How we got into this hole...and how we might get out?

Not much to say, apart from I think these are great articles. I'm not sure, as Peter Wilby says, that we on Airstrip One have all become capitalists; merely that we have been put under great pressure to think we are ones. However, that's a minor quibble.

All of us live by the logic of finance: Margaret Thatcher promised wealth for all in her new society. First, though, we all had to become capitalists. Peter Wilby on our long road to ruin
New Statesman, 5 February 2009

We now know that Alistair Darling was not joking when he said last summer that we faced the worst economic crisis in 60 years. The fall in GDP is now the steepest since 1947. But that was a mere blip on the road to postwar recovery. We cannot be confident that the present crisis is similar, or that comparisons with the most recent recessions – in the 1970s, 1980s and 1990s – are the right ones. Increasingly, politicians and economists recall the 1930s, with its grisly tales of bank closures, currency collapse, deflation and mass unemployment.

Yet none of these precedents provides adequate guidance. In the 1930s, the majority of Britons had not bought (I use the verb deliberately) into capitalism as they have over the past 30 years. Working-class families then accounted for three-quarters of the population, but less than one-fifth owned their home. Few held a bank account and almost none invested in shares or bonds, either directly or through pension schemes. For most of these families their only insurance was against funeral expenses.

Working-class life was based on cash, with surplus income, rare at the best of times, converted into portable possessions. Debt was widespread - it was sometimes the only way a working-class family, even if it had a regular income, could buy new clothes or shoes - but it was small-scale and local. Many were accustomed to existing on the margins of subsistence, and the dole, pitiful as it was, ensured that the Depression just made life more of a struggle. It did not frustrate ambition or aspiration, because most ordinary people had none. The consumer society had not been invented.

The Britain of 2009 is utterly different. The country was changed profoundly by Thatcherism (as the United States was changed by Reaganism), often in ways that were scarcely noticed at the time and are now forgotten.

The roots of the present crisis lie in the 1980s and early 1990s, but the effects of these years are only now becoming evident. At the time, politicians and economists explained that we were entering a post-industrial age. In future, the most successful countries would earn their living from services, not from the production of goods. Given the history and reputation of the City of London, Britain, it was said, was particularly well placed to lead in financial services.

Finance became the country's fastest-growing industry, expanding at 7 per cent a year on average, and dragging in its wake associated functions such as public relations and law.

The implications went far beyond a change in the economic structure. Just as a society based on industry favoured companies that assured themselves a steady supply of raw materials, so did one based on finance favour companies that assured a steady supply of money from the world's credit markets. Just as industry once required strong domestic markets if it were to flourish overseas, so did finance.

Above all, just as the Industrial Revolution transformed lifestyles, family relations, personal expectations and the very rhythm of existence, so did the financial revolution.

For all of us, the logic of finance has become ubiquitous, from the cradle to the grave. New Labour's "baby bonds" encourage parents, on a child's birth, to invest in a trust fund. Students take out loans to finance their higher education, a device that was preferred over a graduate tax precisely because it compels young people to consider their courses as "investments" with "rates of return". A home is no longer just a place to live, love and raise a family but a speculative investment, a source of security for credit, or "equity" that may be "released"; it turns all of us, as Martin Wolf, the Financial Times commentator, has put it, into "highly leveraged speculators in a fixed asset". With the decline of the state old-age pension (now worth less, as a proportion of average earnings, than when it was introduced in 1909) and, outside the public sector, the almost complete disappearance of pensions based on final salaries ("defined benefit" schemes), millions will depend on the vagaries of the bond and share markets for a decent income in old age.

Deregulation, enhanced by the internet, requires consumers to search for better "deals" on power supplies, car insurance, mortgages, savings rates, phone charges and so on. Social scientists have coined the word "financialisation" to describe this new world, as they used "industrialisation" to describe the old. As Essex University's Robin Blackburn has put it, financialisation "encourages households to behave like businesses, businesses to behave like banks, and banks to behave like hedge funds".

The new order followed the collapse in the 1970s of the postwar economic and social consensus, known as Keynesianism. Trade unions were weakened, partly by legislation, partly by the decline of heavy manufacturing industry. Labour could no longer drive a hard bargain.

Capital, assisted by deregulation of money movements across borders, held the whip hand. Under the Anglo-Saxon economic model, employers could now hold down wages - if necessary by relocating or threatening to relocate abroad - shed jobs and require longer hours and/or more productivity from their workforces. Faced with the devaluation of their labour, working people had to try and get a slice of the capitalist action. Money, they had to learn, no longer stopped with the wages generated from employment. As Randy Martin, the New York University public policy specialist, puts it in his illuminating book Financialisation of Daily Life (2002), "what once belonged to the workaday world beds down with leisure and domesticity".

This was exactly what Margaret Thatcher wished for. Once, western governments tried to subjugate the working class. The governments of the postwar era, by contrast, tried to pacify it. High wages, good working conditions, decent housing, stable employment, predictable pensions and, crucially, the power of a large state sector to head off deep recession through fiscal intervention delivered the workers’ consent to, even enthusiasm for, a capitalist economy. It also ensured the stable domestic markets that provided the basis for unprecedented economic growth. As the student rebels of 1968 understood, the workers were required not just to produce goods but to consume them, too.

Thatcher offered what you might call a "third way". The working class was not to be enslaved or tamed, but abolished. Everyone would become, in their private if not in their working life, a member of the bourgeoisie, owning a house, acquiring debt to improve themselves, trading in shares and bonds. With such financial commitments, they would be reluctant to sacrifice regular income by going on strike.

Better still, they would vote Conservative, or at least for an alternative party that accepted, as new Labour did, the broad principles of Thatcherism. The spectre of communism or socialism would be exorcised.

But was it possible to create mass capitalism when large sections of the population lacked capital? Could a new liberalised economy - free from the constraints of either government regulation or union bargaining strength - deliver the stable mass consumer markets of the previous 30 years? To these questions, housing, along with the wide availability of credit, was the central answer.

The sale of council-owned dwellings – the best-known of Thatcher’s housing policies – took more space in the Conservatives’ 1979 election manifesto than health, education or social security. At the time, 85 per cent of British voters favoured the policy and, given that the discounts on sale prices to long-term residents could be as high as 60 per cent, it seemed a rare example of the state offering something for nothing. But it was also a form of gerrymandering, as the effect of the policy was to break up the public housing estates that formed the basis of Labour Party mobilisation.

The sales generated £17.5bn over ten years. But local authorities were not allowed to use the revenues - or the proceeds of other taxes - to build new council housing. Moreover, government subsidies to council house rents were reduced in favour of means-tested benefits available to those who rented private as well as public housing. The result was to make council housing less affordable, with rents rising 40 per cent in real terms between 1979 and 1984, and, as it increasingly became a ghetto for those who lacked either the means or the aspiration to buy, less attractive to live in. In a decade, the proportion of the population who were owner-occupiers jumped from under 55 per cent to more than 65 per cent (it is now 70 per cent).

They were assisted by a second revolution: the easier availability of mortgages. Until the 1980s, nearly all mortgage lending to the public came from building societies. The societies' history went back to the late 18th century and they were specifically designed to allow working people to pool and save their resources in order to build and buy houses. The savers were known as "members" and, nominally at least, owned the societies. Loans, financed purely from savings, were largely restricted to members. If savings were insufficient to meet demand, borrowers had to wait, often for several months. A regular income of sufficient size to support repayments, as well as a deposit from one's own resources, was essential. A building society manager would usually insist on meeting the borrower personally. There was no significant competition: managers of the leading societies met monthly to agree their interest rates.

This system was swept away in the 1980s as the Tories allowed banks to enter the mortgage market. If banks were allowed to behave like building societies, the societies reasoned, they should be allowed to behave like banks. The Building Societies Act 1986 gave them the necessary flexibility, including more freedom to raise funds from the wholesale money markets rather than their own savers and to advance unsecured credit. Crucially, it also allowed them, if a majority of members voted in favour, to demutualise and actually to become banks.

Abbey National - which had broken the societies' interest rate cartel even before the 1986 act - was the first to take advantage of this provision and several more followed over the next decade, as members were tempted by lump-sum "windfalls" that bought them out of their ownership rights. Labour opposed the bill but without great passion or conviction. As Larry Elliott and Dan Atkinson point out in their latest book, The Gods That Failed (2008), deregulation of all kinds was sold with a leftish slant; regulation, once considered a device to protect the public, was now seen as a conspiracy against the public.

In 1986, at least one Labour MP, Austin Mitchell, saw "no great harm in more unsecured credit". A Tory MP proposed that all building societies should be required to demutualise within ten years; in other words, that they should be abolished. Institutions that had survived for 200 years were thus quietly dismantled. An entire model of popular saving was undermined.

Working-class communities had long saved for special needs, such as Christmas or holidays, through local "clubs", often centred on the neighbourhood pub, with a trusted elder, usually a skilled artisan, acting as treasurer. Others, known as "friendly societies" (based, as the name suggests, on personal relationships), provided help in times of ill-health or unemployment. The pre-1986 building societies could trace their lineage directly back to this tradition, which Clive Thornton, then chief general manager of the same Abbey National that so enthusiastically embraced the new era, once called the highest form of socialism. The model, though on a larger, more sophisticated scale and now patronised as much by the middle classes as by the working classes, was essentially unchanged: lending and borrowing was between people who knew and trusted each other (if less intimately than they once did), and the community met its needs from its own resources. It was a world away from the deregulated banking that allowed loans to be split and repackaged as "asset-backed securities" sold to unknown investors on the other side of the planet.

