Naomi Klein, crazy commie from Great White North, defames Milton Friedman
Eric Gisin
and conspiracy theories, and its popularity shows how intellectually bankrupt the liberal left has
become.
Her parents left the US for Canada during the Vietnam war. We don't want US deserters coming into
Canada as "refugees", that last hippy invasion did enough damage to Canadian politics.
WackiPedia: Her father Michael, a physician, was a Vietnam War resister and a member of Physicians
for Social Responsibility. Her mother, film-maker Bonnie Sherr Klein, directed and scripted the
[hateful] anti-pornography documentary film, Not a Love Story. Her brother Seth is director
of the British Columbia office of the [loony left] Canadian Centre for Policy Alternatives.
http://www.reason.com/news/show/128903.html
Defaming Milton Friedman - September 26, 2008, 09:00:00 | in...@reason.com (Johan Norberg)
The Shock Doctrine: The Rise of Disaster Capitalism, by Naomi Klein, New York: Metropolitan Books,
576 pages, $28.
In the future, if you tell a student or a journalist that you favor free markets and limited
government, there is a risk that they will ask you why you support dictatorships, torture, and
corporate welfare. The reason for the confusion will be Naomi Klein's book The Shock Doctrine: The
Rise of Disaster Capitalism.
In a very short time, the book has become a 21st-century bible for anticapitalists. It has also
drawn praise from mainstream reviewers: "There are very few books that really help us understand
the present," gushed The Guardian. "The Shock Doctrine is one of those books." Writing in The New
York Times, the Nobel-winning economist Joseph Stiglitz called it "a rich description of the
political machinations required to force unsavory economic policies on resisting countries."
Klein's basic argument is that economic liberalization is so unpopular that it can only win through
deception or coercion. In particular, it relies on crises. During a natural disaster, a war, or a
military coup, people are disoriented, confused, and preoccupied with their own immediate survival,
allowing regimes to liberal-ize trade, to privatize, and to reduce public spending with little
opposition. According to Klein, "neoliberal" economists have welcomed Hurricane Katrina, the
Southeast Asian tsunami, the Iraq war, and the South American military coups of the 1970s as
opportunities to introduce radical free market policies. The chief villain in her story is Milton
Friedman, the economist who did more than anyone in the 20th century to popularize free market
ideas.
To make her case, Klein exaggerates the market reforms in question, often ignoring central events
and rewriting chronologies. She confuses libertarianism with the quite different concepts of
corporatism and neoconservatism. And she subjects Milton Friedman to one of the most malevolent
distortions of a thinker's ideas in recent history.
Exhibit A against Friedman is a quote from what Klein calls "one of his most influential essays":
"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. That, I believe, is our basic function: to
develop alternatives to existing policies, to keep them alive and available until the politically
impossible becomes politically inevitable." This, says Klein, is "the shock doctrine." In a
not-very-subtle short film based on the book, the quote appears over images of prisoners being
tortured.
Click above to watch Johan Norberg discuss the The Shock Doctrine and the defaming of Milton
Friedman. [see orginal article]
The quote is not, in fact, from one of Friedman's most influential essays; it's from a very brief
introduction to a reprint of his book Capitalism and Freedom. And it is not a rationale for
welcoming disasters; it's about the uncontroversial fact that people change their minds when the
old ways seem to fail. Friedman provides a telling example, which Klein neglects to quote: Young
Americans joined him in opposing the military draft after the Vietnam War forced them to risk their
lives on another continent.
She also distorts other Friedman quotes to support her case. She pretends that Friedman's concept
of "the tyranny of the status quo" refers the tyranny of voters, and that he believed crises were
needed to bypass the democratic process. But for Friedman, the tyranny was something entirely
different: an iron triangle of politicians, bureaucrats, and specialinterest groups (businesses,
for example) that deceive voters.
Discussing Friedman's proposal to reduce inflation through sweeping market reforms, Klein writes,
"Friedman predicted that the speed, suddenness and scope of the economic shifts would provoke
psychological reactions in the public that 'facilitate the adjustment.' " This gives the impression
that Friedman wanted to disorient people through pain in order to push through his reforms. But the
quote in its entirety shows that Friedman had something very different in mind. If a government
chooses to attack inflation in this way, he wrote, "it should be announced publicly in great
detail....The more fully the public is informed, the more will its reactions facilitate the
adjustment." In other words, if voters are not ignorant and not disoriented, but fully informed of
the reform steps, they will facilitate the adjustment by changing their saving, consuming, and
bargaining behavior. Friedman's view was the opposite of what Klein claims.
