Wednesday, October 10, 2007

Economic Goals Of The Iraq War: Disaster Capitalism

(Cross posted from BFD Blog!)

It has all become exceedingly clear for us here at BFD Blog! why the Bushliburton administration started the war in Iraq, it was so that their constituent business backers could exploit the disasters of our times, both those caused by natural acts in the environment, and those caused by man. Blogging for the Huffington Post, John Cusak (yes, that John Cusak) lays it all out in great clarity in his posting titled "The Real Blackwater Scandal: Build A Frontier, You Get Cowboys".

In his posting, Cusak relates ongoing discussions he has had with Naomi Klein, the author of "The Shock Doctrine: The Rise Of Disaster Capitalism". It is Klein's thesis that the scandals of Katrina, of Blackwater, that the war itself are what fuel the "Disaster Capitalism Complex", which we at BFD take as an evolution of the fabled "Military Industrial Complex" as a driver of economic growth:

What Naomi does so well is put the corruption scandals into a broader context, unveiling and meticulously documenting how the scandals of the Bush regime -- from the invasion of Iraq to the inability of FEMA to locate the Superdome for days after Katrina hit -- are actually part of a new emerging economy, what she calls the Disaster Capitalism Complex, which itself is the culmination of a 35 year ideological campaign of radical privatization and de-regulation. It is not a conspiracy in any sense, but a very open, fundamentalist ideological war against the New Deal in America and Keynesian economics around the globe. Francis Fukuyama called the supposed peak of this movement "the End of History." But what may actually be ending is the illusion that this campaign has done anything but great damage to people around the globe. Blackwater is a perfect case in point.

Cusak goes on to relate a dialogue that he and Klein recently had, where Klein builds her thesis:

Cusack: The Blackwater scandal broke just as you hit the US on your book tour. What do you make of the coverage?

Klein: It definitely feels like a watershed moment. There is this collective understanding that this wasn't an accident, it was inevitable: give a bunch of pumped-up guys guns, and send them to a place where they're above the law, and they'll act like cowboys. But what's missing from too much of the analysis is the obvious next point: this is true of the entire occupation.

Give a bunch of contractors billions of dollars with no accountability, while simultaneously eviscerating the Iraqi state (de-Baathification, laying off the army, flinging open the economy with no regulation) and they'll gorge. Give a bunch of Heritage Foundation interns control of an economy with no oversight and they'll try to privatize everything in sight. The entire disaster in Iraq was utterly predictable. But what I argue in the book is that not only was this predictable, it was the plan. The plan wasn't to destroy Iraq; it was to create a market frontier. And the reason you build a frontier is always the same: nothing is more profitable. Adam Smith wrote about it in The Wealth of Nations: on the colonial frontier, land can be grabbed, taxes are few, and capitalism can exist in its purest, most profitable form. That's why the Wall Street Journal has been comparing Iraq to a "gold rush" from the very first reconstruction conferences in 2003 -- any frontier is a gold rush.

So what frustrates me about the current Blackwater scandal is the attitude of surprise in the media and congress -- surprise that these companies are acting like "cowboys" in a "wild west." Of course they are -- the occupation was built to be the Wild West. For four years the White House systematically fought every attempt at oversight of the contractors, specifically granted them immunity under Iraqi law and made no serious attempt to monitor their activities. And it's not just Blackwater -- think of all the tens of billions of public dollars allocated to reconstructing Iraq. The money has all been given away to contractors while Iraq is in worse shape than ever -- those contractors are cowboys too. And that's not even including the roughly $9 billion of Iraq's own oil money that has gone missing.

And what's even worse than the feigned astonishment we are seeing is this insistence on framing everything as an individual "corruption" scandal. Companies are built to profit from opportunity -- to do everything they can get away with to make as much money as possible. It's their legal duty. So the scandal isn't Blackwater or Halliburton or Exxon; it's the vision of politics we have been living with since Reagan that holds that the central role of government is to be the executive chef for this corporate feeding frenzy. In the eighties and nineties, that meant chopping of major limbs of the state -- water, electricity, the airwaves -- and feeding them to corporations. Today the process has moved into the very core of the state: armies, interrogation, evacuations. But rampant corruption has always been part of these neo-colonial privatization frenzies -- think of the instant billionaires in Latin America's privatization wave, when Carlos Slim, now the third richest man in the world, made his fortune, or the lawless rise of the Russian oligarchs during "shock therapy."

What I argue in The Shock Doctrine is that privatization is the post-modern frontier. Essentially, what shock therapy means is selling off as much as possible before the law catches up, just as an earlier era of conquistadors grabbed land and minerals and signed treaties after the fact. The same goes for today: after each one of these feeding frenzies, the same policy makers who opened up the neo-frontier turn around and act surprised and scandalized that the corporations who they themselves have liberated are caught scamming wildly. It's only then that we hear the pious lectures about the need for oversight and rules and regulations. My question is this: how does the capacity for corporate greed keep coming as a surprise? The politicians who designed this war are all supposed to be adherents to a philosophy that holds that there is nothing more powerful in the world than greed -- that it should be the governing force in as many human interactions as possible. Isn't that what Milton Friedman wanted? Iraq's occupation was organized by the Bush Administration to unleash that instinct with absolutely no restraint.

Either greed belongs in a war zone, or it doesn't. You can't unleash it in the name of sparking an economic boom and then be shocked when Halliburton overcharges for everything from towels to gas, when Parsons' sub, sub, sub-contractor builds a police academy where the pipes drip raw sewage on the heads of army cadets and where Blackwater investigates itself and finds it acted honorably. That's just corporations doing what they do and Iraq is a privatized war zone so that's what you get. Build a frontier, you get cowboys and robber barons.

Link to the entire posting by Cusak to get a full picture of what is happening. It is quite clear that what we have in Iraq is a "Gold Rush" mentality among the entire contracting population and "Frontier Justice" overseen by the governments, both United States and Iraq, responsible for maintaining any foundation of civil society. Is this how we view ourselves? Is this how we want the United States viewed among the nations of the world?

Interested in learning more? Amazon is offering Klein's book at a 40% discount from the cover price.