Who benefited from demutualisation? The answer can be summed up in two figures: between 1993 and 2000, chief executives of the demutualised societies got pay rises of 293 per cent against 65 per cent for chief executives of the remaining mutuals. An all-party group of MPs concluded in 2006 that consumers got inferior savings and home loan rates. What the original members gained in windfalls, they lost in higher charges. It is just one example of how financialisation involves a substantial invisible “tax” on nearly all the transactions that ordinary people are encouraged to make: a rake-off by managers in the financial services industry that can amount, according to some estimates, to 25 per cent. Blackburn calls it “insider looting on a grand scale”. No wonder Labour’s scheme for “stakeholder pensions” – intended for people on low or middling incomes who were no longer covered by final-salary schemes – flopped so badly. It set a 1 per cent cap on charges.

A second housing revolution followed legislation on the building societies. In 1988, a housing act introduced the assured shorthold tenancy, which gave tenants - who until then had been notoriously hard to evict - security for just six months, after which landlords need give them only two months' notice, without stating reasons. A second act in 1996, at the fag end of Tory rule, made the assured shorthold the default agreement for any new renting. Henceforth, new assured tenancies became very rare. Lenders and letting agents, recognising the opportunities, introduced a type of mortgage that would allow the small-scale landlord to be treated as an owner-occupier rather than a business.

The stage was set for the buy-to-let revolution, which would eventually involve more than half a million landlords, most owning four properties or fewer, "contributing" (if that is the right word) four times as much to the UK economy as the motor industry. It seemed, for a time, like a win-win for the country: the young, unattached and mobile got a plentiful supply of rentable property while their more settled elders (the median age of buy-to-let landlords is in the early forties) got a new income stream allied to an appreciating asset. All done by the magic of easier credit.

Housing became a national obsession. In an intensely competitive, deregulated mortgage market, lenders fell over each other to offer favourable terms and cared not at all if a high proportion of the money "leaked" to consumer spending. Retired couples were encouraged to remortgage their houses to fund holiday cruises or grandchildren's trust funds. Young couples of all classes stretched their resources to get "on the housing ladder", knowing councils had sold off the best of their housing stock and, for the aspirational family, a council home was no longer an option. Couples in their middle years saw buy-to-let as an additional stream of income, a hedge against redundancy or declining earning power. Second homes became increasingly fashionable. The Tory government abolished rates, which linked local taxes to house values, and substituted first poll tax and then council tax, which was only slightly less regressive. All this created a housing bubble which, in turn, made ownership of houses yet more desirable, even mandatory. Despite occasional crashes, there seemed no end to the upward surge in house values.


Housing thus allowed neoliberalism to deliver what, up to the 1970s, Keynesianism had delivered through high wages, secure employment and guaranteed pensions: buoyant, confident consumer markets and a population that had an interest in preserving the existing political and economic order. The new economic order could not otherwise bring to the masses the stable and rising living standards that it promised.

In the 1980s and early 1990s, it brought deep recession and chronic unemployment, the consequence of the instability of a globalised and deregulated financial system that allowed capital to cross national boundaries at a single computer keystroke. In Britain - and even more so in America - it brought gross inequality of incomes. Average US wages, in real terms, are no higher than they were 30 years ago and in Britain, too, they have stagnated over the past five years.

Credit, normally secured on rising house values but increasingly unsecured, was the rabbit in the neoliberals' hat, as they discovered during the recession of the early 1980s. In 1982, under Sir Geoffrey Howe's chancellorship, controls on hire-purchase, which strictly regulated the amount that could be borrowed, were abolished. Credit cards were then in their infancy, confined to sections of the younger and more affluent middle classes. Now, they are held by some two-thirds of the UK adult population, the highest proportion in Europe.

Colin Crouch, professor of governance and public management at Warwick University, describes the effect of this unprecedented liberalisation of credit as "privatised Keynesianism". J M Keynes argued that, when economies needed stimulating, governments should take on debt. Under the privatised version of his doctrine, individuals do the borrowing.

By the end of 2008, UK personal debt had risen to nearly £1.5trn, more than twice the national (public-sector) debt, and more than 170 per cent of disposable income. When the government incurs debt on a comparable scale - as it has done in its efforts to soften the effects of the recession - Tory politicians and economists ask how it can ever be paid off. No similar questions were asked as private debt ballooned.

The dominant political message of the past 30 years was that the private citizen was on his or her own. Risks previously borne by the state or employers were transferred to individuals, particularly in pension provision. Britain moved towards the stage where, beyond a bare minimum “safety net”, each of us was required to make provision for financial security and social care in our old age, for our children’s post-school education, for our housing, for our capacity to survive spells of unemployment or illness.

As Robin Blackburn puts it in his book Age Shock (2006), citizens "have to learn how to hedge risks and spread income over their life cycle". Each individual needed "to convert himself or herself into a two-legged cost centre and profit centre, with loans and insurance used to shift costs to where they can most advantageously be borne". Collective provision, whether through the state, local authorities, trade unions or mutuals such as the building societies, was discouraged. Like those who travelled on trains or buses, those who relied on such supports were failures.

Anybody who failed to buy shares in privatised utilities, to grab the offer of a windfall from demutualisation, or to take advantage of the tax breaks for owning private pensions or equities was a fool.

New Labour and, in the US, its Democratic equivalents, did little to question this philosophy or to reverse its effects. The idea that individuals should become, as the Blairite guru Anthony Giddens put it, "responsible risk-takers" was fundamental to the Third Way. The US Democrat Philip Bobbitt, nephew of the former president Lyndon B Johnson, explained with approval in his much-praised Shield of Achilles (2002) how the welfare state had been succeeded by the "market state", which abdicated responsibility for the well-being of its citizens and merely provided them with opportunities.

Financialisation is now unravelling, with the state striving desperately to shore it up. With financial institutions facing bankruptcy and credit markets frozen, it can no longer deliver prosperity - or the illusion of it - to the masses. Ruination, which capitalism so regularly visited on the Victorian middle classes and which was portrayed so often in the fiction of the period, threatens to envelop millions. The promises of neoliberalism are revealed for what they were: a sham. An ideology that seduced most of the population is broken. The psychic and political consequences are incalculable.



The only real flaw in Naomi Klein's piece below is that she misses Britain out of her mini-list of 'today's basket cases' that are 'yesterday's "miracles"'...

All Of Them Must Go
Naomi Klein, The Nation, February 5th, 2009

Watching the crowds in Iceland banging pots and pans until their government fell reminded me of a chant popular in anti-capitalist circles back in 2002: "You are Enron. We are Argentina."

Its message was simple enough. You--politicians and CEOs huddled at some trade summit--are like the reckless scamming execs at Enron (of course, we didn't know the half of it). We--the rabble outside--are like the people of Argentina, who, in the midst of an economic crisis eerily similar to our own, took to the street banging pots and pans. They shouted, "¡Que se vayan todos!" ("All of them must go!") and forced out a procession of four presidents in less than three weeks. What made Argentina's 2001-02 uprising unique was that it wasn't directed at a particular political party or even at corruption in the abstract. The target was the dominant economic model--this was the first national revolt against contemporary deregulated capitalism.

It's taken a while, but from Iceland to Latvia, South Korea to Greece, the rest of the world is finally having its ¡Que se vayan todos! moment.

The stoic Icelandic matriarchs beating their pots flat even as their kids ransack the fridge for projectiles (eggs, sure, but yogurt?) echo the tactics made famous in Buenos Aires. So does the collective rage at elites who trashed a once thriving country and thought they could get away with it. As Gudrun Jonsdottir, a 36-year-old Icelandic office worker, put it: "I've just had enough of this whole thing. I don't trust the government, I don't trust the banks, I don't trust the political parties and I don't trust the IMF. We had a good country, and they ruined it."

Another echo: in Reykjavik, the protesters clearly won't be bought off by a mere change of face at the top (even if the new PM is a lesbian). They want aid for people, not just banks; criminal investigations into the debacle; and deep electoral reform.

Similar demands can be heard these days in Latvia, whose economy has contracted more sharply than any country in the EU, and where the government is teetering on the brink. For weeks the capital has been rocked by protests, including a full-blown, cobblestone-hurling riot on January 13. As in Iceland, Latvians are appalled by their leaders' refusal to take any responsibility for the mess. Asked by Bloomberg TV what caused the crisis, Latvia's finance minister shrugged: "Nothing special."

But Latvia's troubles are indeed special: the very policies that allowed the "Baltic Tiger" to grow at a rate of 12 percent in 2006 are also causing it to contract violently by a projected 10 percent this year: money, freed of all barriers, flows out as quickly as it flows in, with plenty being diverted to political pockets. (It is no coincidence that many of today's basket cases are yesterday's "miracles": Ireland, Estonia, Iceland, Latvia.)

Something else Argentina-esque is in the air. In 2001 Argentina's leaders responded to the crisis with a brutal International Monetary Fund-prescribed austerity package: $9 billion in spending cuts, much of it hitting health and education. This proved to be a fatal mistake. Unions staged a general strike, teachers moved their classes to the streets and the protests never stopped.

This same bottom-up refusal to bear the brunt of the crisis unites many of today's protests. In Latvia, much of the popular rage has focused on government austerity measures--mass layoffs, reduced social services and slashed public sector salaries--all to qualify for an IMF emergency loan (no, nothing has changed). In Greece, December's riots followed a police shooting of a 15-year-old. But what's kept them going, with farmers taking the lead from students, is widespread rage at the government's crisis response: banks got a $36 billion bailout while workers got their pensions cut and farmers received next to nothing. Despite the inconvenience caused by tractors blocking roads, 78 percent of Greeks say the farmers' demands are reasonable. Similarly, in France the recent general strike--triggered in part by President Sarkozy's plans to reduce the number of teachers dramatically--inspired the support of 70 percent of the population.

