Tyler Cowen Thinks Naomi Klein Believes Her Own Bulls---

He reads her book. He doesn't think it meets minimum intellectual standards. I think he is right: now I can borrow Tyler's ideas and have an informed view:

Shock Jock - October 3, 2007 - The New York Sun: Rarely are the simplest facts, many of which complicate Ms. Klein's presentation, given their proper due. First, the reach of government has been growing in virtually every developed nation.... [T]he reach of government has been shrinking in India and China, to the indisputable benefit of billions.... [I]t is the New Deal — the greatest restriction on capitalism in 20th century America and presumably beloved by Ms. Klein — that was imposed in a time of crisis.... China was falling apart because of the murderous and tyrannical policies of Chairman Mao, which then led to bottom-up demands for capitalistic reforms.... [T]he reader will search in vain for an intelligent discussion of any of these points. What the reader will find is a series of fabricated claims, such as the suggestion that Margaret Thatcher created the Falkland Islands crisis to crush the unions and foist unfettered capitalism upon an unwilling British public.

The simplest response to Ms. Klein's polemic is to invoke old school conservatism... reject[ing] the idea of throwing out or revising all social institutions at once. Indeed the long history of conservative thought stands behind moderation.... That tradition does advise a scaling down of free-market ambitions, no matter how good they may sound in theory, and is probably our best hedge against disasters of our own making. Such a simple — indeed sensible — point would not have produced a best-selling screed....

The clash between democratic preferences and policy prescriptions is, if anything, a problem for Ms. Klein herself. Ms. Klein's previous book, "No Logo" (2000), called for rebellion against advertising and multinational corporations, two institutions which have proved remarkably popular with ordinary democratic citizens. Starbucks is ubiquitous because of pressure from the bottom, not because of a top-down decision to force capitalism upon the suffering workers in a time of crisis.

If nothing else, Ms. Klein's book provides an interesting litmus test as to who is willing to condemn its shoddy reasoning. In the New York Times, Nobel Laureate Joseph Stiglitz defended the book: "Klein is not an academic and cannot be judged as one." So nonacademics get a pass on sloppy thinking, false "facts," and emotional appeals? In making economic claims, Ms. Klein demands to be judged by economists' standards — or at the very least, standards of simple truth or falsehood. Mr. Stiglitz continued: "There are many places in her book where she oversimplifies. But Friedman and the other shock therapists were also guilty of oversimplification." Have we come to citing the failures of one point of view to excuse the mistakes of another?

With "The Shock Doctrine," Ms. Klein has become the kind of brand she lamented in "No Logo." Brands offer a simplification of image and presentation, rather than stressing the complexity, the details, and the inevitable trade-offs of a particular product.... Klein... admitted that brands were never her real target, rather they were a convenient means of attacking the capitalist system more generally. In the same interview, Ms. Klein also tellingly remarked, "I believe people believe their own bulls---. Ideology can be a great enabler for greed."

When it comes to the best-selling "Shock Doctrine," that is perhaps the bottom line on what Klein herself has been up to.

Five points:

1. Margaret Thatcher did not create the Falklands War in order to crush unions and implement the rest of a domestic program that could barely get 40% of the vote, but she did take advantage of it--of the popularity generated by a short victorious war--to do so. There is only a very small amount of moral fault there: had she provoked the war for domestic political purposes there would be a great deal of fault, but she did not.

2. Tyler is right: Stiglitz ought to know better, for degrading the level of the debate is in your long-run interest only if you are one of the bad guys. And we are not.

3. Some governments can be trusted to run mixed-economy social democracies: those of Western Europe, of the British Dominions, of the islands and peninsulas off the coast of East Asia, and of California, Oregon, Washington, Wisconsin, Minnesota, New York, and New England come to mind.

4. Other governments cannot be trusted to run mixed-economy social democracies: Ghana and Zimbabwe and Egypt and Cuba and China and Mississippi come to mind. We do not know even much about how to predict which governments will fall into which category. We do not know how to change governments from one category to another. We do not have alternatives to recommend to governments that cannot run effictive mixed-economy social democracies.

5. And so the best advice really is Keynes's response to Trotsky: "Granted his assumptions, much of Trotsky's argument is, I think, unanswerable.... But what are his assumptions? He assumes that the moral and intellectual problems of the transformation of Society have been already solved--that a plan exists, and that nothing remains except to put it into operation.... An understanding of the historical process, to which Trotsky is so fond of appealing, declares not for, but against, Force at this juncture of things.... All the political parties alike have their origins in past ideas and not in new ideas and none more conspicuously so than the Marxists. It is not necessary to debate the subtleties of what justifies a man in promoting his gospel by force; for no one has a gospel. The next move is with the head, and fists must wait..."

