Klein's Shock Doctrine

[Ken White]

...
Free-market extremists are as delusional and dangerous as religious extremists.

remember: when politics permeates the totality of society, we call it totalitarianism; when religion permeates the totality of society, we call it theocracy; when market relations permeate the totality of society, we call it freedom? I think, we should call it fascism. Let us not forget Mussolini's famous quote "Fascism should more properly be called corporatism because it is the merger of state and corporate power." What is the privatization frenzy if not this?

delusioned and dangerous -- which is why most people ignore them but prudent folks keep a jaundiced eye on them.

Unrestrained capitalism is dangerous, excessive government intervention is dangerous. Most people intuitively understand that. The difficulty is in finding the correct balance when confronted with a constantly shifting beam in shape and size and a moving fulcrum. No nation has done that well -- though we did fairly well before we started aping Europe and became over regulated (in some senses and in some areas, usually the wrong areas...).

Fascism is a much misused and overused word.

Not that much of this thread including this post of mine has a lot to do with warfare or small wars...

[relative autonomy]

Ken, I see you're point on the balance between government and intervention. The thing is, though, that capitalism needs to do more than continue to meet the needs of the middle classes in the advanced industrial world. we have all the crap we need! instead manufacturing needs and pursuing a cynical model of globalization, which all to often is a race to the bottom, business needs to take a risk, invest some money and try to meet the very real needs the developing world. i think benjamin barber on the bill moyers journal talks about this a lot more intelligently than i can and you can check that out here:

http://www.pbs.org/moyers/journal/12.../profile3.html

Fascism maybe overused but I also think people need to incorporate a critique of authoritarian forms. You can't have true democracy when the economy is run by authoritarian structures like TNCs. You can have a plutocracy but i don't think that is value anyone should spill blood for. i should have said plutocracy instead of fascism in my first post becuase its much more accurate and less polemical.

i do think this conversation is very central to "small wars" becuase "winning the hearts and minds" often comes down to who can deliver the economic services people need to live a decent and equitable life. i feel an exclusive focus on the military aspects can leave this out and, then, all the bullets in the world can't delay inevitability.

I still think, instead of dumping endless money into a needless invasion in Iraq, we should have put diplomatic pressure on regimes like Pakistan and Saudi Arabia and done "civic action" or peace corp type programs to make life less desperate for the people in the margins, whom, i feel, are legitimately attracted to extremist ideologies becuase they have few other options. For a fraction of the cost of the invading Iraq we could have provided clean drinking water, medical treatment and other humanitarian efforts which, beyond the shadow of a doubt, would have done more to win "the war on terror" than unilaterally invading a secular, quasi-socialist authoritarian state, which had no love for Islamic radicalism nor any connection to 9-11.

Klein's polemics aside, I think here is where the shock docterine can be important: to make clear the overlaps between "small wars" and ultra-right economics. if "small wars" can defeat extremist movements and help create liberal democracies they can't be used to push certain political agendas. her anaylsis isn't perfect but no one's is. she deserves some credit for undertaking an ambitious argument that few people would even attempt to undertake.

[Ken White]

Ken, I see you're point on the balance between government and intervention. The thing is, though, that capitalism needs to do more than continue to meet the needs of the middle classes in the advanced industrial world. we have all the crap we need! instead manufacturing needs and pursuing a cynical model of globalization, which all to often is a race to the bottom, business needs to take a risk, invest some money and try to meet the very real needs the developing world. i think benjamin barber on the bill moyers journal talks about this a lot more intelligently than i can and you can check that out here:

Capitalism does do more than that, though not to the extent Barber and you want -- I doubt that it will ever do that. Nor, I would add, are a lot of government attempts to force it to do so likely to have much effect. Neither do I think it necessary; most of the world will do alright if only provided a level playing field; capitalism per se rarely denies that to anywhere near the extent that politicians do (see subsidies, tariffs, et,al.)

Fascism maybe overused but I also think people need to incorporate a critique of authoritarian forms...

Possibly true but valid critiques will not focus on one aspect but will fairly critique all authoritarian forms -- to include rampant socialism which has proven to be ineffective, as authoritarian as fascism and more pernicious as it is couched in idealistic terms (see Klein, N.)

You can't have true democracy when the economy is run by authoritarian structures like TNCs. You can have a plutocracy but i don't think that is value anyone should spill blood for. i should have said plutocracy instead of fascism in my first post becuase its much more accurate and less polemical.

What is a value that anyone should spill blood for?

The economy, world type, is not run by TNCs but by their owners and investors. I'm one. I assure you I'm not a plutocrat.

i do think this conversation is very central to "small wars" becuase "winning the hearts and minds" often comes down to who can deliver the economic services people need to live a decent and equitable life. i feel an exclusive focus on the military aspects can leave this out and, then, all the bullets in the world can't delay inevitability.

Starting at the end and working backwards, who is using an exclusively military focus?

"Hearts and Minds" is a myth, a dangerous myth. It presumes (in the worst sense of the word) to know what others want or need, then to deliver it and thus to convert them into mini clones of the presumer. Fatal fallacy. No foreign power is ever going to win the heart or mind of anyone in any real sense. People will do what is perceived to be in the interest of themselves and, in many societies of their family, clan or tribe. Only the people can determine what those interests are and while they will take what is freely offered that they want or can use, they will utterly reject giving anyone their heart or mind. They will assert their independence in various ways -- as well they should. That's what is inevitable.

