Breaking it Down: Industrial Capitalism vs. Financial Capitalism (or, Why We’re F*cked)

Michael Hudson asks: “In light of the enormous productivity gains since the end of World War II – and especially since 1980 – why isn’t everyone rich and enjoying the leisure economy that was promised?”

The answer (per Hudson) is painfully obvious, but bears repeating (ad infinitum):

What was applauded as a post-industrial economy has turned into a financialized economy. The reason you have to work so much harder than before, even when wages rise, is to carry your debt overhead. You’re unable to buy the goods you produce because you need to pay your bankers. And the only way that you can barely maintain your living standards is to borrow even more. This means having to pay back even more in years to come.

That is the Eurozone plan in a nutshell for its economic future. It is a financial plan that is replacing industrial capitalism – with finance capitalism.

Industrial capitalism was based on increasing production and expanding markets. Industrialists were supposed to use their profits to build more factories, buy more machinery and hire more labor. But this is not what happens under finance capitalism. Banks lend out their receipt of interest, fees and penalties (which now yield credit card companies as much as interest) in new loans.

The problem is that income used to pay debts cannot simultaneously be used to buy the goods and services that labor produces. So when wages and living standards do not rise, how are producers to sell – unless they find new markets abroad? The gains have been siphoned off by finance. And the financial dynamic ends up in austerity.

And to make matters worse, it is not the fat that is cut. The fat is the financial sector. What is cut is the bone: the industrial sector. So when writers refer to a post-industrial economy led by the banks, they imply deindustrialization. And for you it means unemployment and lower wages.

As they say, read the whole damn thing.

And weep.

h/t

(Image: jesse.millan, Flickr)

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The Shock Doctrine 7: Sheep Farming in the Falklands (Or, The Revolution Will Not Be Monetized)

by matttbastard

Chapter 6: Saved by a War Thatcherism and its Useful Enemies

(Previous posts here, Sarah’s posts here.)

“Creating a useful crisis is part of what this will be about….[s]o the first bunch of communications that the public might hear might be more negative than I would be inclined to talk about (otherwise). Yeah, we need to invent a crisis and that’s not just an act of courage, there’s some skill involved”

Former Ontario Education Minister John Snobelen

Margaret Thatcher, the Iron Lady.

She’s presented by many as one of conservatism’s patron saints, a great leader who, through sheer force of will, pushed back against the excesses of the post-WWII British welfare state. Yet her sweeping program of Friedmanite deregulation and rollback of worker’s rights has also been dubbed by many commentators a ‘revolution’.  Though seemingly incongruous, the term is fitting; as the National Review famously declared in 1987, Thatcher’s ultimate goal was “nothing less than the reshaping of British political and economic life as that has been understood since 1945, by Labour and Tory alike. [emph. mine]”

Klein outlines in Chapter 6 how Thatcher used the political capital raised via the war in the Falklands to not only unite the nation, but to finance her radical neoliberal economic reform agenda, despite a previously skeptical public. Klein also notes that the controversial yet popular military endeavour coincided with the penning by Friedman of a passage that she says “best summarizes the Shock Doctrine: “Only a crisis–actual or perceived–produces real change.  When that crisis occurs, the actions that are taken depend on the ideas that are lying around.  That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.””

The so-called ‘crisis hypothesis’ was utilized to great effect, at least in a political context, by Thatcher, according to Klein:

“Between 1084 and 1988, the [British] government privatized, among others, British Telecom, British Gas, British Airways, British Airport Authority and British Steel, while it sold its shares in British Petroleum.

“Much as the terrorist attacks of September 11, 2001, would take an unpopular president and hand him an opportunity to launch a massive privatization initiative (in Bush’s case, the privatization of security, warfare and reconstruction), Thatcher used her war to launch the first mass privatization auction in a Western democracy.”