Comments

[dissent]

The simplest response to Ms. Klein's polemic is to invoke old school conservatism... reject[ing] the idea of throwing out or revising all social institutions at once. Indeed the long history of conservative thought stands behind moderation.... That tradition does advise a scaling down of free-market ambitions, no matter how good they may sound in theory

What a crock. Old school conservatism is refuge of the intellectually dishonest, because it does not exist as a political force in the real world. It's like praying to Santa - not a basis for intelligent criticism. Don't hide under 'old school conservatism', deal with the real thing, which advocates, in every instance, the subjugation of workers and indeed democracy to the interests of the multi national corporations. That is the reality which Klein addresses. That is the reality before which the political credibility of so many economists has been shredded.

[jim]

I haven't read Klein's book and probably won't, so have no opinion on it. But I do have an opinion on Thatcher and the Falklands.

The Falklands War was eminently avoidable right up to the point that Gualtieri invaded. HMG showed absolutely no interest in avoiding war. There are two possible explanations. (1) HMG believed that The Argentine wouldn't under any circumstances start a war, so it was safe to ignore them. (2) HMG didn't mind if a war started, since that would improve their domestic political position; as things were, they were looking at a very dicey upcoming election. Incompetence vs. Malevolence. Ordinarily, we don't explain by malevolence what can adequately be explained by incompetence, but Thatcher did seem to be eager for war once Gualtieri invaded, even against the advice of her military (and the documents released last year show how close-run a thing it was, how reality-based her military advice was).

I wouldn't confidently claim that Thatcher deliberately allowed the war to start in order to improve her domestic political position, but I wouldn't confidently deny it, either.

[david]

Don't know about Klein's book but Cowen comes off here as fact free ideologically driven bulls...

[anne]

http://www.nytimes.com/2007/09/30/books/review/Stiglitz-t.html?ref=books

September 30, 2007

Bleakonomics
By JOSEPH E. STIGLITZ

THE SHOCK DOCTRINE
The Rise of Disaster Capitalism.
By Naomi Klein.

There are no accidents in the world as seen by Naomi Klein. The destruction of New Orleans by Hurricane Katrina expelled many poor black residents and allowed most of the city's public schools to be replaced by privately run charter schools. The torture and killings under Gen. Augusto Pinochet in Chile and during Argentina's military dictatorship were a way of breaking down resistance to the free market. The instability in Poland and Russia after the collapse of Communism and in Bolivia after the hyperinflation of the 1980s allowed the governments there to foist unpopular economic "shock therapy" on a resistant population. And then there is "Washington's game plan for Iraq": "Shock and terrorize the entire country, deliberately ruin its infrastructure, do nothing while its culture and history are ransacked, then make it all O.K. with an unlimited supply of cheap household appliances and imported junk food," not to mention a strong stock market and private sector.

"The Shock Doctrine" is Klein's ambitious look at the economic history of the last 50 years and the rise of free-market fundamentalism around the world. "Disaster capitalism," as she calls it, is a violent system that sometimes requires terror to do its job. Like Pol Pot proclaiming that Cambodia under the Khmer Rouge was in Year Zero, extreme capitalism loves a blank slate, often finding its opening after crises or "shocks." For example, Klein argues, the Asian crisis of 1997 paved the way for the International Monetary Fund to establish programs in the region and for a sell-off of many state-owned enterprises to Western banks and multinationals. The 2004 tsunami enabled the government of Sri Lanka to force the fishermen off beachfront property so it could be sold to hotel developers. The destruction of 9/11 allowed George W. Bush to launch a war aimed at producing a free-market Iraq.

In an early chapter, Klein compares radical capitalist economic policy to shock therapy administered by psychiatrists. She interviews Gail Kastner, a victim of covert C.I.A. experiments in interrogation techniques that were carried out by the scientist Ewen Cameron in the 1950s. His idea was to use electroshock therapy to break down patients. Once "complete depatterning" had been achieved, the patients could be reprogrammed. But after breaking down his "patients," Cameron was never able to build them back up again. The connection with a rogue C.I.A. scientist is overdramatic and unconvincing, but for Klein the larger lessons are clear: "Countries are shocked — by wars, terror attacks, coups d'état and natural disasters." Then "they are shocked again — by corporations and politicians who exploit the fear and disorientation of this first shock to push through economic shock therapy." People who "dare to resist" are shocked for a third time, "by police, soldiers and prison interrogators."