Hearts and minds is pure bunkum, sold by snake oil salesmen who believe all people are innately good and will behave just as said salesmen behave (or want others to behave...). People are not innately good nor are they all equal in any sense. Michael Jordan plays basketball several orders of magnitude better than I ever could. Of all the people in the world, about half are good ranging to great and the remainder are poor ranging to dangerously bad. Kant may have had some things wrong (as is true with all of us) but he had the selfish and own interest parts right. There are a lot of evil folks out there and most will take an idealistic thought and parlay it to their advantage and then slit your throat.

I still think, instead of dumping endless money into a needless invasion in Iraq...

Money supply isn't endless. As for needless, that is at least arguable. There were admittedly other ways to do what was done (shake up the ME in an attempt to speed up the inevitable from five or six generations -- or even more -- to just two or three) and the invasion was admittedly a calculated risk. Whether it achieves the goal is to be determined.

...we should have put diplomatic pressure on regimes like Pakistan and Saudi Arabia...

What do you think we've been doing to both those nations since the 1950s? Didn't get much traction, did it.

...and done "civic action" or peace corp type programs to make life less desperate for the people in the margins...

Civic action is somewhat overrated but in any event, it takes the willing acceptance of the sovereign nation of your program to be effective. Lacking that acceptance and a massive program, the probability of any success is slim. The Peace Corps is a mixed bag, it has many dedicated volunteers who do good stuff. It also has really, overall, been only marginally effective. In any event, if you think either nation would have accepted a lot of Americans in their country to 'help' them, you don't understand the pride and sovereignty factor. If you think hiring local contractors or funneling money to the local government to do the job in lieu of sending Americans, you don't understand the local mores on skimming money from gullible fools while doing no or little work -- and that sub standard.

... whom, i feel, are legitimately attracted to extremist ideologies becuase they have few other options...

True but do not buy the myth that those disaffected are the poor and downtrodden. Those folks are too busy staying alive to indulge in revolutionary foolishness. The disaffected who do engage are predominately educated and at least moderately well off and imbued with radical fervor because the society from which they come irritates them to some degree and / or cannot productively employ them.

For a fraction of the cost of the invading Iraq we could have provided clean drinking water, medical treatment and other humanitarian efforts which, beyond the shadow of a doubt, would have done more to win "the war on terror" than unilaterally invading a secular, quasi-socialist authoritarian state, which had no love for Islamic radicalism nor any connection to 9-11.

Clean drinking water and medical treatment where?

The "secular, quasi-socialist authoritarian state, which had no love for Islamic radicalism nor any connection to 9-11." also had the misfortune of possessing an unloved dictator, pariah status, a largely ineffective military and, most importantly, geographic centrality in the Middle East. Tough but them's the breaks in the real world

Klein's polemics aside, I think here is where the shock docterine can be important: to make clear the overlaps between "small wars" and ultra-right economics. if "small wars" can defeat extremist movements and help create liberal democracies they can't be used to push certain political agendas. her anaylsis isn't perfect but no one's is. she deserves some credit for undertaking an ambitious argument that few people would even attempt to undertake.

We can disagree on most of that with agreement on the word "help" -- war cannot do that, this one can open a window for that to occur, no more. That's all we've done.

[relative autonomy]

Capitalism does do more than that, though not to the extent Barber and you want -- I doubt that it will ever do that. Nor, I would add, are a lot of government attempts to force it to do so likely to have much effect. Neither do I think it necessary; most of the world will do alright if only provided a level playing field; capitalism per se rarely denies that to anywhere near the extent that politicians do (see subsidies, tariffs, et,al.)



Possibly true but valid critiques will not focus on one aspect but will fairly critique all authoritarian forms -- to include rampant socialism which has proven to be ineffective, as authoritarian as fascism and more pernicious as it is couched in idealistic terms (see Klein, N.)



What is a value that anyone should spill blood for?

The economy, world type, is not run by TNCs but by their owners and investors. I'm one. I assure you I'm not a plutocrat.



Starting at the end and working backwards, who is using an exclusively military focus?

"Hearts and Minds" is a myth, a dangerous myth. It presumes (in the worst sense of the word) to know what others want or need, then to deliver it and thus to convert them into mini clones of the presumer. Fatal fallacy. No foreign power is ever going to win the heart or mind of anyone in any real sense. People will do what is perceived to be in the interest of themselves and, in many societies of their family, clan or tribe. Only the people can determine what those interests are and while they will take what is freely offered that they want or can use, they will utterly reject giving anyone their heart or mind. They will assert their independence in various ways -- as well they should. That's what is inevitable.

Hearts and minds is pure bunkum, sold by snake oil salesmen who believe all people are innately good and will behave just as said salesmen behave (or want others to behave...). People are not innately good nor are they all equal in any sense. Michael Jordan plays basketball several orders of magnitude better than I ever could. Of all the people in the world, about half are good ranging to great and the remainder are poor ranging to dangerously bad. Kant may have had some things wrong (as is true with all of us) but he had the selfish and own interest parts right. There are a lot of evil folks out there and most will take an idealistic thought and parlay it to their advantage and then slit your throat.