Not content to misrepresent Friedman's opinions, Klein blames him for various crimes committed
around the world. Most notably, she links him to Augusto Pinochet's brutal military dictatorship in
Chile in the 1970s, writing that Friedman acted as "adviser to the Chilean dictator."
In fact, Friedman never worked as an adviser to, and never accepted a penny from, the Chilean
regime. He even turned down two honorary degrees from Chilean universities that received government
funding, because he did not want to be seen as endorsing a dictatorship he considered "terrible"
and "despicable." He did spend six days in Chile in March 1975 to give public lectures, at the
invitation of a private foundation. When he was there he met with Pinochet for about 45 minutes and
wrote him a letter afterward, arguing for a plan to end hyperinflation and liberalize the economy.
He gave the same kind of advice to communist dictatorships as well, including the Soviet Union,
China, and Yugoslavia.
Klein twists this relationship beyond recognition, claiming Pinochet's 1973 coup was executed to
allow free market economists ("the Chicago Boys," as the economists from Friedman's University of
Chicago were called) to enact their reforms. This false link is crucial for giving the impression
that the Friedmanites have blood on their hands, since the most violent period of the regime came
right after the coup. But Friedman's visit, which Klein claims started the real transformation,
came two years later. Klein insists on having it both ways.
The reality was that Chile's military officials were initially in charge of the economy. They were
corporatist and paternalist, and they opposed the Chicago Boys' ideas. The air force controlled
social policy, for example, and it blocked market reforms until 1979. It wasn't until this approach
led to runaway inflation that Pinochet belatedly threw his weight behind liberalization and gave
civilians ministerial positions. Their success in fighting inflation impressed Pinochet, so they
were given a larger role.
Klein could have used the real chronology to attack Friedman for visiting a dictatorship that
tortured its opponents-a commonly heard criticism of the economist-but that's not enough for her.
To find support for her central thesis that economic liberalism requires violence, she has to make
it look like torture and violence were the direct outcome of Friedman's ideas.
Klein also blames Friedmanite economics for the Iraq war, for the International Monetary Fund's
actions during the Asian economic crisis of the late 1990s, and for the Sri Lankan government's
confiscation of fishermen's property to build luxury hotels after the deadly tsunami of 2005. In a
576-page book about such evils, why wasn't there room to mention that Milton Friedman opposed the
Iraq war, thought the IMF shouldn't be involved in Asia, and believed governments should be
prohibited from expropriating property to give it to private developers? Klein quotes from some
interviews in which Friedman voiced these views, but she declines to mention Friedman's longheld
positions that directly undermine her thesis.
Even though Klein is dead wrong about Friedman, she may well be right in her broader thesis that
it's easier to liberalize in times of crisis, and that there is a close connection between economic
liberalization and political violence. It's true that several dictators have liberalized their
economies in recent years and that some of them have tortured their opponents.
But how strong is this connection? If we look at the Economic Freedom of the World statistics
assembled by the Fraser Institute, a Canadian free market think tank, we find only four economies
on the planet that haven't liberalized at all since 1980, so obviously reform has taken place in
all sorts of countries. But the statistics clearly show that most classical liberal reforms happen
in democracies, not dictatorships. Klein never talks about such rapidly liberalizing democracies as
Iceland, Ireland, Estonia, or Australia, where reforms were given renewed support in several
elections. Presumably these countries just aren't undemocratic and brutal enough. She does discuss
Britain under Margaret Thatcher, but only to argue that Thatcher too relied on shocks and violence.
The Iron Lady won re-election in 1983, Klein says, because of the boost she got from the Falklands
War. She doesn't mention another reason for Thatcher's growing popularity: The British economy was
improving rapidly at the time. A 1987 study in the British Journal of Political Science looked in
detail at the timing of events and British voters' perception of them, and made a strong case that
the Tories gained only three percentage points from the war; the vast majority of the gain came
from improved economic prospects. And the Falklands War certainly cannot explain why Tories won two
more elections after that, nor why Tony Blair's New Labour had to dress itself in Thatcherite
clothes to be elected.
