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In her current best-selling book, The Shock Doctrine: The Rise Of Disaster Capitalism, journalist Naomi Klein takes aim at Chicago School Of Economics guru Milton Friedman's notion that "only a crisis—actual or perceived—produces real change." Around the globe, Klein finds examples of how the implementation of what she's coined "the shock doctrine" is used to exploit a public reeling from natural or man-made disasters to implement economic and social policies to which they would never have otherwise submitted. "Disaster capitalism," as she calls it, has cropped up in post-tsunami Sri Lanka, the occupation of Iraq, and of course, our own backyard in the aftermath of September 11. On the eve of the Beijing Olympics and the increasing noise of our Presidential campaign, Klein sat down with The A.V. Club to discuss offshore oil drilling, the price of gas, Barack Obama, Fox News, Lou Dobbs, and the shame of the Summer Games.
The A.V. Club: Freedom, democracy, capitalism—do these three ideas share a false relationship, that if you're critical of one you must be critical of all three?
Naomi Klein: I think there has been a deliberate sort of intellectual bundling exercise. A term like capitalism is incredibly slippery, because there's such a range of different kinds of market economies. Essentially, what we've been debating over—certainly since the Great Depression—is what percentage of a society should be left in the hands of a deregulated market system. And absolutely there are people that are at the far other end of the spectrum that want to communalize all property and abolish private property, but in general the debate is not between capitalism and not capitalism, it's between what parts of the economy are not suitable to being decided by the profit motive. And I guess that comes from being Canadian, in a way, because we have more parts of our society that we've made a social contract to say, "That's not a good place to have the profit motive govern." Whereas in the United States, that idea is kind of absent from the discussion. So even something like firefighting—it seems hard for people make an argument that maybe the profit motive isn't something we want in the firefighting sector, because you don't want a market for fire.
If we think about the big books of the right, like Milton Friedman's Capitalism And Freedom, which in its very title is bundling those two very ideas. Or Francis Fukuyama's The End Of History, which was part of the very same intellectual exercise, saying that the endpoint of mankind's ideological evolution was free markets in the economic sphere and liberal democracy in the political sphere. On the surface, that may sound self-evident, but it also means you can't democratically decide to change what kind of economy you want. You're really limiting the sphere of democracy. In the natural cycles of capitalism, you have built-in crises and built-in catastrophes and new industries and new innovations come out of that and new technology obliterates an entire past industry and revolutionizes the way we live. That is the way capitalism works. But what I mean by disaster capitalism is not those built-in crises that come from technology, but rather a political strategy based on the need for crisis to advance unpopular policies.
AVC: Sometimes when discussing such broad exploitation of economies and individual liberties, people can devolve into referring to an abstract "they." Is there a big evil "they"?
NK: The book is an alternative history of the triumph of a set of ideas. That this set of ideas has triumphed is actually an incredibly uncontroversial thing to say. We call this globalization, or the age of globalization. And it's been documented many times, but differently. We do know that over the past 35 years there has been an incredible sea change in the way the world economy functions. This has been advanced through bureaucratic institutions like GATT and the World Trade Organization, the International Monetary Fund, the World Bank, and that's why it sort of goes, usually, by the friendlier name "globalization" or "free trade." But, beneath those phrases are a set of policies that call on countries to lower their trade barriers, to privatize industries that had been in the public domain, and that require cuts to social spending. The fact that this change has happened is not controversial. We know that there has been a dramatic change. It has minted billionaires in every country where it has triumphed. As soon as you privatize the entire economy in Argentina, Mexico, Russia—it creates an oligarchic class. What we're all struggling with right now is the legacy of these policies and the fact that it has opened up this dramatic income gap between the winners of this economic model and the losers, the people who have been excluded from it. That has been the disconnect of the Bush years, of the Bush administration saying the economy has been doing well where people are going, "Well, it really doesn't feel like it's doing well." The answer is that it really was doing well for the Bush administration and their friends.