Money supply isn't endless. As for needless, that is at least arguable. There were admittedly other ways to do what was done (shake up the ME in an attempt to speed up the inevitable from five or six generations -- or even more -- to just two or three) and the invasion was admittedly a calculated risk. Whether it achieves the goal is to be determined.



What do you think we've been doing to both those nations since the 1950s? Didn't get much traction, did it.



Civic action is somewhat overrated but in any event, it takes the willing acceptance of the sovereign nation of your program to be effective. Lacking that acceptance and a massive program, the probability of any success is slim. The Peace Corps is a mixed bag, it has many dedicated volunteers who do good stuff. It also has really, overall, been only marginally effective. In any event, if you think either nation would have accepted a lot of Americans in their country to 'help' them, you don't understand the pride and sovereignty factor. If you think hiring local contractors or funneling money to the local government to do the job in lieu of sending Americans, you don't understand the local mores on skimming money from gullible fools while doing no or little work -- and that sub standard.



True but do not buy the myth that those disaffected are the poor and downtrodden. Those folks are too busy staying alive to indulge in revolutionary foolishness. The disaffected who do engage are predominately educated and at least moderately well off and imbued with radical fervor because the society from which they come irritates them to some degree and / or cannot productively employ them.



Clean drinking water and medical treatment where?

The "secular, quasi-socialist authoritarian state, which had no love for Islamic radicalism nor any connection to 9-11." also had the misfortune of possessing an unloved dictator, pariah status, a largely ineffective military and, most importantly, geographic centrality in the Middle East. Tough but them's the breaks in the real world



We can disagree on most of that with agreement on the word "help" -- war cannot do that, this one can open a window for that to occur, no more. That's all we've done.

I understand your points. I'm not going to respond on economics because i think its pretty clear neither of us are going to convince the other. The only thing i will say is that there is a big difference between an you everyday investor and someone with a controlling share. everyday investors can send in their proxy statements and it doesn't mean much. investors with controlling shares set policy.

As for critiquing authoritarian forms, i don't really understand you point. I never said the only authoritarian forms that needed to be critiqued exist in the economy so i am not sure what you are getting at.

You point about hearts and minds is basically the problem of culture. if that's your position i don't understand how you can justify a the US invading any country that isn't western Christian nation. Culturally and historically, when the US intervenes in a formerly colonized nation with a different religion it is more likely than not to be understood as imperialism, plain and simple.

The leaders of Al Queda maybe educated but i bet the people doing the grunt work are the downtrodden Afghans, Iraqis and whomever duped into dying for one of the few organizations that they see as culturally relevant and anti-imperialist. If i was Afghani or Iraqi, I would be fighting the Americans too, any patriot would.

Toe the Bush Administration line on Iraq if that makes you feel better but that doesn't change the fact that intelligence was manipulated and the country was duped into supporting an invasion for reasons that turned out to be lies. There are no WMDs in Iraq. No one can say otherwise. When that reason was exposed as a total lie and lost all viability, all of sudden it became about democracy. If we were interested in democracy in Iraq, Saddam wouldn't have been on CIA payroll killing democratic socialists, liberal democrats, and like from '58-'68. The US helped the Baath party come to power becuase they were anti-soviet. The US gave the Saddam regime weapons throughout the Iran-Iraq war. People tend to conveniently forget that history. If you think this war is really about making Iraq a democracy, i feel sorry for you. This is were I think its important to consider Klein's argument, especially in light of the reforms Bremer pushed through.

As for the US policy toward Saudi Arabia and Pakistan since 1950, it hasbeen a lot more complicated than that your one sentence suggests. I know more about Pakistan so I will talk about that. The US supported Pakistan immediately after the partition of the Raj becuase they saw it as a necessary anti-soviet bulkhead. The US had complex relationship with Pakistan various military dictators (Khan, Yahya, Zia and now Musharraf). In all cases pressures for democratization were undercut by the imperial demands of the cold war/war on terror. The case of Pakistan's civil war with what became Bangladesh's is instructive. The US didn't put pressure on Zia to end the war until Zia helped the Nixon administration engineer their diplomatic reapproachment with China. If you don't believe me see: Pakistan's Foreign Policy: A Reappraisal by Shahid M. Amin

Back to Klein shock docterine, i think her work is important becuase it addresses the larger context that "small wars" are fought in. If all a "small war" can do is open political opening that could lead to anything from civil war and ethnic cleansing to liberal democracy and rebirth, then, i am not sure if they even worth fighting, especially, as in the case of Iraq, there were many chances to realize a democracy that were dashed by the cynical hands of foreign meddling.

[Ken White]

...As for critiquing authoritarian forms, i don't really understand you point. I never said the only authoritarian forms that needed to be critiqued exist in the economy so i am not sure what you are getting at.

You said, earlier "Fascism maybe overused but I also think people need to incorporate a critique of authoritarian forms...". My comment is that Socialism is as dangerous as Fascism and deserves just as much criticism. If you want credibility as a basher, bash fairly and equitably.

You point about hearts and minds is basically the problem of culture. if that's your position i don't understand how you can justify a the US invading any country that isn't western Christian nation. Culturally and historically, when the US intervenes in a formerly colonized nation with a different religion it is more likely than not to be understood as imperialism, plain and simple.

