The Shock Doctrine - The Rise of Disaste

Naomi Klein

Part 13

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In Latin America, the original Chicago School laboratory, the backlash takes a distinctly more hopeful form. It is not directed at the weak or the vulnerable but focuses squarely on the ideology at the root of economic exclusion. And unlike the situation in Russia and Eastern Europe, there is an irrepressible enthusiasm for trying the ideas that were subverted in the past.

Despite the Bush administration's claim that the twentieth century ended with a "decisive victory" for free markets over all forms of socialism, many Latin Americans understand perfectly well that it was authoritarian communism that failed in Eastern Europe and parts of Asia. Democratic socialism, meaning not only socialist parties brought to power through elections but also democratically run workplaces and land holdings, has worked in many regions, from Scandinavia to the thriving and historic cooperative economy in Italy's Emilia-Romagna region. It was a version of this combination of democracy and socialism that Allende was attempting to bring to Chile between 1970 and 1973. Gorbachev had a similar, though less radical, vision to turn the Soviet Union into a "socialist beacon" on the Scandinavian model. South Africa's Freedom Charter, the dream that animated the long liberation struggle, was a version of this same third way: not state communism, but markets existing alongside the nationalization of the banks and mines, with the income used to build comfortable neighborhoods and decent schools-economic as well as political democracy. The workers who founded Solidarity in 1980 pledged to struggle not against socialism but for it, with workers eventually winning the power to run their workplaces and country democratically.

The dirty secret of the neoliberal era is that these ideas were never defeated in a great battle of ideas, nor were they voted down in elections. They were shocked out of the way at key political junctures. When resistance was fierce, they were defeated with overt violence -rolled over by Pinochet's, Yeltsin's and Deng Xiaoping's tanks. At other times, they were simply betrayed through what John Williamson called "voodoo politics": the Bolivian president Victor Paz Estenssoro's postelection secret economic team (and ma.s.s kidnapping of union leaders); the ANC's backroom bargaining-away of the Freedom Charter in favor of Thabo Mbeki's top-secret economic program; Solidarity's exhausted adherents succ.u.mbing to economic shock therapy after the elections in exchange for a bailout. It is precisely because the dream of economic equality is so popular, and so difficult to defeat in a fair fight, that the shock doctrine was embraced in the first place.

Washington has always regarded democratic socialism as a greater threat than totalitarian Communism, which was easy to vilify and made for a handy enemy. In the sixties and seventies, the favored tactic for dealing with the inconvenient popularity of developmentalism and democratic socialism was to try to equate them with Stalinism, deliberately blurring the clear differences between the worldviews. (Conflating all opposition with terrorism plays a similar role today.) A stark example of this strategy comes from the early days of the Chicago crusade, deep inside the decla.s.sified Chile doc.u.ments. Despite the CIA-funded propaganda campaign painting Allende as a Soviet-style dictator, Washington's real concerns about the Allende election victory were relayed by Henry Kissinger in a 1970 memo to Nixon: "The example of a successful elected Marxist government in Chile would surely have an impact on-and even precedent value for-other parts of the world, especially in Italy; the imitative spread of similar phenomena elsewhere would in turn significantly affect the world balance and our own position in it."21 In other words, Allende needed to be taken out before his democratic third way spread. In other words, Allende needed to be taken out before his democratic third way spread.

The dream he represented was never defeated. It was, as Walsh noted, temporarily silenced, pushed under the surface by fear. Which is why, as Latin America emerges from its decades of shock, the old ideas are bubbling back up-along with the "imitative spread" Kissinger so feared. Ever since the Argentine collapse in 2001, opposition to privatization has become the defining issue of the continent, able to make governments and break them; by late 2006, it was practically creating a domino effect. Luiz Inacio Lula da Silva was reelected as president of Brazil largely because he turned the vote into a referendum on privatization. His opponent, from the party responsible for Brazil's major sell-offs in the nineties, resorted to appearing in public looking like a socialist NASCAR driver, wearing a jacket and baseball hat covered in logos from the public companies that had not yet been sold. Voters weren't persuaded, and Lula got 61 percent of the vote, despite disillusionment with the corruption scandals plaguing his government. Shortly afterward in Nicaragua, Daniel Ortega, former head of the Sandinistas, made the country's frequent blackouts the center of his winning campaign; the sale of the national electricity company to the Spanish firm Union Fenosa after Hurricane Mitch, he a.s.serted, was the source of the problem. "You, brothers, are suffering the effects of these outages every day!" he bellowed. "Who brought Union Fenosa to this country? The government of the rich did, those who are in the service of barbarian capitalism."22 In November 2006, Ecuador's presidential elections turned into a similar ideological battleground. Rafael Correa, a forty-three-year-old left-wing economist, won the vote against Alvaro n.o.boa, a banana tyc.o.o.n and one of the richest men in the country. With Twisted Sister's "We're Not Going to Take It" as his official campaign song, Correa called for the country "to overcome all the fallacies of neo-liberalism." When he won, the new president of Ecuador declared himself "no fan of Milton Friedman."23 By then, the Bolivian president Evo Morales was already approaching the end of his first year in office. After sending in the army to take back the gas fields from multinational "plunderers," he moved on to nationalize parts of the mining sector. In this same period in Mexico, the results of the fraud-tainted 2006 elections were being contested through the creation of an unprecedented "parallel government" of the people, with votes held in the streets and plaza outside the seat of government in Mexico City. In the Mexican state of Oaxaca, the right-wing government sent in riot police to break a strike by teachers who were demanding an annual pay raise. It provoked a statewide rebellion against the corruption of the corporatist state that raged for months. By then, the Bolivian president Evo Morales was already approaching the end of his first year in office. After sending in the army to take back the gas fields from multinational "plunderers," he moved on to nationalize parts of the mining sector. In this same period in Mexico, the results of the fraud-tainted 2006 elections were being contested through the creation of an unprecedented "parallel government" of the people, with votes held in the streets and plaza outside the seat of government in Mexico City. In the Mexican state of Oaxaca, the right-wing government sent in riot police to break a strike by teachers who were demanding an annual pay raise. It provoked a statewide rebellion against the corruption of the corporatist state that raged for months.