Perhaps the sturdiest thread connecting this global backlash is a rejection of the logic of "extraordinary politics"--the phrase coined by Polish politician Leszek Balcerowicz to describe how, in a crisis, politicians can ignore legislative rules and rush through unpopular "reforms." That trick is getting tired, as South Korea's government recently discovered. In December, the ruling party tried to use the crisis to ram through a highly controversial free trade agreement with the United States. Taking closed-door politics to new extremes, legislators locked themselves in the chamber so they could vote in private, barricading the door with desks, chairs and couches.

Opposition politicians were having none of it: with sledgehammers and an electric saw, they broke in and staged a twelve-day sit-in of Parliament. The vote was delayed, allowing for more debate--a victory for a new kind of "extraordinary politics."

Here in Canada, politics is markedly less YouTube-friendly--but it has still been surprisingly eventful. In October the Conservative Party won national elections on an unambitious platform. Six weeks later, our Tory prime minister found his inner ideologue, presenting a budget bill that stripped public sector workers of the right to strike, canceled public funding for political parties and contained no economic stimulus. Opposition parties responded by forming a historic coalition that was only prevented from taking power by an abrupt suspension of Parliament. The Tories have just come back with a revised budget: the pet right-wing policies have disappeared, and it is packed with economic stimulus.

The pattern is clear: governments that respond to a crisis created by free-market ideology with an acceleration of that same discredited agenda will not survive to tell the tale. As Italy's students have taken to shouting in the streets: "We won't pay for your crisis!"

So how will the crisis be solved here politically? While I was reading an edited version of the above in yesterday's Guardian, on the opposite page Martin Kettle, Tony Blair's Vicar On Earth, was contemplating a 'National Government' in the next year or two (a Far Centre 'Government Of All The Talents'...without much talent). You have been warned!

Canadian Elections- Plus Ca Change!

(Hat-tip: Vive Le Canada).

Well, Canada's Federal Election on Tuesday was very much like the one in 2006. Stephen Harper's Conservatives increased their percentage of the vote & number of seats in Parliament, but fell short of an overall majority. I thought that, rather than trying to repeat/rehash similar points to last time, I'd repeat what I said after the last Federal Election:

Wednesday, January 25, 2006 Canadian election aftermath

Well, I would advocate UDI for Victoria/Vancouver, but apart from that...

It could have been a lot lot worse! For a start, the Cons are far short of an overall majority. They will need support from other parties, which will basically mean the Bloc Quebecois & Liberals. Stephen Harper, although a sandwich or two short of a full picnic (evangelical Christian and all that), will have to hold back the crazies further out than him (first rule of politics- there are always crazies further out than yourself!) or his government will fall, and I'm sure no-one wants to go to polls for a few years yet. So Harper is pretty much boxed in (I could say "straight jacketed" but that would be a cheap shot!).

Furthermore, they only got 36% of the vote ie almost 2/3rds of the voters didn't vote Con. That suggests to me the vast majority of people in Canada are pretty liberal. Blame the first past the post electoral system. It really is a travesty of democracy. Back in May last year Tony Blair got an overall majority of 66 in the House of Commons over here on just 36% of the vote, so count your blessings Stephen Harper didn't get the same!

In addition, I'd be encouraged by the NDP & Greens increasing their shares of the vote. Neither are perfect (this from a recently joined member of the Green Party over here) but having pressure from "the left" (I try not using such meaningless phrases) might force the Liberals to sharpen up their act.

You may also have heard the phrase coined by one-time Labour PM Harold Wilson: "A week is a long time in politics." I was in despair in 1992, when the Tories scraped in for a fourth successive overall majority (I remember staying up watching the election coverage on tv with the Sex Pistols blaring on my headphones- songs like "Anarchy in the UK", "God Save The Queen", "Liar", "Problems", "No Feelings" & "Holidays In The Sun" ["I want to go to the new Belsen..."] seemed to make a lot of sense in the circumstances). The general consensus was that the Tories would stay in power for ever. Within 6 months they were broken (£ leaving the ERM after billions were wasted on the foreign currency markets; plans to shut down our remaining coal mines caused mass protests), went on to lose the 97 election (best night of tv ever!) and only seem to be coming out of a coma in the last few months. One-time Tory PM Harold MacMillan when once asked what he feared most was "Events, dear boy, events". So wait for "events"- even Stephen Harper praying to The Lord 10 times a day can't prevent them!

However, there are positive things to do apart from waiting for the Cons to collapse. This is from Naomi Klein's website from over 5 years ago, but her proposals suggest that not a lot has happened in Canadian politics since then!

Unlabelled the Left by Naomi Klein December 20 2000

Where do we go from here? There's a big space in the political landscape for a new party, one that looks at the calls for localization and doesn't see a dire threat to national unity.

There is a very simple reason to have a left-wing alternative to the Liberal Party: People are suffering. Despite all the wealth created by deregulated markets, many Canadians are seeing no part of it.

In fishing communities from coast to coast, on family farms, on the streets of large cities, Liberal Canada's recipe for economic growth has meant people being thrown into the global market without a net.

In response, we have seen a wave of political organizing and militant protests. Students blockade trade meetings where politicians are bargaining their futures away in exchange for foreign investment. In First Nations communities, from Vancouver Island to Burnt Church, there is growing support for seizing back control of the forests and fisheries—people are tired of waiting for Ottawa to grant permission that the courts have already affirmed. In Toronto, the Ontario Coalition Against Poverty is occupying buildings and demanding the shelter that is the right of all Canadians.

There is no shortage of principled, radical organizing taking place, yet it is almost completely disconnected from the major political voice of the left, the NDP. Listen to the people excluded from the Liberal mainstream and you hear ideas entirely absent from the NDP platform: the deep distrust of state powers, immigration crackdowns, police harassment, punitive welfare offices, and mismanagement of community affairs.

Surveying the rage directed at Ottawa from across the country, the NDP's only response has been an action plan for better central management. In its policy book, there is no problem that can't be fixed with a stronger, top-down government.

By consistently failing to speak to the hunger for local control, or to the well-deserved skepticism of centralized power, the NDP has yielded the entire anti-Ottawa vote to the right. The Alliance is the party that offers Canadians outside Quebec the opportunity to "send a message to Ottawa"—even if it is only by demanding a refund for poor service in the form of a tax cut.

A national party of the left could articulate a different vision, one founded on local democracy and sustainable economic development. But before that can happen, the left needs to come to grips with how Canadians see government. It needs to listen to the voices on native reserves and in non-native resource communities where the common ground is a rage at government—federal and provincial—for culpably mismanaging the land and the oceans from urban offices.

Government programs designed to "develop" the regions are deeply discredited across the country. Federal initiatives to get fishermen into eco-tourism, for instance, or farmers into information technologies are regarded as make-work projects, unresponsive and, at times, destructive to the real needs of communities.

Frustration with botched central planning is not just an issue in rural Canada. Urban centres across the country are being turned into mega-cities against their will, just as hospitals where cutting-edge programs once thrived are being amalgamated into inefficient medical factories. And if you listen to the teachers having standardized testing rammed down their throats, you hear the same resentment at centralized power, the same calls for local control and real democracy.

All these local battles are, at their root, about people watching power shift to points further and further away from where they live and work: to the WTO, to unaccountable multinationals, but also to more centralized national and provincial governments. What people really want are the tools, both financial and democratic, to control their destinies, to build diverse economies that are genuinely sustainable. And they have plenty of ideas.

On the west coast of Vancouver Island, they are calling for community fish-licence banks, bodies that would keep fishing rights in the community rather than selling them back to Ottawa or to corporate fleets. Native and non-native fishermen, meanwhile, are doing end runs around the Department of Fisheries and Oceans to try to save the salmon fishery by rehabilitating spawning grounds and protecting hatcheries. In other parts of British Columbia, they talk of community forest licences: taking away Crown land from multinational forestry companies that are interested in volume-based logging, and placing sustainable forest management in the hands of local communities.

Even in Newfoundland, long written off by Ottawa as Canada's welfare case, there was talk this election of renegotiating federalism to regain control over the province's rich energy reserves and what's left of the fishery. It's the same message from Inuit leaders determined to ensure that, as the oil and gas prospectors move into their territories once again, the benefits go toward regional development rather than simply enriching multinational corporations.

In many ways, these calls for sustainable economic development are the antithesis of the free-trade model pushed by the Liberals, which insists that increased foreign investment is the key to all of our prosperity, even if it means trading away democratic powers in the process. These communities want the opposite: beefed-up local control, so they can do more with less.

This is also contrary to the Alliance model of regional resentment and tax cuts—though for many, those aren't bad consolation prizes. But there is clearly a deep desire in this country to continue to act collectively, to pool resources and knowledge and build something better than any of us is capable of building as individuals.

This presents a tremendous opportunity for a left-wing party, an opportunity that has been entirely wasted by the NDP. There is a wide-open space in the political landscape for a new party, one that looks at the calls for localization and doesn't see a dire threat to national unity, but the building blocks for a unified—but diverse—nation. In these calls for self-determination, grassroots democracy, and ecological sustainability are the pieces of a national party platform, a coherent vision that includes many Canadians who have never before been represented by the so-called left.

