Wednesday, July 16, 2008

Lies, Damned lies and Naomi Klein

Cato's Johan Norberg has a detailed rebuttal on Naomi Klein's superficial claims about Milton Friedman and free-market policies made in her book, The shock doctrine. Here's a video of Norberg explaining how Ms Klein misrepresents what Friedman said:




Also see this follow up video.

I have leafed-through Klein's book. No one who has actually read Milton Friedman, will take Klein's claims seriously.

Klein's main ammunition is in the from a out-of-context quote by Friedman, who said that real change happens on a crisis, and that it will be led by ideas that are lying around at the time will be implemented. Friedman said this to emphasis the importance of working towards ideas which doesn't seem plausible right now, but might be some day, when people are looking for new ideas, such as in a financial crisis. He didn't mean this in the sense of a natural disaster nor did he advocate disaster.

This is clearly an ideologically neutral statement. If in the current financial mess in the U.S., ideas of more regulation holds sway, that will be implemented. In the face of high commodity prices, if someone is able to convince policymakers that price-controls are a good way of handling the 'crisis' there is a chance of that happening. The former is already sort of happening, the latter doesn't seem to be, thankfully.

It is also true that most important market-reforms did happen in financial crisis, like that of Sri Lanka in 1977, when the economy was squeezed through central-planing by the previous socialist government, or in the case of Indian reforms in the early '90's. Thanks to those reforms millions today are out of poverty. But if a different set of ideas were on the table, things might have gone in another direction.

Obviously, the likes of Klein doesn't have the cognitive power needed to understand this. See Norberg's full rebuttal and also see, Tyler Cowen's take.

4 comments:

Rohan said...

I wonder what people make of her claims re post tsunami Sri Lanka. She states, if I recall correctly, that beach property was taken from poor people and given to hotels. The 100 meter rule was an abomination that we fought and successfully reversed. While the possibility of giving the cleared land to tourism was not absent (I may have raised it myself), it did not actually happen.

Jack Point said...

Most of these activists have the same wrong headed notions. For an excellebt rebuttal of some of them look at this:

http://www.lankabusinessonline.com/print.php?nid=1133118827

For a harder look at Naomi Klein herself look at this;

http://www.economist.com/people/displaystory.cfm?story_id=1429429

Jack Point said...

The article is premium content on the Economist, so just in case you cant access it here's the text:

THE battle to save the world is an arduous and paradoxical one. Today's most visible scourge of globalisation and brands is herself an inexhaustible globetrotting brand: a 32-year-old Canadian journalist, armed with little more than a portable computer, a plane ticket and Internet access. Naomi Klein is the pre-eminent figure (she would deplore the term “leader”) in a worldwide protest movement against companies, free trade and global integration—in effect, against capitalism—that has no name or organisation, but is the most vigorous expression of leftist sentiment since the 1960s.

The movement burst on to the scene in Seattle in December 1999, with protests against the World Trade Organisation. With uncanny timing, Ms Klein's first book, “No Logo”, was published weeks later. Since translated into 15 languages, “No Logo” has become a manifesto for the loose network of activists who now ritually disrupt global summits. Ms Klein is currently promoting a second volume, “Fences and Windows: Dispatches from the Front Lines of the Globalisation Debate”.

The views of this brand-basher—part pop star, part crusader—on what is wrong with the world are studied avidly by street mobs and boards of directors everywhere. At a recent debate with The Economist in New York, Ms Klein drew a sell-out crowd of 1,000, with hundreds more turned away. As her fame spreads, admittedly, there are small signs of resistance. “Fences and Windows”, comprising selections from speeches and articles, has had some tepid reviews, at least by the standard of adulation that greeted “No Logo”. Now and then somebody dares to write that she is all brand and no content. But for the moment she continues to command a wide following.

Ms Klein, by her own account, was a late developer as a social revolutionary. Growing up in a family of activists and campaigners, her teenage rebellion took the form of devotion to the shopping mall and willing enslavement to the tyranny of the logo. When her youthful idealism kicked in, its strength and durability more than made up for its delayed onset. In her 30s, Ms Klein has all the incoherence and self-righteous disgust of the alienated adolescent.

As she looks around the world, she sees nothing she likes, no redeeming features—except for “the movement”. The rule of corporations, as she sees it, is inherently repressive and exploitative of powerless citizens. Democracy is a sham. She gives capitalism no credit for the extraordinary progress seen in recent decades in reducing poverty and other measures of deprivation (notably child mortality) in the world's poor countries. She measures the growing-pains of capitalist development not against real-world alternatives but against a Disneyesque utopia in which no poor person ever loses his job or chooses to work in a multinational factory at low wages (by rich-world standards). As the world's poor move from farm to factory to office, jobs are inevitably lost and people uprooted. The countries that change the least, where the costs of growth are closest to zero, are those where poverty and disease are worst. This basic trade-off is never addressed.
Not her job

What is the superior alternative to capitalist development that Ms Klein proposes? She feels under no obligation to say. It is not her job to dictate to the movement. The most she can do, in all modesty, is to offer indications and observations; the people, thus empowered, must do the rest. True, one essay in “Fences and Windows” is all aflutter over Subcomandante Marcos, masked leader of Mexico's Zapatista insurgents—but this lead turns out to be a dead end when Ms Klein says approvingly that the Subcomandante is interested not in “the Revolution” but in “a revolution that makes revolution possible”. Right.

Certainly, Ms Klein is for justice, “deep” decentralised democracy (not the false kind currently practised), autonomous spaces and diversity of every kind. All these things can presumably be reconciled with the ambitious goals she would doubtless wish to see pursued in welfare spending, environmental protection and income redistribution—aims which, on the face of it, call for a high degree of centralisation and some reduction in the amount of autonomous space—but readers and listeners are never told how this contradiction might be resolved.

Ms Klein's oddest assertion is that multinational companies are more powerful than governments and consumers. Plainly, they are not. Governments regulate business as they choose, and have far more power over their citizens' lives than even the biggest multinational does. Another oddity: Ms Klein deplores freedom to trade as one of the vilest manifestations of the neoliberal tyranny. Yet in “Fences and Windows” she is very keen on taking down fences and opening windows. Surely a trade barrier is a fence and economic openness is a window. What makes trade an exception to the rule that fences are bad and windows good? We may never know.

In training her guns on free trade and big multinationals, Ms Klein is attacking the best means for reducing poverty and, for that matter, extending justice and a political voice to the world's poorest people. When companies, properly regulated and acting within the law, pursue profits, they end up increasing prosperity. This is not a theory but an easily observable fact. The result, unintended though it may be, is social good. Ms Klein denies all this at every turn—and the tragedy is that her denials have an effect.

Ms Klein's harshest critics must allow that, for an angry adolescent, she writes rather well. It takes journalistic skill of a high order to write page after page of engaging blather, so totally devoid of substance. What a pity she has turned her talents as a writer to a cause that can only harm the people she claims to care most about. But perhaps it is just a phase.

paul said...

The World Bank and the IMF regularly commission and publish reports that show her the economic restructuring that they push - increased privatisation, decreased public spending, all the hallmarks of increased devotion to the capitalist model - are consistently failing to alleviate poverty. Meanwhile in Africa, neighbouring countries that resist the restructuring fare much better.

There is much more to say but these repeated admissions by capitalism's fiercest proponents in quietly released, under-read reports are a first and shocking contribution to what has otherwise been a faith-based adherence to the false logic of "trickle-down" capitalism.