I Dream of Naomi the Globophobe

♠ Posted by Emmanuel in at 9/30/2007 10:43:00 PM
Let me qualify that--I have bad dreams about Naomi Klein. She is, of course, the author of the popular book that attacked the evils of corporate globalization, No Logo. A favorite of the anti-globalization movement, she has recently released another, more ambitious book entitled The Shock Doctrine. The book makes an analogy between electroshock therapy applied to psychiatric patients and the "shock therapy" doctrine of wholesale economic makeover. (Although Jeffrey Sachs is associated with the term, he claims not to like it.) Just as electroshock therapy is designed to break down patients and make them susceptible to reprogramming, economic shock therapy supposedly does the same to entire nations. What else, this kind of shock therapy is often accompanied by coercion. To Klein, it's a cocktail of shocks: "Countries are shocked by wars, terror attacks, coups d’├ętat and natural disasters"; afterwards, “they are shocked again — by corporations and politicians who exploit the fear and disorientation of this first shock to push through economic shock therapy.” Lastly, those who “dare to resist” are shocked for a third time, “by police, soldiers and prison interrogators.”

This exceedingly specious analogy is extended to a number of "case studies": Pinochet's Chile in 1973; the Falklands War in 1982; the Tiananmen Massacre of 1989; the rise of Russian oligarchs in 1993; September 11; the invasion of Iraq in 2003; and Sri Lanka after the 2004 tsunami. How deliberately conducted electroshock therapy relates to the catastrophic "shocks" of 9/11 (unless you buy the conspiracy theory that a US missile hit the Pentagon) and the 2004 tsunami is not given much explanation. Nor is it explained how the Falklands War, which, if I recall, resulted from the Argentinian invasion of the Falklands, led to liberalization, privatization, and deregulation in England. In effect, Klein tries to conveniently fit events on a Procrustean bed of an analogy by forcing the description of these events to fit an electroshock therapy/shock therapy analogy and its associated corporate-led violence. Muddling up actors, motives, and outcomes doesn't really matter. Aside from those neoliberal Argentineans who foisted liberalization, privatization, and deregulation on the hapless English, we have the Tiananmen massacre being the turning point in China's conversion to "getting rich is glorious," which Deng Xiaoping first uttered in 1979 if I recall correctly.

Needless to say, I would not hesitate to give any paper based on the idea that the Argentinian invasion of the Falklands was done in order to spur neoliberal reforms in Britain or one that suggested Tiananmen spurred China's turn to the market a failing mark. That such faulty logic could be extended to 500+ pages beggars belief. It's not ideological bias on my part. This is one of the very few blogs covering economics topics that has Marxist sources among its links. Nor would it be fair for me as an IPE instructor to deliberately give lower marks to papers that adopted a Marxist-leaning perspective. (Actually, it's often easier for students to write a good essay with such a perspective, but that's another story.) Rather, the faults with Klein's work are not ideological but logical. Even the renowned left-leaning author, the late great Andre Gunder Frank would have said that markets are not newfangled Western corporate contraptions designed to impoverish the world but have existed throughout the Orient since time immemorial. There's nothing necessarily wrong with markets if you go by the explanation that they're spaces where people come together to exchange things. As Amartya Sen noted in his magnum opus Development as Freedom:
The market mechanism, which arouses passion in favor as well as against, is a basic arrangement through which people can interact with each other and undertake mutually advantageous activities. In this light, it is very hard indeed to see how any reasonable critic could be against the market mechanism, as such. The problems that arise typically spring from other sources—not from the existence of markets per se—and include such concerns as inadequate preparedness to make use of market transactions, unconstrained concealment of information or unregulated use of activities that allow the powerful to capitalize on their asymmetrical advantage. These have to be dealt with not by suppressing the markets, but by allowing them to function better and with greater fairness and with adequate supplementation. The overall achievements of the markets are deeply contingent on political and social arrangements.
Joseph Stiglitz gets this point in his book review of Shock Capitalism: markets become acceptable insofar as institutions are established that enable an economy to function well and reflect the broader social fabric that markets are embedded in. Klein's Procrustean bed is sample selection bias at its worst. Select those cases where money, power, and occasional violence (the subtitle of my blog) come together and use them to make a wholesale indictment of "the market," never mind that the pieces don't fit the (incoherent) shock doctrine thesis. Sorry, but I don't do conspiracy theories. Like the anti-Semitic variation ("Jews control the world") and the anti-American variation ("the corporate American Empire is bent on global domination"), the anti-globalization variation ("the free market is a myth designed to enrich the West and impoverish the rest of the world") suffers from the same tendency towards the grand narrative of market fundamentalists: "free markets automatically deliver peace and prosperity."

The world is too complex to be encapsulated by these conspiracy theory and libertarian simplifications. Grand narratives are fine for storytelling purposes, but for those of us who seek a more nuanced understanding of the dynamics of globalization, it's a much more difficult task. There are no easy answers. I leave you with Will Hutton's scathing but spot-on take on Klein's book:

In her delusional, Manichaean world view, privatisation, free markets, private property, consumer freedom, the profit motive and economic freedom are just other terms for corporate self-enrichment, denial of voice, limitation of citizenship, inequality and, sometimes, even torture. The discredited electro-shock psychological treatment of the Fifties, we learn, informed the thought system of the free marketeers; it is guilt by association and assertion rather than proof, a weaknesses of too much of the book.

Nothing good can ever come from globalisation, which is just more capitalism. Democracy, however, is a halcyon world of political and economic co-operation, citizen voice and engagement, with a freely arrived-at assertion of the common interest in which most think along the same lines as, say, Naomi Klein. She and free-market economist Milton Friedman, whom she has in her sights, are mirror images of each other in the absolutist categories in which they think.