Naomi Klein’s The Shock Doctrine

Operation Iraq Freedom, Economic Genocides, and the Dawn of Neo-Liberalism

More of a social justice issue than strictly environmental, Naomi Klein’s book, Shock Doctrine, is a great introduction to the Iraq invasion, aka, Operation Iraqi Freedom. Klein continues updates on her website.The following has been slightly augmented with another great read, Armed Madhouseby Greg Palast….

An Extraordinarily Brief History of Iraq

Ancient Stuff

4,000 BCE — Mesopotamia (located in present-day Iraq) is the location of the first civilizations including the Sumerians, Akkadians, Babylonians, and Assyrians. Here, the ancients created cuneiform script; language by 3,200 BCE, evidence of first agriculture methods; first laws (Hammurabi’s Code); main breakthroughs in civilization — food crops, domesticated animals, and preserved records; invented cotton, sandals, chess (“rook” = rukh = castle, and “checkmate” = shah mat = your king is dead), tennis, backgammon, cards, sofa, yogurt, algebra, guitar, tambourine…
1,000 BCE — domesticated camels — (invited further invasions)
559–331 BCE — Achaemenid Empire (Persia / Iran — world’s oldest continuous civilization of 6,000 years) took over the area and released all Israeli prisoners being kept by Babylonians; conquest of Babylon by Alexander the Great in 331
116 CE — Trajan, a Roman Emperor, created three provinces where Iraq lies (all Persia): Mesopotamia (between the rivers Euphrates and Tigris), Assyria (east of Tigris), and Armenia (Turkey mainly); west of the Euphrates was part of Syria then.

The Dark Ages / Byzantine Era (476–1450)

550 — Persia is divided into four provinces; the Western division, Khvarvaran, is mostly modern Iraq; the main religion is Zoroastrianism (developed in 620 BCE)
630 — Allah revealed the words of the Koran/Qur’an to Mohammad ibn ‘Abd Allah (born in Mecca, Saudi Arabia) — this marks the origins of the Muslim religion
638 — Khvarvaran is conquered by Muslims and named Iraq; a mass Arabic immigration follows, two cities are created: al-Kufah and al-Basrah

8th to 12th Centuries — the height of Arabian culture with many ground-breaking achievements in math, science, medicine (an Arabic medical text was used in Europe until the 17th century), astronomy (including knowledge that the world is round and travels around the sun — hundreds of years before Copernicus), music, poetry, philosophy — saved the works of Greek writers when Plato’s Academy was trashed; built the first planetarium (900) which is a model for all since; Christian crusades strengthened Muslim power; Arabic is the universal language of academia, had a library of 400,000 books, wrote significant world histories….

13th C — Mongols (Asia) took over Iraq (Genghis Khan); murdered a million Muslims, took others as slaves; defeated briefly by Mamluks (mainly Turks) in 1260–65 who chased out Christians too; many Mongols absorbed into Muslim culture in Iraq; Ghazan Khan became Muslim in 1301

Renaissance, Enlightenment, and Modern Periods

1299–1922 — Ottoman Empire (Turkish rule — Muslim) controlled much of Southeast Europe, the Middle East, and North Africa. During this period Iraq was ruled by the Turkmen (14th and 15th), the Ottoman (16th), Iran (17th), the Mamluk (from Georgia 1747–1831), and the Ottoman again (1831–1917)