True, though I fail to see how what I said justifies invading any western christian nation. My point was that the "hearts and minds" gig is stupid myth and you aren't going to win anyone's heart or mind invading them. The phrase needs to disappear.

Toe the Bush Administration line on Iraq if that makes you feel better but that doesn't change the fact that intelligence was manipulated and the country was duped into supporting an invasion for reasons that turned out to be lies ... If you think this war is really about making Iraq a democracy, i feel sorry for you. This is were I think its important to consider Klein's argument, especially in light of the reforms Bremer pushed through.

Heh. I'm not toeing the Bush line on Iraq but you sure do have all the standard talking points on the issue down pat. Some are correct, some not -- all are irrelevant. I did not say this war was about making Iraq a democracy, BTW -- I did say ""The "secular, quasi-socialist authoritarian state, which had no love for Islamic radicalism nor any connection to 9-11. also had the misfortune of possessing an unloved dictator, pariah status, a largely ineffective military and, most importantly, geographic centrality in the Middle East."" Adding with 'minimal disruption of world oil flow because we really want China and India to have all the oil they need' and those are the real reasons Iraq was selected; it was the vehicle for the goal -- which was to shake up the ME big time and let them know we were no longer going to fail to respond to provocations as we had for the previous 20 plus years. No governmental form concerned or mentioned, we couldn't care less as long as they behave and leave us alone. Tough but them's the breaks in the real world.

We don't really care what form of government they use. You should pay less attention to political rhetoric from either side -- pols lie constantly --and more to what actually happens...

As for the US policy toward Saudi Arabia and Pakistan since 1950, it hasbeen a lot more complicated than that your one sentence suggests.

Of course it's more complicated that that -- just as the invasion of Iraq is far more complex than your sophomoric and polemical talking points above.

Back to Klein shock docterine, i think her work is important...

We can continue to disagree on that.

[Surferbeetle]

Ken,

I always enjoy reading your posts, references, and reflecting upon your well argued point of view. I think that we can agree that the greatness of our constitution, nation, and way of life is worth fighting and dying for.

I posted Klein’s Shock Doctrine to hopefully generate some discussion on how we approach the populace in our operations, Small Wars or otherwise.

As a result of the combination of Capitalism and our Constitution we Americans are able to enjoy an unprecedented way of life as compared to the historical record. Capitalism is the most efficient way that I am aware of to fully engage a population and realize it’s potential. The 2006 US GDP was in the neighborhood of 13 trillion dollars ( http://www.bea.gov/ ) for a population of approximately 300 million people ( http://www.census.gov/main/www/popclock.html ). Americans enjoy an amazing amount of freedom as a result of our constitution and bill of rights (http://www.archives.gov/national-arc...stitution.html ).

It is my observation that many countries that I have had the opportunity to visit, Iraq in particular, are not as fortunate as America. The 2006 Iraqi GDP was approximately 87.9 billion dollars for a population of approximately 27 million people ( https://www.cia.gov/library/publicat.../print/iz.html ). Iraq’s constitution ( www.export.gov/iraq/pdf/iraqi_constitution.pdf ) is currently only a piece of paper with no soul and it does not inspire or sustain it’s people. I think part of the failure of the Iraqi Constitution has to do with the ME outlook that the Koran, and the associated Sharia Law, has divine origin whereas mans laws made in the absence of this guidance are suspect.

I would argue that the people of any country are an essential center of gravity which needs to be addressed in operations which involve the country; these include military, economic, and political. When it comes to strictly military operations kinetic skill is paramount. Winners understand this and losers do not. Small Wars however, are not limited to strictly military operations and thus it is vital that a functional and effective strategy is crafted which successfully engages the populace of a country. We are still trying to implement a succesful one in Iraq.

I will attempt to address this further in a future post.

Steve

[J Wolfsberger]

It sometimes seems as though discussion boils down to kinetic ops OR population centered ops. The reality is, it takes both in situations such as Iraq and Afghanistan. What I would argue is the strategy must center on the population; that the strategic goal should be development of a viable, self -sustaining state (a political entity); and that can only be accomplished as an outgrowth of the culture of the indigenous nation(s) (social entities). The role of armed forces and kinetic operations is creation of an environment where rule of law can be established, allowing people to freely determine their own political and economic fates. That involves security operations (patrolling neighborhoods), support (training police and, military), and occasionally highly kinetic ops (pitched battles against large groups of insurgents).

As a result of the combination of Capitalism and our Constitution we Americans are able an unprecedented way of life as compared to the historical record. Capitalism is the most efficient way that I am aware of to fully engage a population and realize it’s potential. The 2006 US GDP was in the neighborhood of 13 trillion dollars ( http://www.bea.gov/ ) for a population of approximately 300 million people ( http://www.census.gov/main/www/popclock.html ). Americans enjoy an amazing amount of freedom as a result of our constitution and bill of rights (http://www.archives.gov/national-arc...stitution.html ).

Capitalism, free trade, private property, all protected by rule of law. Incidentally, it would be well for everyone to remember that our first shot at forming a national government was the Articles of Confederation - adopted in 1977, ratified in 1781. It was universally regarded a failure, which led to the Constitution, 1788. That's an eleven year span. Demanding the Iraqis do (or criticizing them for not doing) the same in a bit over four years is ... inappropriate.

