I just finished reading The Shock Doctrine by Naomi Klein. This book picked up right where Acid Dreams left off - discussing the CIA's research into brainwashing and torture. It starts off with the story of a Candian woman who went into a psychiatric hospital for depression and how her psychiatrist, who was on the CIA's payroll, proceeded to test his new theories on her about how to cure mental illness by trying to destroy her personality and then rebuild a new one. In this case his methods included medically induced comas, constant electro-shock therapy, sensory deprivation followed by sensory overload, as well as cocktails of many unknown and dangerous drugs. After he had subjected her to sufficient stress to regress her to a child-like state he then tried to rebuild her personality by playing tape loops with messages like "I am a good and caring mother." Not surprisingly, this treatment failed, and when she was discharged she was in a far worse state than she had been when she arrived.

This story is a metaphor for what the book talks about - how the United States tries to impose free-market economies on unwilling countries by using what Ms. Klein calls "The Shock Doctrine." The Shock Doctrine basically involves taking countries that are in a state of crisis and using the panic and shock felt by the populace to push through radical free-market "reforms."

During the Cold War the US made a practice of supporting ruthless dictators so long as they were against communism or socialism, and supported numerous military coups of South American countries where the democratically elected governments were leaning towards socialist policies. These countries were no where close to the type of authoritarian communism of the USSR, but maybe had slightly socialist policies like a strong social safety net or some nationalized industries. And invariably, the effect of the free-market reforms and free trade regulations were what we still see today - huge income inequality, social stratification and the rise of powerful multinational corporations. In other words in these countries the regular people were probably doing fine with jobs at state owned factories that paid enough for them to purchase the essentials, which may have been price controlled. Then the US comes in and privatizes industry and eliminates tariffs and opens up free trade, which results in the cost of living going up, many jobs being eliminated, and the resources of the country being sold off to foreign corporations. The new governments in many cases had to give themselves dictatorial powers in order to push through these unpopular economic programs, and the end result was that the multinational corporations and the wealthy got more wealthy and the rest of the people were driven into poverty.

We see this in Russia after the collapse of the Soviet Union, when Yeltstin dismantled the parliament and gave himself complete control over the country so he could push through his economic "reforms." The Western press mostly reported that he had to do this to prevent the government from being taken back by hard-line communists, so I don't know what the truth of the situation was, but when viewed through the history of economic "reforms" forced by the IMF and the US, this interpretation certainly seems more plausible. While Yeltsin had dictatorial powers, he pushed through the economic policies which resulted in the rise of the Russian oligarchs, and led to the state of the country now - where you have a small number of incredibly wealthy billionaires and the majority of the population is close to or in poverty.

These radical free-market policies were largely conceived of and popularized by Milton Friedman and the Chicago School of economics, who believe that completely free markets are completely efficient, and the less government interference in the markets, the more efficient they are and the better off everyone will be. This philosophy states that the role of the government should essentially be limited to having a police force and a military to ensure law and order and protect the country, and everything else should be done by private enterprise. I learned about this theory in Business school, and at the time it made perfect sense. It took me a good few years of gathering evidence from the real world and thinking on my own to come to the conclusion that in reality this theory doesn't work. In reality this leads to exactly what we are seeing in the US, and the rest of the world, today: the rich get richer and the poor get poorer. I have some thoughts as to the flaws in the theory, but those are for another day.

The book describes numerous occassions where the Shock Doctrine has been put into place - starting with South American military coups, going through the collapse of the Soviet Union, the fall of apartheid in South Africa, the response to the 90's Asian economic crisis, the response to the tsunami in Asia, 9/11, and leading through into Iraq and even the response to Hurricane Katrina. The pattern is always the same - a crisis puts the people into a state of shock, the US government, along with the IMF and the World Bank, takes advantage of the crisis to push through deeply unpopular economic policies. By the time the people regain their senses it is too late to do anything about the new economic policies. And the end result is that the general population ends up doing significantly worse while a small number of new billionaires are made and billions flow out of the country into the pockets of the multinationals.

Unfortunately, now that the threat of communism is long gone, it seems that neo-liberal free-market capitalism is the only game in town and I suspect that things will get much worse before they get better. I think it is going to be very difficult to try to make any significant changes when any such changes will be opposed by the people who profit from the current system and thus have all the money and power. If nothing else, this book was a wake-up call.

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I just read this article about globalization which argues that income inequality isn't caused by globalization, but by societies not choosing to distribute the benefits of globalization equally. As an example, it mentions the idea of a Universal Basic Income, which just came up for a referendum in Switzerland last spring and was defeated. A Universal Basic Income (UBI) is when the government guarantees every citizen a basic income - enough to just barely live on - instead of social support like unemployment or food stamps or public housing. I personally think UBI is a great idea, but I don't really think it has any chance of being enacted anywhere in the near future. 

Here in Switzerland, in the months before the referendum, there were billboards all over showing a fat man in a dirty t-shirt with pizza and empty beer bottles on the table. I don't remember the slogan on the ad, but it was something to the effect of "why would you want to support this loser who doesn't want to work or do anything productive with his life?" The measure was defeated pretty soundly, and most people I spoke to were against it for vague, not well thought through reasons. 

To get back to the point, the article doesn't really give any good options or ideas for more equally distributing wealth, and I don't think it's very well thought through. It does raise a good point though, which is that the technological advances which have given the multi-nationals so much money and power at the expense of the middle and lower classes could easily be used to benefit everyone. Why aren't they benefitting everyone? Because the multi-national corporations exist only to make money, so why would they share their money with others when they can have it all for themselves? 