1914–1918 — World War I — Ottoman sided with Germany, and Britain took over, captured Baghdad in 1917 with the help of the Arab revolt against Ottomans in 1916
1921 — First King of Iraq — Faisal
1923 — Current Iraq border is created by the British and French; they lumped three groups into one country (Sunnis, Shias and Kurds), but officially supported Sunni rule
1927 — massive oil fields found near Karluk. Control went to the IPC, Iraqi Petroleum Company (a British company despite its name)
1932 — Iraq independence from Britain (limited)
1933 — Faisal dies and his son, Ghazi, rules
1939 — Ghazi dies in a car crash and his son, Faisal II, is King, but he’s only 4, so his Uncle Abd al-Ilah rules
1941 — Britain invaded Iraq (Rashid Ali al-Gaylani coup / Golden Square / Anglo-Iraqi War), occupation until 1947; Iraq wanted full independence, Britain said “no”
1945 — Iraq joined the United Nations
1948 — war against Israel
1956 — Baghdad Pact — an alliance was created between Iraq, Turkey, Iran, Pakistan and U.K., formed to challenge Egyptian ruler Nasser
1958 — Kasim, Iraqi military officer overthrown in a coup
1963 (February) — Kasim was assassinated, and Arab Socialist Ba’ath Party took power (Ahmed Hasan al-Bakr); it’s a center-left secular Arab Nationalist party
1963 (November) — coup against Ba’ath by the Abd al-Salam Arif and his brother who
spent 90% of the Iraqi budget on arms
1967 — six day war between Arabs and Israelis; USSR arms Arabs, US arms Israelis; Israel victorious over Egypt, Syria and Jordan — (seen as invincible until 1973)
1968 — Arif died; al-Bakr takes over again as President of Iraq; top priority is Iraqi industry and agriculture;
1970 — Kurdish autonomy law created to grant partial independence within Iraq (boundaries around the region are established, but area still controlled by Iraq)
1971 — Iraqi government nationalized oil production into the Iraq National Oil Company
1973 — Arabs impose an oil boycott on all Israeli supporters and associates (the west); reduce sales by 5%/month and increase prices by 50% overnight until Israel withdraws and recognizes rights of Palestinians; US starts arms sales to Arabs
1974 — Israel troops to withdraw; heavy fighting in north Iraq as Kurds reject the autonomy law — led by Mustafa al-Barzani, receive arms and support from Iran briefly. When they withdrew support in 1975, the Kurds couldn’t keep up the fight
1978 — Iran took 60 US embassy employees hostage; US starts selling arms to Iran
1979 — al-Bakr stepped down (possibly forced) and Hussein, his cousin and the Vice-President, took over — immediately had some top Ba’ath members executed, and ruled that it’s now illegal to form any opposing political party
1980–88 — Iran-Iraq war; Iraq invaded; US helped Iraq; both accepted UN resolution
1990 — Gulf War (Aug 90 to Feb 91) — Iraq invaded Kuwait; UN imposed an embargo on Iraq and the US liberated Kuwait; Operation Desert Shield (Aug 90) was to prevent Iraq from invading Saudi Arabia; Operation Desert Storm (Jan 91) brought air missiles into the game

March 2003 — Operation Iraqi Freedom: US invasion; banned Ba’ath Party and bombed Baghdad severely; Dec. 03 Hussein captured, executed Dec. 06; Mar. 08 — U.S. exit?

Freidman’s Free Market Trail of Destruction

The Mission: Privatize, Deregulate, Make Cutbacks, Bust Unions

• remove all rules and regulations standing in the way of the accumulating profits
• sell off any government assets that corporations could be running at a profit
• dramatically cut back funding of social programs (no minimum wage)
• destroy dissention (unions)
• flood the local market with imports
• start with a sudden, jarring shift to alter expectations, then make changes quickly
• use torture if necessary: “the precise pain in the precise place”

Milton Friedman: “Only a crisis, actual or perceived, produces real change when leaders are liberated to do whatever is necessary.” “Price controls are a cancer that can destroy an economic system’s capacity to function.”
Mike Battles, CIA: “For us, the fear and disorder offered real promise.”

In every country where Chicago School policies have been applied over the past three decades, what has emerged is a powerful ruling alliance between a few very large corporations and a class of very wealthy politicians, with an ever-shifting line between the two groups. The rest of the country is often left hungry or dead. (Naomi Klein)

“POLITICAL CLEANSINGS” or “ECONOMIC GENOCIDES”:

1973 — Chile — coup, put in Pinochet and the “technos” (Friedman and other Chicago School economic advisors) — called a Caravan of Death (3,200 people executed, 80,000 imprisoned, 200,000 fled). After 10 years of increasing poverty of the people, Pinochet added price controls, a food program for children, etc., yet Friedman called it proof that a free market works
1973 — Uruguay — junta takeover “clean-up operation” included book burnings and banning strikes and political meetings.
1973 — Indonesia — coup, put in Suharto and the “Berkeley Mafia”(the CIA had received direction to “liquidate” the former president) — “transformed into the most welcoming environment for foreign multinationals in the world”
1976 — Argentina — took out Peron, a junta took over; before the takeover, there were fewer in poverty than in France or the US; after, entire neighbourhoods had no water or power. It was called a “planned misery.” Vehicles supplied by Ford, and Ford funded Latin Americans’ Chicago School education. 30,000 people
were executed, mainly between 16–30, including students who protested rising bus fees (they were infected with Marxism). Later Menem sold the oil fields, phone system, airline, trains, highways, water, banks, the pension plan, zoos…
1984 — Britain — Falkland War / “Operation Corporate” (ignored UN) — destroyed unions through surveillance operations and brute force of 3,000 extra police, finally 966 remaining striking miners were fired (Reagan fired 11,400 striking air traffic controllers), then privatized communications, gas, and airways
1985 — Bolivia (Che’s last stand) –three month state of siege by government (Paz) who said, “If it doesn’t work…I can catch a plane and flee.” — the poor started growing coca (cocaine)
1989 — colonization of the IMF by the Chicago School in “the Washington Consensus” which decreed that “all state enterprises should be privatized” and “barriers impeding the entry of foreign firms should be abolished.” Illegal to subsidize industry or raise minimum wage or control prices in any way.
1989 — Trinidad and Tobago — Davison Budhoo, who quit the IMF in 1988, made it public that the fund “invented, literally out of the blue, huge unpaid government debts” that made the islands seem less stable than they really were.
1989 — Poland — overnight eliminated price controls and sold off state mines, shipyards and factories to the private sector regardless of Solidarity government’s socialism
1989 — China — Deng and People’s Armed Police — Tiananmen Square massacre and arrest of thousands freed the government to convert the country into a sprawling export zone
1993 — Russia, Boris Yeltsin sent in tanks to set fire to parliament and lock up leaders opposed to privatization (spun as a hero); sold the oil company, nickel, and weapons factories. In ’89, 2 million lived in poverty, by ’98, 74 million did in the “transition towards democracy” (all before Putin attacked Chechnya).
1994 — South Africa — ANC (African National Congress) ignored its own Freedom Charter and created an independent banking system (not controlled by the state) to be run by bankers previously in charge under apartheid (And then severely poverty-stricken doubled from 2 to 4 million, and unemployment rate doubled from 23% to 48% and by 2006, more than 25% of South Africans live in shacks without water or electricity.)
1999 — Yugoslavia — NATO bombed Belgrade not because of Milosevic’s human rights violations, but because of its resistance to the trends in economic reform
2001 — US — Rumsfeld ordered every government department to immediately slash its staff by 15%. He made the announcement on September10th, and it didn’t get much media coverage in the states. “The job of government is not to govern but to subcontract the task to the more efficient and generally superior private sector.”
2004 — Sri Lanka tsunami — used the atmosphere of panic to sell off the coastline of fishing villages to entrepreneurs
2005 — New Orleans’ Katrina — one developer remarked, “I think we have a clean sheet to start again. And with that clean sheet we have some very big opportunities.” Pre-Katrina, there were 123 public schools, after, only 4; the rest were privatized using money allocated for rebuilding homes. Teachers’ union contract was shredded.

Who didn’t get caught up in the free market insanity? (yet)

1993 — Canada — The newspapers and TV insisted we were in the midst of a financial catastrophe and our credit has run out and soon investors would pull out. But then journalist Linda McQuaig spoke directly with Vincent Truglia, the senior analyst in charge of issuing Canada’s credit rating at the Wall Street head office. He told her he had recently come under pressure from Canadian corporate executives to issue damning report, but he refused to because Canada was in an excellent position financially.

Canada was so far beyond its means that our credit rating was going to be dropped significantly, and all foreign investors would pull their money from Canada. The only solution: radically cut programs such as unemployment insurance and health care. Chretien followed suit. The fact that Canada kept getting the highest possible bond rating, A++, made it difficult to maintain the apocalyptic mood. Truglia got fed up with the stats coming out of Canada that he issued a special commentary that aimed some veiled shots at the dodgy math practiced by right-wing think tanks. In 1995, John Snobelen (minister of ed) was caught on video insisting that a climate of panic needed to be created so he could make cuts to education. He called it “creating a useful crisis.”

Iraq and the Free Market: It’s not all about oil.

“After the crusade had conquered Latin America, Africa, Eastern Europe and Asia, the Arab world called out as its final frontier.” — Naomi Klein, The Shock Doctrine

George Bush Sr. responds to accusations that his son invaded Iraq to open up markets for US corporations: “I think that’s weird, and it’s nuts. To suggest that everything we do is because we’re hungry for money, I think that’s crazy.”