As Sarah notes, despite their widely-accepted status as heroic conservative icons, pro-market radicals like Thatcher and US president Ronald Reagan enacted their policies in direct opposition to conservatism.  A so-called ‘conservative’ brazenly utilized a crisis to enact revolutionary change–coopting political theory traditionally the domain of the far left.   In a post highlighting the days events at the ongoing G20 summit, Sarah points out that it was conservative leaders Angela Merkel and Nicolas Sarkozy who were pushing for stricter regulations of global financial markets, rather than left-of-centre leaders like Barack Obama or Gordon Brown:

For Sarkozy to call for giving capitalism a conscience–well, it underlines the difference between French conservatism and American, but it also points out that state regulation and control over capital markets is not actually a shocking, strange idea, and that the rapid deregulation was actually the revolutionary idea.

Rather than promoting pragmatic, prudent conservative economic platforms, Thatcher (and Reagan) instead grabbed hold of the most extreme of Milton Friedman’s theories and ran with them Jamaican sprinter style.  The fact that ‘socialists’ like Tony Blair eagerly took  the baton passed to them by purported ideological opponents and carried it over the finish line only serves to further illustrate the fact that adherence to radical free market economic theory transcends the traditional left-right political axis–and, ultimately, that Thatcher’s revolution was indeed sucessful beyond her wildest expectations.

Next–Chapter 7: The New Doctor Shock Economic Warfare Replaces Dictatorship

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The Shock Doctrine 6: Crimes and Misdemeanors

by matttbastard

Chapter 5: “Entirely Unrelated” How an Ideology was Cleansed of its Crimes

(Previous posts here, Sarah’s posts here.)

Why is it that capitalism’s crimes are divorced from the ideology itself, while Marxism is joined at the hip to the atrocities of the USSR and Revolutionary China?

In Chapter 5, Klein examines how neoliberalism managed to wash itself of the many, many atrocities committed by its acolytes in the Southern Cone, ironically in the name of ‘cleansing’ polluted economic systems.  She contends that, by focusing on generalized ‘human rights violations’ rather than exploring the systemic and ideological foundations underneath, well-meaning organizations such as Amnesty International essentially played the role of useful idiots.  It wasn’t Friedman’s fault (much less neoliberalism’s)  that a few ‘bad apples’ went a bit too far with their security policies while trying to ‘reform’ their ‘impure’ economies.

So, the horrific human rights abuses perpetuated by the likes of Stalin and Mao are used to define and smear an entire political and economic school, while Pinochet or the Junta in Argentina are written off as isolated incidents, nothing to do with the drive to liberalize markets by any means necessary.

As the global economic crisis continues unabated, we find ourselves at a crossroads. Do we write off the current situation as the result of bad luck, incompetence, a few bad apples at AIG getting unearned taxpayer-funded bonuses, Bernie Madoff’s now-infamous Ponzi scheme? Or do we take the opportunity to honestly look at what REALLY brought us to this point?

Matt Taibbi believes we need to examine and come to terms with the deliberate, malicious systemic abuses and deficiencies that, for too many years, have allowed shady speculators to essentially roll the public, repeatedly:

So it’s time to admit it: We’re fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we’re still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. […]

People are pissed off about this financial crisis, and about this bailout, but they’re not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d’état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — “our partners in the government,” as [AIG CEO Edward] Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

In other words, what got us here is a feature, not a bug.  The rot won’t be quelled by purging the barrel of rotten fruit; the barrel itself is befouled and corrupted. We can’t afford to allow the same greedy, sociopathic assholes who helped erect the current neoliberal economic structure to build a new framework that will inevitably lead to another future collapse.

After too many years of evading responsibility, unregulated capitalism must be held accountable, once and for all.

Next–Chapter 6: Saved by a War Thatcherism and its Useful Enemies

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The Shock Doctrine 5: Recurring Dreams

by matttbastard

(Previous posts here, here, here and here; Sarah’s posts here.)

Chapter 4: Cleaning the Slate: Terror Does its Work

In her post outlining Chapter 4 of The Shock Doctrine, Sarah highlighted the rush to conformity and, especially, normative gender roles in post-counterrevolutionary Chile, noting that “Men could be arrested for having long hair, while women were arrested for wearing pants.” Rather than providing a detailed outline of what Klein covers in this chapter (because, really, you all are supposed to be reading along, right?) I’m instead going to take a brief look at The Terror Dream by Susan Faludi, another recent text that explores the other 9/11.  Faludi looks at how the US, in a state of shock following the fall of the towers and the attack on the Pentagon, tried to embrace a false retro-patriarchal-paradigm of men-as-saviour/protector and women as helpless waifs in need of rescue.

