Losing the Peace Incentive - Israel As Warning
Conventional wisdom once thought economic growth and prosperity required peace and stability. No longer. Post-9/11, the terror scare was ignited, wars rage in Iraq and Afghanistan, more war is threatened on Iran, oil prices touched $80 a barrel, the WTO Doha Round trade talks collapsed, and “a golden period of broadly shared growth” prevails (at least until the recent credit crunch). How come?
Conflict and global instability don’t just benefit arms related industries. They help the high-tech security sector, heavy construction, private health care companies treating soldiers and oil and gas. The business bonanza in Iraq alone is hugely profitable with all sorts of companies cashing in. The same goes for New Orleans and Gulf Coast overall. Terrorist attacks are good for business. The more destruction, the more to rebuild - a great market for disaster capitalism it pounces on with every incentive to assure the trend continues unchallenged, and why not when government throws public tax dollars at it.
Today, “instability is the new stability,” and Israel is its “Exhibit A.” In the post-1993 Oslo years, the Jewish state designed its economy to expand in response to escalating violence at home at first and now everywhere. The nation’s technology firms pioneered the homeland security industry, and they still dominate it. In addition, its economy overall is the most “tech-dependent in the world,” according to Business Week magazine, twice as dependent as the US representing half its exports.
Following the 2000 dot-com crash, Israel’s leading tech companies needed a new global niche, and the government encouraged expansion beyond information and communications technologies into security and surveillance. It launched a slew of start-ups “specializing in everything from ‘search and nail,’ data mining, surveillance cameras, to terrorist profiling.” It was perfect timing for a market that exploded post-9/11, and Israel’s economy is thriving with one of the fastest growth rates in the world. Klein calls the country “a kind of shopping mall for homeland security technologies,” and Forbes magazine says it’s “the go-to country for antiterrorism technologies.” Today, the country’s counterterrorism industry is booming, and its defense-related exports make it the fourth largest arms dealer in the world, larger than the UK.
Klein notes: “With more and more countries turning themselves into fortresses (with walls and high-tech fences part of it), ‘security barriers’ may prove to be the biggest disaster market of all.” In the case of Israel, it’s also another “Chicago School frontier marked by rapid stratification of society between rich and poor inside the state.” The security boom fueled a wave of privatizations accompanied by social program cuts, “an epidemic of inequality,” and the virtual end of Labor Zionism. Klein notes 24.4 percent of Israelis live in poverty, including 35.2 percent of children, compared to 8 percent twenty years earlier (but she doesn’t say if these figures include Arab Israeli citizens comprising 20 percent of the population). She concludes Israeli industry no longer fears war as it thrives on it.
Today, Baghdad, New Orleans and suburban Atlanta Sandy Springs are glimpses of a gated community future run by the disaster capitalism complex. But it’s in its most advanced state in Israel - “an entire country (turned into) a fortified gated community, surrounded by locked-out people living in (the) permanently excluded red zones” of Gaza and the West Bank that aren’t just left out but are encroached on and under attack. Disaster capitalism thrives in this environment so it yearns to bring it to a neighborhood near you, and that’s a prospect to fear.
Hopeful Signs — Shock Wears Off
Klein quotes Canada’s National Post editor, Terence Corcoran, wondering if the Chicago School movement Milton Friedman launched could continue as before after his November, 2006 death. The movement’s pinnacle was capturing the Congress in 1994 that it lost in 2006 for three reasons - public disenchantment with the Iraq war, political corruption, and a growing class divide unseen since the Gilded Age of the “robber barons” or roaring 20s. Each factor related to core Chicago School economics - privatization, deregulation and cutting government services. In the US, it created a wealth disparity economist Paul Krugman calls unprecedented while poverty is growing and the middle class dying in the richest country in the world that’s also the least caring one.
Everywhere Chicago School fundamentalism shows up, the results are the same. A small elite gains hugely while most others don’t. But cracks in the ideology are visible as many of its front line adherents got caught up “in an astonishing array of scandals and criminal proceedings (from the) earliest laboratories in Latin America to the most recent one in Iraq.”