THE CORPORATIONS:

Massive profits have been made by industries that include political figures as major shareholders. This breeds a serious problem of conflicting interests:
• Halliburton provides products and services for oil and gas exploration –Dick Cheney, Vice-President
• Health Net, a private health care company, made 7th in the Fortune 500 from treating returning soldiers — Donald Rumsfeld, Secretary of Defense
• Lockheed Martin, the world’s largest defense contractor, had shares jump 145% after the war started — Bruce Jackson and many others are involved in the Committee for the Liberation of Iraq (including Lynne Cheney, Dick’s wife)
• the Carlyle Group makes robotics systems and defense communications systems, they made $6.6 billion in the first 18 months of the war — James Baker, chair of the Iraq Study Group (an advisory panel)
• Bechtel collected $2.3 billion to reconstruct Iraq — George Shultzheads up the Committee for the Liberation of Iraq
• Fluor, one of the biggest reconstruction contract winners in Iraq — Henry Kissinger, advisor to Cheney and original chair of the 9/11 Commission
• Trireme Partners — products and services relevant to defense — Richard Perle, chair of the Defense Policy Board
• Crisis Consulting Practice — a counter-terrorism company — Paul Bremer, top envoy to Iraq and head of the CPA, Coalition Provisional Authority (the official transitional government from April 2003 to June 2004)

A New Bridge Strategies (Joe Allbaugh, ex-head of FEMA) partner admitted, “Getting the rights to distribute Procter & Gamble products in Iraq would be a gold mine. One well-stocked 7-Eleven could knock out 30 Iraqi stores; a Wal-Mart could take over the country.”

In the Gulf War (1991) there was one contractor for every 100 US soldiers. By the fourth year of the Iraq invasion, there’s one contractor for every 1.4 US soldiers.

Beyond the direct cost benefits of war, Paul Bremer started auctioning-off Iraq’s state assets (airports, etc.) to numerous corporations including Bechtel and ExxonMobil a few months into the war.

THE STRATEGY:

Invasion through an initial bombardment designed to erase the canvas of the nation, then occupation to build the nation into a true free market model.

The Invasion:

In the first six weeks, the US dropped 30,000 bombs and 20,000 precision-guide cruise missile on Baghdad, the equivalent of seven Hiroshima bombs, to “render the adversary completely impotent.” But they didn’t bomb the Ministry of Oil, they bombed the museum holding 170,000 priceless objects, the national library, and the Ministry of Religious Affairs, thus removing the memory of an entire culture (killed 16,500).

The Occupation:

Before the invasion, Iraq had the best education system in the region with the highest literacy rate in the Arab world (89%). Its economy was anchored by its national oil company and 200 state-owned companies which produced the staples of the Iraqi diet and raw materials of its industry. The majority of Iraqis (65%) wanted a secular government.

The first thing Paul Bremer did at the helm was to fire 500,000 state workers to “De-Baathify” Iraq. His next step was to try to privatize all 200 national companies. By 2004, unemployment was at 67%, half the population lacked easy access to drinking water, electricity was rationed to two hours a day, less than 40% of children were attending school, 15% (4 million people) have been forced to leave their homes, and crime was rampant. Only 15,000 Iraqis were hired to work for the new reconstruction. A poll found that 70% of Iraqis now wanted Islamic law as the basis of the state.

Bremer lowered the corporate tax rate from 45% to 15% and allowed foreign companies to own 100% of Iraqi assets. Owners would not be required to reinvest in the country, and they would not be taxed. Investors could sign leases and contrast that would last 40 years. Then the US printed a brand-new currency for the Iraqis. And, even though Iraq had a clear and usable constitution, created in 1970 but largely ignored by Hussein, Bush decided to draft a new constitution for them. Bremer handpicked the members of an Iraqi Governing Council and insisted all local leaders had to be appointed by the occupation. The US stopped any public election processes because the process could put the “wrong” person in power.

Bremer on democratic elections: “I’m not opposed to it, but I want to do it a way that takes care of our concerns. Elections that are held too early can be destructive.” One concern is that, when polled, only 4.6% support a party that creates more private sector jobs and only 4.2% wants a party that will keep coalition forces until security is good.

The US economists didn’t privatize the oil reserves while they privatized everything else (it would be seen as an act of war against the Iraqi people), but they did take possession of $20 billion worth of revenues from the national oil company. Billions disappeared in sub-contracting scams in which one job might require four sub-contractors who each took a piece of the profit. $186 million was allocated to build 142 health clinics, but only 6 were built.

THE SET-BACKS

The US administration thought that the Iraqis would be so stunned by US firepower, and so relieved to be rid of Saddam, “that they could be easily marshaled from point A to point B” (Richard Armitage, former deputy secretary of state). Instead, even while being bombarded with explosives, the majority of Iraqis strongly rejected Bremer’s program and demanded a say in the transformation of their country. They were unshockable.

