No Shock Doctrine for Haiti


News stories about Haiti are full of tales of looters. There’s less talk of a bigger scale plunder to come. In Naomi Klein’s ‘The Shock Doctrine‘ she maps the rise of “disaster capitalism”. She describes how, over 40 years, The International Monetary Fund (IMF), Pentagon, and various mega-corporations have increasingly used (or created) disasters as an excuse to push through unpopular right wing economic policies, and asset strip vulnerable economies.

HaitiI was just finishing this book on Thursday as the scale of Haiti’s earthquake was becoming clear. My immediate fear was an obvious one. So I did what all young lefties do in a time of crisis. I set up a Facebook group: “No Shock Doctrine for Haiti”.

It turns out the vultures were already circling. Almost immediately, a friend joined the group and posted a link to The Heritage Foundation – a highly influential conservative American think-tank. They argued (in a paper which has since been removed) for the approach described in Klein’s book. See a description of it here.

Worse still, if this article in The Nation is to be believed, the IMF were way ahead of us. As I was setting up the group, they were haggling with Haiti. They agreed to an emergency loan of $100 million. But, allegedly, they forced the Haitian government to agree to freeze public sector pay, and raise fuel costs in exchange.

This is standard fair for the IMF. I won’t detail them here, but Klein gives examples in her book of how disasters or major shocks have been used by the Fund and others as a chance to force through unpopular, radically pro-corporate policies, which have led ultimately to massive inequality. These case studies range from Russia to Chile, and South Africa to Poland.

Debt is also familiar to Haiti. Jubilee USA provide a useful briefing in which they explain how France’s demands for reparations for the lost labour from Haiti’s freed slaves forced the country into massive debts from which it never recovered.

Despite allowing corrupt dictators to remain in power for decades, when the people of Haiti elected a leader promising to do something about poverty, we either backed, or allowed, two coups against him.

The US has also pushed privatisation – of more benefit to their companies than the poor of Haiti. According to Haiti Progrès, for example, in 1996, the United States Agency for International Development (the government’s aid wing) signed an $800,000 contract with a Canadian Public relations firm to hype privatisation in Haiti.

The economic guru of the radical right, Milton Friedman, explained to his students how their neo-liberal ideas would take over the world:

“Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”

The poverty which made this earthquake so devastating is no accident. It is the result of two centuries of oppression of the world’s first black republic. It is the result of enforced neo-liberal policies that have prevented Haiti developing the only way any country has – through investing in infrastructure and people. Friedman’s ideas are so popular with the mega-rich because they have only ever succeeded in doing one thing – making them richer.

If you want to do something, you can donate to ActionAid or one of these charities. The Shock Doctrine works by pushing policies through while people are distracted and grieving. So we must also be their eyes and ears, and keep the vultures at bay until they can come together to decide how they want their country to be re-built. As I write, more than 4,000 people have joined the Facebook group, and are helping act as those eyes and ears.

Our guest writer is Adam Ramsay who will jointly launch a new blog brightgreenscotland.org on Wednesday.

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  • http://www.selfdestructivebastards.com/ Chris Lawrence

    Haiti’s history is a sad and depressing one. It is a tale full of genocide, slavery, extortion, invasion and occupation, resource theft, and severe repression. It is a cruel joke that a country that has endured so much, and has so little ability to deal with catastrophe, must endure even more suffering.

    http://www.watchinghistory.com/2010/01/haiti-long-tragedy.html

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  • http://achangeofpersonnel.blogspot.com/ a change of personnel

    thanks for highlighting this it looks well worth a read, Naomi Klein certainly doesn’t pull any punches.

  • Charles Barry

    In Defence of the IMF

    Look Adam, you may be blind to the other side of the coin as a result of your political prejudices, but I am appealing to your sense of an independent mind here.

    The phrase “disaster capitalism” is just a stupid soundbite phrase that some invented to describe policy decisions they don’t agree with. Fine. But the reasons those decisions were made were on the basis of sound economics.