It is my observation that many countries that I have had the opportunity to visit, Iraq in particular, are not as fortunate as America.

One outcome of the Twentieth Century is that socialism, in any form was completely discredited. (Before the fur starts flying, I said "discredited" not "abandoned.") Whether Communism (Soviet Union, PRC, N. Korea, Cuba), Nazism (Germany), Fascism (Italy and Spain), Third Way (Sweden), or the mild form the US is drifting around, national economies performed in inverse proportion to the degree they embraced socialism. (An interesting bone of contention between Ireland and the rest of the EU has been Ireland's performance after throwing off a lot of its socialist economic policies. The result was embarrassing - to the EU.) It was this, not good fortune, that has clobbered so many countries. I am leaving out states such as Zimbabwe, Zaire under Mobutu and Iraq under Hussein. These were kleptocracies. The only reason they use the term like "socialist" in their official names is so western "intelligentsia" will give them a pass.

Which, I think, is what Ms. Klein is guilty of. Any reading of history shows numerous examples of strong nations enforcing their will on weaker ones at the point of a gun. Colonialism involved more than imposition of will, it involved dominance. That history phased out after WW II. To present one example, it was certainly the intent of the French in Indochina. It was certainlly not the goal of the US in Indochina.

What Ms. Klein refers to as "Neo-Colonialism" seems to involve "cultural dominance." And while it is clear to her, it is unclear to me whether any such thing exists. If the term has any useful meaning, it has to involve more than the purchase of Britney Spears or Michael Jackson CDs. (Which, in any event, are not what I would hold up as an example of culture. )

I only read summaries of her positions, but they seem to define "Neo-Colonialism" as the "export" of ... capitalism, free trade, private property, all protected by rule of law. I.e. everything that led to our good fortune. And that is the reason I referred, in a previous post, to her "high school grasp of economics." I would add, her knowledge of history and understanding of social structure seem equally deficient.

(As an aside, in the 1970's I took a course in International Relations. I got hammered in discussions for asserting:

1. The Soviet Union was attempting to maintain a First World military with a Third World economy.

2. They couldn't sell enough raw materials (oil, etc.) to make up the deficiency.

3. Their economy would would collapse under the strain, sooner rather than later.

4. As a state, the USSR would probably dissolve before the end of century.

I was told I clearly didn't understand the nature and structure of socialist states. In hindsight, I think it's clear somebody didn't. )

[Dayuhan]

Ken, I see you're point on the balance between government and intervention. The thing is, though, that capitalism needs to do more than continue to meet the needs of the middle classes in the advanced industrial world. we have all the crap we need! instead manufacturing needs and pursuing a cynical model of globalization, which all to often is a race to the bottom, business needs to take a risk, invest some money and try to meet the very real needs the developing world.

I think this misses the point entirely. If you look around the world you will see very quickly that the incidence and severity of poverty is harshest in countries and regions within countries that are isolated from the capitalist global economy. The fastest improvements in economic and social conditions (observe east Asia for examples) have been in areas that have embraced economic integration. Maybe "we have all the crap we need", but if we stop buying that "crap" then the people who make that "crap" lose their jobs. The argument that living simply allows others to simply live is based on a false assumption: that whatever one has must be taken from another. In reality, consumption leads production, and production generates employment. The best way to help poor countries is to allow and encourage them to produce and sell goods and services.

people need to incorporate a critique of authoritarian forms. You can't have true democracy when the economy is run by authoritarian structures like TNCs.

Who says "the economy" is run by TNCs? Which economy?

TNCs actually play an important and largely beneficial role in many developing economies, one which the Naomi Kleins of the world don't generally acknowledge. Many developing economies are totally dominated by rapacious local elites that are more far more authoritarian and more exploitive than TNCs could ever dream of being. These elites generally have the political and legal clout to suppress local competition. TNCs provide a balance to their power and an alternative source of supply and employment.

In the Philippines, where I live, jobs with TNCs are highly sought after because they offer better pay, better working conditions, and better opportunity for advancement than local employment. Widespread hiring of English-speaking graduates by foreign investors has pushed wage scales up and forced other employers to pay more (competition for employees raises wages far faster than strikes). These employees spend a large percentage of their incomes locally, unlike the previously dominant elites, and generate follow-on jobs.

I still think, instead of dumping endless money into a needless invasion in Iraq, we should have put diplomatic pressure on regimes like Pakistan and Saudi Arabia and done "civic action" or peace corp type programs to make life less desperate for the people in the margins, whom, i feel, are legitimately attracted to extremist ideologies becuase they have few other options. For a fraction of the cost of the invading Iraq we could have provided clean drinking water, medical treatment and other humanitarian efforts which, beyond the shadow of a doubt, would have done more to win "the war on terror" than unilaterally invading a secular, quasi-socialist authoritarian state, which had no love for Islamic radicalism nor any connection to 9-11.

I'm a former Peace Corps Volunteer, and I can tell you that the Corps is about 99% show and 1% go, and the volunteers receive far more benefit (in experience and training) than the host communities. It's not a bad thing, but if your solution to poverty is the Peace Corps, God help the poor.

Humanitarian aid is important and necessary. It can alleviate the worst effects of poverty, but it does not eliminate or even reduce poverty. If you give a poor community a water system, they will have water and be healthier, but they will still be poor, and they will probably depend on you to come back and maintain that water system.