In another introductory chapter, Klein offers an account of Milton Friedman — she calls him "the other doctor shock" — and his battle for the hearts and minds of Latin American economists and economies. In the 1950s, as Cameron was conducting his experiments, the Chicago School was developing the ideas that would eclipse the theories of Raul Prebisch, an advocate of what today would be called the third way, and of other economists fashionable in Latin America at the time. She quotes the Chilean economist Orlando Letelier on the "inner harmony" between the terror of the Pinochet regime and its free-market policies. Letelier said that Milton Friedman shared responsibility for the regime's crimes, rejecting his argument that he was only offering "technical" advice. Letelier was killed in 1976 by a car bomb planted in Washington by Pinochet's secret police. For Klein, he was another victim of the "Chicago Boys" who wanted to impose free-market capitalism on the region. "In the Southern Cone, where contemporary capitalism was born, the 'war on terror' was a war against all obstacles to the new order," she writes.

One of the world's most famous antiglobalization activists and the author of the best seller "No Logo: Taking Aim at the Brand Bullies," Klein provides a rich description of the political machinations required to force unsavory economic policies on resisting countries, and of the human toll. She paints a disturbing portrait of hubris, not only on the part of Friedman but also of those who adopted his doctrines, sometimes to pursue more corporatist objectives. It is striking to be reminded how many of the people involved in the Iraq war were involved earlier in other shameful episodes in United States foreign policy history. She draws a clear line from the torture in Latin America in the 1970s to that at Abu Ghraib and Guantánamo Bay.

Klein is not an academic and cannot be judged as one. There are many places in her book where she oversimplifies. But Friedman and the other shock therapists were also guilty of oversimplification, basing their belief in the perfection of market economies on models that assumed perfect information, perfect competition, perfect risk markets. Indeed, the case against these policies is even stronger than the one Klein makes. They were never based on solid empirical and theoretical foundations, and even as many of these policies were being pushed, academic economists were explaining the limitations of markets — for instance, whenever information is imperfect, which is to say always.

Klein isn't an economist but a journalist, and she travels the world to find out firsthand what really happened on the ground during the privatization of Iraq, the aftermath of the Asian tsunami, the continuing Polish transition to capitalism and the years after the African National Congress took power in South Africa, when it failed to pursue the redistributionist policies enshrined in the Freedom Charter, its statement of core principles. These chapters are the least exciting parts of the book, but they are also the most convincing. In the case of South Africa, she interviews activists and others, only to find there is no one answer. Busy trying to stave off civil war in the early years after the end of apartheid, the A.N.C. didn't fully understand how important economic policy was. Afraid of scaring off foreign investors, it took the advice of the I.M.F. and the World Bank and instituted a policy of privatization, spending cutbacks, labor flexibility and so on. This didn't stop two of South Africa's own major companies, South African Breweries and Anglo-American, from relocating their global headquarters to London. The average growth rate has been a disappointing 5 percent (much lower than in countries in East Asia, which followed a different route); unemployment for the black majority is 48 percent; and the number of people living on less than $1 a day has doubled to four million from two million since 1994, the year the A.N.C. took over....

[anne]

Me, I would not borrow the time of day from Tyler Cowen let alone the vacuous ideas peddled by Cowen. I appreciate Naomi Klein, quite a lot; appreciating a writer and speaker who is not waving about the flag of American empire everywhere and forever; appreciating a writer who has room for alternative vocies from Latin America or Africa or Asia. Nothing wrong with listening to those who we always ignore.

[Crawford]

Having read Klein's book (and having reviewed it in Vancouver's online magazine The Tyee-- http://thetyee.ca/Books/2007/09/11/ShockTherapy/ --), I have been following the reaction to it across the web. And as a loyal follower of your blog, Brad, I was looking forward to your response.

It seems to me that Cowen, like many of Klein's critics, has either understood her too quickly or deliberately misrepresented her arguments. That goes for Stiglitz too.

You're right that Thatcher exploited the Falklands, but the critics prefer to claim that she somehow fomented the war to impose Friedmanian horrors on Britain.

Whatever Stiglitz thinks of Klein's arguments, he would have done better to find holes in her documentation, which is extensive, rather than patronize her as a lesser being.

As for "trusting" some governments to run mixed economies, that sounds like Kissinger dismissing the Chileans for not being responsible enough to run their country to suit the US. Klein's point is that people ought to be able to sort out their own solutions to their own problems. US policies since 1945 have largely denied them that option. (Tim Weiner's Legacy of Ashes is a summary of those policies.)

Your fifth point, an oracular invocation of Keynes, is a bit baffling. Are you saying Klein is our new Trotsky, calling for fists when heads are needed? She doesn't seem so to me. It's precisely her documentation of the fists supporting Friedmanism that annoys her critics.

(They also like to think of the torture issue as an mistaken metaphor, rather than what she says it is: the ultimate enforcement of economic policy against the individual critics of that policy.)