    Of course the IMF should be offering $100m to Haiti. But it shouldn’t be offering a blank cheque, and it should ensure that if Haiti takes the money, it should accept some reasonable restraint. If Haiti doesn’t like those conditions, then fine, it doesn’t have to have the money. There’s no need for Haiti to accept the money, although more likely than not it will take it.

    The point about restraining public pay and raising fuel costs is more likely than not to be about ensuring Haiti will be able to pay off its debts, by attempting to balance the budget. And be clear – Haiti’s corrupt government should not be given hundreds of millions of other people’s dollars with no strings attached.

    If the US government spend 1 million dollars on PR for privatisation, so what? Privatisation has been shown to be (when properly handled) the best way forward. The Haitian government should privatise in a way that the shares pass to the people and not “oligarchs”, raise tariffs to ensure its companies can compete on the world stage and ensure that the rule of anti-monopoly law and general order can prevail.

    There’s a lot of tragedy and a lot of opportunity to rebuild Haiti as a better country, with the possibility of raising thousands out of poverty. I also think Obama is unlikely to let it become a corporate oligopoly playground. So let’s take a look at all the available options, and not resort to sensationalist stereotypes.

  • Mark

    It’s easy to demonise the IMF but they are not set up to be sinister. Instead they bring in outside help and resources, something that Haiti lacked for so long. After all, debt is next to irrelevant given the crushing poverty and the kleptocratic governments this country has seen. A dose of IMF rigour isn’t exactly going to “shock” this disastrous nation, it’s probably the least of their worries. Sadly it takes a tragedy on this scale for the US and Europe to wake up: we’ll invade Iraq for the oil but the US didn’t care for this near-neighbour.

  • Lee Vanderheiden

    Charles,

    The tone in your letter is soothing however your assertions are unsupported. “…the reasons those decisions were made were on the basis of sound economics”. Untrue. Economics is not a science, it is based on theory only, and supply and demand, laissez-faire economic theory has not proven itself to be sound at all. It is the reason the for the past twenty-five years all over the world where nations have instituted neo-liberal/neo-conservative Chicago school, Milton Friedman economic ideas have redistributed their common wealth into just two camps: the majority poor and the very rich elite, with overwhelming political power favouring the rich. Sound economics for whom?

    Furthermore, at a time of great upheaval and tragedy is NOT the time to offer a loan with long standing and long-suffering strings attached. How cruel! It is a time for compassion and aid. Yes, without any strings! No one with a heart would seek to profit from such a catastrophe as this!

    Haiti’s corrupt government? Who in much of Haiti’s history has been responsible for this? The USA has consistently interfered with Haiti’s democratic electoral process. Should the people be blamed for this? Blaming the victim, another cruel response to tragedy.

    Please support your assertions with facts. Where on earth has privatization been shown to be the best way forward? In Canada? The USA? Russia? Iraq? Where??? Where there has, there has been corruption of the worst kind. Please visit the Canadian Center for Policy Alternatives website for a review of this, for a quick example: “Flawed analysis props up BC public private partnerships” ( http://www.policyalternatives.ca/publications/commentary/flawed-analysis-props-bc-public-private-partnerships ) COMER (The Committee on Monetary Economic Reform : http://www.comer.org/ is another website with more in depth information regarding the downside of monetarism.

    Your own soundbite: “There’s a lot of tragedy and a lot of opportunity to …” is classic Milton Friedman “shock therapy”. The phrase “shock therapy” is not Naomi Klein’s words but Milton’s own. Read his works!

    Any why wouldn’t Obama let it become a “corporate oligopoly playground”? His multi-billion dollar bailouts to the banks and his current foreign policy of more aggression into Afghanistan and possibly Yemen (following in Bush’s footsteps) is doing just that. Not only to his own country but to these others too, where he has no right to be in! The War on Terror is creating corporate oligopolies and, unfortunately, more terrorists (displaced, traumatized, desperate, angry young men and women).