In an interview with TIME Magazine, Faludi explores how women in the US were repressed in the dream-like aftermath of the assault:

You had a 40% drop of women guests on the important Sunday morning talk shows. You had dramatic declines on all the Op-Ed pages of all the important newspapers, and even women who would seem like obvious guests for the Sunday morning talk shows, like Diane Feinstein or Barbara Boxer who are both chairpersons of subcommittees on terrorism, there was this feeling that this was the time for men and women should take a back seat. There was one place where there were plenty of women’s faces on TV, and that was the 9/11 widows, as long as they played the role of helpless homemaker victims. In the absence of female victims in the planes or rescued from the events of 9/11, the TV shows trotted out 9/11 widows as the substitute victims. Then, the Larry Kings and Bill O’Reillys acted like daddy saviors towards them…There was this need to assert the protective authority role of men, particularly after a trauma in which every aspect of the male protective system failed. Our government ignored warnings that we were about to come under attack. Our 9/11 dispatch system did not warn people properly. Our military did not protect our skies.

The trauma perpetuated by Pinochet and his backers greatly differs from the 9/11 assault in many ways, especially in that the overthrow of Allende was, by and large, an internal matter rather than an external breach of security (CIA complicity in Santiago notwithstanding).  Still, it’s still interesting to note in both instances how gender roles were impacted by the shock of political instability and insecurity. Embracing ‘tradition’ following drastic upheaval was almost a means of centering, reunifying a fractured nation–even if the return to ‘old’ values are largely a fictional construct.

As Sarah notes, “we see [Friedmanite markets] again and again coupled with militarism and cultural conservatism, coming in on a wave of torture, death, terror, and strictly enforced gender roles.”

Indeed, who could forget Bush’s infamous ham-fisted attempt to sooth a shattered nation’s fragile collective psyche:

On September 20, in his first lengthy national address after the attacks, Bush told the citizens of the United States what they personally could do: “Live your lives and hug your children,” he said. Be patient with FBI investigations and travel delays, and “your continued participation and confidence in the American economy” would be greatly appreciated.

Apparently the terror dream is one that recurs.

Sunday–Chapter 5: “Entirely Unrelated” How an Ideology Was Cleansed of Its Crimes

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The Shock Doctrine 4: Parallel Lines

by matttbastard

Chapter 3: States of Shock: The Bloody Birth of the  Counter-revolution

(Previous posts here, here and here; Sarah’s posts here.)

I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11. I think that’s a great success story. …

former US vice-president Dick Cheney

Infamous Chilean despot General Augusto Pinochet died in December of 2006. His passing came one month after Milton Friedman, the man whose faithful acolytes, as Naomi Klein outlines in Chapter 3 of The Shock Doctrine, helped lay the ideological groundwork for the bloody counter-revolution undertaken by Pinochet and his right-wing brethren. (For the grim details, see Trend over at Alterdestiny).

As Klein notes:

For the first year and a half, Pinochet faithfully followed the Chicago rules: he privatized some, though not all, state-owned companies (including several banks); he allowed cutting-edge new forms of speculative finance; he flung open the borders to foreign imports, tearing down the barriers that had long protected Chilean manufacturers; and he cut government spending by 10 percent — except the military, which received a significant increase.  He also elimiated price controls–a radical move in a country that had been regulating the cost of necessities such as bread and cooking oil for decades.

But, as Klein further notes, despite assurances from the Chicago Boys that these radical ‘market reforms’ would (somehow) spur a decrease in inflation, inflation in Chile jumped to 375 percent in 1974, “the highest rate in the world and almost twice the top level under [former president Salvadore] Allende.” Sensing a shift among both the public and, most disturbingly, Chile’s business elite, the Chicago Boys “decided to call in the big guns,” enlisting Friedman himself to use his “rock star” presence to sell economic shock-therapy by sheer force of will.

