How Shocking : Yet Another Foreign Anti-Globalization Speaker at Scripps

By Aditya Bindal and Ilan Wurman

Last week, we went to hear Naomi Klein, author of The Shock Doctrine, rant about capitalism, Milton Friedman, and the Chicago School of Economics. The talk was sponsored by the Scripps Humanities Institute and as a part of their Global Media speaker series. Some of our readers may remember this Canadian anti-globalist from last spring when the CC went to her speech at UCLA. Soon after the talk, Charles Johnson wrote:

'Klein, ironically enough, claims to have written the anti-Friedman book against "radical free market reforms," knew nothing about Estonia's, India's, or China's economic transformations using Friedman policies when I questioned her in front of her audience of sycophants.'

That almost seems like advertising -- No Logo?

For our more fortunate readers who haven't read Klein's slander, Cato Institute Scholar Johan Norberg has written a devastating critique of The Shock Doctrine. I highly recommend his Cato Briefing Paper to set the record state and separate libel from argument. According to Norberg: (emphasis mine)

"Klein's analysis is hopelessly flawed at virtually every level. Friedman's own words reveal him to be an advocate of peace, democracy, and individual rights. He argued that gradual economic reforms were often preferable to swift ones and that the public should be fully informed about them, the better to prepare themselves in advance. Further, Friedman condemned the Pinochet regime and opposed the war in Iraq."

He adds,

"..in the absence of serious arguments against the consequences of free markets, we are left with Klein’s reasonable critique of torture, dictatorships, government corruption, and corporate welfare. In the final analysis, The Shock Doctrine boils down to the curious claim that Milton Friedman and free markets are bad because governments are incompetent, corrupt, and cruel. It is probably not a coincidence that there are blurbs from four fiction writers on the back of the book."

So it came as no surprise that Scripps College invited Klein to speak about the ills of globalization and free trade. Although Klein is far from being an economist or even an academic for that matter, her largely friendly audience was fully convinced that Friedman and the Chicago Boys conspired with other think tanks, dictators and military generals to impose market reforms on an unwilling population by using shock therapy.

In her talk at Scripps, Klein mentions that the first people to espouse this idea of "radical" deregulation and free markets were the dictatorships (a la Chile, Argentina) that imposed those policy ideas on their countries undemocratically. Last time we checked, Adam Smith and John Locke weren't dictators of anything. But that's neither here nor there. Her more insidious argument boils down essentially to the following: capitalism and free markets are imposed undemocratically. She mentions Bolivia as another example. In the Q&A session, I (Ilan Wurman) explained to her that, despite picking and choosing examples from particular countries in particular moments in time, when you apply a statistical study of economic freedom and political freedom across all countries, there is an impressively strong correlation between economic freedom and political freedom. The study referred to relates Cato's Index of Economic Freedom and Freedom House's Political and Civil Liberties Index.

So how can she say that free markets are imposed undemocratically, and how does she respond to the fact that the policies she espouses seem to exist concurrently with a lack of political freedom?

She doesn't. In her response, she essentially said, "You're wrong, but I can't tell you why." She skirted the question entirely. She said that she doesn't have a response now, because "it's complex," but that on her website there is a full rebuttal to that argument. (Unless we missed something, her website had nothing on the EFW and the proven statistical correlation between Economic Freedom, Political Freedom and Civil Liberties) But rather than moving on, she proceeded to say that most economists don't take the Index of Economic Freedom seriously because it is conducted by the Cato Institute and is ideologically skewed. The irony seems to be beyond Ms. Klein: that Cato's "ideological" criteria for economic freedom correlates with political freedom suggests that she should support those criteria! That is assuming, of course, that she supports political freedom. Despite her dodge and the blatant irony, the audience ate it up with applause.

Of course, keeping in character with her book, Klein fails to provide a source for her claim that the EFW isn't taken seriously by economists. Let alone that the EFW is compiled and analyzed by prominent economists, Dr. James Gwartney and Dr. Robert Lawson. For a full list of papers on the EFW and its findings, click here.

Klein went on to add psychology (or mind-reading) to the list of fields about which she is not qualified to speak yet does so anyway. When conservatives apply "radical" ideas in states of crisis (or "shock"), such as drilling for more oil when the price hits $130 a barrel, Klein seems to believe that they are genuinely doing so to try to keep the working man in a state of repression. She even seemed to acknowledge that FDR's 100 days of legislation may very well seem like "shock therapy" but from the liberal side. "But there's a real difference," says Klein. The liberals genuinely want to do good; the conservatives get together in smoke-filled, secret meetings and contemplate how to repress the lower classes. Yep, she's really pegged conservatives.