    Naomi Klein’s book, “Disaster Capitalism” and the ideas contained within are refreshingly new and most controversial, given the predominate economic zeitgeist. As far, far away from “sensationalist stereotype” as you can get. Nothing stereotypical about it at all. Except the rich and powerful plundering the poor and weak.

  • http://oxfordkevin.carbonclimate.org Oxford Kevin

    Adam, I can see now why I couldn’t get you to stand in a ward in Oxford. But WDM http://www.wdm.org.uk has lots of information on the problems with the World Bank, the IMF and the WTO. Specifically the demands to apply conditionality to loans has nothing to do with rooting out corruption and everything to do with forcing markets to open up, which has proved again and again that the IMF/World Bank/WTO model is a complete failure. There have been horrendous examples of exacerbating corruption when the privatization of state assets has occurred, not just in Africa like the failed sell off Tanzania’s water supply but also in Russia after the collapse of the Soviet Union.

    The World Development Movement has a number of recent reports on the failure of these unnaccountable organizations.

    http://www.wdm.org.uk/out-time-case-replacing-world-bank-and-imf
    http://www.wdm.org.uk/denying-democracy-how-imf-and-world-bank-take-power-people
    http://www.wdm.org.uk/zambia-condemned-debt-how-imf-and-world-bank-have-undermined-development
    http://www.wdm.org.uk/treacherous-conditions-how-imf-and-world-bank-policies-tied-debt-relief-are-undermining-development
    http://www.wdm.org.uk/debt-and-destruction-senegal-study-twenty-years-imf-and-world-bank-policies

  • Adam Ramsay

    Hello,

    thanks for the comments on this.

    Charles, I was going to respond to your well made points, but Lee, above, has already made most of my points. I am somewhat surprised by the idea that privatisation has been show to be the best way forwards though. Looking around Europe at the moment, I think it’s fair to say the opposite is true with many types of resource.

    Mark, you’re right. The IMF was set up as a result of the Bretton Woods conference in order to bring stability to the global economy. However as, among many others, Joseph Stiglitz found when he was chief economist at the World Bank, they has consistently failed to do this. I’d argue this is largely because they are controlled by rich countries who, understandably, push their own interests.

    I find it difficult to accept the idea that debt is irrelevant. The country was bankrupted on it’s independence and has never recovered. It is a disaster because we have constantly intervened in their affairs and done them harm. IMF rigor isn’t what they need – their structural adjustment programs are a joke. The reason developing countries were so loath to accept any role for the World Bank/IMF in climate finance at Copenhagen, for example, is that no developing countries trust them any more because of the mess they’ve made.

  • http://twitter.com/tomusher/status/7889867002 Tom Usher

    RT @nohaitishock: Read Adam Ramsay's article on #Haiti on Left Foot Forward: http://bit.ly/8zGtc3

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  • John Grogan

    Look Charles Barry, you may be blind to the other side of the coin as a result of your political prejudices, but I am appealing to your sense of an independent mind here. [see how that works]

    The term “disaster capitalism” is not “just a stupid soundbite phrase that some invented to describe policy decisions they don’t agree with” as you have so glibly accused.

    Let’s review… when you disagree with another they have a “political prejudice” but when you argue a concept as being “stupid” we are to believe there is no bias.

    I expect that you may have made a valid point before signing off, but the truth of the matter is that the bad taste in my mouth distracted me from giving proper consideration of your further remarks.

    I have read Shock Doctrine, and recommend it as terms of reference for any further discussion.

    I think there is clear and ample evidence available of shock doctrine crisis capitalism, so I will not engage you further.

    Good Day!

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  • http://twitter.com/cracorruption/status/7894089737 The Source

    CanadaRights.com No Shock Doctrine for Haiti | Left Foot Forward: She describes how, over 40 years, The Internatio… http://bit.ly/4F9W0l

  • http://twitter.com/bashmore/status/7897954252 bashmore

    Good blog post from @leftfootforward http://twurl.nl/yiwoe6 No Shock Doctrine for Haiti – in relation to Naomi Klein's excellent book

  • Roger

    The Klein and Chomsky cults response to Haiti rather reminds me of Lenin’s first published article where he rounds on leftists who supported relief for a famine then raging in Tambov province.