And it worked:

In his letter of response, Chile’s supreme chief expressed “my highest and most respectful regard for you,” assuring Friedman that “the plan is being fully applied at the present time.” Immediately after Friedman’s visit, Pinochet fired his economic minister and handed the job to Sergio de Castro, whom he later promoted to finance minister.  De Castro stacked the government with his fellow Chicago Boys, appointing one of them to head the central bank.

[…]

Freed of the naysayers, Pinochet and de Castro got to work stripping away the welfare state to arrive at their pure capitalist utopia. In 1975, they cut public spending by 27 percent in one blow–and they kept cutting until, by 1980, it was half of what it had been under Allende.

Elsewhere, in Brazil and Argentina, other right-wing juntas perfected the Chilean model, waging a dirty war on those whose left-wing ideological leanings were in opposition to the wave of corporatist economic and social reform underway within the nations of the Southern Cone. But behind the counter-revolutionary action in Central and South America lurked a covert American presence, one that provided both training and materiel to the military arbiters of radical neoliberal ‘reform’ under the dubious auspices of  Operation Condor.  According to Klein, as part of the infamous program “the intelligence agencies of the Southern Cone shared information about “subversives”–aided by a state-of-the-art computer system provided by Washington–and then gave each other’s agents safe passage to carry out cross-border kidnappings and torture, a system eerily resembling the CIA’s “extraordinary rendition” network today”.

The justification for the dirty work was the same then as it is now: a war on ‘terror’, in which it was deemed necessary to sometimes skirt the boundaries of human rights and dignity in order to serve a higher purpose.  Whether that purpose was the spread of ‘freedom’ and ‘democracy’ or neoliberal doctrine is, of course at the heart of both Klein’s book and this series. Regardless, as Klein notes, the parallels between what occurred in  the 1970s and 80s and the post-9/11 era are striking.

Sarah outlines these parallels in further detail:

Warrantless wiretapping certainly isn’t mass disappearances of citizens, but it is a tool that keeps everyone in fear that they are next. It suppresses dissent and keeps people in fear for their basic safety, while around them their economic safety net is dismantled. America hadn’t undergone enough of a shock to allow, for instance, Social Security privatization, but in Chile and the other Friedmanite regimes, torture and repression left people unable to fight back.

In a NY Times op-ed (adapted from a lengthy essay published in the New York Review of Books), Mark Danner shows in stark detail just how far the Bush administration was willing to go in order to fight its contemporary “war for freedom and against tyranny”, as Argentinian Junta leader Admiral Massara at the time justified his nation’s embrace of the dark side:

Shortly after Abu Zubaydah was captured, C.I.A. officers briefed the National Security Council’s principals committee, including Vice President Dick Cheney, the national security adviser, Condoleezza Rice, and Attorney General John Ashcroft, in detail on the interrogation plans for the prisoner. As the interrogations proceeded, so did the briefings, with George Tenet, the C.I.A. director, bringing to senior officials almost daily reports of the techniques applied.

At the time, the spring and summer of 2002, Justice Department officials, led by John Yoo, were working on a memorandum, now known informally as “the torture memo,” which claimed that for an “alternative procedure” to be considered torture, and thus illegal, it would have to cause pain of the sort “that would be associated with serious physical injury so severe that death, organ failure, or permanent damage resulting in a loss of significant body function will likely result.” The memo was approved in August 2002, thus serving as a legal “green light” for interrogators to apply the most aggressive techniques to Abu Zubaydah:

“I was taken out of my cell and one of the interrogators wrapped a towel around my neck; they then used it to swing me around and smash me repeatedly against the hard walls of the room.”

The prisoner was then put in a coffin-like black box, about 4 feet by 3 feet and 6 feet high, “for what I think was about one and a half to two hours.” He added: The box was totally black on the inside as well as the outside…. They put a cloth or cover over the outside of the box to cut out the light and restrict my air supply. It was difficult to breathe. When I was let out of the box I saw that one of the walls of the room had been covered with plywood sheeting. From now on it was against this wall that I was then smashed with the towel around my neck. I think that the plywood was put there to provide some absorption of the impact of my body. The interrogators realized that smashing me against the hard wall would probably quickly result in physical injury.”