I'm really not advancing a "great man" theory of history, or some idea of a back-door conspiracy, I just think this is the way history works. After the market crash in 1929, the tide really did turn in favor of the middle class and workers. We saw a period over 30 to 40 years where the middle class rose to unprecedented levels in the United States, but not just in the United States, in any country that adopted these types of policies. And it really did work, in terms of creating class mobility. But it really did eat into profits and this stage that we've been living in since Reagan is really about the people in the highest income brackets saying, "We want our New Deal. We don't want to share so much." The basic demands of this counterrevolution, or this revolt of the elites, have all been about taking back those gains—breaking unions, being able to pay lower wages, having the freedom to scour the world for the lowest wages—and it's really been a liberation movement—the liberation of capital from all constraints.
So, is that a conspiracy? I don't see that as a conspiracy, I actually just think this is the way the tides of history work. It swings in one direction; it swings in the other direction. I don't think it's any more of a conspiracy than the New Deal was a conspiracy. Interests do organize and launch movements and campaigns and have tactics and win victories. It's worth looking at how they do it.
AVC: If disaster capitalists seek to profit from natural disasters, wouldn't the next logical step be to create the disaster instead of waiting around for one?
NK: One of the main ways in which I get attacked is by being called a conspiracy theorist by the right and the other main attack is actually from the conspiracy theorists who are really pissed at me for not admitting that 9/11 was an inside job. Or from Marxists who feel that the book is too Keynes-ian. So it's either rabidly anti-capitalist, or sell-out Keynes-ian, or a conspiracy, or not recognizing the conspiracy. So, I'm trying to find that sweet spot somewhere. [Laughs.] I'm not doing very well.
AVC: So, in your view, you don't see any evidence that we've gotten to the point where actual disasters are being created to advance these policies you describe in your book?
NK: There are such clear examples of the amazing speed in responding and exploiting disasters that were clearly not created, like the breaking of the levees in New Orleans. Although, yeah, sure, some people will tell you that they exploded. But, I don't think they did. What I saw in Sri Lanka after the tsunami—which I think pretty much everyone agrees was a natural disaster—four days after it hit, the government of Sri Lanka proposed a water privatization bill. This was when the country was still partially underwater. What I'm trying to argue is that this political strategy is keenly understood by the elites. There have been many, many incredibly boring papers published about it. I have taken the trouble to read them. Please, just read the juicy parts! They're in the book! Because we need to understand this as a strategy and when we understand this as a strategy, it is much less effective as a strategy. In fact, the strategy can be flipped. In terms of your question of how they would use another crisis, we can't rule anything out. Certainly with McCain's advisors talking about how it would be a good thing. But I'm also not sure they're right.
AVC: That what would be a good thing? Invading Iran?
NK: Well, no. One of McCain's advisors said if there was a terrorist attack What did he say, it would be a great thing, a good thing?
AVC: Oh, yeah, that his campaign would benefit from another terrorist attack on American soil.
NK: Yeah, so clearly there are people who are making that calculation, even forgetting that they shouldn't say it out loud. But one of the things I have found that's worth some optimism is that it does seem a lot of the tactics don't work as well as they used to. Just in terms of scaremongering on Iran. All kinds of trial balloons clearly have been sent out to see whether the public would be willing to buy a similar build-up directed at Iran that was directed at Iraq. There must be some kind of feedback returning that says people actually aren't as ready to accept it. There is a lot of diminishing return about scare tactics in general. They don't just keep working over and over again. I think we are seeing some pretty effective examples of applications of the shock doctrine, not with regards to a terrorist attack, but the way in which the oil crisis is being handled.
AVC: Arguably, we're currently experiencing a few crises—a housing crisis, an energy crisis, a climate crisis. Are any of these being exploited in a way that fits your model?
