Twofish's Blog

September 30, 2007

Disaster Capitalism – Comments on Naomi Klein

Filed under: academia, economics, finance, globalization — twofish @ 8:57 pm

Interesting book that is worth reading.  However, there are some important points here.

First of all, it always fascinates me that the people who are most in favor of privatization and lassiez-faire capitalism are people that have spent most of their lives outside of business and finance, just like the people who are most in favor of military intervention are people who have spent most of their lives outside the military.  There’s something ironic and disturbing that the economists of the World Bank and International Monetary Fund that are telling third world nations to privatize everything are people who generally have never worked in a private company in their entire lives.

It’s also telling that the people who were the most skeptical about military intervention in Iraq were people who were the professional soldiers, and the people who are some of the loudest voices against the excesses of capitalism are professional finance people like George Soros and Warren Buffett.

“Being there” changes your perspective in a lot of ways.  For example, pretty much everyone who has worked in a private corporation has lost their job at some point, and knows in an emotional way, the consequences have being unemployed.  So when I see angry people on the streets of Baghdad and Jakarta, I know what they are feeling because I’ve been there in a way that I doubt most of the economists in the World Bank or IMF have.

I do think that Klein is a bit too much a believer of “incorrect” conspiracy theories, and doesn’t quite appreciate the breathtaking amount of incompetence there is out there.  There are people in this world that truly, honestly believe that government is the problem, and that totally privatized world will create a utopia.  These people are for lack of a better word, dangerous idiots.  Private corporations and private capital can do a lot of good, and the profit motive and pure greed can do some incredibly wonderful things, but you have to consider the entire social system.

I seriously doubt that anyone in the Bush administration intended that New Orleans and Iraq would be in such the awful mess that they are in.  Even in cases where there is obvious greed and cronyism, then attitude of the people getting the checks toward society is neutral.  People who are making big money off New Orleans and Iraqi reconstruction, frankly don’t care if New Orleans or Iraq prospers or burns, as long as they get the checks, so the trick in getting something useful done is to set up the incentives so that people make more money if New Orleans prospers.  This is one reason why you really want local people running things.  A corrupt political boss that is located in New Orleans at least spends the proceeds of their corruption locally and has some connection between their political/economic well-being and those of the community.

Finally, I think that Klein totally misses the really, really, really scary implication of her work.  One thing that you learn to ask yourself in business is “Who is the competition and what are they doing?”

So who is the competition and what **are** they doing?

Hezbollah and the Islamic Brotherhood has managed to capture the support of large numbers of people because they run schools and services that are competently run.  The reason that Islamism has become such a powerful force is because they provide a lot of social services and reconstruction aid.  The United States promised freedom to Iraq, and it brought devastation.  Meanwhile Islamist groups are getting the job done.  If things go on the way that Klein says they are going on, then we are going to lose this war……  And let me say something obvious, in the Middle East, we are losing this war….  We haven’t lost, but we are losing……

1 Comment »

  1. The Disaster Capitalism by Naomi Klein qualifies as a grand theory in political science
    which could reveal and explain the underlying theme of global conflict and strugle. Just
    like Howard Zinn pointed out that slavery and racism was the product and symptom of colonial
    America, Naomi Klein points out that the true face of modern politics is no more than the
    old story of class conflict. There was the elite capitalists who viewed themsleves as the
    axis of the universe around which everyone else must revolve, so no one else was more than a
    serf to them are the same wealthy elites today who view the world as their property. The
    same ones who would not hesitate to venture with public money and national resources, to
    wage global wars in order to rob foreign nations albeit the price is the blood of their
    native fellows. The anatomy of their psychology is grounded into self-interest as well as
    puritan idealogy. For a while I had to strugle to decide whether it was self-interest or exclusively puritan views that drives their wild appetite to plot, conspire, and exploit the
    political reality of the nations to achieve their goals and ideals. I was a bit confused
    until I realized that their morality is utilitarian in nature. So even if we assume that
    their machine is driven by puritan idealogies where they realize at the end that all the
    poor and the meek would vanish from the universe leaving behind a clean slate for a
    utopian society of only the most fit, this very view is not morally independent of their
    self-interest ventures. Their self-serving ideologies go hand in hand with their free-market
    philosophy. Yes, they want to cut down social spending, because the recepients in their view
    deserve not to live in their utopian world, plus the same money…public money can be used
    instead to profit their ventures as government paid services or direct loans and grants to
    support their interprise operation. And yes they want to deregulate the market so they become
    the monopoly which will eventually drive small businesses to extinct, hence destroying
    middle class and replacing it into poverty, and pay no due taxes on their astronomical
    revenues. And yes they want to privatize national wealth and resources so that there exists
    no funds to support any government programs of any welfare nature. At the end they will be the
    government, but a very small one of pure, elite, and regal stature! This is the manifest
    destiny which equals ethnic and class cleansing which equals the utopian small world they
    dream of ruling… a society that is founded on Social Darwinism and blue blood.

    Comment by Abe D — February 7, 2008 @ 7:06 am

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