War fought for glory and profit

Naomi Klein takes no pris­on­ers in her cri­tique of the un­holy al­liance be­tween money and guns, writes Mike Steke­tee The Shock Doc­trine: The Rise of Dis­as­ter Cap­i­tal­ism By Naomi Klein Allen Lane, 558pp, $ 32.95

The Weekend Australian - Review - - Books -

DIS­AS­TER hap­pens, to mis­quote Don­ald Rums­feld on Iraq. So why not make a buck out of it? Let’s go one bet­ter. Why not make dis­as­ter hap­pen and draw up plans for the money- mak­ing op­er­a­tion at the same time? Al­low­ing for only slight ex­ag­ger­a­tion, that is the theme of this pow­er­ful polemic from Naomi Klein. The Iraq war is a ter­ri­ble fail­ing of US for­eign pol­icy, not to men­tion for Iraqis, but it is a lu­cra­tive one if you have shares in com­pa­nies such as Hal­libur­ton. Among those who do are Vice- Pres­i­dent Dick Cheney, who Klein says sold some Hal­libur­ton shares but kept 189,000, to­gether with 500,000 op­tions.

With Iraq the sin­gle most prof­itable event in Hal­libur­ton’s his­tory, the com­pany’s share price rose from $ 10 be­fore the war to $ 41 three years later. Rums­feld re­tained a large share­hold­ing in an­other com­pany, Gilead Sci­ences, which had the pa­tent for a vac­cine pur­chased by the Pen­tagon and the US De­part­ment of Health. The shares rose in price from $ 7.45 when he be­came defence sec­re­tary to $ 67.60 when he left.

The idea of mak­ing se­ri­ous money from war is as old as the mil­i­tary- in­dus­trial com­plex. What is new is the ex­tent of private sec­tor in­volve­ment and the over­lap with pub­lic re­spon­si­bil­ity. Klein, au­thor, syn­di­cated colum­nist and poster per­son for the anti- glob­al­i­sa­tion move­ment, has pulled to­gether some threads: the op­por­tu­ni­ties for change pro­vided by sud­den shocks, the in­dus­tries that have grown around it, the in­flu­ence of the neo- lib­eral agenda fa­thered by Mil­ton Fried­man and the dis­ci­ples who pro­pound it, in­clud­ing Cheney and Rums­feld. She is left tee­ter­ing on the edge of the daddy of all con­spir­acy the­o­ries: ‘‘ While the dis­as­ter cap­i­tal­ism com­plex does not de­lib­er­ately scheme to cre­ate the cat­a­clysms on which it feeds ( though Iraq may be a no­table ex­cep­tion), there is plenty of ev­i­dence that its com­po­nent in­dus­tries work very hard in­deed to

make sure that cur­rent dis­as­trous trends con­tinue un­chal­lenged.’’ She points to the weapons and home­land se­cu­rity con­trac­tors who con­trib­ute heav­ily to Wash­ing­ton think tanks that pump out mes­sages about a dark and men­ac­ing world.

As with all polemics, Klein’s does not bur­den read­ers with qual­i­fi­ca­tions. The neo- lib­eral eco­nomic agenda is un­al­loyed evil. But what about China’s and In­dia’s em­brace of free mar­kets, which is lift­ing hun­dreds of mil­lions out of poverty, as well as fu­elling the present surge of global pros­per­ity? The prob­lem iden­ti­fied by Klein lies with fun­da­men­tal­ism and ex­cess, not nec­es­sar­ily with the pol­icy.

In the 1970s, Fried­man was an ad­viser to Chilean dic­ta­tor Au­gusto Pinochet, ben­e­fi­ciary of a CIA- as­sisted coup against the left- wing gov­ern­ment of Sal­vador Al­lende. Fried­man ad­vised shock treat­ment or, as it also was re­ferred to, ‘‘ ma­jor surgery with­out anaes­thetic’’: whole­sale pri­vati­sa­tion, cuts to wel­fare, dereg­u­la­tion and free trade. To en­cour­age co- op­er­a­tion from a re­luc­tant pop­u­la­tion, 3200 peo­ple were ‘‘ dis­ap­peared’’, at least 80,000 im­pris­oned, many of them tor­tured, and 200,000 fled the coun­try.

The short- term costs were con­sid­er­able in terms of mea­sures such as un­em­ploy­ment and poverty and the long- term ben­e­fits are still in dis­pute, with an im­proved eco­nomic per­for­mance off­set by a sharp rise in in­equal­ity.

But in any case no eco­nomic pol­icy war­rants such abuse of hu­man­ity. Pinochet died be­fore charges against him of geno­cide, tor­ture and ter­ror­ism could be de­ter­mined.

Klein draws a line through Chile, sim­i­lar ex­per­i­ments in Brazil, Ar­gentina and Rus­sia, among oth­ers, and on to Iraq. The changed cir­cum­stances pro­vided by dis­as­ters such as coups or tsunamis clear the way for rad­i­cal, en­forced change. Iraq was made pos­si­bly by the shock of Septem­ber 11, to­gether with false in­for­ma­tion about weapons of mass de­struc­tion. Klein con­cen­trates on the post- war plan­ning: Iraq as the eco­nomic fron­tier, with Amer­i­can firms clean­ing up with sub­stan­tial con­tracts and Iraqi and most other for­eign firms frozen out.

A new oil law al­lows com­pa­nies such as Shell and BP to sign 30- year con­tracts, which Klein ar­gues gives them a large share of Iraq’s oil prof­its. Even con­crete was im­ported from abroad at up to 10 times the price, de­spite Iraq’s 17 sta­te­owned ce­ment fac­to­ries.

It was this eco­nomic pol­icy that she claims pro­voked the re­sis­tance that led to the re­pres­sion and the es­ca­lat­ing spi­ral of vi­o­lence. ‘‘ It is a very cap­i­tal­ist dis­as­ter, a night­mare of un­fet­tered greed un­leashed in the wake of war.’’ Per­haps, but there were other other grounds for re­sis­tance as well, such as the fact of for­eign oc­cu­pa­tion.

The other line drawn through th­ese events is the role of key play­ers. In 1976, the year of a coup in Ar­gentina that had fi­nan­cial sup­port from Wash­ing­ton, Ger­ald Ford was pres­i­dent, Cheney was his chief of staff, Rums­feld his sec­re­tary of defence and the ex­ec­u­tive as­sis­tant to sec­re­tary of state Henry Kissinger was Paul Bre­mer, who al­most 30 years later be­came head of the Coali­tion Pro­vi­sional Author­ity in Iraq af­ter the war. Some of the private sol­diers hired for Iraq by the private se­cu­rity firm Black­wa­ter in­cluded Chileans who served un­der Pinochet.

US for­eign pol­icy in­volves more than mak­ing a buck from war: be­lief in US ex­cep­tion­al­ism, ide­ol­ogy and re­li­gion, for a start.

But en­trepreneurs are not go­ing to let op­por­tu­ni­ties go beg­ging. Mike Steke­tee is The Aus­tralian’s na­tional af­fairs ed­i­tor.

Help­ing hand for Hal­libur­ton: Paul Bre­mer in his role as head of the Coali­tion Pro­vi­sional Author­ity in Iraq in 2004

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