Chile and Argentina are both led by politicians who define themselves against their countries' Chicago School experiments, though the extent to which they provide genuine alternatives remains a subject of intense debate. The symbolism, however, represents its own kind of victory. Several of the people in the cabinet of the Argentine president, Nestor Kirchner, including Kirchner himself, were imprisoned during the dictatorship. On March 24, 2006, the thirtieth anniversary of the 1976 military coup, Kirchner addressed demonstrators in the Plaza de Mayo, where the mothers of the disappeared held their weekly vigils. "We are back," he declared, referring to the generation that had been terrorized in the seventies. In the huge a.s.sembled crowd, he said, were "the faces of the 30,000 disappeared companeros returning to this plaza today."24 Chile's president, Mich.e.l.le Bachelet, was one of the thousands who were victims of Pinochet's reign of terror. In 1975, she and her mother were imprisoned and tortured in Villa Grimaldi, known for its wooden isolation cubicles, so small that prisoners could only crouch. Her father, a military officer, had refused to go along with the coup and was murdered by Pinochet's men. Chile's president, Mich.e.l.le Bachelet, was one of the thousands who were victims of Pinochet's reign of terror. In 1975, she and her mother were imprisoned and tortured in Villa Grimaldi, known for its wooden isolation cubicles, so small that prisoners could only crouch. Her father, a military officer, had refused to go along with the coup and was murdered by Pinochet's men.

In December 2006, a month after Friedman's death, Latin America's leaders gathered for a historic summit in Bolivia, held in the city of Cochabamba, where a popular uprising against water privatization had forced Bechtel out of the country several years earlier. Morales began the proceedings with a vow to close "the open veins of Latin America."25 It was a reference to Eduardo Galeano's book It was a reference to Eduardo Galeano's book Open Veins of Latin America: Five Centuries of the Pillage of a Continent, Open Veins of Latin America: Five Centuries of the Pillage of a Continent, a lyrical accounting of the violent plunder that had turned a rich continent into a poor one. The book was first published in 1971, two years before Allende was overthrown for daring to try to close those open veins by nationalizing his country's copper mines. That event ushered in a new era of furious pillage, during which the structures built by the continent's developmentalist movements were sacked, stripped and sold off. a lyrical accounting of the violent plunder that had turned a rich continent into a poor one. The book was first published in 1971, two years before Allende was overthrown for daring to try to close those open veins by nationalizing his country's copper mines. That event ushered in a new era of furious pillage, during which the structures built by the continent's developmentalist movements were sacked, stripped and sold off.

Today Latin Americans are picking up the project that was so brutally interrupted all those years ago. Many of the policies cropping up are familiar: nationalization of key sectors of the economy, land reform, major new investments in education, literacy and health care. These are not revolutionary ideas, but in their unapologetic vision of a government that helps reach for equality, they are certainly a rebuke to Friedman's 1975 a.s.sertion to Pinochet that "the major error, in my opinion, was... to believe that it is possible to do good with other people's money."

Though clearly drawing on a long militant history, Latin America's contemporary movements are not direct replicas of their predecessors. Of all the differences, the most striking is an acute awareness of the need for protection from the shocks of the past-the coups, the foreign shock therapists, the U.S.-trained torturers, as well as the debt shocks and currency collapses of the eighties and nineties. Latin America's ma.s.s movements, which have powered the wave of election victories for left-wing candidates, are learning how to build shock absorbers into their organizing models. They are, for example, less centralized than in the sixties, making it harder to demobilize whole movements by eliminating a few leaders. Despite the overwhelming cult of personality surrounding Chavez, and his moves to centralize power at the state level, the progressive networks in Venezuela are at the same time highly decentralized, with power dispersed at the gra.s.s roots and community level, through thousands of neighborhood councils and co-ops. In Bolivia, the indigenous people's movements that put Morales in office function similarly and have made it clear that Morales does not have their unconditional support: the barrios will back him as long as he stays true to his democratic mandate, and not a moment longer. This kind of network approach is what allowed Chavez to survive the 2002 coup attempt: when their revolution was threatened, his supporters poured down from the shantytowns surrounding Caracas to demand his reinstatement, a kind of popular mobilization that did not happen during the coups of the seventies.

