the overall volume of oil and bids up the price.
Two, by denying control to the national oil companies the freedom to choose a currency there is less of a risk of flooding the market with dollars. Bonds, treasuries and the like get monetized (traded in for goods) no longer see the same level of circulation because of another currency. The dollar index drops thereby lowering its value - IE dollar goes down inflation goes up and things get more expensive.
Three, oil futures are the main driver of oil prices. That is what is known in the ground sets the price. If the market looks tight or if somebody overstated their reserves, the price on futures goes up. If a supply (intervention) can be assured then the price will level off at some point, this ties directly in with point one.
Do you think bringing in private security operations like Blackwater is part of a BA philosophy, as Naomi Klein believes, to privatize the military as much as possible along with other present government responsibilities. Explain
I have a feeling we could get into many extended philosophical debates on the privatization of the military. I might take in some of Friedman's works as well before commenting further.
QUOTE
Three, oil futures are the main driver of oil prices. That is what is known in the ground sets the price. If the market looks tight or if somebody overstated their reserves, the price on futures goes up. If a supply (intervention) can be assured then the price will level off at some point, this ties directly in with point one.
In addition the price changes due to numerous other factors such as the weather in the North East (cold) which affects the demand for oil, also the refining capacity available. OPECs output etc.
As Greenspan has said, and I agree, one of the unstated but important reasons for the war in Iraq was to rid as area with more than ˝ the world’s oil of a dangerous dictator with WMD. For some reason Presidents feel uncomfortable saying this and I am not sure why. Perhaps they feel the American people are not capable to grasp how attached we are to oil. How critical oil, and the price/availability of oil, is to our 12.5 Trillion $$$ economy.
Yes imo a good deal of the Iraq war was “blood for oil” – not the ownership of it but the certainty of it supply from the ME.
“America's dependence on oil is a threat to our national security and our economy. Growing demand and shrinking domestic production means America is importing more and more oil each year - much of it from the world's most unfriendly or unstable regions. We spend more than $200,000 per minute -- $13 million per hour -- on foreign oil, and more than $25 billion a year on Persian Gulf imports alone.1 By October 2004, Americans had shelled out $249 per capita to foreign oil-interests.2
The top six sources of U.S. oil imports, Canada, Mexico, Saudi Arabia, Venezuela, Nigeria and Iraq, account for 65.1 percent of all foreign crude reaching our shores and 38.9 percent of total domestic consumption. Of these, four, Saudi Arabia, Venezuela, Nigeria and Iraq provide 38.2 percent of oil imports and 22.6 percent of total consumption.
“For a variety of reasons, none of the four I just mentioned can be considered a reliable source of supply.
Clearly, given the instability that characterizes four of our top six sources of oil, the question is not whether we will experience a supply disruption, but rather when.
“While it is broadly acknowledged that our undue dependence on imported oil would pose a threat to the nation's economic and military security in the event of a supply disruption, less well understood is the enormous economic toll that dependence takes on a daily basis.
“The principal reason why we are not fully aware of the true economic cost of our import dependence is that it largely takes the form of what economists call ‘externalities, that is, costs or benefits caused by production or consumption of a specific item, but not reflected in its pricing.’’
http://weblogs.chicagotribune.com/news/pol...nce_on_oil.html
I offered NK's shock thesis as an interesting think piece and it seems to be fulfilling its promise. Following up on Naomi's ideas is Alexander Cockburn who offers his critical assessment of her thesis. The part where I most agree with him is, as I indicated earlier, she is too time confined. Anyway, here is Cockburn on Naomi Klein.
http://counterpunch.com/cockburn09222007.html
http://counterpunch.com/cockburn09222007.html
QUOTE
Capitalism, after all, as always been a shock doctrine of selfish predation, as one can discover from Hobbes and Locke, Marx and Weber, none of them saluted by Klein. Read the vivid accounts of the Hammonds about the English enclosures of the eighteenth century, when villagers would find nailed to the door of the parish church an announcement their common lands had been privatized. Protesters may not have "depatterned", but were briskly hanged or relocated to Botany Bay. Klein could have used Karl Polanyi to better effect than as an epigraph. The wrenching conversion of peasant societies to cash economics, private property, the job regime, has always been brutal.