Rumsfeld was running the military like a corporation, cutting back 300,000 government employed soldiers from the battle. The private sector was left to fill in the gaps at every level. Blackwater’s original contract was to provide private security, but later it engaged in all-out street combat and even assumed command over active-duty US marines in battle with the Mahdi Army. According to CEO, Erik Prince, “We’re trying to do for the national security apparatus what FedEx did for the postal service.”

Moqtada al-Sadr, leader of the Shia rebellion, was a force to be reckoned with. He denounced the constitution as illegitimate and compared Bremer to Hussein. He started building up the Mahdi Army after peaceful protests had no effect. (Mahdi is the name of the final imam; Shias believe he will return to Earth as a saviour one day.)

Contractors started pulling out. New Bridges Strategy conceded that “McDonald’s is not opening any time soon.”

THE RESPONSE

Washington responded by ordering personal attacks. An estimated 61,500 Iraqis were captured and imprisoned, often tortured. In August 2003, Captain William Ponce, and intelligence officer, sent an e-mail to fellow officers in Iraq: “The gloves are coming off gentlemen regarding these detainees…we want these individuals broken.” Then Major General Geoffrey Miller, warden of the Guantanamo Bay prison (Gitmo), was brought to Iraq, and new interrogation procedures were authorized including humiliation, exploitation of fears, sensory deprivation and overload, and stress positions. Military lawyers determined that the Iraqi detainees were not protected by the Geneva Conventions. After being “detained,” Iraqis were freed, and 70–90% were told their arrest was a mistake. In May 2007, 19,000 Iraqis still remained in custody. An estimated 300 academics have been assassinated by death squads.

In December 2006 (after almost four years), the US started to get Iraq’s state-owned factories running and made efforts to employ more Iraqis. It seemed like they were going Keynesian. But while they were letting go of control of some minor businesses, they were starting to privatize oil.

With all the religious fighting within Iraq (1,000 Iraqis were killed every week), Iraq was now seen as a security risk, and the Bush administration deemed it necessary to draft a new oil law for Iraq which would allow companies like Shell and BP to sign 30-year contracts in which they could keep a large share of Iraq’s oil profits (hundreds of billions of dollars). The law placed no limits on the amount of profits foreign companies can take from the country, and it prevents Iraq’s elected parliamentarians from having any say in the terms for future oil contracts ever. This in effect sentences Iraq to perpetual poverty since, formerly, 95% of government revenues came from oil. Iraq’s cabinet (hand-picked by the US) adopted the law in February 2007. The Federal Oil and Gas Council was created to be the ultimate decision-makers on all oil matters, and to be advised by “an appointed panel of oil experts from inside and outside Iraq.”

In 2004, the U.S. State Department launched a new branch: the Office of Reconstruction and Stabilization. It pays private contractors to draw up plans to reconstruct 25 different countries that may one day find themselves the target of U.S.-sponsored destruction. Corporations and consultants are currently lined up on pre-signed contracts so they can act as soon as disaster strikes.

Current Iraqi Demographics (2006 figures):
Population: 26.7 million (Canada — 32.8; U.S. — 303.3)
Infant mortality rate: 48.6 deaths/l,000 live births (Canada — 4.8; U.S.- 6.4)
Fertility rate: 4.1 children/woman (Canada — 1.6; U.S. — 2.0)
Life expectancy: 69.0 years (Canada — 79.8; U.S. — 78.0)
Median age: 19.7 years (Canada — 39.5; U.S. — 35.3)
Ethnic groups: 78% Arab, 17% Kurd, 5% other (mainly Assyrian and Turkmen)
Religions: 97% Muslim (65% Shia, 32% Sunni), 3% other (mainly Christian)
Shi’ism / Shia / Shi’ite — ruler must be a direct descendant of Mohammad
Sunni (majority of Muslims, except in Iraq and Iran) — ruler can be any person
elected by a majority;

DISCUSSION QUESTIONS:

1. What are the groupthink ideas about the war in Iraq (and/or some other incidents you might know about) being promoted by mass media?

2. Using your knowledge about the psychology of conformity, explain why the US expected to be able to get total conformity to their plan after bombing the Baghdad?

3. Using your knowledge about the psychology of conformity inoculation, speculate on why the Iraqis are “unshockable”? Why didn’t they conform to the US authority like so many other countries did?

4. In what way is Chomsky’s idea of manufactured consent necessary to free market methods? How can we avoid this phenomenon?

5. What makes Canada different? Consider Linda McQuaig’s work as well as Maude Barlow and Tony Clarke’s success in stopping the MAI.