Naomi Klein is a journalist who's done her homework, not an economist who's gone off the reservation or a neo-Bolshevik calling for blood in the gutters. Economists who dismiss her as a non-economist are missing the point. Free-market theologians who misrepresent her arguments are ducking the point.

If she is to be effectively criticized, it must be as a journalist who got her facts wrong, or who perversely misinterpreted the facts.

That will take more effort than I have so far seen in the blogosphere's response to The Shock Doctrine. Unsupported assertion is no more a refutation of her book than is the condescension her critics quickly resort to.

[anne]

Imagine, we had a Federal Reserve chair who wandered about Washington urging the insane cost benefit usefulness of invading and occupying Iraq, but never a word of criticism for Alan Greenspan and never an apology from Greenspan for an immoral mistake that will cost us $800 billion in direct spending by this December alone.

But, Naomi Klein, a voice of peace, becomes subject to intemperate language and worse criticism.

[anne]

Thank you and agreed completely, Crawford. I am shocked at the intemperance of Brad DeLong, while I found Klein all too temperate and careful in journalistic research and analysis.

Klein has the tragedy of Iraq perfectly; a tragedy that has led to 4.7 million refugees and internally displaced persons according to the latest United Nations estimates, and there are the 650,000 excess deaths estimated by June 2006. Hows them there shocks?

[anne]

Have we shocked and awed Iraqi sufficiently? Should we try for Iran now? What about shocking Somalia with Ethiopia last December, leading to the same humanitarian tragedy? Lots of shocking going on, and been going on before Iraq and possibly we might just read and think, and I do not mean from the horridly slanted New York Sun.

Mad British-Harvard forever-imperialists receive a temperate reading, but not the peace-seeking Naomi Klein.

Phooey.

[Slocum]

OK -- I retract the comment about preserving dining privileges at a Democratic White House.

"Tyler is right: Stiglitz ought to know better, for degrading the level of the debate is in your long-run interest only if you are one of the bad guys. And we are not."

Well, played.

[anne]

"And so the best advice really is Keynes's response to Trotsky...."

Shameful, shame to use such an analogy for a person of peace, while a person of war as Alan Greenspan is bowed before. When deaths and displacement in Iraq amount to nearly 20% of the population, while the Senate is happily recommending ethnic separation for Iraq (separate and equal come again, and recommended abroad) after having happily voted for shocking and awing Iraq 3 years ago, then such criticism of a person of peace is shameful.

[anne]

Tyler Cowen is wrong as usual, and could not tie Joseph Stiglitz' shoes. But, notice, the fear and war mongering Republican worms come for a night crawl.

A person of peace, a woman of peace, must be insulted, must be belittled. Shock forever, as we learn in the New York Times this very day.

[david]

"Mad British-Harvard forever-imperialists receive a temperate reading, but not the peace-seeking Naomi Klein."

Brilliant. Hurray for Anne all around.

This kind of knee-jerk hatred for people to the left (along with ass-covering for people to the right, cough Fed Randite nutcases, cough Bryon Caplan, cough no way was there ever one for bs artist extraordinairre Niall Ferguson?) is a real weakness, that should cause reflection rather than blog posting.

Hope springs eternal.

[bakho]

Klein's book is a mess, written to support a POV rather than a more dispassionate view. Klein makes many valid points, most of them supported by credible evidence, some of it not so well documented. I have a hard time with her conspiracy theories. So it is a mixed bag.

I don't see where Cowen gets that Stiglitz "defends" Klein. Stiglitz puts that he agrees with some of Klein's conclusions (but hardly all of them) and certainly disagrees with the way she makes the case. Stiglitz has the same problem with his review that most have with the book. How does one critique the book in a way that doesn't provide the other side with ammo to shoot down the whole, including the valid criticisms that Klein makes?

[wood turtle]

I'm can't believe that you let Tyler Cowen get away with that remark about the New Deal, you being an instructor of said times.

It was an attempt to mitigate the effects of capitalism gone very bad. What would be his solution?

[bakho]

"Some governments can be trusted to run mixed-economy social democracies"

I disagree. No government can be "TRUSTED" to do anything. Government rarely functions well in the absence of accountability. The governments on your list are not "trusted", they are held accountable. The governments that cannot be "trusted" have no accountability. Go figure.

Checks and balances and institutions that have the power to demand accountability are necessary components of competent government. The type of government matters less than the accountability of that government.

The problem with Bush lies not just with the incompetence and corruption of his administration but the lack of accountability. Bush failures have been accompanied by failures of other institutions to hold Bush accountable. Bush attempts to undermine accountability have exacerbated his failures.