After this beating, Abu Zubaydah was placed in a small box approximately three feet tall. “They placed a cloth or cover over the box to cut out all light and restrict my air supply. As it was not high enough even to sit upright, I had to crouch down. It was very difficult because of my wounds. The stress on my legs held in this position meant my wounds both in the leg and stomach became very painful. I think this occurred about three months after my last operation. It was always cold in the room, but when the cover was placed over the box it made it hot and sweaty inside. The wound on my leg began to open and started to bleed. I don’t know how long I remained in the small box; I think I may have slept or maybe fainted.

“I was then dragged from the small box, unable to walk properly, and put on what looked like a hospital bed, and strapped down very tightly with belts. A black cloth was then placed over my face and the interrogators used a mineral water bottle to pour water on the cloth so that I could not breathe. After a few minutes the cloth was removed and the bed was rotated into an upright position. The pressure of the straps on my wounds was very painful. I vomited.

“The bed was then again lowered to horizontal position and the same torture carried out again with the black cloth over my face and water poured on from a bottle. On this occasion my head was in a more backward, downwards position and the water was poured on for a longer time. I struggled against the straps, trying to breathe, but it was hopeless.”

After being placed again in the tall box, Abu Zubaydah “was then taken out and again a towel was wrapped around my neck and I was smashed into the wall with the plywood covering and repeatedly slapped in the face by the same two interrogators as before.

“I was then made to sit on the floor with a black hood over my head until the next session of torture began. The room was always kept very cold. This went on for approximately one week.”

Danner concludes:

The use of torture deprives the society whose laws have been so egregiously violated of the possibility of rendering justice. Torture destroys justice. Torture in effect relinquishes this sacred right in exchange for speculative benefits whose value is, at the least, much disputed.

As I write, it is impossible to know definitively what benefits — in intelligence, in national security, in disrupting Al Qaeda — the president’s approval of use of an “alternative set of procedures” might have brought to the United States. Only a thorough investigation, which we are now promised, much belatedly, by the Senate Intelligence Committee, can determine that.

What we can say with certainty, in the wake of the Red Cross report, is that the United States tortured prisoners and that the Bush administration, including the president himself, explicitly and aggressively denied that fact. We can also say that the decision to torture, in a political war with militant Islam, harmed American interests by destroying the democratic and Constitutional reputation of the United States, undermining its liberal sympathizers in the Muslim world and helping materially in the recruitment of young Muslims to the extremist cause. By deciding to torture, we freely chose to embrace the caricature they had made of us. The consequences of this choice, legal, political and moral, now confront us. Time and elections are not enough to make them go away.

Klein estimates that the number of individuals tortured in the Southern Cone during the 70s and 80s was “probably somewhere between 100,000 and 150,000, tens of thousands of them killed.” Though the numbers of so-called ‘enemy combatants’ who faced torture in CIA black sites represent a mere fraction in comparison, the willingness to throw away stated values in the name of a greater goal is borne of the same moral limbo, where ends justify all means, no matter what. And, as Sarah noted, even though the numbers are far from comparable, the effect remains the same:  keep the populace “in fear for their basic safety, while around them their economic safety net is dismantled.”

Tomorrow: Chapter 4: Cleaning the Slate: Terror Does its Work

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The Shock Doctrine 3: From Chicago to Santiago

by matttbastard

Chapter 2: The Other Doctor Shock: Milton Friedman and the Search for a Laissez-Faire Laboratory

(Series intro here, Sarah’s posts here, my previous two installments here and here)

In the first installment of this series, I noted that shock was “a theme Klein continually examines and reexamines throughout the book–and not simply  in a metaphorical sense.”  Last week we saw just how literal–and visceral–Klein’s thesis could be, as she recounted in agonizing detail the infamous CIA-sponsored McGill University shock therapy experiments. In the second chapter, Klein finally shines the spotlight on the key villain of the book who will eventually tackle shock therapy on a macro level: noted economist Milton Friedman of the highly influential Chicago School of Economics.

