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
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