Located in remote, tranquil countryside, near the border of England and Wales, Hay-on-Wye is a small town famous for its bookshops. Yet this discrete and inconspicuous place delivered a telling message to all those who travelled to its annual literary festival: uncontrolled commercialisation, privatisation, deregulation and greed have resulted in global inequality, unhappiness and a media that can no longer tell the truth.
Rain delayed the arrival on stage of Naomi Klein, author of ‘No Logo’ and ‘The Shock Doctrine’, but her account of the exploitation of disaster-struck nations was meticulous and worth the wait, although Rosie Boycott’s lack of probing questions failed to uncover any flaws in her work.
Klein began by outlining the ideas behind her latest book: “What I mean by the ‘Shock Doctrine’ is essentially a philosophy of power,” she said. “The best time to push through a radical free-market makeover of a country is, when what economists sometimes call shock therapy, takes place in the aftermath of some kind of shock.”
The levels of distress required to implement economic reform, according to Klein, are increasing as people are becoming more aware of the failures of “privatisation, deregulation and cuts in social spending” finding that “the real legacy of these policies has been inequality.”
Whilst many conspiracy theories have been alluded to, Klein believes that the ‘shocks’ are often independent of the responses. “I don’t think Iraq was invaded so it could be privatised,” she said. “I think there are a variety of reasons why these shocks take place. But once they take place there is a sense of acute disaster preparedness to take advantage of the crisis.
“When I left Iraq at the end of April 2004, I wrote a piece for Harpers magazine concluding that this attempt to turn Iraq into a capitalist’s dream, to quote the Economist, had backfired. Now Iraq is indeed a capitalist’s nightmare. It’s hard to believe, but in those early days there was talk of a McDonalds in downtown Baghdad.”
While multinational corporations have so far failed to exploit Iraq, the military operations have seen millions of dollars generated for contractors. In the first Gulf War there was one contractor for every 100 US soldiers. At the start of the second war there was one contractor for every 10 US soldiers. The latest numbers show that there are 180,000 private contractors in Iraq and 160,000 US soldiers.
“The US military and, I think, the British as well, didn’t invade Iraq just to loot Iraq, they also invaded Iraq to loot themselves and that part of the project has been extremely successful,” said Klein.
As Britain heads for 42 days’ detention without charge, Klein warned that “in many ways Britain and Europe are ahead of the US in the loss of civil liberties. It’s very interesting in the context of companies doing better the worse things get, that after 7/7 the NASDAQ jumped. And that is a marked change from the previous response to terrorist attacks.”
“Much of what we call globalisation – the Free Trade Agreement, the World Trade Organisation, the conditions attached to International Monetary fund loans – are about codifying this so called [Washington] consensus,” said Klein.
“I don’t think it’s inevitable but that has been the point of taking economics out of the hands of elected politicians. It’s less about the policies, it’s about this locking in process and something like the independence of the central bank is a classic piece of the programme.”
Much of this locking in has been speeded up and made stronger by the blurring between the private and public sector, which BBC business editor, Robert Peston, and Daily Mail columnist, Peter Oborne, discussed as they talked about who controls British politics.
Peston began joking that, despite sitting in the Barclays Wealth Tent, the super-rich are not always such a good thing. His statistical illustrations of the enormous amounts of money being earned in the City where shocking.
“The top 0.1% of earners in the UK control 4% of national income, twice as much as most of Europe,” he said.
“The justification from many of these people making all this money is that it’s supposed to make all of us richer. But actually it leads to boom and bust. The bottom 5% have done very badly under Labour and the top 1% have done spectacularly well.”
Oborne was more scathing of the super-rich, who, he said, “have done enormous damage to Britain’s political and social fabric.
“What we now see is the emergence of a very narrow political elite, acting in conjunction with these ghastly creatures who Robert was describing, to destroy much of what is best and splendid and most magnificent about our terrific country.
“What Robert didn’t say in his speech, is that these tax breaks weren’t just due to treasury naivety but that they were purchased by the new rich. Private equity managers bought these tax breaks. Ronald Cohen, the private equity mogul, arranged with Gordon Brown, and there were numerous others, that it was necessary to slash tax for the private equity industry and at the same time donated significant funds to the Labour Party.
“Jeremy Heywood is a fascinating figure actually, the private secretary to the prime minister [Tony Blair] and now under Brown. In the three years between he hopped over to Morgan Stanley and arranged privatisation with the Treasury; a classic case of the debasement of our public domain and capture of our civil service by super-rich American bankers.”
The national media has sat back as much of the above has taken place. Nick Davies, journalist and author of ‘Flat Earth News’, revealed that “there is far more falsehood, distortion and propaganda than is excusable or necessary in our newspapers.”
“If you want to understand why we told you so many things that weren’t true about the weapons of mass destruction, or the Millennium Bug, or the scandal around Bill Clinton, or any of that stuff, you have got to understand that we have become structurally likely to be manipulated.”
Family run papers are now owned by large corporations and Davies claimed that this switch changed the way newspapers work. “The old family owners were indeed propagandists. The new lot, they want to make money, it’s understandable. That releases, in all sorts of subtle ways, the logic of commercialisation and it’s undermined our journalism.”
“We found that the average Fleet Street journalist now has only a third of the time to spend on each story that he or she would have done in 1985. So on the whole we no longer go out and find stories and make contacts and check facts. Instead of being active news-gatherers we have become passive processors of second hand material.”
Julia Hobsbawm, professor of PR, responded to Davies by claiming that for all the bad that PR has done it has also done as much good. Where they did agree, though, was that journalists no longer have enough time. “The best journalism, as Nick says, has both the time and the judgement to make investigations and to present realities in a context that the reader or viewer can understand,” she said.
When asked by a member of the audience why it was that, despite the assertion that news breaks every second, we only see a small number of stories, Davies responded by saying: “There are these extraordinarily powerful concentric forces which are pushing all the mass media into this tiny little consensus selection of stories and angles and sources for those stories. One of those is the structural problem I have talked about, the ‘churnalism’. So we are all feeding on this narrow supply which is coming off the wire service and out of PR.”
So what can we do to change what’s happening? “What we need are some counter narratives and we need the tools to stay orientated when the next shock hits,” said Klein
“What needs to happen is that these crises that we are facing need to be opportunities to propose a real economic, social and ecological alternative to our economic model which is essentially a crisis creating machine. This is why I don’t actually subscribe to the conspiracy theory. I personally think that what we have is an economic model that delivers crises quite reliably.
“In the book I quote Milton Freedman in 1992, ‘only a crisis, natural or perceived, produces real change and when that crisis occurs the change depends on the ideas that are lying around.’ We should learn a lot from that statement because it means that the onus is on us to have our ideas ready for the next crisis.”
As for what governments could do, Peston said: “The tax system is part of the solution and actually regulation is part of the solution. It is well within the power of our government, and other governments as well, to simply say to certain groups of these financial players that certain things that they have been doing are just not right.”
Hay Festival may have alerted us to the problems we are facing but many of those speaking were short on solutions. Maybe they can come up with some ready for next year.
Categorised in: Article
This post was written by Matt Genner