As Sarah notes in her examination of Chapter 2, “there’s a thread of commonality with religion running alongside the development of radical capitalism–not just through the uneasy relationship that the two formed with the rise of the religious right in the Republican party, but in the religious devotion to markets as a good in themselves.” Their mission was chilling in both its simplicity and, at the time, its revolutionary audacity: “stripping the market” of U.S. government ‘interference’–price-fixing, minimum wage legislation, public education–they believed “were actually doing untold harm to the market.” To save the integrity of the world economic system would require nothing less than, in the words of Klein, “a capitalist Reformation: a return to uncontaminated capitalism.”

Klein notes that Friedman’s charismatic ambition helped drive the efforts,  that it was his “energy that gave the school its revolutionary fervour” in its collective drive to return the world  economy “back to a state of “natural” health, when all was in balance, before human interferences created distorting patterns.” As an expression of their radical devotion, Friedman and his then-largely-marginalized acolytes made a concerted effort, with the financial assistance of government and corporate patrons, to quietly evangelize the global South, where in most nations the prevailing system was “developmentalism”–a nationalistic economic theory anathema to free-market fundamentalists so righteously preaching the doctrine of laissez-faire capitalism.  A number of Chilean citizens were eventually recruited and trained in Chicago in what became known as the Chile Project, later returning to staff high-level government positions that would eventually allow them to shape economic policies in directi0ns prescribed by Friedman in his book Capitalism and Freedom:

First, governments must remove all rules and regulations standing in the way of the accumulation of profits. Second, they should sell off any assets they own that corporations could be running at a profit.  And third, they should dramatically cut back funding of social programs.

The born-again laissez-faire faithful came back to Chile fully indoctrinated, as Klein observes, quoting economist Mario Zanartu,”more Friedmanite than Friedman.”  They began to establish themselves within local government and academic circles, quietly lying in wait as Nixon ascended to the presidency and the CIA began to work in concert with the Chilean opposition to plot the overthrow of the democratically-elected socialist regime of Salvador Allende.  Recent coup d’etats in Brazil and Indonesia would provide a template for violent, shocking regime change in Chile that would allow the vaunted tabula rasa so long desired by the Friedmanites to be established–by any means necessary, as we will soon discover.

Next Week: State of Shock The Bloody Birth of the Counter-Revolution

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The Shock Doctrine 2: Clean Slates

by matttbastard

Chapter One: The Torture Lab

Ewan Cameron, the CIA and the maniacal quest to erase and remake the human mind

(previous posts in this series here and here; Sarah’s take on chapter one is here)

“Economic growth may one day turn out to be a curse rather than a good, and under no conditions can it either lead into freedom or constitute a proof for its existence.”

– Hannah Arendt

The first chapter of The Shock Doctrine is, without a doubt, one of the most disturbing things I’ve read in some time.  Naomi Klein renders her shock therapy metaphor viscerally literal, outlining a horrific series of Cold War-era CIA- sponsored experiments conducted on unwitting Canadian mental patients by renowned Canadian psychiatrist Dr. Ewen Campbell of McGill University–techniques that Klein contends are now (or, at least at the time the book was published, were) “being applied to prisoners in Guantanamo and Abu Ghraib.”

Rebecca Lemov explains what Cameron did on behalf of his generous patrons in the U.S. intelligence community:

Cameron’s goal was to wipe out the stable “self,” eliminating deep-seated psychological problems in order to rebuild it. The CIA wanted to know what his experiments suggested about interrogating people with the help of sensory deprivation and psychic disorientation.

Cameron’s technique was to expose a patient to tape-recorded messages or sounds that were played back for long periods. The goal was a condition Cameron dubbed “penetration”: The patient experienced an escalating state of distress that often caused him or her to reveal long-buried past experiences. At that point, the doctor would offer “healing” suggestions. Frequently, his patients didn’t want to listen and would attack their analyst or try to leave the room.