Latin America's new leaders are also taking bold measures to block any future U.S.-backed coups that could attempt to undermine their democratic victories. The governments of Venezuela, Costa Rica, Argentina and Uruguay have all announced that they will no longer send students to the School of the Americas (now called the Western Hemisphere Inst.i.tute for Security Cooperation)-the infamous police and military training center in Fort Benning, Georgia, where so many of the continent's notorious killers learned the latest in "counterterrorism" techniques, then promptly directed them against farmers in El Salvador and auto workers in Argentina.26 Bolivia looks set to cut its ties with the school, as does Ecuador. Chavez has let it be known that if an extremist right-wing element in Bolivia's Santa Cruz province makes good on its threats against the government of Evo Morales, Venezuelan troops will help defend Bolivia's democracy. Rafael Correa is set to take the most radical step of all. The Ecuadorean port city of Manta currently hosts the largest U.S. military base in South America, which serves as a staging area for the "war on drugs," largely fought in Colombia. Correa's government has announced that when the agreement for the base expires in 2009, it will not be renewed. "Ecuador is a sovereign nation," said the minister of foreign relations, Maria Fernanda Espinosa. "We do not need any foreign troops in our country." Bolivia looks set to cut its ties with the school, as does Ecuador. Chavez has let it be known that if an extremist right-wing element in Bolivia's Santa Cruz province makes good on its threats against the government of Evo Morales, Venezuelan troops will help defend Bolivia's democracy. Rafael Correa is set to take the most radical step of all. The Ecuadorean port city of Manta currently hosts the largest U.S. military base in South America, which serves as a staging area for the "war on drugs," largely fought in Colombia. Correa's government has announced that when the agreement for the base expires in 2009, it will not be renewed. "Ecuador is a sovereign nation," said the minister of foreign relations, Maria Fernanda Espinosa. "We do not need any foreign troops in our country."27 If the U.S. military does not have bases or training programs, its power to inflict shocks will be greatly eroded. If the U.S. military does not have bases or training programs, its power to inflict shocks will be greatly eroded.

The new leaders in Latin America are also becoming better prepared for the kinds of shocks inflicted by volatile markets. One of the most destabilizing forces of recent decades has been the speed with which capital can pick up and move, or how a sudden drop in commodity prices can devastate an entire agricultural sector. But in much of Latin America these shocks have already happened, leaving behind ghostly industrial suburbs and huge stretches of fallow farmland. The task of the region's new left, therefore, has become a matter of taking the detritus of globalization and putting it back to work. In Brazil, the phenomenon is best seen in the million and a half farmers of the Landless Peoples Movement (MST) who have formed hundreds of cooperatives to reclaim unused land. In Argentina, it is clearest in the movement of "recovered companies," two hundred bankrupt businesses that have been resuscitated by their workers, who have turned them into democratically run cooperatives. For the cooperatives, there is no fear of facing an economic shock of investors leaving, because the investors have already left. In a way, the reclamation experiments are a new kind of post-disaster reconstruction- reconstruction from the slow-motion disaster of neoliberalism. In sharp contrast to the model offered by the disaster capitalism complex in Iraq, Afghanistan and the Gulf Coast, the leaders of Latin America's rebuilding efforts are the people most affected by the devastation. And unsurprisingly, their spontaneous solutions look very much like the real third way that had been so effectively shocked out of the way by the Chicago School campaign around the world-democracy in daily life.

In Venezuela, Chavez has made the co-ops a top political priority, giving them first refusal on government contracts and offering them economic incentives to trade with one another. By 2006, there were roughly 100,000 cooperatives in the country, employing more than 700,000 workers.28Many are pieces of state infrastructure-toll booths, highway maintenance, health clinics-handed over to the communities to run. It's a reverse of the logic of government outsourcing-rather than auctioning off pieces of the state to large corporations and losing democratic control, the people who use the resources are given the power to manage them, creating, at least in theory, both jobs and more responsive public services. Chavez's many critics have derided these initiatives as handouts and unfair subsidies, of course. Yet in an era when Halliburton treats the U.S. government as its personal ATM for six years, withdraws upward of $20 billion in Iraq contracts alone, refuses to hire local workers either on the Gulf Coast or in Iraq, then expresses its grat.i.tude to U.S. taxpayers by moving its corporate headquarters to Dubai (with all the attendant tax and legal benefits), Chavez's direct subsidies to regular people look significantly less radical.