If you want a poor community to stop being poor, you have to create sustainable employment. That means somebody has to invest money in producing and/or distributing goods and services that can be profitably sold in a free market - if the production is not profitable or requires external subsidy, it's not sustainable. Once a community has jobs and income, they can build their own water system, buy their own mosquito nets, etc, etc...

I guess that's a rant, and maybe it makes me a "neo-liberal". I've never encountered that term outside the academic cloister, and I'm not convinced that anyone who uses it really knows what it means, except that it covers all the stuff they don't like. But what the hell, if this be neo-liberalism, let us make the most of it. It still works. It doesn't work perfectly (not much in this world does), but there's a good deal to be said for it.

[Rex Brynen]

I guess that's a rant, and maybe it makes me a "neo-liberal". I've never encountered that term outside the academic cloister, and I'm not convinced that anyone who uses it really knows what it means, except that it covers all the stuff they don't like. But what the hell, if this be neo-liberalism, let us make the most of it. It still works. It doesn't work perfectly (not much in this world does), but there's a good deal to be said for it.

I think there has been a powerful neoliberal impulse in the aid and development community—notably in the international financial institutions, stretching as far back as the Reagan Administration, and often attacked by critics such as Klein. However, I would argue that its all become a bit of a strawperson.

Developmental approaches have become much more nuanced. Almost everyone these days accepts that most employment and growth is generated by private sector activity and investment, and that you can't create large numbers of sustainable jobs with aid money. There's broad acceptance that TNCs can have positive effects (although, in some contexts, negative ones too.)

On the other hand, almost no one--not even in the World Bank or IMF—believes that unrestricted free markets are a good thing, or that you can get equitable and sustainable growth without effective state institutions to provide an enabling environment (rule of law, anti-corruption measures, security, critical infrastructure, education, health, social safety nets, environmental regulation, enforcement of labour standards, etc). It is also important that stakeholder consultation be done properly, ideally through a political system that is responsive to the needs of all affected groups, not just those with money.

The World Bank in particular has made major adjustments in the way it works, partly because of external and internal criticism, and partly out of learning from experience. The IMF remains more of a bastion of narrow classical economics, but critics miss the point that it should be—it is an institution that is all about promoting fiscal solvency. In doing so it provides a useful reminder of the dangers of unsustainable state expenditure. Think of the IMF as your parents: No, they weren't always right, and certainly not very cool, but in retrospect aren't you glad they lectured/reminded/nagged you at times?

Sadly, it was the case that some of the initial US development personnel in Iraq—political appointees or recent hires in most cases, not career USAID folks— were ideologically blinkered neoliberal/neocons, who treated it as a bit of a sandbox for ideas about radical privatization. Almost none of this worked out very well, and much of it was later abandoned or revised.

[Dayuhan]

I think there has been a powerful neoliberal impulse in the aid and development community—notably in the international financial institutions, stretching as far back as the Reagan Administration, and often attacked by critics such as Klein. However, I would argue that its all become a bit of a strawperson.

I'd honestly prefer to drop the term "neoliberal". It has no traction outside the left and academe, and its definition is so vague that it makes discussion almost impossible. At some level almost any program that includes mainstream economic analysis can be said to demonstrate a "neoliberal impulse". It has also, as you say, become a complete strawperson. We've seen a long string of studies emerging from the academic side, looking at the failures and shortcomings of projects and programs deemed "neoliberal", and concluding that "neoliberalism" is a failure. These studies generally neglect to mention that the prescriptions of what might be called the "anti-neoliberals" haven't fared much better. A more reasonable conclusion might be that external attempts to promote economic development - whether "neoliberal" or otherwise - are extremely difficult and prone to unintended consequences and manipulation by local powers with vested interests. This is particularly true when those seeking to promote development are expected to remain strictly apolitical in environments where the principal constraints on development are political.

There's a great deal that could be said about development efforts during the Reagan era. My own greatest criticism is not that there was an excess of "neoliberalism", but that these principles were applied unevenly and often disregarded, especially when dealing with governments regarded as cold war allies. To take the example I'm most familiar with: in the Philippines, the flow of public and government-guaranteed private borrowing was sustained long beyond the point where it was clear to any observer that the money was not being productively invested and the borrowing far exceeded capacity to pay. According to "neoliberal" criteria Marcos should have been abandoned, but the conviction that he was an essential bulwark against communism kept the spigot open - even though anyone paying attention could see that Marcos was the best thing that ever happened to the Philippine communist movement. This was a common theme during the Reagan period: we talked the "neoliberal" talk, but didn't walk the walk.

Another sore point often misinterpreted is the undoubted failure of what were generically called "structural adjustment" programs. Unfortunately, these failures cast doubt on many reforms that were desirable and necessary, but were implemented by force at an impossible pace. It is of course true that subsidies, price controls, state owned enterprises do more harm than good, but forcing a country that has grown accustomed to these bad policies to abandon them instantly is simply too great a shock, especially during the early stages of democratic transition. A more rational approach would have been to aim for an extended transition period. What was done was analogous to forcing a severely unfit and overweight individual into a high intensity exercise program overnight. The diagnosis and the prescription are correct, but implementing the solution too harshly can kill the patient.