NK: Yeah, I think with offshore oil drilling and opening up ANWAR [the Arctic National Wildlife Refuge], it's a pretty classic example of this deliberate strategy. It's almost like McCain has a moral responsibility now to sell these policies that would be unsellable with oil at 40 dollars a barrel, just because he can. The fact that opening up ANWAR or offshore oil drilling will have no impact on the price of oil is completely beside the point. The point is you can sell it now and you couldn't sell it then so you should sell it now.
I've heard several people make that point, frustrated with McCain because although he's said yes to offshore he hasn't yet caved on ANWAR. The opinion polls do support the claim that this is working. A lot of this has to do with the Democrats not having the guts to really go after the oil company profits with some enthusiasm. I mean, I turned on Fox like three weeks ago and even O'Reilly was talking about this. But this was before the talking points came down, saying, "Okay, stop bashing the oil companies and actually give them everything they want." But for a while, it was so populist to say, "Wait a minute. What do we make of the fact that Exxon just reported another $9 billion in profits and I can't pay for gas?" that even someone like O'Reilly felt he had to devote an entire show to just bashing the oil company executives.
And then it just changed. The fact that it has worked as well as it has, that people now support this so-called solution, you even have those bumper stickers that say, "Drill here. Drill now. Pay less," as if it's going to immediately impact the price at the pump. The only way to actually win progressive victories in a moment like this is to not be afraid to be populist. And that means going after big business and corporate welfare quite aggressively. Frankly, I don't think it's at all surprising that the Republicans are serving the interests of the oil lobby. What's deeply disappointing is that while there's been admirable resistance on this from the Democrats, in terms of pushback from [Nancy] Pelosi on offshore oil drilling, they haven't caved yet. There isn't the kind of ballsy, unapologetic, "We have to go after the fat cats" type of discourse that would actually sell.
Obama's reticence on this point is complicated and to some extent understandable, because the discussion of race in America is such that it's one thing to be a black man running for President, but to be an angry black man running for President is potentially unwinnable. But it is a moment for anger. In the framing of his campaign there was a brief window of dreamy hope. But the mood is not dreamy hope right now. The mood is pissed off. [Laughs.] Lou Dobbs knows that, but unfortunately he articulates it and then just says, "Get the Mexicans."
AVC: You were on a Fox News show recently trying to talk about these issues and they kept cutting you off, especially after you referred to President Bush as the "extortionist-in-chief."
NK: On that Fox show, the thing that was driving me crazy was, at one point I said, "I'd like to ask you guys a question." And they were like, "And we have to go." But what I wanted to ask them was whether they're advocating nationalizing ExxonMobil, because this whole idea that we'll drill and then we'll get the oil is insane because we don't have a national oil company. Norway does, Mexico does, Brazil does, Saudi Arabia does, Iraq does! Most countries with significant oil reserves have an oil company. So if China does drill off the coast of Cuba—which they're not doing—but if they did, they could actually direct the oil back to the Chinese market because they have a national oil company. But the U.S. Government has no power over Exxon to force them to not sell the oil that they drill offshore to China. So the idea that somehow this is our oil is this weirdly nationalist concept that has absolutely nothing to do with the economic policies they so enthusiastically embrace.
AVC: There's been talk of taxing oil company profits, which isn't a very popular notion with many Americans, even those suffering at the gas pump. Punishing a company for being profitable in many respects goes against the grain of what it is to be American. Do you think people are eventually going to support the idea?
NK: I think it's a really easy sell, especially if you're willing to link it to climate change and say that these companies have left us with a massive cleanup bill. We have a climate crisis, which most people understand, and that requires massive investments in alternative infrastructure. Whether it's public transit, whether it's retrofitting buildings, whether it's actually having the infrastructure for wind and solar because the technology is there to harness the energy, but what's lacking is the kind of public infrastructure that we have invested for electricity. So the companies that are profiting so spectacularly from chaos and shortages around the world should help pay for the mess that their industry created. People understand that for tobacco and the tobacco companies have been taxed like crazy to help clean up the health disaster that they created. I actually think these are really populist positions, but you don't get to them by apologizing your way into it. Plus, these infrastructure projects create a huge number of jobs. I think these are abundantly sellable positions and I don't think people are going to feel too sorry for the oil executives.