Latin America's most significant protection from future shocks (and therefore from the shock doctrine) flows from the continent's emerging independence from Washington's financial inst.i.tutions, the result of greater integration among regional governments. The Bolivian Alternative for the Americas (ALBA) is the continent's retort to the Free Trade Area of the Americas, the now buried corporatist dream of a free-trade zone stretching from Alaska to Tierra del Fuego. Though ALBA is still in its early stages, Emir Sader, the Brazil-based sociologist, describes its promise as "a perfect example of genuinely fair trade: each country provides what it is best placed to produce, in return for what it most needs, independent of global market prices."29 So Bolivia provides gas at stable discounted prices; Venezuela offers heavily subsidized oil to poorer countries and shares expertise in developing reserves; and Cuba sends thousands of doctors to deliver free health care all over the continent, while training students from other countries at its medical schools. This is a very different model from the kind of academic exchange that began at the University of Chicago in the mid-fifties, when Latin American students learned a single rigid ideology and were sent home to impose it with uniformity across the continent. The major benefit is that ALBA is essentially a barter system, in which countries decide for themselves what any given commodity or service is worth, rather than letting traders in New York, Chicago or London set the prices for them. That makes trade far less vulnerable to the kind of sudden price fluctuations that devastated Latin American economies in the recent past. Surrounded by turbulent financial waters, Latin America is creating a zone of relative economic calm and predictability, a feat presumed impossible in the globalization era. So Bolivia provides gas at stable discounted prices; Venezuela offers heavily subsidized oil to poorer countries and shares expertise in developing reserves; and Cuba sends thousands of doctors to deliver free health care all over the continent, while training students from other countries at its medical schools. This is a very different model from the kind of academic exchange that began at the University of Chicago in the mid-fifties, when Latin American students learned a single rigid ideology and were sent home to impose it with uniformity across the continent. The major benefit is that ALBA is essentially a barter system, in which countries decide for themselves what any given commodity or service is worth, rather than letting traders in New York, Chicago or London set the prices for them. That makes trade far less vulnerable to the kind of sudden price fluctuations that devastated Latin American economies in the recent past. Surrounded by turbulent financial waters, Latin America is creating a zone of relative economic calm and predictability, a feat presumed impossible in the globalization era.

When one country does face a financial shortfall, this increased integration means that it does not need to turn to the IMF or the U.S. Treasury for a bailout. That's fortunate because the 2006 U.S. National Security Strategy makes it clear that for Washington, the shock doctrine is still very much alive: "If crises occur, the IMF's response must reinforce each country's responsibility for its own economic choices," the doc.u.ment states. "A refo-cused IMF will strengthen market inst.i.tutions and market discipline over financial decisions." This kind of "market discipline" can only be enforced if governments actually go to Washington for help-as Stanley Fischer explained during the Asian financial crisis, the IMF can help only if it is asked, "but when [a country is] out of money, it hasn't got many places to turn."30 That is no longer the case. Thanks to high oil prices, Venezuela has emerged as a major lender to other developing countries, allowing them to do an end run around Washington. That is no longer the case. Thanks to high oil prices, Venezuela has emerged as a major lender to other developing countries, allowing them to do an end run around Washington.

The results have been dramatic. Brazil, so long shackled to Washington by its enormous debt, is refusing to enter into a new agreement with the IMF. Nicaragua is negotiating to quit the fund, Venezuela has withdrawn from both the IMF and the World Bank, and even Argentina, Washington's former "model pupil," has been part of the trend. In his 2007 State of the Union address, President Nestor Kirchner said that the country's foreign creditors had told him, " 'You must have an agreement with the International Fund to be able to pay the debt.' We say to them, 'Sirs, we are sovereign. We want to pay the debt, but no way in h.e.l.l are we going to make an agreement again with the IMF.'" As a result, the IMF, supremely powerful in the eighties and nineties, is no longer a force on the continent. In 2005, Latin America made up 80 percent of the IMF's total lending portfolio; in 2007, the continent represented just 1 percent-a sea change in only two years. "There is life after the IMF," Kirchner declared, "and it's a good life."31 The transformation reaches beyond Latin America. In just three years, the IMF's worldwide lending portfolio had shrunk from $81 billion to $11.8 billion, with almost all of that going to Turkey. The IMF, a pariah in so many countries where it has treated crises as profit-making opportunities, is starting to wither away. The World Bank faces an equally grim future. In April 2007, Ecuador's president, Rafael Correa, revealed that he had suspended all loans from the bank and declared the inst.i.tution's representative in Ecuador persona non grata -an extraordinary step. Two years earlier, Correa explained, the World Bank had used a $100-million loan to defeat economic legislation that would have redistributed oil revenues to the country's poor. "Ecuador is a sovereign country, and we will not stand for extortion from this international bureaucracy," he said. At the same time, Evo Morales announced that Bolivia would quit the World Bank's arbitration court, the body that allows multinational corporations to sue national governments for measures that cost them profits. "The governments of Latin America, and I think the world, never win the cases. The multinationals always win," Morales said. When Paul Wolfowitz was forced to announce his resignation as president of the World Bank in May 2007, it was clear that the inst.i.tution needed to take desperate measures to rescue itself from its profound crisis of credibility. In the midst of the Wolfowitz affair, The Financial Times The Financial Times reported that when World Bank managers dispensed advice in the developing world, "they were now laughed at." reported that when World Bank managers dispensed advice in the developing world, "they were now laughed at."32 Add the collapse of the World Trade Organization talks in 2006 (prompting declarations that "globalization is dead"), and the futures of the three main inst.i.tutions that had imposed the Chicago School ideology under the guise of economic inevitability are at risk of extinction. Add the collapse of the World Trade Organization talks in 2006 (prompting declarations that "globalization is dead"), and the futures of the three main inst.i.tutions that had imposed the Chicago School ideology under the guise of economic inevitability are at risk of extinction.