Consider a hypothetical nation where an authoritarian ruler has for several decades placated the urban populace by imposing price controls on food. Of course the result is that as production costs increase and selling prices remain fixed, production becomes economically unviable and output begins to drop, creating a supply/demand imbalance that tries to force prices up beyond the government-imposed ceiling. That is an untenable situation, and in the world of economics the solution is to scrap the price controls completely, allowing prices to rise to a level that stimulates additional production.

In the world of reality, trying to achieve immediate supply/demand/price equilibrium in an environment distorted by years or decades of bad policy will produce abrupt and dramatic price increases, and you get the populace storming the palace and stringing the unfortunate President up from the nearest lamp-post. Right prescription, wrong implementation. Unfortunately, the bad result discredits the prescription.

On the other hand, almost no one--not even in the World Bank or IMF—believes that unrestricted free markets are a good thing, or that you can get equitable and sustainable growth without effective state institutions to provide an enabling environment (rule of law, anti-corruption measures, security, critical infrastructure, education, health, social safety nets, environmental regulation, enforcement of labour standards, etc). It is also important that stakeholder consultation be done properly, ideally through a political system that is responsive to the needs of all affected groups, not just those with money.

I'm not sure that anyone ever seriously contested these ideas. I've heard many left leaning academics proclaim that "the neoliberals want to eliminate government", but I've never seen anything coming from the mainstream development world that supports that rather extreme conclusion. Those accused of being "neoliberal" are generally supportive of effective state institutions. What they do not want is to see expanding state intervention in the economy, and there are good reasons for this. The "anti-neoliberals" often propose that state intervention is necessary to protect "the people" from "big business", but they fail to recognize that state intervention in much of the developing world has generally been aimed not at protecting "the people" but at protecting the interests of the governing elite.

The IMF remains more of a bastion of narrow classical economics, but critics miss the point that it should be—it is an institution that is all about promoting fiscal solvency. In doing so it provides a useful reminder of the dangers of unsustainable state expenditure. Think of the IMF as your parents: No, they weren't always right, and certainly not very cool, but in retrospect aren't you glad they lectured/reminded/nagged you at times?

A senior Philippine politician once told me something like "we say we hate the IMF, but we love them. They make us do things we would have to do anyway, and they get the blame instead of us".

Sadly, it was the case that some of the initial US development personnel in Iraq—political appointees or recent hires in most cases, not career USAID folks— were ideologically blinkered neoliberal/neocons, who treated it as a bit of a sandbox for ideas about radical privatization. Almost none of this worked out very well, and much of it was later abandoned or revised.

I can't disgree with that. I recall reading the Treasury Dept's proposals for the Iraqi economy, back when first released. It struck me as one of the saddest documents I've ever seen. In many ways it was a lovely plan, and it would have been ideal, if it was even remotely possible to implement. Of course it wasn't: it was utterly divorced from the reality on the ground and there was never the slightest chance that it could be put into effect. Economists have some very useful knowledge and some very valuable tools, but there's a lot they don't know about political and social environments that are alien to them. Economies are far too important to be left to economists.

[Surferbeetle]

Humanitarian aid is important and necessary. It can alleviate the worst effects of poverty, but it does not eliminate or even reduce poverty. If you give a poor community a water system, they will have water and be healthier, but they will still be poor, and they will probably depend on you to come back and maintain that water system.

If you want a poor community to stop being poor, you have to create sustainable employment. That means somebody has to invest money in producing and/or distributing goods and services that can be profitably sold in a free market - if the production is not profitable or requires external subsidy, it's not sustainable. Once a community has jobs and income, they can build their own water system, buy their own mosquito nets, etc, etc...

As a person who has worked in Central America and Iraq these are topics that I wrestle with. What's appropriate, acceptable, sustainable, and will be perceived as a hand up as opposed to hand out given the time and resource limitations that I am working under? How do I apply my language/cultural, biology, civil engineering, and business administration skills to produce sustainable quantifiable change?

Loss of the Cold-War construct has allowed for rapid observable changes in international affairs. Although they are only analogies, and many caveats of course apply, I find it helpful to use the concepts of ecological succession and geomorphology when considering the why's of what is occurring.

I find China's approach to international development and other things pretty fascinating. It's an interesting study to compare their methodologies with ours. When I do this I keep in mind that the 2009 Economist's Pocket World in Figures reports China's GDP at $2,645 bn and the US at $13,164bn.

Lebanon, Palestine, Iraq, Central Europe, and Central Asia are on my radar screen as places of rapid change where the application of various international development strategies are particularly visible. Tom Odum used the phrase Gunpowder or Gold the other day, and it's one that captures neatly the approaches on display.

On the other hand, almost no one--not even in the World Bank or IMF—believes that unrestricted free markets are a good thing, or that you can get equitable and sustainable growth without effective state institutions to provide an enabling environment (rule of law, anti-corruption measures, security, critical infrastructure, education, health, social safety nets, environmental regulation, enforcement of labour standards, etc). It is also important that stakeholder consultation be done properly, ideally through a political system that is responsive to the needs of all affected groups, not just those with money.

The World Bank in particular has made major adjustments in the way it works, partly because of external and internal criticism, and partly out of learning from experience. The IMF remains more of a bastion of narrow classical economics, but critics miss the point that it should be—it is an institution that is all about promoting fiscal solvency. In doing so it provides a useful reminder of the dangers of unsustainable state expenditure. Think of the IMF as your parents: No, they weren't always right, and certainly not very cool, but in retrospect aren't you glad they lectured/reminded/nagged you at times?