Right now, we have federal parties that try to hold this country together against its will, and regional parties that pit the country against itself at its peril. A new party could do something else: show the country not the differences but the connections among these struggles for localization and articulate the progressive principles of economic sustainability, self-determination and participatory democracy. Rather than fighting localization, we need to spend national resources in a way that would systematically encourage creative, local solutions, making respect for the local the centrepiece of our national project.

What is needed is a federal party that would relentlessly champion the reinvention of local democracy with the same enthusiasm that the Alliance champions tax cuts. That doesn't mean abandoning strong national standards—and stable, equitable funding—for health care, education, affordable housing, and environmental protections.

But it does mean that the mantra of a political party of the left should change from "increase funding" to "empower the grassroots"—in towns, on native reserves, at schools, in resource communities, in workplaces. This project doesn't mean less government, just a different kind of government.

Its slogan: "Protect the Local, Nationally."


Although they hardly registered on the electoral map, I think the Canadian Action Party have some good ideas, at the national level anyway. Perhaps if I was Canadian I wouldn't have voted for them this time around, but if they got involved with the NDP and Greens they may be the catalyst for challenging the two main parties over the question of true patriotism and what it means to be Canadian.

Top Ten Reasons to Vote For CAP on January 23!

1-Freedom for all in a sovereign strong nation. Despite no taxpayer funding, CAP is the only party exposing the unaccountable, unelected rulers of Canada(that is the Canadian Council of Chief Executives, former government officials, business leaders, and academics). MP's are irrelevant, emasculated, and subject to corruption so long as they submit to that influence. As such they are no good to the citizenry.

2-Put your Money to work for You-Reinstate full use of the Bank of Canada-fund infrastructure and enable universal healthcare, education, environmental protection, full employment, and an end to the GST

3-Restore our civil rights and liberty-rescind all liberty stripping legislation including the anti-terrorism law, Public Safety and Preparedness Act. Prevent new laws that spy on law abiding citizens, such as surveillance legislation, tracking devices, biometric identifiers. Remove legislation that imprisons law abiding citizens in our own country, such as no fly lists, no passport lists, security certificates.

4-Restore Canada's Military Peace-Keeping role-Canada to stay out of Northcom, Star Wars, and to withdraw from the Binational Military Planning Group

5-Take Canada out of international agreements that are anti-Canadian, anti-democratic, anti-free trade, anti-environment, anti-universal healthcare-cancel NAFTA, FTA, the Smart Border Declaration,(signed in December 2001 by John Manley Deputy Prime Minister of Canada and Tom Ridge, Director of the United States Homeland Security Department); Withdraw from the Security and Prosperity Partnership Agreement, signed in March 2005 by Fox, Martin, Bush.

6-Electoral Reform-Restore democracy-revoke Section 550 of the Canada Election Act, that prohibits election promises to be accountable to the electorate-bring in proportional representation, recall legislation, direct democracy, all to provide transparent accountability to the people of Canada

7-Reinstate and enforce the four pillars of the Canada Health Act-including universality, portability, accessibility, fully funded public health programs with a ban on private healthcare(Bank of Canada)

8-Universal access to publicly funded education from pre-school through post-secondary including low interest student loans (Bank of Canada)

9-Providing and investing in alternative energy, research and development (Bank of Canada)

10-strong Voice of opposition- standing for peace, not WAR, and promoting real security and prosperity for the people not for corporate exploitation


Finally, some advice to the NDP in BC from Larry Gambone. I'm not sure when this was written but as BC is currently run by Liberals at Provincial level it must have some applicability! I'm sure it would be of use to NDPers/Greens/CAPers etc elsewhere in Canada as well.

BC, A LAND OF MISSED OPPORTUNITIES

The recent events in BC with the Liberal government are only the latest events in a 120 year history of mis-management, corruption and downright stupidity. One might well say that the present cut-backs are the fruit of this sordid mess. We, or more correctly they, since I languish in Siberian exile, did have 3 (or was it 4?) NDP governments and the situation could have been turned around. But the NDP didn’t. Now it shouldn’t be up to me to lay out a political program for social democrats, after all, I ain’t one ’o them, but the fact that an outsider can show them a thing or two, only points out what a bunch of unimaginative losers they must be.

What can a po’ provincial govt. do? Now we might bitch a lot about Ottawa and all its powers, and rightly so, BUT, the provinces do have a lot of power – at least 75% of the powers of an independent state. Look at Quebec. These are residual powers granted to each province by the British North America Act of 1867 and expanded on since. What are these residual powers? First off, the province can organize the lower level of government as it sees fit – as we have seen to our great displeasure here in Quebec with forced municipal mergers. Secondly, the provincial government itself, as long as it remains within the tradition of parliamentary democracy and does not overstep its constitutional limits visa-vis the Feds, can also organize itself as it pleases. A provincial police force, provincial pension fund and provincial banks are also constitutional. Once again, check-out them there Queebecers. Now you’d think wouldn’t ya, that anyone with an IQ a bit larger than their shoe size, could do a lot with all these powers – a lot of things to make life in BC pleasant.

If I must, I’ll spell it out simply. Government in BC is highly centralized, more so than in the East. Government is also highly undemocratic, virtually every govt. is a govt. supported by a minority, not a majority. Once in power, a party can do what it wants. Centralization and lack of democracy means less control by the people. Less control by the people means the government is free to reward its friends from public lands and taxes, ignore the environment, grab your property, impose expensive and useless mega projects, etc., etc. and etc. Furthermore, a govt. can introduce a reform, but the next party in power can undo it. What Our Lord the State giveth, Our Lord the State can also taketh away.

What COULD have been done is this: BC could be given a proper level of local government – counties and municipalities – which would be largely autonomous. These govts. would be based on real existing communities and not be artificial creations like at present. Much of what the prov. govt. does could be handed over to these local govts. Hospitals and schools could be de-nationalized (more correctly de-provincialized) and become the property of the community. Development, provincial lands and environment could also be the right of the community. Rather than govt. revenue being concentrated in the hands of the province – and therefore much of it getting wasted by bureaucracy and pet projects – it would be disbursed immediately to the lower levels of govt. to pay – at least in part – for the hospitals, schools, streets etc.

In order to minimize corruption at the lower levels of govt., the provincial govt. would maximize democracy at these levels. Small communities would replace the mayor and council with New England style direct democracy. All issues deemed controversial – by a simple petition of say 10% of eligible voters – would require a referendum which would need 66% of all eligible voters to pass. Large cities would be broken up into Neighborhood Councils, based on real neighborhoods, and elected locally. The Neighborhood Council would elect a recallable DELEGATE to the City Council. The position of Mayor would be abolished, instead a rotating Spokesperson. The Referendum Law would also apply at the Neighborhood Council and City Council levels.

The provincial govt. would undergo the following changes: A limited proportional ballot would be introduced. Any party with more than 5% of the vote would be given a seat. However, the vast majority would represent communities. These would no longer be artificial electoral districts (or ridings as they are quaintly referred to in Canada) but would be based upon real existing municipalities and counties. Each of these – as close as possible to rep by pop. - would elect a recallable DELEGATE to Victoria. Once again, the Referendum Law would apply. A Cabinet would be elected from the Legislature and the position of Premier stripped of any powers. The Premier would become an annually rotated spokesperson. The Prov. Govt. would engage in only those areas that the lower levels of govt. desired, such as collecting and disbursing revenue, provincial parks, highways, ferries, and the maintenance of standards, health and water inspection etc. (*)

These changes in government would be incorporated within a Provincial Constitution. To tie the hands of any future government who might try to destroy these freedoms any changes to the Constitution would require the approval of BOTH 90% of the lower governments and 90% of the eligible voters.

BC would withdraw from the Canada Pension Plan and set up its own Plan like Quebec. Within no time this would become the largest investor in the province. A Ministry of Cooperative Affairs would be set up to encourage mutual aid, cooperatives and the general social economy. Rather than introducing private health care and privatizing auto insurance and BC Hydro, they would be mutualized, i.e., turned into client-owned and controlled cooperatives. With the Pension Fund, mutualism and community ownership, each person would come to own a share in the economy. In time, the bulk of the economy would be in the hands of the ordinary person.

The results? Government would be cheaper and more efficient. The environment would be better protected – who want’s to dirty their own nest? There would be less dissension since government would actually reflect the will of the people and not a minority. The economy would thrive since it would be owned by those who work it. Community would be re-inforced and rebuilt, resulting in less alienation and therefore less social problems. Voluntarism and mutualism would thrive as large, centralized institutions got broken down to human scale.

Like I said before, I’m not a social democrat, if any of you reading this are, well here’s your program. Take it, it’s yours. You don’t even need mention my name. In fact, please don’t or I’ll be forced to turn in my anarchist membership card. Claim it as your idea, for all I care.

*) Anybody thinking that I must be smoking something when writing this should be aware that a place governed on similar lines exists – It’s called Switzerland and happens to be the wealthiest nation on earth.


For what it's worth, if I was Canadian I would have voted either Green or NDP, not least as they are both opposed to the Security and Prosperity Partnership, the stepping stone from NAFTA to North American Union.

Elections v. v.quick update- First Highgate, then the world...

Well, Boris won the Mayoral Election. The best thing you can say for him is that he is opposed to ID cards.

Furthermore, the BNP got a seat in the GLA.

On the plus side, the Greens took the 3rd seat in Highgate ward. Lab came second and the Cons third. The Greens took two seats on the GLA (same as in 04)and Sian Berry (who I found out on Wed night drinks bitter, after an evening getting soaked leafletting letter boxes in Archway) came fourth in the first round of the Mayoral contest. Furthermore, the Greens did pretty well in most of the constituency contests.