AVC: Can a so-called environmental crisis be as easily exploited for profit as any other kind of crisis? Can the notion that the planet is dying be turned around to deprive individual rights even if it feels like a populist movement, to save the planet?
NK: I think it's even more insidious than that. We've already seen it with ethanol and it's turned into yet another massive corporate subsidy that's driving up food prices around the world. The World Bank says that about 70 percent of the increase in the price of food globally is attributable to bio-fuels like ethanol. So, that's already happened. I think there is a danger that an environmental crisis can be used in precisely the same way as the terrorist threat can be used in terms of giving up freedom. It's what people call green fascism. That's one of the reasons for urgency, in terms of coming up with democratic responses. You can argue that there really is a window before you're in such deep crisis, that the argument of, "We need a strong leader who'll take decisive action and we need to give up rights in order to give them that power" will carry the day. I don't think we're in that window yet. We're in a window where, if there's some real leadership there can be some visionary policies and there can be a strengthening of the democratic process and a real embrace of a change in direction. But I do think that if we wait too long, that threat is really quite credible.
AVC: In the book you talk about how the war on terror is the perfect way to sustain a kind of open-ended shock, perpetuating policies of economic imbalance. Are we locked into something we can't get out of?
NK: At the end of the book, I also give some examples of countries where these types of tactics haven't worked. I was in Argentina in early 2002, making a documentary film, and the country had just gone through this total economic meltdown where people were locked out of their bank accounts, there was a run on the bank, there was massive inflation, and basically the country's economy completely imploded. There was this moment that happened where the government declared a state of siege. It was the beginnings of a coup. They told everyone to stay inside, they imposed a curfew, all of that. It was crazy. But people rebelled against it in this incredible way. They took to the streets, they overtook the President and he had to leave in a helicopter. That's really where the research for this book began—talking to people about why they responded in the way that they did. I just got the same answers from everyone, generations across the board, people said, "When he declared the state of siege, it reminded us of 1976." And you'd hear this from teenagers who weren't alive in 1976, but it's because there's this narrative in that country about how they had lost their democracy in the '70s, and how they had been afraid and a state of siege had been declared and it turned into a military dictatorship. So, in that one instant, no matter how afraid they were and they were really afraid, they rebelled instead of acquiescing. It sounds like V For Vendetta, but it was a pretty amazing experience being there.
Another example is Spain with the Madrid bombings, where you had José María Aznar use those terrorist attacks in a very George Bush-like manner, saying, "This is why we're in Iraq." Plus, he blamed ETA [the Basque separatist group], so it made no sense. Because if it was ETA, what did it have to do with Iraq? They were in the middle of elections, and he used it in a very opportunistic way. It completely backfired. They had huge demonstrations against fear and then they voted out Aznar's party and voted in Zapatero who was promising to pull troops out of Iraq. Of course, the way it was portrayed on Fox News was, like, "Those European surrender monkeys! At the first sign of trouble, they cave!" What was so interesting, reading the Spanish response, was the reason why people reacted so negatively to Aznar is that he reminded them of Franco. So, once again it's this issue of historical memory.
With the U.S., in terms of why it is so incredibly easy to take advantage of a moment of crisis is because this is such an amnesiac culture. More than being an amnesiac culture, it's a culture that makes amnesia a point of pride—the idea that you can reinvent yourself, that you have no history, that you have no past. It's really a culture that's been at war with memory since its inception. It sees memory as baggage. So, to be a little less optimistic here for a minute [Laughs], I do think until historical memory, including the bad parts, is something that's valued in the United States and amnesia is no longer fetishized, these patterns will repeat. Because people without memory are putty.