It stands to reason that the revolt against neoliberalism would be in its most advanced stage in Latin America-as inhabitants of the first shock lab, Latin Americans have had the most time to recover their bearings. Years of street protests have created new political groupings, eventually gaining the strength not just to take state power but to begin to change the power structures of the state. There are signs that other former shock laboratories are on the same path. In South Africa, 2005 and 2006 were the years that the long-neglected slums decisively abandoned their party loyalty to the ANC and began protesting against the broken promises of the Freedom Charter. Foreign journalists commented that this kind of upheaval had not been seen since the townships rose up against apartheid. But the most remarkable mood change is taking place in China. For many years, the raw terror of the Tiananmen Square ma.s.sacre succeeded in supressing popular anger at the erosion of workers' rights and deepening rural poverty. Not anymore. According to official government sources, in 2005 there were a staggering eighty-seven thousand large protests in China, involving more than 4 million workers and peasants.5833 China's activist wave has been met with the most extreme state repression since 1989, but it has also resulted in several concrete victories: major new spending in rural areas, better health care, pledges to eliminate education fees. China too is coming out of shock. China's activist wave has been met with the most extreme state repression since 1989, but it has also resulted in several concrete victories: major new spending in rural areas, better health care, pledges to eliminate education fees. China too is coming out of shock.

Any strategy based on exploiting the window of opportunity opened by a traumatic shock relies heavily on the element of surprise. A state of shock, by definition, is a moment when there is a gap between fast-moving events and the information that exists to explain them. The late French theorist Jean Baudrillard described terrorist events as an "excess of reality"; in this sense, in North America, the September 11 attacks were, at first, pure event, raw reality, unprocessed by story, narrative or anything that could bridge the gap between reality and understanding.34 Without a story, we are, as many of us were after September 11, intensely vulnerable to those people who are ready to take advantage of the chaos for their own ends. As soon as we have a new narrative that offers a perspective on the shocking events, we become reoriented and the world begins to make sense once again. Without a story, we are, as many of us were after September 11, intensely vulnerable to those people who are ready to take advantage of the chaos for their own ends. As soon as we have a new narrative that offers a perspective on the shocking events, we become reoriented and the world begins to make sense once again.

Prison interrogators intent on inducing shock and regression understand this process well. It is the reason the CIA's manuals stress the importance of cutting detainees off from anything that will help them establish a new narrative -their own sensory input, other prisoners, even communication with guards. "Prisoners should be segregated immediately," the 1983 manual states. "Isolation, both physical and psychological, must be maintained from the moment of apprehension."35 The interrogators know that prisoners talk. They warn each other about what's to come; they pa.s.s notes between the bars. Once that happens, the captors lose their edge. They still have the power to inflict bodily pain, but they have lost their most effective psychological tools to manipulate and "break" their prisoners: confusion, disorientation and surprise. Without those elements, there is no shock. The interrogators know that prisoners talk. They warn each other about what's to come; they pa.s.s notes between the bars. Once that happens, the captors lose their edge. They still have the power to inflict bodily pain, but they have lost their most effective psychological tools to manipulate and "break" their prisoners: confusion, disorientation and surprise. Without those elements, there is no shock.

The same is true for wider societies. Once the mechanics of the shock doctrine are deeply and collectively understood, whole communities become harder to take by surprise, more difficult to confuse-shock resistant. The intensely violent brand of disaster capitalism that has dominated since September 11 emerged in part because lesser shocks-debt crises, currency crashes, the threat of being left behind "in history"-were already losing much of their potency, largely because of overuse. Yet today, even the cataclysmic shocks of wars and natural disasters do not always provoke the level of disorientation required to impose unwanted economic shock therapy. There are just too many people in the world who have had direct experience with the shock doctrine: they know how it works, have talked to other prisoners, pa.s.sed notes between the bars; the crucial element of surprise is missing.