[roublen]

There was an interesting book Culture Matters, put out in 1999, with a bunch of essays about wealth and poverty. To me, one of the most important facts in the book was in Jeffrey Sach's essay, that the world distribution of patents and research papers, etc. is even *more* unequally distributed than the distribution of wealth. To me, that suggest there's a bunch of valuable, pretty specific, facts and processes and embodied capital that wealthy places have discovered/created over the past 200 years, in civil/chemical engineering/materials science/biology, among other disciplines, that a sufficient number of people in wealthy places know about, in order to utilize the knowledge and processes effectively and transmit them across generations, but poor places don't.

In that regard, I found your lecture of the technology the pre-Columbians lacked interesting:

"technological and organizational gradient:
no wheels
no metallurgy
no gunpowder
no roads
no big animals
no waterwheels
no printing"
no eyeglasses (?)
no waterwheels (?)

(I added the last two, which weren't in your lecture, but seemed somewhat in the same vein).

Regarding the discussion of growth and prosperity, I think probably the most important thing is how the social system harnesses conflict/competition/striving in the service of long-run beneficial outcomes, rather than short-term beneficial/long-term destructive outcomes.

Also, perhaps one underlooked factor is to what extent the population is on drugs. And as Bill Watterson has said, the 20th century drug of choice is passive, sedative consumption of media, primarily electronic media.

I don't mean at all to say that in a harsh and judgemental way, I'm just as or more guilty than anyone, just thinking aloud, really.

[jerry]

I was going to come here and say what Anne said, but I was going to say it much more poorly.

When you say "we are not one of the bad guys", I am left thinking of your various defenses for free trade, your refusal at the time (and even now) to call out Greenspan and other economists on his and their evasive language.

"We are not one of the bad guys" but it is not clear that you are not an enabler or co-dependent.

Renounce your tenure (keep your position, but just renounce your tenure). It will give your arguments a new clarity, and a needed grounding in reality.

[shah8]

I have not read Ms Klein's book. I have read several reviews, and they have not made me want to read her book. As I said over at the Agonist, more or less, she has written a book about a trivial answer.

People are always going to take advantage of disasters to reap profits. So what's new?

[dsquared]

[Other governments cannot be trusted to run mixed-economy social democracies: Ghana and Zimbabwe and Egypt and Cuba and China and Mississippi come to mind. We do not know even much about how to predict which governments will fall into which category. We do not know how to change governments from one category to another. We do not have alternatives to recommend to governments that cannot run effictive mixed-economy social democracies.]

but the implication here is that Ghana, Zimbabwe, Egypt, Mississippi etc /could/ be trusted to run deregulated, privatised "free market" economies (because that is, in fact, the policy prescription made for them by the neo-liberal policy structure). Is this not a little bit more ludicrous?

[I would say that it is more than a little bit ludicrous. But what other options are there? The state is better at running a court system than planning an automobile industry. And it is not at all clear what to do when the state is no good at running a court system.]

Or a harder question: could Russia in the 1990s have been trusted to run a mixed economy and social democracy? If not, why not, and would the outcome have been better or worse than what actually happened?

[SERO]

Hurray for Anne, indeed.

Is it Ms.Klein's, "Ideology can be a great enabler for greed" that provokes such an intemperate reaction from Cowen and the Professor?

"Out, damned spot"?

[J Thomas]

"Tyler is right: Stiglitz ought to know better, for degrading the level of the debate is in your long-run interest only if you are one of the bad guys. And we are not."

If the bad guys present their lying arguments on all levels, and you present your correct analysis only on the highest academic level, who will win?

We desperately need ways to present the core of economic ideas in terms that anyone can understand. Simplify away the smaller details -- point out that they're there and you're ignoring them because they aren't the biggest effect, or say that they add up to a big effect and invoke them together.

If you only make arguments that 90% of the public won't follow, then the only reason they have to believe you is that they trust you because you're a great economist. And why should they trust you over Greenspan -- until after they see the results?

If the bad guys get to say absolutely anything they want to, and the good guys can only say the absolute truth in the dryest most academic way possible, how can the truth ever prevail?

[Ponzi Q. Globalization]

"""Tyler is right: Stiglitz ought to know better, for degrading the level of the debate is in your long-run interest only if you are one of the bad guys. And we are not."""

...

"We desperately need ways to present the core of economic ideas in terms that anyone can understand. Simplify away the smaller details -- point out that they're there and you're ignoring them because they aren't the biggest effect, or say that they add up to a big effect and invoke them together."

...

"If the bad guys get to say absolutely anything they want to, and the good guys can only say the absolute truth in the dryest most academic way possible, how can the truth ever prevail?"

Reading such things you'd think that there were no disagreements among economists.

[Barry]

"People are always going to take advantage of disasters to reap profits. So what's new?"

Posted by: shah8

1) Decreased accountability for rampant 'taking advantage'.