Respect (apart from 15% in City and East) and Left Luggage, sorry Left List, did extremely badly. It seems the last hope of the English Left is the Green Party. However, how more disasters it will take for the message to get home to all those wanting to re-stage Sergei Eisenstein's October?

Will blog more Sunday night/Monday morning here. I saw Naomi Klein's Shock Doctrine going dirt cheap in a bookshop yesterday so I'm going to splash out and read it in the park this afternoon, either trying to get a suntan or rust...

Update: Early Hours of Monday 5th: Just finished Shock Doctrine. It is even better than No Logo. The book it complements is Greg Palast's Armed Madhouse (I need to look hard in the footnotes to see if NK cites him). I want to review it at length, or at least use it as a starting point for other posts. For instance, surely there is a viable political way between grovelling to Corporate Capitalism on one side and pandering to RORO (Racially Or Religiously Obsessed) types on the other? I'm tired and I digress...

There has been talk over the weekend that there may be a challenge to Gordon Brown's leadership of the Labour Party at some point in the coming months if things don't impove. There seems to be hopes on the Labour Left that NuLab can be defeated at last, but I'm pretty sure NuLab will find someone else to lead them all on the Forward Path to Reform and Modernisation if GB fails. The Tories seem to think the next General Election is all over bar the shooting, sorry shouting, but I still think we will have a hung Parliament in 2009-10 and a National Government of "Reformers" and "Modernisers" will form in the aftermath. We will see...

Kevin Carson on Naomi Klein

This is a superb piece. Kevin Carson critiques Naomi Klein's Shock Doctrine from a free market anti-capitalist perspective. However, it is also a free market anti-capitalist attack on Actual Existing Capitalism. Apols for the lack of links: there were so many...please check Kevin's original article at his blog.

Friday, November 02, 2007
Naomi Klein: The Shock Doctrine

Naomi Klein, to a casual reader, might seem to hate the free market. Or at least she hates what most people think of as the free market, based on the conventional use of that term by mainstream politicians and journalists. And the usual vulgar libertarian suspects (see here and here and here) have reacted with exactly the kind of by-the-numbers polemics you'd expect. (She's met with a more open-minded reception from real libertarians. See, for example, Sheldon Richman, "Naomi Klein: Free Market Ally?" and Kehlkopfmikrofon, "Left-Libertarian Perspectives on Naomi Klein.")

If Klein hates what she mistakenly believes is the free market, the blame is pretty easy to assess: for the most part the very same folks at Cato, the Adam Smith Institute, and their ilk, that have their panties in such a wad over her book. As I've repeatedly said in the past, if I thought the free market actually meant what those people mean when they talk about "free markets," I'd hate it myself.

It's hard to spend any time at all in the allegedly "libertarian" parts of the Web without being deluged by commentary defending corporate globalization, CO2 emissions, Third World landed oligarchies, Nike's sweatshops, Wal-Mart, Big Pharma's profits, CEO salaries, and Microsoft's market share, all based on the principles of "the free market."

From Smith to Ricardo and Mill, classical liberalism was a revolutionary doctrine that attacked the privileges of the great landlords and the mercantile interests. Today, we see vulgar libertarians perverting "free market" rhetoric to defend the contemporary institution that most closely resembles, in terms of power and privilege, the landed oligarchies and mercantilists of the Old Regime: the giant corporation. When the "free market" is perverted to defend such odious interests, it's not hard to see why sane people view it with the same apprehension they normally reserve for the bubonic plague. Make no mistake: I hate such commentary, and the agenda behind it, with every fiber of my being. But it's not the free market.

If Germany had won the war, there would probably be a mushroom proliferation of Nazi "free market" think tanks (not inconceivably staffed by a considerable portion of the Austrian diaspora returned from America) defending the profits of Krupp and I.G. Farben in terms of "free market principles," along with the Nazi equivalent of Nike sweatshops in Eastern Europe and black Africa. All decent people would hate such intellectual vermin and their monstrous version of the "free market." The version of the "free market" defended by neoliberals and vulgar libertarians in our own world is only better in degree, and even that probably not by much.

Klein uses the term "disaster capitalism" to refer to the neoliberal modus operandi of "waiting for a major crisis, then selling off pieces of the state to private players while citizens [are] still reeling from the shock, then quickly making the 'reforms' permanent."

It's a very real phenomenon. As an account of the process of neoliberal "reform" as it occurred in country after country, and a chronicle of the corrupt collusion between government and corporate interests in formulating the "reforms," it is an outstanding reference work. The endnotes alone are immensely valuable.

My main objection, to repeat, is to her misuse of the term "free market" to describe such policies. Most of the examples of "free market reform" Klein describes could be more accurately described as "economic fascism." What passes for "free market reform," "deregulation," and "privatization" among the neoliberals is probably at least as statist as the various social democratic and mixed economy models to which neoliberalism is opposed. As Nicholas Hildyard argues in "The Myth of the Minimalist State,"

Far from doing away with state bureaucracy, free market [sic] policies have in fact reorganised it. While the privatisation of state industries and assets has certainly cut down the direct involvement of the state in the production and distribution of many goods and services, the process has been accompanied by new state regulations, subsidies and institutions aimed at introducing and entrenching a "favourable environment" for the newly-privatised industries.

The state has actually played a central role in implementing free market [sic] policies and, moreover, has a continued "intimate and ubiquitous" involvement in regulating the minutiae of the market economy -- a direct consequence of the hand-in-glove relationship that free market [sic] governments have fostered between "adjusted" state institutions and market interests....

A good example is the standard neoliberal model of "privatization," as carried out by Milton Friedman in Chile and Jeffrey Sachs in Russia. As Klein herself puts it in regard to New Orleans' massive post-Katrina conversion to charter schools (involving almost the entire school system), neoliberal "privatization" of public functions usually results in "publicly funded institutions run by private entities according to their own rules." [p. 5] Another variant of the same phenomenon is taxpayer-funded vouchers, a favorite of the folks at Cato, the ASI, and the Heritage Foundation. It was implemented in Pinochet's Chile, among other places.

Perhaps the most egregious example of this phenomenon is the fascist economy that has grown up around the national security state, including both the "private" firms that act as camp followers to the U.S. military in its wars abroad, and the "private" firms contracting with Homeland Security and other police state agencies at home. Klein, who aptly calls it the "disaster capitalism complex," considers it the booming sector of the economy in the same way as housing until recently, and the tech sector before that.

In my opinion the very term "private sector," in regard to such entities, is grossly misleading. Big business interests whose profits depend on direct subsidies and protections from the state are, in fact, a part of the state. If Marx was right in calling the state "the executive committee of the ruling class"--and I think he was--then the owners and managers of the corporate economy make up the lion's share of that ruling class. Corporate directors and senior management from the state capitalist sector constantly shuffle, in classic revolving door style, into political appointments in the state apparatus and then back to "private" employment.

Brad Spangler put it this way:

...one robber (the literal apparatus of government) keeps you covered with a pistol while the second (representing State-allied corporations) just holds the bag that you have to drop your wristwatch, wallet and car keys in. To say that your interaction with the bagman was a “voluntary transaction” is an absurdity. Such nonsense should be condemned by all libertarians. Both gunman and bagman together are the true State.

Large corporations are neither passive victims nor passive beneficiaries of the state; they act through the state. Or rather, to a large extent they are the state. It makes about as much sense to separate them from the state, as it would have made to separate the landholding class from the state in Medieval times.

And here's how the Libertarian Alliance's Sean Gabb described the model of fake "privatization" promoted by the Adam Smith Institute:

As reconstructed in the 1980s - partly by the Adam Smith Institute - the new statism is different. It looks like private enterprise. It makes a profit. Those in charge of it are paid vast salaries, and smugly believe they are worth every penny....

But for all its external appearance, the reality is statism. And because it makes a profit, it is more stable than the old. It is also more pervasive. Look at these privatised companies, with their boards full of retired politicians, their cosy relationships with the regulators, their quick and easy ways to get whatever privileges they want....

As with National Socialism in Germany, the new statism is leading to the abolition of the distinction between public and private. Security companies, for example, are being awarded contracts to ferry defendants between prison and court, and in some cases to build and operate prisons. This has been sold to us on the - perfectly correct - grounds that it ensures better value for money. But it also involves grants of state powers of coercion to private organisations. All over the country, private companies are being given powers of surveillance and control greater than the Police used to possess.

....There has been no diminution in the economic power of the State, only a change in its mode of operation....

Sometimes neoliberal "privatization" involves not just the contracting out of public functions with continued taxpayer funding, but the auctioning off of state assets. The process generally goes something like this: The World Bank cultivates technocratic elites within a Third World government, educating them in the neoliberal model of economic development and promoting their autonomy from democratic political pressure. The World Bank acts collusively with these elites to arrange loans for building the transportation and utility infrastructure needed for Western industry to build profitable facilities in the country. When the country incurs a crushing debt load, owing to the collusion between domestic technocratic elites and the World Bank, the World Bank and IMF use the debt as leverage to impose a "structural adjustment reforms," including "privatization" of the very infrastructure that was created at taxpayer expense to subsidize Western industry. Naturally, the infrastructure is bought up by Western capital--the same interests it was originally built at taxpayer expense to serve--for pennies on the dollar. During the privatization process, the Third World government may invest more money in the infrastructure, to make it salable, than it gets from the sale. And following "privatization," the new owners' first order of business will be systematic asset stripping, with the income from sale of capital assets exceeding what they paid for the infrastructure. Pretty neat, huh?