    Yes of course aid from capitalist institutions will serve their wider agenda – but given the desperation of the Haitian situation even before the quake I can’t imagine that more fully integrating them into the globalised capitalist economy can make them any worse off.

    And given their centrality to her conspiratist world view Naomi will no doubt be finding great significance in the fact that the Israelis have already sent an entire hospital to Haiti.

  • http://oxfordkevin.carbonclimate.org Kevin Meaney

    I’m not sure why so many “young lefties” are so committed to facebook. One of the original investors Paul Theil is a libertarian neocon and stands to do well out of his investment in facebook.

  • http://twitter.com/loota/status/7899674620 Peter McColl

    If you read one article on Haiti, read this: http://bit.ly/8GbfEl. A foretaste of Bright Green Scotland – coming on Wednesday

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  • http://greenerblog.blogspot.com Richard Lawson

    Let us not just rage about the threatened corporate takeover of Haiti, let us be clear about the alternative, community based, ecological reconstruction of Haiti that we would wish to see, so that we can put it forward as a coherent plan.
    http://www.blogger.com/post-edit.g?blogID=9192922&postID=5806032517153574176

  • Edward

    Quite. Poor Chile, now the poorest of South American countries. I’m sure it’s only getting into the OECD (rich countries’ club) because capitalists are all liars and its high GDP per capita is a lie.

    Poor South Africa, someone should tell all the Zimbabwean refugees that they ought to go to Zambia instead.

    Poor Russia, someone tell them that they should not universally love their leader Vladimir Putin any more, because he is an evil capitalist, whereas the pre-reform system (i.e. Communism) was good and popular and equitable and sustainable.

    Clearly, what we need is African-style aid dependency and anti-capitalism combined with Argentine-style protectionism. That has worked so well for those places in the past.

    The author wants the IMF to act as a blank chequebook for genocidal dictators, and wants the dictators themselves to decide who gets the cheques, rather than the people providing the money, i.e. us.

  • http://oxfordkevin.carbonclimate.org Oxford Kevin

    Edward, perhaps Chile has done better than some of its South American neighbours because Pinochet disappointed Friedman and his acolytes at the Catholic University of Chile after the early experiences of the destruction of not just peoples lives but also of the economy from the first reforms pushed through by Pinochet, over the long term Pinochet did not follow through with all that was desired from the Friedmanites and actually undid some of his early changes. Also Chile started from a high level of development prior to Pinochet’s dictatorship.

    Other South American countries like Argentina had many structural adjustment programs applied to it, the next one being applied due to the failure of the previous structural program. Talk about not learning from your lessons. The IMF/World Bank/WTO are not about rooting out corruption but imposing the failed neoliberal program of forcing markets open, privatized services, this has been demonstrated over and over again.

    I can hardly see Russia as a good example of the success of an enforced shock. The enriching of the Russian oligarchs as a result of the forced rapid privatization of the former soviet assetts was at the expense of the rest of the population. Russia’s population declined as a result of the application of this external solution, with a rapid decline in lifespan and living standards. The brief improvements in living standards for most Russians has only occurred due to the recent high prices of its oil exports.

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  • http://www.timworstall.com Tim Worstall

    “The poverty which made this earthquake so devastating is no accident. It is the result of two centuries of oppression of the world’s first black republic. It is the result of enforced neo-liberal policies that have prevented Haiti developing the only way any country has – through investing in infrastructure and people. Friedman’s ideas are so popular with the mega-rich because they have only ever succeeded in doing one thing – making them richer.”

    Please, get a grip.Haitian GDP per capita is around $1,300 a year. This is around the English level back in 1700. It’s about twice the level prevaling at the time of the Roman Empire (yes, adjusted for inflation).