According to Klein, liberal shocks are democratic, while conservative shocks are undemocratic. Her naive understanding of history and economics is very telling -- she has no problem with the use of shock therapy as long as she agrees with policy being implemented. If the 'crisis' is used for market reforms and economic freedom, then the ideas and the people behind those ideas are evil, undemocratic conspirators. Using this dubious logic, Klein stamps every market reform in the world with words like 'crisis' and 'shock.' Her Wall of Shame includes Reagan, Thatcher, Tianemen Square (fortunately, Klein's lies don't quite fit the timeline for this one), Latin America and South East Asia. But, as Johan Norberg pointed out in his Briefing Paper, countries around the world have moved away from the failure of Socialism and Keynesian economics:

"If we look at the Fraser Institute's Economic Freedom of the World statistics, we find only four economies about which we have data that haven't liberalized at all since 1980.(31) All others have. Obviously this also means that we will see economic liberalization even in brutal dictatorships, just as in peaceful democracies."

Her complete disregard for statistical analysis and reliance on anecdotal evidence led her to believe that President Bush was the shining example of free markets and Friedman's ideas. She made the case that President Bush was pursuing Friedman's ideas through the 'privatized' Iraq war and his Katrina relief effort. The problem with this argument, like all other arguments in her book, is that the numbers just don't match up. The past 8 years have seen the largest increase in spending (total and non-defense) since the Nixon and LBJ. In addition to the growth in government size, the Bush administration observed a huge increase in regulation and barriers to international trade.

According to the Independent Institute:

"Independent Institute Senior Fellow Robert Higgs, author of such key books as Crisis and Leviathan and the new Against Leviathan, (predicted that) this explosion of government power would only have been possible in the aftermath of 9/11. Times of crisis present the easiest opportunities for politicians to take advantage of a frightened American public."

President George W. Bush is now on his way to becoming the first full-term president since John Quincy Adams (1825-1829) to not veto a single bill. The result is a congress that has been completely unconstrained in satiating its appetite for pork and corporate welfare. In response, Democratic challenger John Kerry has maligned alleged spending cuts and called for even higher taxes and spending. The consequence is that we now have two parties competing to see which can grow government faster."

Higgs isn't the only one making such a claim. The EFW, which Klein chose to dismiss, found that economic freedom in the United States has declined in the past 8 years. Government spending, subsidies, regulation, tariffs, and other barriers to trade increased during the Bush presidency. So how does Noami Klein explain this phenomenon? Wasn't the shock from 9/11 and the Iraq war supposed to pave the way for free market reforms? How does she explain this increase in government?

Once again, she doesn't. When I asked Klein to address this apparent paradox, she stated, 'I don't believe in the free market ideology.' She claimed that I was correct in observing an increase in government over the past 8 years (actually the EFW made this observation) and said that, 'this is what they do.' According to Klein, the increase in government naturally follows a free market platform. She then switched topics and gave a confused reply, ranting about Pinochet and South East Asia. But her response raises a new problem in her thesis. Reagan and Thatcher explicitly campaigned and enacted on a platform of limited government, deregulation, and free markets. This was in contrast to Bush's 'compassionate conservatism', which is easily distinguishable from laissez-faire.

Towards the end of the Q&A session, Charles Johnson asked her to comment on Friedman and his role on ending the draft. At first, it seems that Naomi Klein would agree with Friedman on ending the draft, since her own family moved to Canada during the Vietnam war. But instead, Klein attacked Friedman by stating that the draft was socialist, and Friedman wanted to privatize the army. She even managed connect Friedman's advocacy to end the draft with Blackwater and Halliburton! Needless to say, defenders of liberty, including Milton Friedman, opposed the draft because it contradicted the principle of self ownership. In an argument with Gen. William Westmoreland, Friedman famously said: (emphasis mine)

"General, would you rather command an army of slaves?"
Retort by Milton Friedman to Gen. William Westmoreland's claim that he did not want to command "an army of mercenaries" during a heated discussion on the costs and benefits of endorsing a volunteer army vs. the draft in the 1960s

While we got this outrageous claim about Friedman and the draft on record, I wish Charles could ask her about Estonia and the Baltic states, like he did last spring. Unlike the UCLA talk -- where she admitted to not knowing anything about the Baltic tigers in her talk at Scripps, she vaguely mentioned the PBS Documentary, 'Commanding Heights: Battle for the World Economy' and gave an explanation for leaving out Estonia from her book.

Luckily, this time we have it all on video. Sometime next week, our Claremont Conservative YouTube channel will be operational and we will post all our videos from Klein's speech. Also, we will post our document that contained questions and notes for the talk. Unfortunately, we could only ask three, since the easily convinced audience had several 'What can I do (sometimes modified to include the word grassroots) to stop the evil right wing conspiracy?' type of questions.