International Economics

A Libertarian Counterpoint on Naomi Klein

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Measured praise for Naomi Klein's Shock Doctrine comes from an unusual source: the longest-lasting journal of modern American libertarian thought, The Freeman. See Joseph Stromberg, an old movement hand, review the book (scroll a bit down in this page of the book reviews from the October Freeman).

An excerpt summing up his case for Klein:

She makes a complex argument dealing with what are, indeed, complicated matters. Some reviewers complain that Klein forces the evidence into a pattern. They say her treatment of the views of certain psychologists, economists, and military planners and her comparative account of how those views are (were) implemented, are "unfair," especially to the economists. But Klein rightly pursues the ideas in question across these fields of knowledge (and action) by analogy—a perfectly good Aristotelian and Thomistic procedure. "Hooding" a captive and "blacking out" an entire city by bombing are analogous, because they are done for the same reason—to disorient and confuse, and so on, through further stages of comparison.

The said psychologists, economists, and military planners dwell endlessly on certain themes because they see the world as a manipulable object and proceed from shared mechanistic, Hobbesian, positivist premises, whereby actual people are mere atoms, objects, or empty ciphers on indifference curves. We cannot be surprised that these experts' activities complement one another in real life and reveal an indifference to "unforeseen consequences," while a kind of mathematical Platonism underlies the supposedly "empirical" performances. Shared themes include "shock," "shock therapy," crises as experimental opportunities, and "clean slates" (Hobbes's "clean paper") on which to plot out new worlds. They talk this way; Klein makes nothing up.

Klein follows these common threads from the "free-market" Chilean tyranny, through Mrs. Thatcher's rather mixed reforms, phony "privatizations" in Poland and Russia, the half-mad U.S. invasion of Iraq, with more phony "privatizations," dispossession of small-holders in Sri Lanka, and "state failure" in New Orleans, where school vouchers were imposed while the city rotted.

The Sri Lankan case must suffice here. There, long-established fishermen, having survived the tsunami, were barred from their beach holdings, so that resort hotels favored by the World Bank, U.S. operatives, and investors might expand. This is precisely what a Chicago Law and Economics (Coasean) judge would do. The fishermen are "socially inefficient." They got no "growth." Away with their land! They may come back in the reformed "free market" as waiters and busboys.

One key to the new order, I would add, is this: By excluding war-making capacity ("defense") from the concept of "state" by implicit definition, Republican "anti-statists" create a desert mirage. We can wrangle over smaller government any time; no one can reasonably hold that we are getting such a thing now from those in power, sundry "privatizations" notwithstanding.

Current Freeman editor Sheldon Richman (an old colleague and old friend) has been far more open than previous Freeman editors to what is sometimes called "left-libertarian" thought, a complicated locution that in at least one of its meanings indicates a willingness to recognize and discuss how many of the existing facts of quasi-market capitalism in America deserve not commendation, but strict and constant condemnation, from libertarians.

This mode was more common in the libertarian movement mainstream in the 1960s and 1970s (with Stromberg even then a recognizable voice for it) than it has been since. (In a very, very rough metric, the libertarians of this type tended to love Murray Rothbard a lot more than they loved Milton Friedman, who is in Klein's own view the prime villain of the modern world.)

These types of libertarians are the ones who tend to poke at me for choosing that Randian phrase "radicals for capitalism" as the title of my history of the libertarian movement, since they see "capitalism" as being best defined as not true free markets but the complicated realm of corporate/state privilege we now live in. (To me, and Rand, capitalism merely meant a system where people can freely and justly own and trade private property.) For a good blog that waves the flag commendably for this variety of libertarian thought, see frequent Hit and Run commentor Kevin Carson at his Mutualist blog.

Our October issue featured a far more critical review of Klein's book, from Johan Norberg. Jesse Walker here dissects her misunderstandings, and misrepresentations, about the extent to which the Current Crisis does, and doesn't, reflect failures of the free market.