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Thursday, October 04, 2007

Ms. Klein has become the kind of brand she lamented in "No Logo"

Books By TYLER COWEN October 3, 2007
Naomi Klein's "The Shock Doctrine: The Rise of Disaster Capitalism" (Metropolitan Books, 446 pages, $28), the latest anti-capitalist best seller, tries in vain to discredit the economic system that brought about modern America, the Industrial Revolution, and high standards of living around the world.
The energy of the book is real and there is no doubt it will mobilize most of its readers to higher levels of outrage and action. It's probably the most effective brand of emotional nonfiction to be published this year. But when it comes to the underlying message, and the standards of evidence used to support it, "The Shock Doctrine" is a true economics disaster.
Ms. Klein's core thesis is not without merit. She argues that the policy recommendations of free market economists, such as Milton Friedman, are simply not very popular. Of course Friedman would have been the first to admit as much himself. Ms. Klein goes further and argues that a right-wing conspiracy deliberately courts or looks for disaster, so it can impose unpopular free market ideas on an unwilling populace. For instance, Hurricane Katrina (supposedly) led to the privatization of New Orleans and was (supposedly) welcomed for this reason. Yet there's not much evidence for active conspiracies, apart from a vague 1962 statement by Friedman: "Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around."
Most of the book is a button-pressing, emotionally laden, whirlwind tour of global events over the last 30 years: Katrina, the invasion of Iraq, torture in Chile, the massacre in Tiananmen Square, the collapse of the Soviet Union, and the September 11, 2001, terrorist attacks. The book offers not so much an argument but rather a Dadaesque juxtaposition of themes and supposedly parallel developments in the global market. Above the excited recitation stands Milton Friedman as the ├╝berdemon of the march toward global tyranny and squalor.
Ms. Klein's rhetoric is ridiculous. For instance, she attaches import to the fact that the word "tank" appears in the label "think tank." In her book, free market advocates are tarred with the brush of torture, because free market advocates often support unpopular policies, and torture also often supports unpopular policies. Clearly, by her tactic of freewheeling association, free market advocates must support torture. Often Ms. Klein's proffered connections are so impressionistic and so reliant on a smarmy wink to the knowing that it is impossible to present them, much less critique them, in the short space of a book review.
Rarely are the simplest facts, many of which complicate Ms. Klein's presentation, given their proper due. First, the reach of government has been growing in virtually every developed nation in the world, including in America, and it hardly seems that a far-reaching free market conspiracy controls much of anything in the wealthy nations. Second, Friedman and most other free market economists have consistently called for limits on state power, including the power to torture. Third, the reach of government has been shrinking in India and China, to the indisputable benefit of billions. Fourth, it is the New Deal — the greatest restriction on capitalism in 20th century America and presumably beloved by Ms. Klein — that was imposed in a time of crisis. Fifth, many of the crises of the 20th century resulted from anti-capitalistic policies, rather than from capitalism: China was falling apart because of the murderous and tyrannical policies of Chairman Mao, which then led to bottom-up demands for capitalistic reforms; New Zealand and Chile abandoned socialistic policies for freer markets because the former weren't working well and induced economic crises.
But the reader will search in vain for an intelligent discussion of any of these points. What the reader will find is a series of fabricated claims, such as the suggestion that Margaret Thatcher created the Falkland Islands crisis to crush the unions and foist unfettered capitalism upon an unwilling British public.
The simplest response to Ms. Klein's polemic is to invoke old school conservatism. This approach, most prominently represented by classical liberal Friedrich Hayek, rejected the idea of throwing out or revising all social institutions at once. Indeed the long history of conservative thought stands behind moderation in most matters of social and economic policy. That tradition does advise a scaling down of free market ambitions, no matter how good they may sound in theory, and is probably our best hedge against disasters of our own making. Such a simple — indeed sensible — point would not have produced a best-selling screed, however. And so we return to charging Friedman as an enabler of torture. The clash between democratic preferences and policy prescriptions is, if anything, a problem for Ms. Klein herself. Ms. Klein's previous book, "No Logo" (2000), called for rebellion against advertising and multinational corporations, two institutions which have proved remarkably popular with ordinary democratic citizens. Starbucks is ubiquitous because of pressure from the bottom, not because of a top-down decision to force capitalism upon the suffering workers in a time of crisis.
If nothing else, Ms. Klein's book provides an interesting litmus test as to who is willing to condemn its shoddy reasoning. In the New York Times, Nobel Laureate Joseph Stiglitz defended the book: "Klein is not an academic and cannot be judged as one." So nonacademics get a pass on sloppy thinking, false "facts," and emotional appeals? In making economic claims, Ms. Klein demands to be judged by economists' standards — or at the very least, standards of simple truth or falsehood. Mr. Stiglitz continued: "There are many places in her book where she oversimplifies. But Friedman and the other shock therapists were also guilty of oversimplification." Have we come to citing the failures of one point of view to excuse the mistakes of another?
With "The Shock Doctrine," Ms. Klein has become the kind of brand she lamented in "No Logo." Brands offer a simplification of image and presentation, rather than stressing the complexity, the details, and the inevitable trade-offs of a particular product. Recently, Ms. Klein told the Financial Times, "I stopped talking about [the campaign against brands] about two weeks after ‘No Logo' was published." She admitted that brands were never her real target, rather they were a convenient means of attacking the capitalist system more generally. In the same interview, Ms. Klein also tellingly remarked, "I believe people believe their own bulls---. Ideology can be a great enabler for greed."
When it comes to the best-selling "Shock Doctrine," that is perhaps the bottom line on what Klein herself has been up to. Mr. Cowen is professor of economics at George Mason University and author of "Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist."

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