The Chicago Boys laid waste the southern cone of Latin America in the name of unfettered private enterprise, but 125 years earlier a million Irish peasants starved to death while Irish grain was exported onto ships flying the flag of economic liberalism. Klein writes about "the bloody birth of counter-revolution" in the 1960s and 1970s, but any page from the histories of Presidents Jackson, Polk or Roosevelt discloses a bleak and blood-stained continuity with the past. Depatterning? Indian children were taken from their families and punished for every word spoken in their own language, even as African slaves were given Christian names and forbidden to use their own, or to drum. Amid the shock of the Civil War the Republicans deferred by several years the freeing of slaves, while hastening to use crisis to arrange a banking and monetary system to their liking.
Just as there is continuity in capitalist predation, there is continuity in resistance. Here's where Klein's catastrophism distorts the picture. Her controlling metaphor for the attack on Iraq is the initial "shock and awe" bombardment, designed to numb Saddam's forces and the overall civilian population into instant surrender and long-term submission. But "shock and awe" was a bust. It didn't work. Its value even as a metaphor is useless, except as illustration of what parlor wargamers in Washington DC can hype. Having sensibly decided not to fight or die on an American timetable, many of Iraq's soldiers regrouped to commence an effective resistance. Iraqi civilians struggle along as best they can under awful conditions and, un-numbed, tell pollsters that they wish the Americans would leave at once.
"Shock therapy" neoliberalism really isn't most closely associated with Milton Friedman, but rather with Jeffrey Sachs, to whom Klein does certainly give many useful pages, even though Friedman remains the dark star of her story. Sachs first introduced shock therapy in Bolivia in the early 1990s. Then he went into Poland, Russia, etc, with the same shock therapy model. Sachs' catchy phrase then was that "you can't leap over an abyss step-by-step," or words to that effect. This is really where contemporary neoliberalism took shape. And, it wasn't just Sachs.
The Chicago Boys laid waste the southern cone of Latin America in the name of unfettered private enterprise, but 125 years earlier a million Irish peasants starved to death while Irish grain was exported onto ships flying the flag of economic liberalism. Klein writes about "the bloody birth of counter-revolution" in the 1960s and 1970s, but any page from the histories of Presidents Jackson, Polk or Roosevelt discloses a bleak and blood-stained continuity with the past. Depatterning? Indian children were taken from their families and punished for every word spoken in their own language, even as African slaves were given Christian names and forbidden to use their own, or to drum. Amid the shock of the Civil War the Republicans deferred by several years the freeing of slaves, while hastening to use crisis to arrange a banking and monetary system to their liking.
Just as there is continuity in capitalist predation, there is continuity in resistance. Here's where Klein's catastrophism distorts the picture. Her controlling metaphor for the attack on Iraq is the initial "shock and awe" bombardment, designed to numb Saddam's forces and the overall civilian population into instant surrender and long-term submission. But "shock and awe" was a bust. It didn't work. Its value even as a metaphor is useless, except as illustration of what parlor wargamers in Washington DC can hype. Having sensibly decided not to fight or die on an American timetable, many of Iraq's soldiers regrouped to commence an effective resistance. Iraqi civilians struggle along as best they can under awful conditions and, un-numbed, tell pollsters that they wish the Americans would leave at once.
"Shock therapy" neoliberalism really isn't most closely associated with Milton Friedman, but rather with Jeffrey Sachs, to whom Klein does certainly give many useful pages, even though Friedman remains the dark star of her story. Sachs first introduced shock therapy in Bolivia in the early 1990s. Then he went into Poland, Russia, etc, with the same shock therapy model. Sachs' catchy phrase then was that "you can't leap over an abyss step-by-step," or words to that effect. This is really where contemporary neoliberalism took shape. And, it wasn't just Sachs.
I'll add a couple caveats Dingo,
As values within a society evolve so does the idea of capitalism. It has been practiced in different ways by different countries as Cockburn has demonstrated. Property rights were something that was acquired gradually, not overnight. Same goes for perceptions on slavery. The point is capitalism is a work in progress.
