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In Naomi Klein's The Shock Doctrine: The Rise of Disaster Capitalism, she argues that an idea that began with Chicago School economist Milton Friedman has determined much of the course of recent history – that a time of crisis, whether a war or a hurricane, offers a strategic opportunity to overwrite the resulting “blank slate” with market privatization and corporatism.
Ms. Klein traces the application of such “shock treatment” to Chile in the 1970s, Russia in the 1990s and elsewhere. She argues that “disaster capitalism” has exploited Sept. 11, Hurricane Katrina and Iraq. In this section, she considers the aftermath of George W. Bush's “anti-Marshall Plan”: Rather than help Iraqis rebuild their own economy, as the U.S. did in Germany in Japan in the 1940s, she says, they would permit Western corporations to remake Iraq in their own image. Things did not go as planned. But were some of those goals achieved?
On my flight leaving Baghdad, every seat was filled by a foreign contractor fleeing the violence. It was April, 2004, and both Fallujah and Najaf were under siege; 1,500 contractors pulled out of Iraq that week alone. Many more would follow. At the time, I was convinced that we were seeing the first full-blown defeat of the corporatist crusade. Iraq had been blasted with every shock weapon short of a nuclear bomb, and yet nothing could subdue this country.
The experiment, clearly, had failed.
Naomi Klein
Now I'm not sure. On one level, there is no question that parts of the project were a disaster. [Former Iraq administrator Paul] Bremer was sent to Iraq to build a corporate utopia; instead, Iraq became a ghoulish dystopia where going to a simple business meeting could get you lynched, burned alive or beheaded. By May, 2007, more than 900 contractors had been reported killed and “more than 12,000 wounded in battle or injured on the job,” according to a New York Times analysis. The investors Bremer had done so much to attract had never showed up – not HSBC, or Procter & Gamble, which put its joint venture on hold, as did General Motors. New Bridge Strategies, the company that had gushed about how “a Wal-Mart could take over the country,” conceded that “McDonald's is not opening any time soon.”
Bechtel's reconstruction contracts did not roll easily into long-term contracts to run the water and electricity systems. And by late 2006, the privatized reconstruction efforts that were at the centre of the anti–Marshall Plan had almost all been abandoned on the ground – and some rather dramatic policy reversals were in evidence.
Stuart Bowen, U.S. special inspector general for Iraq reconstruction, reported that in the few cases where contracts were awarded directly to Iraqi firms, “it was more efficient and cheaper. And it has energized the economy because it puts the Iraqis to work.” It turns out that funding Iraqis to rebuild their own country is more efficient than hiring lumbering multinationals who don't know the country or the language, surround themselves with $900-a-day mercenaries and spend as much as 55 per cent of their contract budgets on overhead.
Jon C. Bowersox, who worked as the health adviser at the U.S. embassy in Baghdad, offered this radical observation: The problem with Iraq's reconstruction, he said, was its desire to build everything from scratch. “We could have gone in and done low-cost rehabs, and not tried to transform their health-care system in two years.”
An even more dramatic about turn came from the Pentagon. In December, 2006, it announced a new project to get Iraq's state-owned factories up and running – the same ones that Bremer had refused to supply with emergency generators because they were Stalinist throwbacks. Now the Pentagon realized that instead of buying cement and machine parts from Jordan and Kuwait, it could be purchasing them from languishing Iraqi factories, putting tens of thousands to work and sending revenue to surrounding communities.