AVC: If America spent a little more time remembering what we've let happen to ourselves, we'd be more likely to recognize it the next time and resist it?
NK: One of the things that progressives said about what happened in Spain is, "Well, that's Spain. They have a history of fascism and we don't." It's a pretty amazing thing to say, actually, about the history of the United States. It's not the same as European fascism, but there's McCarthyism, there's the original founding of the country, there's slavery. There's so many historical echoes. I mean, even the way in which Abu Ghraib was discussed, a lot of the analysis would say, "What's really unique about this is that they took pictures." In the African-American community, people were writing, "Well, what about the snapshots people used to take of lynchings and then turn them into postcards?" That war with memory—particularly the refusal to look at the original genocide at the founding of the country and slavery and the fact that it's seen as unpatriotic to look at the difficult parts—I think is the biggest aid in the use of shock again and again in the United States. It's why it makes Americans particularly vulnerable to the use of these strategies.
AVC: Will the Beijing Olympics be anything more than an elaborate, world-televised advertisement for China's own socialist-capitalist experiment?
NK: One of the things that was really interesting about the lead up to the Olympics is how quiet it was. In terms of the marketing outside China, it was practically nonexistent. I was in China in March and obviously the ramp-up was in full swing, with all of these American companies that are sponsoring the Olympics, like Coke and GE, competing frantically with their Chinese rivals. The strategy clearly is to fight for the Chinese market. The struggle is really between Western brands and their Chinese rivals. The Western brands have a lot of prestige in China, but there's such a strong Chinese nationalism connected to the Olympics right now that there's a sense of pride in supporting Chinese companies.
So the Western companies are fighting frantically for their market share and whereas they usually use the Olympics as a global marketing platform, I think there's a clear strategy to actually play down their connection to the games outside of China and just fight the internal market battle because the prize is so huge. I think there's going be a kind of shame associated with the Games, even for a company like NBC which has broadcast rights. They're in an awkward position. They're owned by General Electric, which gets huge military contracts and huge homeland security contracts. I don't think they're going to want to draw too much attention to how enmeshed they are. Because GE is a sponsor of the games, they've also sold surveillance equipment to the Beijing government to secure the games and they have exclusive broadcast rights. It's an election year. I don't think they're going to want to play that up too much.
AVC: Is the upcoming U.S. Presidential election a false choice, or is there a significant difference between the candidates and how they will affect our country's future?
NK: I want Obama to win over McCain. It's not that complicated for me. My concern about this political moment is the extent to which the Obama campaign sucks up all the political oxygen on the progressive end of the spectrum. I don't think there really is an anti-war movement in the United States anymore. I think there is a pro-Obama movement. There's this idea that elections are a moment when you really talk about politics, but actually what they do is they defer politics and you're constantly told, "We'll talk about that after the election. First, we have to beat McCain!"
If it weren't for these endless elections, I think there would be more of an independent anti-war voice in the United States. I think there would be a more independent economic justice movement responding to the housing crisis, responding to high oil prices, because when you talk to the organizations—whether it's trade unions, policy institutes, or even anti-war organizations—about what's happening right now, they'll say, "You're absolutely right. We have to do something about that as soon as we win the election." There has to be a plan, a post-election plan, that's not naïve, that understands Obama is under huge pressure from corporate interests to move to the right and there has to be some sort of independent strategy with muscle behind it that is pushing in the opposite direction. That planning can't begin after the elections, that's too late. It has to begin now. We have been living a 35-year war against the New Deal. It's worth remembering what conditions brought about the New Deal in the first place. It was this really interesting dialectic between a President who was intelligent and wanted to listen and a really radical and independent base that scared him. That was the push and pull that was going on and that is the push and pull where good things happen, where real breakthroughs happen. Not when you just have super-fan cheerleaders going, "We love you!"