Sean Corrigan described the process in more colorful terms:

Does he [Treasury Secretary O'Neill] not know that the whole IMF-US Treasury carpet-bagging strategy of full-spectrum dominance is based on promoting unproductive government-led indebtedness abroad, at increasingly usurious rates of interest, and then – either before or, more often these days, after, the point of default – bailing out the Western banks who have been the agents provocateurs of this financial Operation Overlord, with newly-minted dollars, to the detriment of the citizenry at home?

Is he not aware that, subsequent to the collapse, these latter-day Reconstructionists must be allowed to swoop and to buy controlling ownership stakes in resources and productive capital made ludicrously cheap by devaluation, or outright monetary collapse?

Does he not understand that he must simultaneously coerce the target nation into sweating its people to churn out export goods in order to service the newly refinanced debt...?

Joseph Stromberg referred to such privatization of state assets as "funny auctions, that amounted to new expropriations by domestic and foreign investors."

Proposals to auction off Iraqi properties, with the state acting as effective owner, would likely lead, if implemented, to a massive alienation of resources into the hands of select foreign interests.

...and for Stromberg, a real free market libertarian, remember, this is a bad thing.

The textbook case of "funny auctions" was the looting carried out under the supervision of Yeltsin and Sachs. The Russian state ministers transferred enormous public funds into banks owned by the oligarchs--themselves major figures in the state and former Communist Party leadership. The oligarch's banks, in turn, conducted the privatization auctions of state industry--and they bid on it themselves, using the embezzled funds received from the government. [p. 233] Klein refers to it as "the strip mining of an industrialized state." [p. 242] This, by the way--and Yeltsin's suspension of parliament and rule by decree--went largely unremarked on by the same people currently squealing about Putin's authoritarianism. The difference is that Putin is using his muscle against the oligarchs and even Western capitalist interests.

Neoliberal "privatization" may leave a larger share of functions under nominally private direction, but the new "private" enterprises operate within a web of protections, advantages and subsidies defined by the state.

A much better model for privatization is that of Murray Rothbard and Karl Hess. As Hess argued in 1969, real free market libertarians don't reflexively defend anything that's called "property."

The truth, of course, is that libertarianism wants to advance principles of property but that it in no way wishes to defend, willy nilly, all property which now is called private.

Much of that property is stolen. Much is of dubious title. All of it is deeply intertwined with an immoral, coercive state system which has condoned, built on, and profited from slavery; has expanded through and exploited a brutal and aggressive imperial and colonial foreign policy, and continues to hold the people in a roughly serf-master relationship to political-economic power concentrations.

Hess called for creative libertarian analysis, confronting issues of "the revolutionary treatment of stolen "private" and "public" property in libertarian, radical, and revolutionary terms." For example, he asked, "What... should happen to General Motors in a liberated society?"--a question that's never been raised at the Cato Institute or the Heritage Foundation, I'll wager. ["The Student Revolution," The Libertarian (soon renamed The Libertarian Forum) May 1, 1969, p. 2.]

Rothbard attempted to provide some answers to the question Hess raised. He argued that state property should simply be treated as "unowned," and then homesteaded by those currently occupying and using it. In the case of utilities and other public services, this would mean turning them into consumer cooperatives. Universities would be turned either into consumer cooperatives, owned by student guilds, or into producer co-ops owned by the faculty. State-owned industry should be handed over to its workers. He even argued that private industry that got the majority of its profits from the state should be treated as state property and homesteaded by its workers. ["Confiscation and the Homestead Principle," The Libertarian Forum June 15, 1969 p. 3]

In the specific case of the post-Soviet economies and other state socialist countries attempting market reforms, he argued in "How and how not to desocialize" that state property should be privatized on the principle of "all land to the peasants, all factories to the workers!" ["How and How Not to Desocialize," The Review of Austrian Economics 6:1 (1992) 65-77]

That was, incidentally, the form of privatization actually envisioned by Solidarity at the fall of the pro-Soviet regime: the transformation of all state enterprises into workers' co-ops. But under the influence of the Chicagoids who infested Poland, with their dire threats of capital flight, the new Solidarity government was browbeaten into opening the country up to corporate looting. That was the model envisioned by Gorbachev (surely a more legitimate claim to the name of "free market reform" than what actually occurred), before a wrathful deity visited Russia with the triple calamity of Yeltsin, Sachs, and the oligarchs. I'll take emerods in my secret parts any day.

Neoliberal policies depart from genuine free market principles in numerous other ways.

For example, they tend to be adopted in contexts where corporate elites desire to roll back the bargaining power of labor. The governments that adopt Chicago School policies also tend to terrorize unions and other forms of poltical organization by workers in ways that no genuine believer in free markets could possibly support (any implied commentary on George Reisman is very much intentional).

A large part of he appeal of Chicago School economics was that, at a time when radical-left ideas about workers' power were gaining ground around the world, it provided a way to defend the interests of owners... [p. 52]

As the countries of the South American cone, one after another, fell under military dictatorships and played host to pestilential swarms of Chicago Boys, the first targets of their terror were the trade unions and their parties. And they were actively encouraged by Kissinger. [p. 97] The main purpose of the infamous Operation Condor was to organize mutual support among the intelligence operations of the South American military dictatorships, in identifying and assassinating the leaders of the left-wing opposition. In several countries of the region, military coups were followed immediately by raids on trade union headquarters, and by military raids on factories in which union organizers and radicals--helpfully pointed out by managers--were "disappeared." [p. 106]

Now, even by the avowed principles of the vulgar libertarians, labor and capital are supposedly coequal "factors of production." Imagine the reaction at Cato or the ASI if corporate headquarters were raided and terrorized in the way that union headquarters were, or if prominent and influential capitalists were tortured, murdered, and "disappeared," and later discovered in ditches with their faces hacked off, as a means of intimidating them and reducing the bargaining power of capital in the market. The difference, for the Catoids and Misoids, is that such treatment of labor is a regrettable necessity, or an aberration in the "political" realm that did not affect the fundamentally "free market" orientation of the regime; identical policies carried out against capital, on the otherhand, would be directly repugnant to their "free market" principles. The control of the state by the owners of one "factor of production" (capital), and the use of state power to terrorize the owners of another "factor of production" (labor-power) on behalf of capital, is just as repugnant to free market principles as the reverse case.

There's nothing inherent in free market principles, as such, that implies greater affinity for owners than workers. In fact, one can make a free market argument (as I repeatedly have) that the state's interventions in the market have served mainly the interests of the owning classes, to the great detriment of the bargaining power of labor. Taft-Hartley, for example, surely had that effect. So did the draconian police state regime imposed on the British working classes (e.g. the Laws of Settlement, the Riot Act, and the Combination Laws) during the early Industrial Revolution. The state's enforcement of artificial scarcity in land and capital, by maintaining entry barriers and other special privileges on behalf of landlords and capitalists, makes the means of production artificially scarce and expensive for workers so that they are forced to sell their labor in a buyer's market. Instead of jobs competing for workers and driving down the rate of profit until wages equal the full product of labor, which would be the case in a free market without such special privilege, we have instead a state of affairs in which workers are forced to compete for jobs and drive down wages, and pay a form of tribute for access to the means of production.

The neoliberal version of "free markets" tends to reflexively support any title to "private property" in land, with absolutely no regard to issues of just acquisition. In all the Latin American countries where the Chicago Boys were given free rein, land reforms were reversed and the peasants' land restored to the latifundistas and other feudal landed oligarchs. And every time a left-leaning Third World government nullifies the illegitimate titles of such feudal elites, and gives the land to its rightful owners--the peasants working it--the predictable squeals of outrage start among the Catoids.

The only form of property the Catoids and other vulgar libertarians don't respect is the property of ordinary working people. In Sri Lanka after the Tsunami, and in New Orleans after Katrina, one of the top items on the agenda, as a condition for disaster relief aid, was to eliminate legal barriers to expropriating and evicting poor people from land desired by commercial interests. In Sri Lanka, the reconstruction plan was drafted by a coalition of businesspeople, of whom the largest portion represented the tourist industry that coveted beachfront property. The plan they came up with included the eviction of entire beachfront villages so their land could be used for hotels, and the use of disaster relief funds to provide corporate welfare for superhighways and industrial port facilities.[pp. 292-293, 297] The same pattern was followed in India and Indonesia, with peasants forbidden to rebuild on their own land, driven into holding camps, and their land (and lots of aid) given to hotel companies. [p. 399] In Honduras after Hurricane Mitch, the mining laws were changed to make it easier to evict peasants from land the mining companies wanted. [p. 395]

But there is absolutely no legitimate basis in free market principle for the artificial property rights of feudal landlords. I admit I'm not a typical free market advocate in that regard. As an individualist anarchist, I tend to be hostile toward absentee landlords in principle; that sets me apart from the libertarian mainstream, which is predominantly Lockean (with a large minority of Georgists thrown in for good measure). But even the Lockean principles of Murray Rothbard and his followers are fundamentally hostile to the artificial property rights of quasi-feudal landlords like the latifundistas of Latin America. Rothbard denounced such feudal property titles in no uncertain terms.