Before he died, Pinochet was under house arrest. In Argentina, courts stripped former junta leaders of immunity. Bolivia’s de Lozada got chased from the country and is now a wanted man. In Russia, many of the oligarch fraudsters were either in exile or jail. In Canada, newspaper magnate Conrad Black was convicted of fraud. In the US, a rogue’s gallery of CEOs were charged and convicted as well, and other high level types were caught up in scandals like lobbyist Jack Abramoff’s influence-peddling one.
Klein notes another hopeful sign as well — shock effects were beginning to wear off, and in Argentina’s 2001 economic crisis forced out five presidents in three weeks. It was spreading and most apparent in Latin America where it began with opponents of Chicago School doctrine winning elections like Hugo Chavez in Venezuela, but he wasn’t alone. It showed a renewed faith in democracy and condemnation of Washington Consensus dogma when people made a choice at the polls in free and open elections. Today’s movements aren’t replicas of the past, and one of the differences “is an acute awareness of the need for protection from shocks of the past” - coups, foreign shock therapists, torturers, debt and currency shocks.
They’ve learned from the past and are building “shock absorbers into their organizing models.” It’s in movements less centralized, Venezuela’s grassroots community councils, Brazil’s Landless Peoples Movement, and the streets of Oaxaca, Mexico where thousands battled police since a year ago May and still won’t quit. In addition, governments are rejecting old trade models and adopting new ones like Venezuela’s ALBA bartering system making it less vulnerable to turbulent markets.
They’re also rejecting World Bank and IMF debt slavery, and the change is dramatic. In 2005, 80 percent of IMF’s lending portfolio was to Latin America. It dropped to 1 percent in 2007. And IMF’s 2005 $81 billion dollar portfolio shrank to $11.8 billion in three years with nearly all of it in Turkey. The World Bank is also being rejected. Venezuela severed its relationship, and Ecuador’s Raphael Correa suspended bank loans and declared its country representative persona non grata in an extraordinary move the equivalent of a well-deserved slap in the face. In addition, the Doha Round trade talks collapsed, and some observers thought it signaled “globalization is dead,” or if not, it’s at least breathing hard.
Resistance is showing up in Europe, too, with voters in France and the Netherlands rejecting the European Constitution the French call “savage capitalism” and a codification of the corporatist order they reject. The Putin era in Russia is also seen as a backlash against the shock therapy of the 90s that impoverished millions of its people still left out and many desperate. The same is true in South Africa where people in slums abandoned the ANC to protest against their broken Freedom Charter promises. It even surfaced in China where, according to official government sources, 87,000 large protests were held involving over four million workers and peasants. They won major victories for new rural area spending, better health care and pledges to eliminate education fees.
Millions of Lebanese were in the streets as well - that wasn’t a show of strength by Hezbollah as the major media characterized it. It was a rejection of the Siniora government’s willingness to accept Chicago School reforms in exchange for billions of needed reconstruction loans to recover from Israel’s summer, 2006 blitzkrieg attack. Klein called their actions “a poor and working-class people’s revolt.”
Examples are everywhere, but so far just ripples in a pond needing greater numbers for real change. They were in tsunami-struck Thailand where, unlike in Sri Lanka, many settlements were successfully rebuilt in months but not by the government, which offered no aid. So hundreds of villagers “engaged in what they called land ‘re-invasions,’” defied their government with direct-action, and rebuilt their communities making them better than before the destruction.
The same thing happened in New Orleans. In February, 2007, housing project residents “reinvaded” their old homes and reclaimed them in another example of “people rebuilding for themselves” and bypassing government indifferent to their needs and rights. Klein calls this phenomenon “the antithesis of the disaster capitalism complex’s ethos.” The actions are communal, with people helping each other, rebuilding rubble, and aiming to end the erasure “of history, of culture, of memory.”
It’s a message of collective shock resistance replacing shock, but it’s too early to declare victory. The signs are encouraging, and, with enough of them, who knows what’s possible. Hopefully a better world replacing the bankrupt notion that markets work best and government is the problem.
That’s an idea for the trash bin of history where it belongs and where it one day will be.
Stephen Lendman lives in Chicago and can be reached at lendman stephen@ sbcglobal. net. Readers are also invited to visit his blog site at sjlendman. blogspot. com and listen to The Steve Lendman News and Information Hour on TheMicro Effect.com Saturdays at noon US central time.