    We got rich, France got rich, the US got rich, Hong Kong got rich, China and India are getting rich…..all through some variant of the same thing. Liberal capitalism. It’s the only way that any country has ever got out of the Malthusian trap that Haiti is caught in. Naomi Klein’s wibble about worker cooperatives is just fine if you’re rich enough to be able to cope with such wibble. What Haiti needs is a great deal more capitalism in hte near future.

  • Edward

    Kevin characterises opponents of Marxism as extremists, and any success that Pinochet achieved as being essentially moderate and anti-capitalist in nature. Of course, that isn’t the case, but the myth of Chilean anti-capitalist success is essential to maintain faith-based socialism. Chile became successful with market reforms along the lines of what Friedman recommended, and China is currently doing the same. Chile and China didn’t legalise drugs or institute democracy, either, but we wouldn’t call that a repudiation of Friedman’s agenda.

    Isn’t it contradictory to blame market reform policy for the Russian recession, but to ascribe future success to a fortunate change in oil prices rather than policy? Again, a necessary anti-capitalist myth. Russian market reforms caused a few years of poverty – of course they did, they were compensating for the persistent failure of anti-capitalist economics, after all. (The Soviet Union collapsed because of economic stagnation from the 1980s, which incited nationalism in the republics.) The alternative was to spend, spend, spend, and rack up debt, debt, debt, as the Soviets did at the end. But after the adjustment period, Russian growth has been consistently high and growing for the last ten years, regardless of what level the oil price happened to occupy at any given time.

    Anti-capitalists want the Third World to remain at subsistence levels of income just so they have a laboratory to carry out shock socialism, as they did in North Korea.

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  • Roger

    Not all anti-capitalists are that dumb – those of us who have actually read Marx – rather than his malevolent Soviet epigones or trendy pomo trivialisers like Klein – know all too well that literally dirt-poor economies like Haiti can only acquire the material basis for socialism by going through their own dreadful process of primitive capitalist accumulation.

    The systematic denial of that fundamental tenet of Marxism by the likes of Lenin, Trotsky, Stalin and Mao virtually destroyed the twentieth century socialist movement.

    And anyone who believes that a ‘alternative, community based, ecological reconstruction’ of Haiti is possible knows literally nothing about the demographics, economics and political history of that particular corner of hell.

  • http://twitter.com/m_lassiter/status/7930883837 Michael Lassiter
  • http://twitter.com/adamramsay/status/7939082784 AdamRamsay

    more than 11,200 members!: join the Facebook group: http://bit.ly/5ECsQA see my piece: http://bit.ly/8ZV3cI No Shock Doctrine for #Haiti

  • http://twitter.com/edpomfret/status/7941391567 Ed Pomfret

    RT @willhorwitz Interesting article @leftfootfwd about #Haiti IMF & injustice (not just bad luck) that led to disaster http://j.mp/4vkVHD

  • http://twitter.com/diva_on_wheelz/status/7949111432 Rebecca Nokes
  • Pingback: Haiti And Bankers. « ModernityBlog

  • http://twitter.com/adamramsay/status/7965584171 AdamRamsay

    1̶1̶,̶2̶0̶0̶ 14,150 members!: join the Facebook group: http://bit.ly/5ECsQA see my piece: http://bit.ly/8ZV3cI No Shock Doctrine for #Haiti

  • http://twitter.com/emmitabanks/status/8028181495 Emma Banks

    @alexcernebanks They are not the only ones: http://www.leftfootforward.org/2010/01/no-shock-doctrine-for-haiti/

  • Simon

    http://www.counterpunch.org/quigley01182010.html

    forget vicious loans, forget aid, how about reparations for Haiti?

    The idea, mentioned earlier, that a no-strings-grant for Haiti would be somehow bad, MIGHT have been defensible pre-quake, maybe, but in the present situation this idea is cold, heartless, dare I say elitist?

  • http://www.aaaaargh.wordpress.com Aaaaargh

    This book just arrived from Amazon, very timely to read it now. How’s this for an alternative way to help Haiti though:
    http://aaaaargh.wordpress.com/2010/01/15/where-does-charity-begin/

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