10. The Problem of Land Theft

...suppose that centuries ago, Smith was tilling the soil and therefore legitimately owning the land; and then that Jones came along and settled down near Smith, claiming by use of coercion the title to Smith’s land, and extracting payment or “rent” from Smith for the privilege of continuing to till the soil. Suppose that now, centuries later, Smith’s descendants (or, for that matter, other unrelated families) are now tilling the soil, while Jones’s descendants, or those who purchased their claims, still continue to exact tribute from the modern tillers. Where is the true property right in such a case? It should be clear that here, just as in the case of slavery, we have a case of continuing aggression against the true owners—the true possessors—of the land, the tillers, or peasants, by the illegitimate owner, the man whose original and continuing claim to the land and its fruits has come from coercion and violence.... In this case of what we might call “feudalism” or “land monopoly,” the feudal or monopolist landlords have no legitimate claim to the property. The current “tenants,” or peasants, should be the absolute owners of their property, and, as in the case of slavery, the land titles should be transferred to the peasants, without compensation to the monopoly landlords....

11. Land Monopoly, Past and Present

Land monopoly is far more widespread in the modern world than most people—especially most Americans—believe. In the undeveloped world, especially in Asia, the Middle East, and Latin America, feudal landholding is a crucial social and economic problem—with or without quasi-serf impositions on the persons of the peasantry.... [American "free market"] preachments naturally fall on deaf ears, because “free market” for American conservatives obviously does not encompass an end to feudalism and land monopoly and the transfer of title to these lands, without compensation, to the peasantry....

American conservatives... exhort the backward countries on the virtues and the importance of private foreign investment from the advanced countries, and of allowing a favorable climate for this investment, free from governmental harassment. This is all very true, but is again often unreal to the undeveloped peoples, because the conservatives persistently fail to distinguish between legitimate, free-market foreign investment, as against investment based upon monopoly concessions and vast land grants by the undeveloped states. To the extent that foreign investments are based on land monopoly and aggression against the peasantry, to that extent do foreign capitalists take on the aspects of feudal landlords, and must be dealt with in the same way....

Another divergence of neoliberal "market reform" from the real thing is its treatment of odious debt. In country after country, even as the neoliberals lauded the global "sweep of democracy," they refused any forgiveness of debts acquired by the previous military regimes--such debts acquired, by the way, largely to create the subsidized transportation and utility infrastructure necessary to render Western capital investments profitable (when not used, that is, to fund the repressive military and police apparatus). [pp. 156-157]

The neoliberal version of "market reform," as opposed to the real thing, tends to take a jaundiced view of tort liability law and its use to hold corporate interests accountable for the harm they do. We've seen this domestically, with "tort reform" being a top item on the corporate agenda during the past two decades. In Iraq, the CPA puppet regime indemnified American crony capitalists of liability for any actions taken in that country. [p. 358] In effect, Bremer resurrected the venerable principle of extraterritoriality. Real free market libertarians, on the other hand, view a vigorous tort law regime as the free market alternative to the regulatory state. Real free market libertarians consider the evisceration of traditional common law liability in the nineteenth century, by judges in the service of commerical interests, to be a bad thing. In a genuine free market order, corporations that dumped waste or polluted groundwater would be eaten alive by lawsuits.

Finally, although Klein devotes little attention to it, a central preoccupation of the Washington Consensus, and in the model of disaster capitalism imposed in the areas under its thumb, is "intellectual property" [sic]. Although I haven't managed to track it down, I still recall a statement by Paul Bremer in 2003 announcing that the goal of the Coalition Political Authority was to create a market democracy with "strong intellectual property rights." Now so-called "intellectual property" is an abomination to free market principles.

The main function of patents, domestically, was to enable the cartelization of industry through patent control. General Electric and Westinghouse, for example, cartelized the home appliance industry by an exchange of patents. The power of AT&T was rooted in the Bell Patent Association. Internationally, patents give transnational corporations a monopoly on the newest generation of production technology, effectively enabling them to lock host countries into supplying sweatshop labor for foreign-owned industry. "Intellectual property" is especially important to the new global economy. It's hardly coincidental that the sectors of the American corporate economy that flourish in the global economy are all heavily dependent either on direct subsidies, on patents and copyrights, or both: agribusiness and biotech, software, entertainment, electronics, and arms. If patents, copyrights, and excessive trademark rights disappeared, most of the global economy would vanish right along with them. The first order of business of any genuine free market regime would be to repudiate--totally--the IP accords of the Uruguay Round of GATT. The first order of business in Washington, of course, would be to declare it a terror state.

Klein herself admits at times that the neoliberal policies she rightly condemns are not consistent with genuine free market principles. For example:

Friedman framed his movement as an attempt to free the market from the state, but the real-world track record of what happens when his purist vision is realized is rather different. 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 mostly wealthy politicians--with hazy and ever-shifting lines between the two groups. In Russia, the billionaire private players in the alliance are called "the oligarchs"; in China, "the princelings"; in Chile, "the piranhas"; in the U.S., the Bush-Cheney campaign "Pioneers." Far from freeing the market from the state, these political and corporate elites have simply merged, trading favors to secure the right to appropriate precious resources previously held in the public domain--from Russia's oil fields, to China's collective lands, to the no-bid reconstruction contracts for work in Iraq.

A more accurage term for a system that erases the boundaries between Big Government and Big Business is not liberal, conservative or capitalist but corporatist. Its main characteristics are huge transfers of public wealth to private hands, often accompanied by exploding debt, an ever-widening chasm between the dazzling rich and the disposable poor and an aggressive nationalism that justifies bottomless spending on security. For those inside the bubble of extreme wealth created by such an arrangement, there can be no more profitable way to organize a society. But because of the obvious drawbacks for the vast majority of the population left outside the bubble, other features of the corporatist state tend to include aggressive surveillance (once again, with government and large corporations trading favors and contracts), mass incarceration, shrinking civil liberties and often, though not always, torture. [p. 15]

It's clear that Chile was never the laboratory of "pure" free markets that is cheerleaders claimed. Instead, it was a country where a small elite leapt from wealthy to super-rich in extremely short order--a highly profitable formula bankrolled by debt and heavily subsidized (then bailed out) with public funds. When the hype and salesmanship behind the miracle are stripped away, Chile under Pinochet and the Chicago Boys was not a capitalist state featuring a liberated market but a corporatist one. Corporatism, or "corporativism," originally referred to Mussolini's model of a police state run as an alliance of the three major power sources in society--government, businesses and trade unions--all collaborating to guarantee order in the name of nationalism. What Chile pioneered under Pinochet was an evolution of corporatism: a mutually supporting alliance between a police state and large corporations, joining forces to wage all-out war on the third power sector--the workers--thereby drastically increasing the alliance's share of the national wealth....

...[P]erhaps shock treatment was never really about jolting the economy into health. Perhaps it was meant to do exactly what it did--hoover wealth up to the top and shock much of the middle class out of existence. [p. 86]

...[China] is a mirror of the corporatist state first pioneered in Chile under Pinochet: a revolving door between corporate and political elites who combine their power to eliminate workers as an organized political force. [p. 190]

But following every such burst of clarity, she immediately resumes identifying the neoliberal agenda with the "free market." For example, the passage on p. 15 block quoted above is followed directly, in the very next paragraph, by this sentence: "From Chile to China to Iraq, torture has been a silent partner in the global free-market crusade." By my count, she misuses "free market" in this way some times.

I think I understand why she does it. That is, after all, the conventional usage of "free market" in mainstream American politics and in the mainstream press. Just this past week, I heard a pinhead on some conservative talk radio show contrast the Canadian single payer healthcare system to "our free market system" of healthcare--the latter industry being, in fact, about as heavily subsidized, protected and cartelized as the aerospace industry.

Although she seems aware that what the neoliberal politicians and journalists call the "free market" agenda is in fact a highly statist form of corporatism, she does not seem to be aware that their use of the free market label is heavily contested by a genuine, philosophically consistent strand of free market thought. Although she often judges the neoliberal version of "free markets" by their corporatist reality, she neglects even to consider the possibility of an intellectually honest free market movement that judges such corporatism illegitimate in terms of genuine free market principles.

And in taking the neoliberal use of "free market" at face value, she also seems unaware of just what an enormous ideological victory she's handing the corporate ruling class.

As Sean Gabb argued, it's about as legitimate to identify the existing neoliberal model of corporate globalization with "free markets" and "free trade" as it would be to call the Soviet oligarchy under Stalin with "workers' power." The transnational corporations and financial elites, and the neoliberal court intellectuals who service them, have appropriated the language and symbolism of the classical liberal movement to legitimize their corrupt power interests. In much the same way, Stalin appropriated the libertarian and humanist symbolism of the nineteenth socialist movement to letitimize the exploitative class system under the Party apparat.

The neoliberals have no more right to the heritage of the classical liberal movement--to the thought of Thomas Hodgskin, Benjamin Tucker, Lysander Spooner, and Franz Oppenheimer--than Stalin had to the red banner and the Internationale. The language of free market liberalism ought to burn their filthy mouths; by their very use of the term, they set themselves up as an abomination of desolation in the holy place.

Most importantly, one of the most effective weapons we have against corporate power and its intellectual mouthpieces is to demonize the neoliberals in terms of their own professed "free market values," and show them up for the corporate welfare parasites they really are.

There is, in fact, a considerable degree of mirror imaging between the mainstream right and left, when it comes to this understanding of free markets. The corporate economy and its court intellectuals have a vested interest in promoting the belief that big business got that way because of superior efficiency and other competitive virtue in the "free market." Big government liberals, on the other hand, have a parallel vested interest in pretending that the concentration of wealth and corporate power is the inevitable result of the normal market process, and the only way to stop it is to create a centralized government bureaucracy run by them.