A striking example is the response of millions of Lebanese to attempts by international lenders to impose free-market "reforms" as a condition of reconstruction aid after the Israeli attacks in 2006. By all rights, that scheme should have worked: the country could not have been more desperate for funds. Even before the war, Lebanon had one of the heaviest debts in the world, while the new losses from attacks on roads, bridges and airport runways were estimated at $9 billion. So when delegates from thirty wealthy nations got together in Paris in January 2007 to pledge $7.6 billion in reconstruction loans and grants, they naturally a.s.sumed that Lebanon's government would accept whatever strings they attached to the aid. The conditions were the usual ones: phone and electricity privatizations, price increases on fuel, cuts to the public service and an increase to an already controversial tax on consumer purchases. Kamal Hamdan, a Lebanese economist, estimated that, as a result, "household bills [would] increase by 15 percent because of increased taxes and adjusted prices"-a cla.s.sic peace penalty. As for the reconstruction itself, the jobs would of course go to the giants of disaster capitalism, with no requirement to hire or subcontract locally.36 The U.S. secretary of state, Condoleezza Rice, was questioned about whether such sweeping demands const.i.tuted foreign interference in Lebanon's affairs. She replied, "Lebanon is a democracy. That said, Lebanon is also undertaking some important economic reforms that are critical to making any of this work." Fouad Siniora, Lebanon's prime minister, backed by the West, easily agreed to the terms, shrugging and saying that "Lebanon did not invent privatization." Further demonstrating his willingness to play ball, he hired the Bush-connected surveillance giant Booz Allen Hamilton to broker Lebanon's telecom privatization.37 Many Lebanese citizens, however, were distinctly less cooperative. Despite the fact that a lot of their homes still lay in ruins, thousands partic.i.p.ated in a general strike, organized by a coalition of unions and political parties, including the Islamist party Hezbollah. The demonstrators insisted that if receiving reconstruction funds meant raising the cost of living for a war-ravaged people, it hardly deserved to be called aid. So while Siniora was rea.s.suring donors in Paris, strikes and road blockades brought the country to a halt-the first national revolt specifically targeting postwar disaster capitalism. Demonstrators also staged a sit-in, which went on for two months, turning downtown Beirut into a cross between a tent city and a street carnival. Most reporters characterized these events as shows of strength by Hezbollah, but Mohamad Bazzi, the Middle East bureau chief for New York's Newsday, Newsday, said that this interpretation missed their true significance: "The biggest motivator driving many of those camped out in downtown isn't Iran or Syria, or Sunni versus Shiite. It's the economic inequality that has haunted Lebanese Shiites for decades. It's a poor and working-cla.s.s people's revolt." said that this interpretation missed their true significance: "The biggest motivator driving many of those camped out in downtown isn't Iran or Syria, or Sunni versus Shiite. It's the economic inequality that has haunted Lebanese Shiites for decades. It's a poor and working-cla.s.s people's revolt."38 The location of the sit-in provided the most eloquent explanation for why Lebanon was proving so shock resistant. The protest was in the part of downtown Beirut that residents refer to as Solidere, after the private development company that built and owns almost everything in its confines. Solidere is the result of Lebanon's last reconstruction effort. In the early nineties, after the fifteen-year civil war, the country was shattered and the state was in debt, with no money to rebuild. The billionaire businessman (and later prime minister) Rafiq Hariri made a proposal: give him the land rights to the entire downtown core and let him and his new real estate company, Solidere, turn it into the "Singapore of the Middle East." Hariri, who was killed in a car bombing in February 2005, bulldozed almost all the standing structures, turning the city into a blank slate. Marinas, luxurious condominiums (some with elevators for limousines) and lavish shopping malls replaced the ancient souks.39Almost everything in the business district-buildings, plazas, security forces-is owned by Solidere.

To the outside world, Solidere was the shining symbol of Lebanon's postwar rebirth, but for many Lebanese it had always been a kind of holograph. Outside the ultramodern downtown core, much of Beirut lacked basic infrastructure, from electricity to public transit, and the bullet holes inflicted during the civil war were never repaired on the facades of many buildings. It was in those neglected slums surrounding the gleaming center that Hezbollah built its loyal base, rigging up generators and transmitters, organizing trash removal, providing security-becoming the much vilified "state within a state." When the residents of the run-down suburbs ventured into the Solidere enclave, they were often thrown out by Hariri's private security guards; their presence frightened the tourists.

Raida Hatoum, a social justice activist in Beirut, told me that when Solidere began its reconstruction, "people were so happy the war was over and the streets were being rebuilt. By the time we became aware that the streets had been sold, that they were privately owned, it was too late. We didn't know that the money was a loan and we'd have to pay it back later." That rude awakening of finding out that the least advantaged people had been stuck with the bill for a makeover that benefited only a small elite has made the Lebanese experts in the mechanics of disaster capitalism. It is this experience that helped keep the country oriented and organized after the 2006 war. By choosing to hold their ma.s.s sit-in inside the Solidere bubble, with Palestinian refugees camped outside the Virgin megastore and high-end latte joints ("If I ate a sandwich here, I'd be broke for a week," one protester remarked), the demonstrators were sending a clear message. They did not want another reconstruction of Solidere-style bubbles and rotting suburbs- of fortressed green zones and raging red zones-but a reconstruction for the entire country. "How can we still accept this government that steals?" one demonstrator asked. "This government that built this downtown and acc.u.mulated this huge debt? Who's going to pay for it? I have to pay for it, and my son is going to pay for it after me."40 Lebanon's shock resistance went beyond protest. It was also expressed through a far-reaching parallel reconstruction effort. Within days of the cease-fire, Hezbollah's neighborhood committees had visited many of the homes. .h.i.t by the air attacks, a.s.sessed the damage and were already handing out $12,000 in cash to displaced families to cover a year's worth of rent and furnishings. As the independent journalists Ana Nogueira and Saseen Kawzally observed from Beirut, "That is six times the dollar amount that survivors of Hurricane Katrina received from FEMA." And in what would have been music to the ears of Katrina survivors, the Hezbollah leader, Sheik Ha.s.san Nasrallah, promised the country in a televised address, "You won't need to ask a favor of anyone, queue up anywhere." Hezbollah's version of aid did not filter through the government or foreign NGOs. It did not go to build five-star hotels, as in Kabul, or Olympic swimming pools for police trainers, as in Iraq. Instead, Hezbollah did what Renuka, the Sri Lankan tsunami survivor, told me she wished someone would do for her family: put the help in their hands. Hezbollah also included community members in the reconstruction -it hired local construction crews (working in exchange for the sc.r.a.p metal they collected), mobilized fifteen hundred engineers and organized teams of volunteers. All that help meant that a week after the bombing stopped, the reconstruction was already well under way.41 In the U.S. press, these initiatives were almost universally derided as bribery or clientelism -Hezbollah's attempt to purchase popular support after it had provoked the attack from which the country was reeling (David Frum even suggested that the bills Hezbollah was handing out were counterfeit) 42 42 There is no question that Hezbollah is engaged in politics as well as charity, and that Iranian funds made Hezbollah's generosity possible. Equally important to its efficiency, however, was Hezbollah's status as a local, indigenous organization, one that rose up from the neighborhoods being rebuilt. Unlike the alien corporate reconstruction agencies imposing their designs from far-off bureaucracies via imported management, private security and translators, Hezbollah could act fast because it knew every back alley and every jury-rigged transmitter, as well as who could be trusted to get the work done. If the residents of Lebanon were grateful for the results, it was also because they knew the alternative. The alternative was Solidere. There is no question that Hezbollah is engaged in politics as well as charity, and that Iranian funds made Hezbollah's generosity possible. Equally important to its efficiency, however, was Hezbollah's status as a local, indigenous organization, one that rose up from the neighborhoods being rebuilt. Unlike the alien corporate reconstruction agencies imposing their designs from far-off bureaucracies via imported management, private security and translators, Hezbollah could act fast because it knew every back alley and every jury-rigged transmitter, as well as who could be trusted to get the work done. If the residents of Lebanon were grateful for the results, it was also because they knew the alternative. The alternative was Solidere.