Sadly, it was the case that some of the initial US development personnel in Iraq—political appointees or recent hires in most cases, not career USAID folks— were ideologically blinkered neoliberal/neocons, who treated it as a bit of a sandbox for ideas about radical privatization. Almost none of this worked out very well, and much of it was later abandoned or revised.

The IMF provides interesting datapoints and can be commended for many things but its relevance/authority/direction is being challenged. This is not necessarily a knock, but if you are up for sharing references, as always, they would be greatly appreciated.

[Rex Brynen]

The IMF provides interesting datapoints and can be commended for many things but its relevance/authority/direction is being challenged. This is not necessarily a knock, but if you are up for sharing references, as always, they would be greatly appreciated.

I've worked fairly extensively with IMF folks and data in the past in Palestine, and in general they did excellent work in promoting greater fiscal transparency and accountability, tracing irregular financial flows, measuring key benchmarks, and providing technical assistance to the Palestinian MoF. (For many years the current Palestinian PM, Salam Fayyad, was the IMF rep to the WB/Gaza). There is considerable information and analysis on their website.

My broader point is that even when we may choose to ignore them—either because we think they're wrong, or because we think their failing to see the broader picture—its useful to have the IMF focused on issues of fiscal solvency, since no one else in the development community has quite that mandate.

[Dayuhan]

Although they are only analogies, and many caveats of course apply, I find it helpful to use the concepts of ecological succession and geomorphology when considering the why's of what is occurring.

The succession analogy brings to mind something I call "the running shoe curve". Back when I was a kid your running shoes (we called them sneakers) were made in Japan or Korea. As infrastructure improved and labor force efficiency grew those economies moved on to more profitable lines like simple electronics assembly, and the shoes moved on to Taiwan, Thailand, the Philippines. Eventually those economies moved on to the niches now vacated by the Japanese and Koreans in further steps up, and the shoes moved on to Vietnam, Indonesia, Bangladesh. Someday (one hopes) the shoes will be coming out of Zimbabwe, the Congo, Sudan.

Hardly a perfect model and of course it's way more complex than that... but as a target model one can do worse.

[tequila]

Dayuhan - have you ever read The Economist's Tale? I'd think you'd get a heck of a kick out of it. About a World Bank consultant on the ground in Sierra Leone in the 1980s and his struggle to get the WB to reverse policy on rice subsidies. An outstanding real-world example of dysfunctional aid at work.

The entire book is excellent, but the best passages are about the difficulty of getting good real-world data on how Third World economies actually function, and how bad data (which abounds) can lead to decisions with appalling effects.

[goesh]

I always liked the Peace Corps concept of income generating projects - small, village type projects to boost a bit the standard of living with no dollar amounts ever set in stone, no paper trail, no real government involvement except for a bit of seed money here and there, no real expectations except perhaps a bit of success here and there, nobody to blame for failure but themselves, nobody to take any money they made. In the real bush country of the world, the only way to ever get economies boosted is to infuse them with solar cooking devices, thus freeing up immense amounts of time that can be devoted to more gardening, more crafts and goods and animal production, farming, etc. We've got a big hunk of the bush population, the women, spending maybe 1/4th of their time scrounging wood, hanging around fires cooking and minding the damn pots and pans.

[Rex Brynen]

Dayuhan - have you ever read The Economist's Tale? I'd think you'd get a heck of a kick out of it. About a World Bank consultant on the ground in Sierra Leone in the 1980s and his struggle to get the WB to reverse policy on rice subsidies. An outstanding real-world example of dysfunctional aid at work.

The entire book is excellent, but the best passages are about the difficulty of getting good real-world data on how Third World economies actually function, and how bad data (which abounds) can lead to decisions with appalling effects.

I agree, Tequila--it is a great book.. I set it as a reading in my intro development course when it came out.

Dayuhan: While I don't want to get too bogged down in semantics, I think the term neoliberal has had more traction--for good and for ill--than you suggest. It is a staple phrase of much the NGO community (that is to say, the folks who in many sectors actually deliver the bulk of ODA), and one of the chief critic of past "neoliberalism" has been former World Bank chief economist/senior VP Joseph Stiglitz--hardly just a marginal leftist academic. Of course, Stiglitz won his Nobel Prize in economics for highlighting the potential shortcomings and limits of market mechanisms, so that's not a surprise

[Dayuhan]

Dayuhan - have you ever read The Economist's Tale? I'd think you'd get a heck of a kick out of it. About a World Bank consultant on the ground in Sierra Leone in the 1980s and his struggle to get the WB to reverse policy on rice subsidies. An outstanding real-world example of dysfunctional aid at work.

The entire book is excellent, but the best passages are about the difficulty of getting good real-world data on how Third World economies actually function, and how bad data (which abounds) can lead to decisions with appalling effects.

I haven't read it, but I suspect that I've lived it a few times. In fairness I'd have to say that NGOs can be every bit as obtuse as the big multilateral agencies, sometimes more so. They do less damage, having less capacity, but every bit as obtuse.

I'll look for the book... and maybe tell a story or two; after 30 years in SE Asia I've got quite the litany!