Naomi Klein usually exaggerates the economic liberalization that has been carried out by brutal
dictators. She needs to demonstrate that Pinochet's interest in market reforms was typical of
authoritarian regimes-otherwise, her archvillain Friedman might have been right when he said that
the surprising thing in Chile was not that the market worked but that the generals allowed it to
work. So Klein ropes in the Argentinean dictatorship of 1976-1983. Based on those two examples, she
claims the southern part of Latin America is where "contemporary capitalism was born." She even
calls the countries "Chicago School juntas."
There were indeed advisers from the University of Chicago in Argentina; since there is strong
global demand for Chicago economists, they have visited many countries. But their influence in
Argentina was barely noticeable. In the Fraser Institute index of economic freedom, which gives
scores from 1 (the least free) to 10 (the most), Argentina moved from 3.25 in 1975 to 3.86 in 1985.
Compare this with the countries Klein mentions as superior alternatives to the Chicago Boys' brutal
"neoliberal" models: Sweden went from 5.62 in 1975 to 6.63 in 1985; Malaysia, one of the "mixed,
managed economies" Klein prefers, went from 6.43 to 7.13. In 1985, after Argentina allegedly
applied Friedman's ideas, the country's economy was less marketoriented than all the Eastern
European communist economies tracked by Fraser, including Poland, Hungary, and Romania. But
Argentina tortured people, so in Klein's mind it must have been on the fast track to free markets.
By Klein's account, China is another country that violently imposed Friedmanite reforms. To make
this case, she rewrites the history of the Tiananmen Square massacre of 1989, claiming the
protesters were primarily opposed to economic liberalization, instead of one-party dictatorship.
According to Klein, the Communist Party, led by Deng Xiaoping, attacked them to save its free
market program and advance yet more sweeping reforms while people were still in shock.
If the students were indeed protesting economic reform, they seldom expressed that grievance at the
time. Instead, they demonstrated in favor of democracy, government transparency, and equality
before the law, and against bureaucracy and violence. The protesters first gathered to mourn former
Secretary General Hu Yaobang, one of China's most important economic reformers. The protests soon
grew to include everybody who wanted liberal democracy-both those who wanted more economic reform
and those who wanted less. Klein equates the second element with the whole protest.
Chinese officials suppressed the demonstrations because they wanted to protect the party's power,
not because they wanted to liberalize the economy. The majority were economic conservatives who
were skeptical of markets; some even refused to visit Chinese free trade zones on principle. And
the economic reforms did not accelerate after the massacre, as Klein claims. For the first time
since their inception, they stalled.
The most consistent free marketeer in the leadership, General Secretary Zhao Ziyang, was purged
because he supported the protesters, and he spent the rest of his life under house arrest.
(Friedman had met him in Beijing in 1988 and wrote him a letter of advice. For Klein, this is yet
another meeting with a tyrant.) Zhao's rivals-including Premier Li Peng, who was pushing for a
violent crackdown on the protesters-then tried to roll the market reforms back and reintroduce
economic controls. The conservatives blamed the unrest on the openness associated with economic
liberalization, and Deng's position in the party was weakened. Far from being the start of "shock
therapy," Tiananmen Square was almost the end of China's economic liberalization. Klein writes that
"Tiananmen paved the way for a radical transformation free from fear of rebellion," but according
to the Fraser statistics, China was actually less economically open in 1990 than it was in 1985.
Klein writes that Deng opened the Chinese economy "in the three years immediately following the
bloodbath." This is true only if "immediately" means "three years later." Reform faltered so much
in the years following the crackdown that Deng felt he needed to go outside normal channels and
jump-start liberalization in the spring of 1992, even though he was 87 years old and had formally
retired. His "southern tour" was a trip filled with speeches and networking aimed at saving the
reform program. The tour was not initially reported in the national media, since they were
controlled by Deng's rivals. Deng even found himself forced to write articles supporting his agenda
under a pen name to get access. But he was eventually successful in winning local support and
building alliances with provincial governors who favored liberalization. Only then did President
Jiang Zemin reluctantly support Deng's reforms.
To show that radical economic liberalization can happen only in dictatorships, Klein compares China
to democratic Poland in the late 1980s and early '90s: "In China, where the state used the
gloves-off method of terror, torture and assassination, the result was, from a market perspective,
an unqualified success. In Poland, where only the shock of economic crisis and rapid change was
harnessed-and there was no overt violence-the effects of the shock eventually wore off, and the
results were far more ambiguous." Once again, the statistics tell a different story. According to
the Fraser data, Poland actually took reform farther and faster. In 1985 its economy was much less
open, with a score of 3.93 versus China's 5.11. In 1995, both scored 5.3. In 2005 Poland was way
ahead, with 6.83 to China's 5.9.