2) Increased attitude on the part of the powerful that 'neglect' can not only be profitable in the short run (don't do the job and pocket the money) but that the results of the corruption can be even more profitable in the long run, as disasters strike.

[J Thomas]

Ponzi, if economists could express their legitimate disagreements in ways that make sense to laymen, we'd all be better off.

Economic ideas are fundamentally simple. There was a story about a challenge to find an economic concept that wasn't trivial and wasn't wrong. The only candidate was Ricardo's comparative advantage. And that turns out to be trivial too, once you understand what it's really saying. What makes it seem mysterious is the claim that comparative advantage will always provide markets better than autarky, which is false.

What it actually says is that when comparative advantage provides markets better than autarky, the result is better than autarky.

[nick]

Brad is a _professional_ economist. He gives other economists, whatever political/ideological differences may exist between them, the benefit of the doubt; he witholds the benefit of the doubt from those non-professionals who seek to occupy terrain he regards as rightfully that of the economics profession: professionalism trumps politics, with, I think, regrettable consequences in this particular episode....

[shah8]

Barry:
1) The powerful are never easily stopped from taking advantage of a disaster. There has rarely been any kind of accounting. The main thing is that when a major disaster occurs, a large amount of resources are freed up. Elites can usually bribe the underclasses of thier own factions for enthusiastic cooperation. White policies against Native Americans, both in taking advantage of disasters, and causeing them by spreading disease/arms/drink demons. This was the case among Arab slavers in Africa, who eventually caused a culture of inciting wars for slaves. It's damned common.

2) This IS a newer theme of an old strategy of benign or malign neglect. It's only new because of the implications of the Industrial Revolution, which needs so much capital on a regular basis, such that starving the beast is much easier than something like interdicting food. It's not *that* new, though. Irish potato famine was one of the first examples of a new tactic in an old strategem. Ireland keeps exporting food due to the general capitalist trade network operating, instead of UK suspending wheat exports from Ireland. And this example is just an update on a very old strategy of interdicting food in the thought of aquiring more land for the interdicters.

3) As I told Ian Welsh and the others there, strategies like these do not work out for the aggressors, UNLESS the aggressors have it planned out. I.e., the attempt to utilize shock doctrine after natural disasters usually fail. Attempts to use shock doctrine in a totally ad hoc fashion usually fails. The behavior of people described in the Shock Doctrine is bad because they fuck everything up, just like Bremer. We're not going to see more Iraqi oil to the US soon, or making oil more fungible for the US. We're not going to see New Orleans become a stilted theme playground for the wealthy. We're not going to see infrastructure successfully built so that lots of new fancy hotels can offer lots of amenities and things to do.

Naomi Klein should attempt something...new. This is old as humanity.

[skb]

First, another cheer for anne.

Second, on Brad's point 2:
"Tyler is right: Stiglitz ought to know better, for degrading the level of the debate is in your long-run interest only if you are one of the bad guys. And we are not."

Doesn't this presume that the level of debate was higher pre-Klein's book than after? Isn't it entirely possible that, flawed though it apparently is, it is still less flawed than the debate overall? Note that the debate here is in the marketplace for books such as Klein's, which I presume is not identical to that among faculty at a place like the University of California. Isn't that where Stiglitz's comment about different standards of judgment might validly apply?

[anne]

Thank you :)

Shah, the importance of your shrewd historical observations are echoed from a contemperory perspective by Naomi Klein. I am thinking of what a blend might be historically, but do not dismiss your own shrewd sight.

[Barkley Rosser]

Well, Uruguay has run a pretty decent social democracy for a long time, and Chile's was not too bad before the Chicago Boys took over under Pinochet.

[piotr]

What is this point about "degrading the level of debate"? I understand that Naomi Klein is mixing with abandon the noble area of economics with the tawdriness of morality. While Steiglitz is not exactly free of taint on that matter, at least he made HIS arguments closer to number-based economics.

And now scientific, fact and number based Brad feels brotherhood with Cowen who shares these characteristic, and somehow gets intoxicated by the feeling of brotherhood and tosses/accepts some howlers.

Cowen cited approvingly: "First, the reach of government has been growing in virtually every developed nation....

[T]he reach of government has been shrinking in India and China, to the indisputable benefit of billions."

The first part is wrong if one counts Western Europe among "developed nations". At some point the nanniness of the state went overboard over there and pretty universally it shrank quite a bit. E.g. in Sweden the ratio of the government spending to nationa product went down, roughly from 66% to 54%. From American point of view it was a descend from Mt. Everest to Lhotse, but a descent it was, and it happened all over West Europe (surely with exceptions).