The reason why Ron Paul and the Austrians have garnered a level of respect is they recognize a distinction between decentralized and centralized capitalisation efforts. The idea I'm trying to convey is similar to the mixing of church and state except this is banking and state. Each institution can play a positive role in modern society but when mixed together the tenents of each can become distorted and corrupt.
In a decentralized environment, America pre 1913, banks could not create wealth out of thin air and those that got into trouble could not trade inter bank between each other. This meant very frequent booms and busts on a localized level. The lack of easy money reduced the number of niche speculators chomping at the bit to open poorer country to exploitation. This limitation was used as a control to varying degrees. War for the sake of development was a much harder sell in our grandfather's time because decentralized societies relied on savings which were finite. Note this didn't stop war only made it harder to sustain itself.
Centralized banking merges profit, politics and debt. This core idea is why Libertarians mininize their institutions as much as possible. Mr.Cockburn does not make this distinction. Lew Rockwell would. In practice there is a huge gap between joe businessman on the street who pays his taxes, recognizes property rights, and respects the institutions which allow the accumulation of private property. This would be the American response. The corporate response would be to create an entity of the government that can print as much money as it wants to purchase resources and pay off the promises of politicians or lobbyists who preach peace through the NED or IMF. Purchasing isn't the problem for rich countries with big armies, access is the issue. This is Cockburn's issue, appropriation by less than the equitable means with no regard to the consequences.
What is necessary to sustain continual growth is access to resources. When one country is developed central banks look to other areas of the globe. Nationalized economies and easy access begin to butt heads. I think many would mislabel this phenomena as democracy vs. communism whereas I would call it centralized banking and the uses of debt for speculation.
What Cockburn does bring to the table is how lop sided development can be. Not all development is healthy - especially when forced into closed economies which are pried open through war and trauma. Disaster capitalism as I would define it is a liquidity problem hosted entirely by those who can create debt. Normal people cannot create debt. Centralized banks can make debt to infinity. This is the problem. This is the how I would define good capitalism/bad capitalism.
As values within a society evolve so does the idea of capitalism. It has been practiced in different ways by different countries as Cockburn has demonstrated. Property rights were something that was acquired gradually, not overnight. Same goes for perceptions on slavery. The point is capitalism is a work in progress.
The reason why Ron Paul and the Austrians have garnered a level of respect is they recognize a distinction between decentralized and centralized capitalisation efforts. The idea I'm trying to convey is similar to the mixing of church and state except this is banking and state. Each institution can play a positive role in modern society but when mixed together the tenents of each can become distorted and corrupt.
In a decentralized environment, America pre 1913, banks could not create wealth out of thin air and those that got into trouble could not trade inter bank between each other. This meant very frequent booms and busts on a localized level. The lack of easy money reduced the number of niche speculators chomping at the bit to open poorer country to exploitation. This limitation was used as a control to varying degrees. War for the sake of development was a much harder sell in our grandfather's time because decentralized societies relied on savings which were finite. Note this didn't stop war only made it harder to sustain itself.
Centralized banking merges profit, politics and debt. This core idea is why Libertarians mininize their institutions as much as possible. Mr.Cockburn does not make this distinction. Lew Rockwell would. In practice there is a huge gap between joe businessman on the street who pays his taxes, recognizes property rights, and respects the institutions which allow the accumulation of private property. This would be the American response. The corporate response would be to create an entity of the government that can print as much money as it wants to purchase resources and pay off the promises of politicians or lobbyists who preach peace through the NED or IMF. Purchasing isn't the problem for rich countries with big armies, access is the issue. This is Cockburn's issue, appropriation by less than the equitable means with no regard to the consequences.
What is necessary to sustain continual growth is access to resources. When one country is developed central banks look to other areas of the globe. Nationalized economies and easy access begin to butt heads. I think many would mislabel this phenomena as democracy vs. communism whereas I would call it centralized banking and the uses of debt for speculation.
What Cockburn does bring to the table is how lop sided development can be. Not all development is healthy - especially when forced into closed economies which are pried open through war and trauma. Disaster capitalism as I would define it is a liquidity problem hosted entirely by those who can create debt. Normal people cannot create debt. Centralized banks can make debt to infinity. This is the problem. This is the how I would define good capitalism/bad capitalism.