We do not always respond to shocks with regression. Sometimes, in the face of crisis, we grow up-fast. This impulse was in powerful evidence in Spain, on March 11, 2004, when ten bombs ripped through commuter trains and rail stations in Madrid, killing nearly two hundred people. President Jose Maria Aznar immediately went on television and told Spaniards to blame the Basque separatists and to give him their support for the war in Iraq. "No negotiation is possible or desirable with these a.s.sa.s.sins who so many times have sown death all around Spain. Only with firmness can we end the attacks" he said.43 Spaniards reacted badly to that kind of talk. "We are still hearing the echoes of Franco," said Jose Antonio Martines Soler, a prominent Madrid newspaper editor who had been persecuted under Francisco Franco's dictatorship. "In every act, in every gesture, in every sentence, Aznar told the people he was right, that he was the owner of the truth and those who disagreed with him were his enemies."44 In other words, the very same qualities that Americans identified as "strong leadership" in their president after September 11 were, in Spain, regarded as ominous signs of a rising fascism. The country was three days away from national elections, and, remembering a time when fear governed politics, voters defeated Aznar and chose a party that would pull troops out of Iraq. As in Lebanon, it was the collective memory of past shocks that made Spain resistant to the new ones. In other words, the very same qualities that Americans identified as "strong leadership" in their president after September 11 were, in Spain, regarded as ominous signs of a rising fascism. The country was three days away from national elections, and, remembering a time when fear governed politics, voters defeated Aznar and chose a party that would pull troops out of Iraq. As in Lebanon, it was the collective memory of past shocks that made Spain resistant to the new ones.

All shock therapists are intent on the erasure of memory. Ewen Cameron was convinced that he needed to wipe out the minds of his patients before he could rebuild them. The U.S. occupiers of Iraq felt no need to stop the looting of Iraq's museums and libraries, thinking it might make their jobs easier. But like Cameron's former patient Gail Kastner, with her intricate architecture of papers, books and lists, recollections can be rebuilt, new narratives can be created. Memory, both individual and collective, turns out to be the greatest shock absorber of all.