Second, Indian government is very much involved in providing education on all levels, healthcare, railroad transportation etc,. and as in West Europe, we have seen a very measured "retreat of the government". The same can be said about China, which seems to be ruled by rather competent bastards. None of the two countries is ruled according to "free market principles", as "The Economist" compains regularly about.

The "most free market economies" happen to be paradises of crony capitalism, except that in Hong Kong and Singapore the latter seem to be competent and having some regard on the common good.

The point I want to make is that a journalist with moralist bent like Miss Klein is probably not distorting the reality more than scientific Mr. Cowen, while being more transparent about her likes and dislikes. I mean, she at least explains well why one should dislike people that she dislikes.

And then Brad comes up with his own howler, that we cannot trust "China, Ghana, Missisipi etc. with running mixed-economy social democracies". And we cannot trust curly-haired peoples with running mixed-economy straight-haired governments. Accurate, meaningless and misleading. For example, China is doing a mediocre job with her environment and health care, and she can encouraged to do better, and it should not be even that hard. Brad seems to dismiss such an effort as futile, because we cannot trust them anyway. As administrators, rulers of China do a passing job, and taking the total lack of accountability, a marvelously good job, so the ability is there. In the same time, Missisipi in not a fascistic hell-hole that can be contrasted with social-democratic paradize of California. It is really nice oversimplification that can be justified in an after-dinner conversation, but in a critique of a writer as being "not solid"?

Finally, the best advise is totally baffling. I mean "whaaa???" kind of baffling. I guess, it means "the best kind of advise is one that only people as bright as myself can understand; advising morons is as rewarding as plowing the sea, but saying so clearly makes folks cranky".

[andres]

I'm late to this debate, but I should point out that Brad is not an unbiased observer, given that he has lashed out at Naomi Klein on a few previous occasions. I would accuse Brad of engaging in professional snobbery on this point: Klein's position differs in individual details and obviously in the style of writing and method reasoning, but in terms of its conclusions it is not different in any significant sense from that of Dani Rodrik or Jamie Galbraith, and even bears some similarities to Stiglitz. And yet Rodrik, Galbraith, and Stiglitz get respect from Brad whereas Naomi Klein does not.

More in a bit, but I thought I'd just point that discrepancy out.

[anne]

Brad DeLong was wildly intemperately inconsiderate and unfair to Naomi Klein, and I am not pleased. I expect wild intemperance from Tyler Cowen. Me, I dig Naomi Klein. It is that simple.

http://www.nytimes.com/2007/09/29/books/29redb.html

"We did not lose the battles of ideas," she said in a recent speech to the American Sociological Association. "We were not outsmarted and we were not out-argued. We lost because we were crushed. Sometimes we were crushed by army tanks, and sometimes we were crushed by think tanks. And by think tanks I mean the people who are paid to think by the makers of tanks."

That must be a comforting thought. If only it were that simple.

[anne]

"We did not lose the battles of ideas. We were not outsmarted and we were not out-argued. We lost because we were crushed. Sometimes we were crushed by army tanks, and sometimes we were crushed by think tanks. And by think tanks I mean the people who are paid to think by the makers of tanks."

Dear Naomi Klein, thank you, I would have laughed and applauded too as the sociologists who heard this did. I am tired of being crushed by think tank thinkers who are paid to think by the makers of tanks.

[anne]

Because of dear Naomi Klein, I read some Milton Friedman this week and thought to the American Viceroy wonderfully entitled by the American democratic polity to rule Iraq, and shock and awe what was still not awed or shocked and I understood what damage a theoretical amoralist and minions could wreck.

[anne]

There was a time people would wonder about Molly Ivins, can she say that? She could and did and as Paul Krugman would write better than he could and that takes some doing.

Well, Naomi Klein can say what she said and did say that and there are those who would listen, say, even at the dread American Sociological Association....

[anne]

http://www.democracynow.org/article.pl?sid=07/08/15/1432250

August 15, 2007

Lost Worlds
By Naomi Klein

As we think about reaching this other possible world, I want to be very clear that I don't believe the problem is a lack of ideas. I think we're swimming in ideas: universal healthcare; living wages; cooperatives; participatory democracy; public services that are accountable to the people who use them; food, medicine and shelter as a human right. These aren't new ideas. They're enshrined in the UN Charter. And I think most of us still believe in them.

I don't think our problem is money, lack of resources to act on these basic ideas. Now, at the risk of being accused of economic populism, I would just point out that in this city, the employees of Goldman Sachs received more than $16 billion in Christmas bonuses last year, and ExxonMobil earned $40 billion in annual profits, a world record. It seems to me that there's clearly enough money sloshing around to pay for our modest dreams. We can tax the polluters and the casino capitalists to pay for alternative energy development and a global social safety net. We don't lack ideas. Neither are we short on cash.