Klein also exaggerates the free market elements in anything she can associate with a crisis. She
writes that politicians used Hurricane Katrina to introduce "a fundamentalist version of
capitalism" in New Orleans. The "fundamentalist" reform in question? The introduction of more
charter schools. Not satisfied to exaggerate just the nature of the change, Klein also stretches
its extent: She writes that the school board used to run 123 public schools but after the hurricane
ran only four, whereas the number of charter schools increased from seven to 31. She doesn't
mention that these figures date to the period immediately after the hurricane, when the school
board was much slower to reopen its schools. As of September 2007, ordinary public schools again
outnumbered charter schools, 47 to 44.
The strangest thing about Klein's suggestion that crises benefit free markets and limited
government is that there is such a long record of the exact opposite. World War I led to communism
in Russia; economic depression gave us Nazi Germany. Wars and other disasters are rarely friends of
freedom. On the contrary, politicians and government officials often use crises as an opportunity
to increase their budgets and powers. As one prominent economist put it while explaining his
opposition to war in Iraq: "War is a friend of the state....In time of war, government will take
powers and do things that it would not ordinarily do." The economist? Milton Friedman.
Friedman was right about the Iraq war: The Bush administration has used that conflict and the
larger War on Terror to dramatically expand the federal government's powers and expenditures.
Bizarrely, Klein points to the U.S. after 9/11 as a major illustration of her thesis. She claims
the terrorist attacks gave the Bush administration an opportunity to implement Friedman's ideas by
benefiting friends in the defense and security industries with new contracts and unprecedented sums
of money. Klein never clearly explains how this could possibly be Friedmanite. In the real world,
Friedman "had always emphasized waste in defense spending and the danger to political freedom posed
by militarism," in the words of his biographer Lanny Ebenstein. Somehow, Klein has confused
Friedman's limited-government liberalism with corporatism.
As Klein sees it, in Bush's America "you have corporatism: big business and big government
combining their formidable power to regulate and control the citizenry." This sounds like a healthy
libertarian critique of the administration-something Friedman himself might say. But Klein thinks
that Bush-style corporatism is the "pinnacle of the counterrevolution launched by Friedman" and
that the team that implemented it is "Friedmanite to the core."
So even when the U.S. government breaks all the rules in Milton Friedman's book, Klein blames
Friedman. At one point she writes about the lack of openness in the Iraqi economy: "All the...U.S.
corporationsthat were in Iraq to take advantage of the reconstruction were part of a vast
protectionist racket whereby the U.S. government had created their markets with war, barred their
competitors from even entering the race, then paid them to do the work, while guaranteeing them a
profit to boot-all at taxpayer expense." This would be an excellent Friedmanite critique of how
governments enrich their friends at the expense of competitors and taxpayers-if it weren't for the
conclusion to the paragraph: "The Chicago School crusade...had finally reached its zenith in this
corporate New Deal."
For Klein, tax-funded corporate welfare is the zenith of Chicago's free market revolution. The idea
seems to be that Milton Friedman likes corporations, so if governments give corporations contracts,
subsidies, protection, and privileges, that must be Friedmanite. At times it seems like Klein
thinks any policy is Friedmanite if private companies are involved. But you would have a hard time
finding an economist more persistent than Friedman in warning how corporations and capitalists
conspire against the public to obtain special privileges. As Friedman wrote in reason in 1978:
"Business corporations in general are not defenders of free enterprise. On the contrary, they are
one of the
chief sources of danger....Every businessman is in favor of freedom for everybody else, but when it
comes to himself that's a different question. We have to have that tariff to protect us against
competition from abroad. We have to have that special provision in the tax code. We have to have
that subsidy."
In the absence of serious arguments against free markets, we are left with Klein's reasonable
critiques of torture, dictatorships, corruption, and corporate welfare. In essence, her book says
that Milton Friedman's limited government ideals are bad because governments are incompetent,
corrupt, and cruel. If there is a disaster here, it is not one of Friedman's making.
Johan Norberg (in...@johannorberg.net) is a Swedish historian of ideas and a senior fellow at the
Cato Institute, which published another version of this article.
Bill
you, to the point where you preface your paste job with a litany of frothing
at the mouth, opinion as fact distortions and character assassinations. So
she's doing something right.