In a 1956 American Journal of Psychiatry article, Cameron explained that he broke down their resistance by continually repeating his message using “pillow and ceiling microphones” and different voices; by imposing periods of prolonged sleep and by giving patients drugs like Sodium Amytal, Desoxyn and LSD-25, which “disorganized” thought patterns.

To further disorganize his patients, Cameron isolated them in a sensory deprivation chamber. In a dark room, a patient would sit in silence with his eyes covered with goggles, prevented “from touching his body — thus interfering with his self image.” Finally, “attempts were made to cut down on his expressive output” — he was restrained or bandaged so he could not scream. Cameron combined these tactics with extended periods of forced listening to taped messages for up to 20 hours per day, for 10 or 15 days at a stretch.

In 1958 and 1959, Cameron went further. With new CIA money behind him, he tried to completely “depattern” 53 patients by combining psychic driving with electroshock therapy and a long-term, drug-induced coma. At the most intensive stage of the treatment, many subjects were no longer able to perform even basic functions. They needed training to eat, use the toilet, or speak. Once the doctor allowed the drugs to wear off, patients slowly relearned how to take care of themselves — and their pretreatment symptoms were said to have disappeared.

So had much of their personalities. Patients emerged from Cameron’s ward walking differently, talking differently, acting differently. Wives were more docile, daughters less inclined to histrionics, sons better-behaved. Most had no memory of their treatment or of their previous lives. Sometimes, they forgot they had children.

Klein drives home the destructive impact of Cameron’s experiments by profiling Gail Kastner, one of the victims of his attempts to “penetrate” the human mind.  Kastner resides in a cluttered apartment within what Klein describes as “a grim old age home”,  beset by chronic pain due to severe injuries suffered during her time spent as one of Cameron’s subjects. The legacy of trauma is not just physical; Kastner suffers from lingering psycological damage, severe nightmares involving Cameron, long dead, and the shocks that he administered 63 times during the course of her ‘treatment’, sending “150 to 200 volts of electricity” coursing through “the frontal lobes of her brain, while her body convulsed violently on the table, causing fractures, sprains, bloody lips, broken teeth.”

Kastner does her best to compensate for the damage, scrawling out seemingly inconsequential details on scraps of paper and old cigarette boxes, “extremely dense handwriting: names, numbers, thousands of words”. Klein explains that, for Kastner, these constitute “something more than an unconventional filing system.  They are her memory.”

As Klein notes, “Gail’s mind has failed her; facts evaporate instantly, memories…are like snapshots scattered on the ground”.  Cameron’s desire to “unmake and erase faulty minds , then rebuild new personalities on that ever-elusive clean slate” was all-too effective, leaving Kastner and others who were victimized in this quest to dissect the human consciousness “as empty as Eve,” as fellow shock therapy survivor Marilyn Rice described her remade and remodeled self.  Klein gets to the root of where Cameron and, as further detailed later on in the book, economic shock therapists like Milton Friedman and Jeffrey Sachs are misguided in the chosen method of treatment:

The problem, obvious in retrospect, was the premise on which [Cameron’s] entire theory rested: the idea that before healing can happen, everything that existed before needs to be wiped out.

(Creative) destruction in order to cleanse the world of corruption.

Sarah notes that the evils perpetuated by Cameron and, later, by “pro-war hawks who call for the bombing of countries ‘back to the stone age'”, (an analogy made by Klein that is, in my mind, all-too-apt) are not borne of comic-book villain malevolence; rather, “these people quite often do think in a strange way that they’re helping.” Still, regardless of intent, the goal remains the same, as do the means of achievement: “wipe out the stable “self,” eliminating deep-seated…problems in order to rebuild it.” As we’ll discover in later chapters, this clinical quest to return entire societies by way of severe trauma –and, consequently, the individuals like Kastner who collectively make up these societies–to what the disaster capitalists believe to be an Edenic state of uncorrupted economic purity has been embarked upon numerous times throughout the latter half of the 20th century.

And the consequences have been no less devestating than what Kastner now has to live with for the rest of her life.

Next week: The Other Doctor Shock: Milton Friedman and the Search for a Laissez-Faire Laboratory

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