Interesting analysis Trouble. However I assume we had a national currency and corporations borrowed heavily before the creation of the Federal Reserve Banks. It seems to me debt has always had to have some relation to present or future equity. Without knowing too much about the details I always thought of the Fed as trying to smooth out some of the boom and bust cycles of earlier times. My impression is that Friedman didn't have so much a problem with its existence as much as wanting the Fed to restrict itself to normalizing the increase in the money supply as the way of keeping things on an even keel. The whole business of turning the closed economies of others into open resources for exploitation seemed to be well established by the twentieth century. Wasn't Adam Smith's 'Wealth of Nations' the book that gave it academic respectability?
One angle I've heard brought up is the business of the courts giving corporations legal personhood back sometime in the 1880s. Apparently before that businesses were held accountable by operating under local revocable 'Charters' based on certain standards of behavior. The courts broke that implied contract and reduced local accountability. Perhaps the size of corporations would have made local accountability a dead letter anyway but I know a lot of people point to that legal decision as giving rise to a kind of dark turn in our history.
One angle I've heard brought up is the business of the courts giving corporations legal personhood back sometime in the 1880s. Apparently before that businesses were held accountable by operating under local revocable 'Charters' based on certain standards of behavior. The courts broke that implied contract and reduced local accountability. Perhaps the size of corporations would have made local accountability a dead letter anyway but I know a lot of people point to that legal decision as giving rise to a kind of dark turn in our history.
QUOTE(Dingo)
Interesting analysis Trouble. However I assume we had a national currency and corporations borrowed heavily before the creation of the Federal Reserve Banks. It seems to me debt has always had to have some relation to present or future equity. Without knowing too much about the details I always thought of the Fed as trying to smooth out some of the boom and bust cycles of earlier times. My impression is that Friedman didn't have so much a problem with its existence as much as wanting the Fed to restrict itself to normalizing the increase in the money supply as the way of keeping things on an even keel. The whole business of turning the closed economies of others into open resources for exploitation seemed to be well established by the twentieth century. Wasn't Adam Smith's 'Wealth of Nations' the book that gave it academic respectability?
One angle I've heard brought up is the business of the courts giving corporations legal personhood back sometime in the 1880s. Apparently before that businesses were held accountable by operating under local revocable 'Charters' based on certain standards of behavior. The courts broke that implied contract and reduced local accountability. Perhaps the size of corporations would have made local accountability a dead letter anyway but I know a lot of people point to that legal decision as giving rise to a kind of dark turn in our history.
One angle I've heard brought up is the business of the courts giving corporations legal personhood back sometime in the 1880s. Apparently before that businesses were held accountable by operating under local revocable 'Charters' based on certain standards of behavior. The courts broke that implied contract and reduced local accountability. Perhaps the size of corporations would have made local accountability a dead letter anyway but I know a lot of people point to that legal decision as giving rise to a kind of dark turn in our history.
You are correct the Fed did try to even out the booms and busts. Unfortunately the normalization process is an ugly rollercoaster. I'll take a couple paragraphs and deviate onto what normalization means - at least my understanding of it.
The Fed has only one card to play and that is injecting ever greater amounts of money into either the stock market, commodities which are the telltale signs of inflation, or in cold hard cash. Cash is the most sensitive because there will be a demand followed by a rise in whatever market this new money tends to dominate. The shortage is whatever sells out. This is inflation in its most bare form. An artificial demand which pushes prices up. Excess money creation. By itself this sounds like no big deal. But if left over time this creates a gap between true demand and goods driven by artificial demand expands which plays a helping hand in making manufacturing uncompetitive.
The great debate between the austrians and the keynsians is the keynsians think the act of intervening in a market actually had some positive effect. Don't even get me started on the warfare-wellfare thing but you get the idea...Take the conflicting views of Iraq. We know now there was no wmd. We know there were no chemical weapons. The neocon view is regime change was still justified because the former regime was run by a dictator. The opposing view sites the destruction, the deaths, the refugees which are all a larger, more complex problem to solve then when Saddam was left in power. This is the debate between the two monatary schools of thought. One side sees the answer to a bust cycle is to create money, the other side knows the money will migrate creating further bubbles in sectors and devalue the currency by creating money at a rate faster than what the country needs resulting in loss of purchasing power. While the latter may sound jingoistic to a layperson, all the great societies which had complex means of barter fell into war when their economies fell into ruin. There have been no exceptions historically.
