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Naomi Klein on the value of ‘shock’

BY KATIE HANSON | FEBRUARY 19, 2009 7:44 AM

Augusto Pinochet’s violent 1970s takeover of Chile seems distinctly different from the current bank bailout, but they may in fact share a few similarities. They were both born from shocking events.
Journalist Naomi Klein discussed the negative effects free-market theories have had on the world economy Wednesday at the IMU.

Klein, a journalist and columnist, is the best-selling author of The Shock Doctrine: The Rise of Disaster Capitalism, released in 2007.

“The shock doctrine refers to a strategy, a philosophy of power … that the best time to push through a radical free-market agenda … is in the aftermath of some type of shock,” Klein said to the crowd. “The idea is to very quickly privatize key state industries, but [proponents] can’t advance this agenda without a crisis.”

These shocks have included wars, natural disasters, and terrorist attacks, and Klein drew upon Pinochet’s coup in Chile, Britain’s Falklands War, the collapse of the Soviet Union, and Hurricane Katrina for evidence.

Following the destruction in New Orleans, Klein said, many policymakers called the hurricane a tragedy as well as an opportunity and used it to pass their own agendas.

“The response was not to fix the infrastructure … but a crisis born of the public sphere was used as an excuse to finish the job,” Klein said. “It was an orchestrated raid on the public sphere.”

Klein used economist Milton Friedman’s support for school vouchers instead of rebuilding New Orleans’ public schools to expand on The Shock Doctrine’s idea that Friedman originally developed the free-market ideas that have been implemented throughout the world to widespread strife.

Klein’s position is not without its critics.

Will Wilkinson, a research fellow at the Cato Institute, a libertarian nonprofit research facility in Washington, D.C., delivered a rebuttal to Klein’s argument at the Seamans Center on Tuesday night.
Wilkinson said Klein ignores the success of neo-liberal ideology in such countries as Australia, the United Kingdom, and the United States. He also showed a recent clip from Chief of Staff Rahm Emanuel in which he explains the opportunities within a crisis to demonstrate all political parties use shocking events to their advantage.

“It’s just political,” Wilkinson said. “This is just how politics works.”

But Klein isn’t a fan either of the Obama administration’s response to the current economic crisis.
“The government has turned itself into a nonstop ATM for Wall Street,” she said, noting that the bank bailout started under former President George Bush and continued under President Barack Obama “will go down in history as the greatest heist in modern history.”

Instead of taking the “logical step” to nationalize failing banks, Klein said, the government has given the banks more money and allowed them to stay private.

“If the banks don’t pay for this crisis, then you guys are going to pay for this — we’re all going to pay for this,” she said.

Lauren Sauter, a UI graduate student in public health, said she was impressed by Klein’s range of ideas.

“She can take big theories and make them fit nicely into ideas you can carry out,” Sauter said.
As a result of current misguided spending, Klein said a new shock, that of debt, will occur. But she added Americans can draw inspiration from citizens who have taken on major corporations and succeeded.

“With good organization and good support we can turn this around and the anger will go where it should go instead of to the people who are most vulnerable.”


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