Regardless, this article does provide a different opinion to the one in "No Logo" and to my own opinion, so I thought it was worth sharing.

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I just finished reading "No Logo" by Naomi Klein, which is a book about the globalization of corporate marketing. The book was published in 2000 and parts of it hold up very well while other parts do not hold up so well. 

The first two parts of the book hold up the best, and they are about how corporations have ceased to make any actual products and instead focus on their brand, which is to say that they spend most of their efforts on trying to create a brand identity through advertising and marketing. An example of this is Nike, which in the 1970's made a decision to not focus on shoes, but instead focus on being about "transcendance through sports." Nike today is a huge company which sells sneakers for hundreds of dollars that cost pennies to make in third-world sweatshops, and has such a well-known brand that I didn't even think twice when reading about people tattooing the Nike swoosh on themselves. Nike was one of the first companies to realize that what people think about your brand is more important than your actual products, and that realization turned Nike into a global behemoth.

After Nike's success with this model, other companies followed suit, and led to the creation of the "consumer-based economy" we have today, which basically means that companies don't really do much of value - they instead spend ridiculous amounts of money trying to create demand for their products with marketing. Look at pretty much any expensive designer clothing - do people buy it because they think it's better quality, or do they buy it because they like what they think the brand represents? If people think something is better they will pay more for it, regardless of the actual quality or any other actual physical attributes. Take a pair of jeans from Walmart - people are going to think they are cheap and low quality, when in reality you can take the exact same jeans made in the exact same sweatshop and put a Calvin Klein label on them and people will pay a lot more for them and say they are stylish and high quality.

Here's another example - Tylenol versus generic acetominophen. The brand-name Tylenol is more expensive, because it is more expensive people assume the quality is better. In reality a chemical is a chemical, there is no difference between one acetominophen molecule and another acetominophen molecule - when you pay more for Tylenol you are essentially just paying to watch advertisements on TV - because that is the only difference between brand-name and generic. Of course the corporations have invested billions of dollars to convince you that the logo on the bottle is worth the extra money, and most people are never going to question something which has been drilled into their head repeatedly over their entire lives through advertising.

Before reading this book, I never really got the arguments against globalization. My thought was always that globalization makes cheaper goods available, and if I have the extra money and want to support local businesses I have the option to do that. This book explains how corporations made insane amounts of money by having their goods produced by overseas contractors in third-world sweatshops for pennies, and then selling those goods in first-world countries for insane profit margins, and that the only real value add of the corporation is the marketing they do. There was a popular book a while back called the "Four Hour Work-Week" the thesis of which was basically applying the corporate globalization model on a personal level - you hire people in China or India or another place where people will work for pennies, and have them do your work for you. So you spend a few hours a week overseeing them, and charge first-world rates for the work you have done for third-world rates. 

Globalization is a very complex topic with a lot of angles and nuances, and I'm not totally sure that it is totally a bad thing, but it is clear to me that it has contributed greatly to the income inequality which is growing steadily in the US, and it is clear to me that corporate greed is out of control. Whether there is a solution I don't know. Capitalism is based two concepts - that money is the most important thing there is, and that if everyone is greedy and makes rational decisions based solely on their self-interest everything should work out in the end. If the entire world economy is based on these ideas how can you expect corporations to act any other way than the way they do? After WWII corporations tended to be a bit more socially responsible and care for things like their employees more than their bottom line, but companies that sacrifice profits by the greater good will lag behind those that don't care about anything other than their profits.

The second half of the book talks about a lot of anti-corporate movements, most of which don't exist anymore, so doesn't hold up as well as the first half. In the afterword Ms. Klein talks about how 9/11 killed the anti-globalization movements by scaring people into giving up their civil rights and by fostering an atmosphere where being anti-corporate was portrayed as being anti-American. People were encouraged to go out and buy as much as possible to keep the economy going and told that not doing so was unpatriotic. We did see some vestiges of the anti-corporate movements in the Occupy Wall Street protests a few years ago, and we saw some more in Bernie Sander's recent presidential campaign. But with the upcoming President Trump saying he basically wants to give corporations free reign and no taxes, who knows what will happen over the next four years.

There is a bit of an unintentional poignancy to this book in it's descriptions of the early days of the Internet. Back when the book was written the Internet was revolutionizing communication by allowing people to share and find information and to communicate with other people, bypassing the coporate controlled mainstream media. This was before online advertising really took off, when websites existed to share information rather than to attract as many eyeballs as possible to see as many ads as possible. Once people started to be able to make serious money by showing advertisements on web sites, the Internet radically changed as people started launching websites with the goal of getting as many visitors as possible, and the profit motive corrupted what had promised to be a revolutionary concept. In the book, Ms. Klein talks about how corporations coopt anti-corporate sentiment to try to find new ways to sell themselves, and this is basically what happened to the internet when it turned from a giant public library into a giant version of Times Square.

In summary, "No Logo" is a very interesting book which really clarified for me the problems with free trade and globalization in the hands of people of corporations who only care about making money at everyone else's expense. It also explains why advertising is such a huge industry and why it is now more important than the making actual products or things that have value or uses. Global advertising spend is projected to be about $543 billion for 2016, which is significantly higher than the GNP of Switzerland, where I live. As a comparison, the UN estimates that global hunger could be eliminated for a mere $30 billion a year, and global poverty could be eliminated for about $175 billion a year. But what's more important, people starving to death or convincing people that they need to pay hundreds of dollars for products that cost pennies to make? Think about that next time you see a commercial on TV for, well, anything.

Labels: books, politics, economics
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