Klein buys into the liberal side of this matrix reality when she regurgitates Art Schlesinger's goo-goo myth of the New Deal, referring to the Great Depression as a "market-created disaster" and the New Deal as "the end of laissez-faire." [p. 54]

A genuine laissez-faire economy would have produced something about as far from the state of affairs in 1929 as you could get. Absent the role of the state-promoted national railroad system in creating a centralized national market for firms operating on a national scale, absent the cartelizing effects of patents and tariffs, and absent the cartelizing effects of "Progressive" Era regulation, I would expect the American pattern of industrialization to have looked a lot more like something envisioned by Kropotkin and Lewis Mumford, and a lot less like something out of Schumpeter and Chandler.

Klein also buys into the Schlesingerite idea that American big business "grudgingly accepted" the New Deal. [p. 251] Big business didn't grudgingly accept the New Deal; it designed the New Deal. I strongly recommend G. William Domhoff's work (especially The Power Elite and the State and The Higher Circles) on the role of GE's Gerard Swope and the Business Advisory Council in formulating FDR's economic agenda. The blueprint they originally came out with, the NIRA, was a classic example of the kind of corporatist economy that Klein refers to elsewhere. It might have come from the desk of Hjalmar Schacht in Nazi Germany: it essentially organized every major industry into a state-authorized and state-protected cartel, with the avowed purpose of restricting production and keeping up prices. In other words, had it been allowed to stand it would have done, successfully, exactly what the great trusts at the turn of the century had tried and failed to do, by private means.

While acknowledging a legitimate role for markets, Klein calls for tempering "market fundamentalism" by such expedients as

requir[ing] corporations to pay decent wages, to respect the right of workers to form unions, and for governments to tax and redistribute wealth so that the sharp inequalities that mark the corporate state are reduced. [p. 20]

This implies that such "sharp inequalities" actually result from the unregulated market, and not from active state intervention on behalf of privileged capitalist elites. In fact our billionaire plutocracy and CEOs like Welch and Nardelli are not the products of a free market. They're turtles on fenceposts. In a genuine free market, organized around the principle of equal exchange and free from special privilege, the natural tendency is for prices to fall to production cost and for short-term entrepreneurial profits for innovative behavior to fall to zero as competitors enter the market and adopt new techniques. The only way to draw perpetual profits from innovation is to erect market barriers. R.A. Wilson made essentially this argument in The Illuminatus! Trilogy:

If you and I exchange equal goods, that is trade: neither of us profits and neither of us loses. But if we exchange unequal goods, one of us profits and the other loses. Mathematically. Certainly. Now, such mathematically unequal exchanges will always occur because some traders will be shrewder than others. But in total freedom—in anarchy— such unequal exchanges will be sporadic and irregular. A phenomenon of unpredictable periodicity, mathematically speaking. Now look about you, professor— raise your nose from your great books and survey the actual world as it is— and you will not observe such unpredictable functions. You will observe, instead, a mathematically smooth function, a steady profit accruing to one group and an equally steady loss accumulating for all others. Why is this, professor? Because the system is not free or random, any mathematician would tell you a priori. Well, then, where is the determining function, the factor that controls the other variables? You have named it yourself, or Mr. Adler has: the Great Tradition. Privilege, I prefer to call it. When A meets B in the marketplace, they do not bargain as equals. A bargains from a position of privilege; hence, he always profits and B always loses. There is no more Free Market here than there is on the other side of the Iron Curtain.

Interestingly, an article in New Scientist observed that wealth among the richest 3% of the population followed a power law distribution described by Pareto: in layman's terms, "to him that hath, much shall be given." The distribution of wealth for everyone else, on the other hand, corresponded to the law that describes the spread of energies of atoms in a gas.

Klein also takes at face value the corporate liberal rhetoric used to sell the IMF and World Bank in the 1940s [p. 162]--when, as pointed out by Gabriel Kolko in The Politics of War, their actual purpose was to subsidize the disposal of surplus American goods and capital in foreign markets. The World Bank and IMF were created as an adjunct of William Appleman Williams' "Open Door Imperialism," a safety valve for the chronic overproduction and overaccumulation under state capitalism.

Klein sees the spread of anti-Washington and anti-neoliberal regimes, especially in Latin America, as a sign of hope; this is the subject of her conclusion, appropriately titled "Shock Wears Off." The usual suspects at Cato, predictably, have turned Chavez and Morales as whipping boys. But the economic model pursued by the "Bolivarian revolution" is arguably no more statist than that of the Washington consensus. The land policy of Chavez and Morales, and of the Landless Workers Movement in Brazil, is far more legitimate from a free market standpoint than the Catoids' instinctive sympathy for the latifundistas. And Chavez's nationalizations and his subsidies to the cooperatives are no more statist than the policies pursued under the Washington consensus; they're just statist in a different direction. Frankly, when a former ruling class starts tasting a bit of the repressive medicine it was formerly accustomed to spooning out, it's hard for me to work up too much moral outrage.

The Catoid reaction to Chavez is fairly typical of vulgar libertarianism: corporate welfare and special protections for the rich are kinda sorta bad, in principle, maybe, I guess, and we oughta possibly, maybe, get around to writing a position paper on it someday... But welfare and protections for the poor and for aid to cooperative enterprise, now--they're flaming red ruin on wheels! A Pinochet who terrorizes unions and transfers land from the peasants to the oligarchy, well, that's too bad, I guess, but you've gotta break a few eggs, and yada yada yada.... But a Chavez who uses a bit of muscle on Western-owned corporations--why that's an outrage!

The reaction among American elite circles to the authoritarianism of Yeltsin and that of Chavez, respectively, speaks volumes. Nothing Chavez has done yet has remotely approached the openly avowed "Pinochet option" taken by Yeltsin, and his use of tanks to shut down the Russian parliament. None of Chavez's nationalizations remotely approaches the sheer scale of looting that transferred state assets directly into the bank accounts of the oligarchs.

Like Klein, I also see Chavez and allied regimes as a net positive force. Until about a decade ago, the Washington Consensus was almost universally regarded as "the only game in town." Now these new regimes, as statist in many ways as they admittedly are, are presenting a fundamental challenge to the statist global order that corporate capital depends on. The Washington Consensus is no longer the only game in town. If we're going to have one superpower, it's better that it be restrained by another one.

I've argued in the past that one of the best things we could hope for would be a concerted repudiation of neoliberalism, by a large enough number of Third World countries that they couldn't be crushed by American invasion or covert action. I can imagine a substantial agenda of "libertarian socialist" policies to be pursued by such a coalition, that would be closer to genuine free market principles than anything festering in the bowels of the Heritage Foundation. For starters, genuine land reform: nullifying the feudal titles of the landed oligarchies, granting full and permanent title to those cultivating, and restoring the land stolen in recent decades to those evicted from it (or their descendants). For another, a model of privatization that turns state services into consumer cooperatives, and state industry into worker cooperatives. For yet another, absolute and total repudiation of so-called "intellectual property" [sic] accords. Such a Third World coalition might wield, as its doomsday weapon, the threat of a coordinated repudiation of debt and/or of the dollar as reserve currency, and call on a coalition of Eurasian nuclear powers to protect them from military attack.

I am no social democrat. I'm under no illusions about the central role of big business in formulating the New Deal. I don't like statism of any kind. In my opinion, New Deal liberalism and the Reagan-Thatcher model of neoliberalism are like two farmers. The first farmer thinks he can get more work out of his livestock, in the long run, if he feeds them well and gives them comfortable shelter and sufficient rest. The second farmer thinks he can get more work out of them if he works them to death and then replaces them. There's no question that both "farmers" view us as "livestock," and that their prime concern is with their own profit. But I know which farm I'd rather live on.

Quite frankly, if my only choices are corporate liberalism and social democracy, and a banana republic on the neoliberal model, I'll take the former any day. If I get to choose between the paternalism of Brave New World and the jackboot in my face of 1984, it won't take me long to decide. I'm not ashamed to say that if my only choices are the welfare statist and neoliberal versions of statism, I'll take the kind of statism whose yoke weighs less heavily on my own back.

But my hope is that the social democratic statism of the Chavez-Morales bloc in the Third World, aligned with the European variant of mixed capitalism, will serve as an effective counterbalance against the neoliberal world order, and provide enough breathing room that both systems will be open to genuine libertarian change. My hope is that Chavez's aid to cooperatives and the solidarity economy, when all is said and done, will even out the previous statism in the other direction, and leave in place a decentralized and cooperative economy that will be able to survive on a stable basis when the oil subsidies are withdrawn and Chavez is long gone. My hope, above all, is that, as the two world power blocs fight each other to a standstill, we--the working people in both blocs--can build a genuine alternative from the ground up, in the interstices of both systems. We can build an economic order based on self-governing neighborhoods, cooperatives, LETS systems, peer production, mutual aid associations, human-scale technology, community-supported agriculture, and the informal and household economies, linking all those facets together into a coherent counter-system, that will be ready to replace the corporate economy in the one sphere and the bureaucratic state in the other when the two systems of power reach their limits. We can, in short, build the foundation of the new society within the shell of the old.

Finally: I must stipulate that I regard Klein's symbolic identification of economic shock treatment with the literal electroshocks used by CIA interrogators and Third World secret police as quite forced. Nevertheless, her chapter on the history of the American role in refining and promoting torture, from the development of the techniques in MK Ultra, through their promotion by the Green Berets and SOA in an endless series of atrocities, to the use of the very same techniques against Jose Padilla and the detainees at Gitmo and Abu Ghraib, is a brilliant work of research in its own right. For any serious student of the subject, the chapter alone is worth the price of the book.