Now take that thought and focus everything you can do to grow your economy to sop up the excess money. Certain sectors respond better than others. Infrastructure is hard to grow quickly. Manufacturing is hard to grow and may be even harder to justify if the sales aren't there. The next best thing? Focus on the service side and the financial side of the economy. The point I am making is that not all sectors grow evenly under pressure and if such a trend continues on long enough, people realize things have changed and the workforce has become distorted. I've taken this approach because we've all heard about the loss of manufacturing and jobs and I wanted to give you a more nuanced reason over and above the obvious "cheap chinese labour" response.
In order to reestablish an equilibrium, the economy must expand. At the beginning of the bust cycle money and credit is plentiful and cheap. (Higher interest rates slow money the cycle down but slows the economy down and are not popular politically - the gurus call this money velocity or how fast money changes hands.) It is under this backdrop when money and credit are easy to come by that Naomi begins her book. I am quickly interpreting it as opportunism for short term gain.
Now where you and I come in is how well we equate opportunism with an increase in social welfare. This is something that I pondered on for years. For every example in favour I could find a socialist example against. (Remember all the most aggressive ideas of capitalism were first tested in latin america and definitely had a hand in fomenting socialist sentiment.) Your example of the charters is a good example of linking social interests to those with capitial. I'll have to search from this angle more in the future.
In the twentieth century opening up primitive countries to development was a no-brainer, that is development automatically increased the welfare and actually took enough of society out of poverty that allowed for stable governing. The tradional point was engaging in capitalistic ventures strengthened democratic principles which lended itself to western styled governments. Even without a Charter, the rise in the standard of living was enough to offset any negatives experienced from developement. The problem with this approach is it is rather hit and miss depending on the company, the time period, the government and a million other factors.
Naomi's entire arguement is that something changed between theory and practice, that capitalism does not sprout into a healthy institution building effort for every country. (I picked up the book and am reading it now.) While finding a definitive answer to economic theory is difficult because establishing cause and effect is speculative, I will mention John Bogle's book "The Battle For The Soul Of Capitalism: How the Financial System Underminded Social Ideals."
Bogle makes a simple observation after spending his entire life around Wall Street. The capital used to open up markets was originally run by people with a long term outlook. That is gains in the next quarter were not so important as consistent earnings over the next twenty years. To do that the capital must be focused entirely in creating a product or service that does well in the host country. IE the social implications were a barometer of how well a company was managing itself. Somewhere over that last thirty years the outlook gradually shortened. This meant companies only had to be profitable in the short term and did not focus as much on social or environmental costs. This was a gradual shift. I agree with Bogle increasing the role of credit in society was a contributing factor. He sites credit was the door for speculative greed. The result was a dramatic reversal of taking wealth out of country rather than creating wealth in the country to be used by that country. As you can see this observation plays heavily into disaster capitalism and whether or not this builds upon democratic principles or steals them away.
Sorry for the long winded response. There was no other way of moving from normalized credit cycles to Naomi's book.
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This meant companies only had to be profitable in the short term and did not focus as much on social or environmental costs. This was a gradual shift. I agree with Bogle increasing the role of credit in society was a contributing factor. He sites credit was the door for speculative greed. The result was a dramatic reversal of taking wealth out of country rather than creating wealth in the country to be used by that country. As you can see this observation plays heavily into disaster capitalism and whether or not this builds upon democratic principles or steals them away.
Certainly you are correct that the outlook of the typical business (esp. companies with public stock) is now too short. This is not the fault of “capitalism” but rather of business leaders, investors, and the US investment market. Other countries like Japan work differently.
I have no clue what you mean by “dramatic reversal of taking wealth out of country rather than creating wealth in the country to be used by that country” – certainly you are not speaking of the US which has seen dramatic growth of both.
And I disagree on “on social or environmental costs” – businesses focus on the efficient production of goods and services taking into account social and environmental regulations.
Obviously keeping the work force happy and motivated is a major part of this and Capitalism does a wonderful job of insuring this in a world of scarce labor assets.
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