Despite all the successful attempts to exploit the 2004 tsunami, memory also proved to be an effective tool of resistance in some areas where it struck, particularly in Thailand. Dozens of coastal villages were flattened by the wave, but unlike in Sri Lanka, many Thai settlements were successfully rebuilt within months. The difference did not come from the government. Thailand's politicians were just as eager as those elsewhere to use the storm as an excuse to evict fishing people and hand over land tenure to large resorts. Yet what set Thailand apart was that villagers approached all government promises with intense skepticism and refused to wait patiently in camps for an official reconstruction plan. Instead, within weeks, hundreds of villagers engaged in what they called land "reinvasions." They marched past the armed guards on the payroll of developers, tools in hand, and began marking off the sites where their old houses had been. In some cases, reconstruction began immediately. "I am willing to bet my life on this land, because it is ours," said Ratree Kongwatmai, who lost most of her family in the tsunami.4' The most daring reinvasions were performed by Thailand's indigenous fishing peoples called the Moken, or "sea gypsies." After centuries of disen-franchis.e.m.e.nt, the Moken had no illusions that a benevolent state would give them a decent piece of land in exchange for the coastal properties that had been seized. So, in one dramatic case, the residents of the Ban Tung Wah Village in the Phang Nga province "gathered themselves together and marched right back home, where they encircled their wrecked village with rope, in a symbolic gesture to mark their land ownership," explained a report by a Thai NGO. "With the entire community camping out there, it became difficult for the authorities to chase them away, especially given the intense media attention being focused on tsunami rehabilitation." In the end, the villagers negotiated a deal with the government to give up part of their oceanfront property in exchange for legal security on the rest of their ancestral land. Today, the rebuilt village is a showcase of Moken culture, complete with museum, community center, school and market. "Now, officials from the sub-district come to Ban Tung Wah to learn about 'people-managed tsunami rehabilitation' while researchers and university students turn up there by the bus-full to study 'indigenous people's wisdom.' "46 All along the Thai coast where the tsunami hit, this kind of direct-action reconstruction is the norm. The key to their success, community leaders say, is that "people negotiate for their land rights from a position of being in occupation"; some have dubbed the practice "negotiating with your hands."47 Thailand's survivors have also insisted on a different kind of aid-rather than settling for handouts, they have demanded the tools to carry out their own reconstruction. Dozens of Thai architecture students and professors, for example, volunteered to help community members design their new houses and draw their own rebuilding plans; master boat builders trained villagers to make their own, more sophisticated fishing vessels. The results are communities stronger than they were before the wave. The houses on stilts built by Thai villagers in Ban Tung Wah and Baan Nairai are beautiful and st.u.r.dy; they are also cheaper, larger and cooler than the sweltering prefab cubicles on offer there from foreign contractors. A manifesto drafted by a coalition of Thai tsunami survivor communities explains the philosophy: "The rebuilding work should be done by local communities themselves, as much as possible. Keep contractors out, let communities take responsibility for their own housing." Thailand's survivors have also insisted on a different kind of aid-rather than settling for handouts, they have demanded the tools to carry out their own reconstruction. Dozens of Thai architecture students and professors, for example, volunteered to help community members design their new houses and draw their own rebuilding plans; master boat builders trained villagers to make their own, more sophisticated fishing vessels. The results are communities stronger than they were before the wave. The houses on stilts built by Thai villagers in Ban Tung Wah and Baan Nairai are beautiful and st.u.r.dy; they are also cheaper, larger and cooler than the sweltering prefab cubicles on offer there from foreign contractors. A manifesto drafted by a coalition of Thai tsunami survivor communities explains the philosophy: "The rebuilding work should be done by local communities themselves, as much as possible. Keep contractors out, let communities take responsibility for their own housing."48 A year after Katrina hit, a remarkable exchange took place in Thailand between the leaders of that country's gra.s.sroots reconstruction effort and a small delegation of hurricane survivors from New Orleans. The visitors from the United States toured several rebuilt Thai villages and were taken aback by the speed with which rehabilitation had become a reality. "In New Orleans, we're waiting around on the government to do things for us, but here you all are doing by yourselves," said Endesha Juakali, founder of the "survivors' village" in New Orleans. "When we go back," he pledged, "your model is our new goal."49 After the community leaders from New Orleans returned home, there was indeed a wave of direct action in the city. Juakali, whose own neighborhood was still in ruins, organized teams of local contractors and volunteers to gut the flood-damaged interiors in every house on the block; then they moved on to the next one. He said that his trip to the tsunami region gave him "a good perspective on . . . how the people of New Orleans are going to have to put FEMA aside and the city and state government aside and begin to say, 'What can we do right now to start to bring our neighborhoods back in spite of the government, not because of it?'" Another veteran of the Asia trip, Viola Washington, also returned to her New Orleans neighborhood, Gentilly, with an entirely new att.i.tude. She "broke down a map of Gentilly into sections, organized representative committees for each section and appointed leaders who meet to discuss rebuilding needs." She explained that "as we fight the government to get our money we don't want to be doing nothing to try and get ourselves back."50 There was still more direct action in New Orleans. In February 2007, groups of residents who had lived in the public housing projects that the Bush administration was planning to demolish began "reinvading" their old homes and taking up residence. Volunteers helped clean out apartments and raised money to buy generators and solar panels. "My home is my castle, and I'm taking it back," announced Gloria Williams, a resident of the housing project C. J. Peete. The reinvasion turned into a block party complete with a New Orleans bra.s.s band.51There was much to celebrate: at least for now, this one community had escaped the great cultural bulldozer that calls itself reconstruction.

Uniting all these examples of people rebuilding for themselves is a common theme: partic.i.p.ants say they are not just repairing buildings but healing themselves. It makes perfect sense. The universal experience of living through a great shock is the feeling of being completely powerless: in the face of awesome forces, parents lose the ability to save their children, spouses are separated, homes-places of protection-become death traps. The best way to recover from helplessness turns out to be helping-having the right to be part of a communal recovery. "Reopening our school says this is a very special community, tied together by more than location but by spirituality, by bloodlines and by a desire to come home," said the a.s.sistant princ.i.p.al of Dr. Martin Luther King Jr. Elementary School in the Lower Ninth Ward of New Orleans.52 Such people's reconstruction efforts represent the ant.i.thesis of the disaster capitalism complex's ethos, with its perpetual quest for clean sheets and blank slates on which to build model states. Like Latin America's farm and factory co-ops, they are inherently improvisational, making do with whoever is left behind and whatever rusty tools have not been swept away, broken or stolen. Unlike the fantasy of the Rapture, the apocalyptic erasure that allows the ethereal escape of true believers, local people's renewal movements begin from the premise that there is no escape from the substantial messes we have created and that there has already been enough erasure-of history, of culture, of memory. These are movements that do not seek to start from scratch but rather from sc.r.a.p, from the rubble that is all around. As the cor-poratist crusade continues its violent decline, turning up the shock dial to blast through the mounting resistance it encounters, these projects point a way forward between fundamentalisms. Radical only in their intense practicality, rooted in the communities where they live, these men and women see themselves as mere repair people, taking what's there and fixing it, reinforcing it, making it better and more equal. Most of all, they are building in resilience-for when the next shock hits.

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