And unlike Jeffrey Sachs, I actually don't believe that what is lacking is political will at the highest levels, cooperation between world leaders. I don't think that if we could just present our elites with the right graphs and PowerPoint presentations -- no offense -- that we would finally convince them to make poverty history. I don't believe that. I don't believe we could do it, even if that PowerPoint presentation was being delivered Angelina Jolie wearing a (Product) Red TM Gap tank top and carrying a (Product) Red cell phone. Even if she had a (Product) Red iPhone, I still don't think they would listen. That's because elites don't make justice because we ask them to nicely and appealingly. They do it when the alternative to justice is worse. And that is what happened all those years ago when the income gap began to close. That was the motivation behind the New Deal and the Marshall Plan. Communism spreading around the world, that was the fear. Capitalism needed to embellish itself. It needed to soften its edges. It was in a competition. So ideas aren't the problem, and money is not the problem, and I don't think political will is ever the problem....

[anne]

Can Naomi Klein say that? I say yes; interestingly however, Jeffrey Sachs found reason to cancel speaking to the sociologists possibly fearing the presence of the ferocious peace Kleinian advocacy :)

Me, I read Milton Friedman and I am afraid; not so reading Klein.

The interesting term being used this very day is that America is "threatening" Costa Rica about no reconsideration of the trade proposal if voters fail to approve the proposal. Notice that we threaten and will not use diplomacy in the event our threat is not bowed to. What makes us forever threaten through these times? Is Costa Rica really Iran? We seem incapable of diplomacy even with near friends.

Shocking doictrine, indeed.

[anne]

There was just a massive demonstration against CAFTA in Costa Rica, so in a democratic near friend of America there are important concerns about the trade proposal which will be played through democratically. Why then is it so simple a matter for America to "threaten" Costa Ricans over a matter of democratic voting, as the term is being widely used from public radio on?

Imagine France threatening America over national referendum on a trade proposal. That would be madness and anti-democratic, but we have an Administration and a press that will threaten Costa Ricans with no sense of the madness involved.

Costa Rica and Costa Ricans have been wonderful to me; let's all find a Costa Rican to bash, now.

Among the issues that make me wonder about the value of CAFTA for Costa Rica are the flow of subsidized American crops to Costa Rica and the displacement of domestic farmers and produce, the likely increasing cost of drugs as use of substitutes to American drugs is limited, and restrictions on use of intellectual property in a developing economy.

[anne]

The American trade threat to Costa Ricans as opposed to a willingness to continually negotiate should give us a sense of what Naomi Klein is trying to illustrate in the "Shock Doctrine." We threaten, we bully, we bash actually and figuratively. We shock and awe, and have no sense that others may not care to be awed or shocked. For this Klein has drawn bashing and sneering from selected economists who should be ashamed.

Shocking doctrine, indeed.

[Ralph]

Naomi Klein's newest book, the Shock Doctrine, sounds like a major contribution to the debate over economic development behind so many of the biggest economic traumas we have experienced in the past 50 years. I have not yet looked at the book but I have seen several interviews with her on the internet such as Democracy Now. The most interesting interview was on CSPAN today (Sunday, Oct 7). An hour long interview with Franklin Foer of the New Republic which ranged over a number of important topics with an in depth discussion of what L Paul Bremer tried to accomplish in Iraq after LTG Jay Garner was dismissed following the invasion. An important part of the critique regarding Klein's work is the question of what her qualifications are for writing such a major thesis as she has attempted in the Shock Doctrine. She is not a professional academic economist as others have noted in this thread. But she is a seasoned economic journalist and film maker. Importantly, she assembled a team of reasearchers and traveled to the disaster scenes like Iraq, Sri Lanka (after the tsunami), and New Orleans (after Katrina) and interviewed and had access to people at different levels in the recovery process. The book took four years of research to produce. Her years of reporting on economic shock cases such as in Argentina (where she filmed a short documentary which vied for a prize at the Venice Film Festival), Russia, and S E Asia (1997-8) unquestionably qualifies her as a major thinker and documentor on economics IMHO. Going back to the CSPAN interview, Foer asked her the tricky question of whether the Russian revolution of 1917 and the New Deal could be classified as cases of shock doctrine although in reverse from that of Milton Friedman and his followers (i.e. from private to public control). She answered this quite well but it would take a much longer time and space for me to repeat what she said than I have today.

[roublen]

re: the shock doctrine, the most interesting fact I read in Andrei Chernyi's The Next Deal was that in the Mckinley-Jennings Bryan election, factory owners threatened to fire their workers if Bryan won the election.

[Ralph]

YouTube has a slew of Naomi Klein clips from her lecture circuits. Use the search tool on the typical YouTube page.