A documentary adaptation Naomi Klein's 2007 book, The Shock Doctrine. An investigation of disaster capitalism, based on Naomi Klein's proposition that neo-liberal capitalism feeds on natural disasters, war and terror to establish its dominance.
Based on breakthrough historical research and four years of on-the-ground reporting in disaster zones, The Shock Doctrine vividly shows how disaster capitalism -- the rapid-fire corporate re-engineering of societies still reeling from shock -- did not begin with September 11, 2001.
The films traces its origins back fifty years, to the University of Chicago under Milton Friedman, which produced many of the leading neo-conservative and neo-liberal thinkers whose influence is still profound in Washington today.
New, surprising connections are drawn between economic policy, shock and awe warfare and covert CIA-funded experiments in electroshock and sensory deprivation in the 1950s, research that helped write the torture manuals used today in Guantanamo Bay.
The Shock Doctrine follows the application of these ideas through our contemporary history, showing in riveting detail how well-known events of the recent past have been deliberate, active theatres for the shock doctrine, among them: Pinochet's coup in Chile in 1973, the Falklands War in 1982, the Tiananmen Square Massacre in 1989, the collapse of the Soviet Union in 1991, the Asian Financial crisis in 1997 and Hurricane Mitch in 1998.*******
The Pinochet coup in Chile, 1973
By Mark Curtis
An edited extract from Unpeople: Britain’s Secret Human Rights Abuses.
In September 1973, a democratically-elected Chilean government under President Salvador Allende was overthrown in a brutal coup organised by the Chilean military with the backing of the CIA. General Pinochet soon emerged as the leader of the military junta which immediately engaged in gross repression against supporters of the previous government and other suspected opposition figures, while all political activity was banned. At least 3,000 people were killed, most executed, died under torture or “disappeared”.
Allende had been elected with 36 per cent of the vote in September 1970 elections and appointed President of a Popular Unity government with the consent of the Christian Democratic Party. The new President inherited an economy that, as in most of Latin America, was controlled by a small elite while the majority had few economic rights. In his victory speech in November Allende proclaimed a programme for fundamental economic change, proposing to abolish the monopolies ‘which grant control of the economy to a few dozen families’, abolish the tax system that favoured the rich, abolish the ‘large estates which condemn thousands of peasants to serfdom’ and ‘put an end to the foreign ownership of our industry’. ‘The road to socialism lies through democracy, pluralism and freedom’, Allende proclaimed.
The strategy was to create a restructured society based on three different classes of ownership (state, mixed and private) to be achieved mainly through the rapid extension of state control over large parts of the economy. This involved the state takeover of both foreign and domestic private interests either by direct nationalisation or by government investment. These policies improved the position of the poor, especially in the early part of the Allende presidency, through raising the minimum wage and special bonuses paid to poorly paid workers. This was matched by rising popularity for the government; in congressional elections in the year of the coup, 1973, the Popular Unity coalition increased its vote to 44 per cent.
The US government and the CIA had initially sought to prevent Allende taking office and subsequently to overthrow him. A declassified CIA report reveals that throughout the 1960s and 1970s the US promoted ‘sustained propaganda efforts, including financial support for major news media, against Allende’ while ‘political action projects supported selected parties before and after the 1964 elections and after Allende’s 1970 election’. In the 1960s, actions included financial assistance to the Christian Democratic Party and other parties, the distribution of posters and leaflets, and financial assistance to selected candidates in Congressional elections. By the time of the 1964 election, won by favoured US candidate Eduardo Frei of the Christian Democratic Party, the CIA had provided $3 million to prevent Allende winning.
In the run-up to the 1970 election eventually won by Allende, the CIA conducted ‘”spoiling operations” to prevent an Allende victory’ and President Nixon authorised the CIA ‘to seek to instigate a coup to prevent Allende from taking office’. A few days after Allende assumed office, the CIA was authorised to establish direct contacts with Chilean military officers ‘to evaluate the possibilities of stimulating a military coup if a decision were to be made to do so’. Arms, including machine guns and ammunition, were provided to one of the group plotting a coup. Ten million dollars was authorised ‘to prevent Allende from coming to power or unseat him’.
Once Allende was in office, the CIA funnelled millions of dollars ‘to strengthen opposition political parties’ and ‘also provided assistance to militant right-wing groups to undermine the President and create a tense environment’. CIA money was also used for ‘forwarding worldwide propaganda information for placement in local media’ and promoting public opposition to Allende among leading Chilean newspapers. Further CIA covert action initiatives were launched in 1971 and 1972 aimed principally at keeping the Allende’s opponents active by supporting opposition parties.
Also approved were efforts ‘to encourage Chilean businesses to carry out a program of economic disruption’. US ambassador Edward Korry explained that the strategy was to: ‘do all within our power to condemn Chile and the Chileans to utmost deprivation and poverty, a policy designed for a long time to come to accelerate the hard features of a Communist society in Chile’. After the Pinochet take-over, the CIA notes that it ‘continued some ongoing propaganda projects, including support for news media committed to creating a positive image for the military junta’.
Britain’s Joint Intelligence Committee recognised that ‘the Allende government has been directing its economic efforts primarily at effecting a redistribution of income’ in which prices had been held down and salaries allowed to rise. The strategy was recognised as being ‘to put right what they regard as economic and social injustices (including foreign domination of certain sectors of the economy)’ while Allende was ‘committed to proving that socialism can be brought to Chile in a peaceful and democratic fashion’.
Allende’s primary heresy was nationalisation. In July 1971 the copper industry – which provided 70 per cent of Chile’s export earnings – was fully nationalised and the US-owned copper mines completely taken over by the government, with the unanimous approval of the Congress. The US reacted sharply and cut off all credit and new aid to the government and pressed the World Bank to do the same. The chief US mining corporations, Kennecott and Anaconda, began legal proceedings against the government.
The US ambassador, Davis, told his British equivalent, Reginald Seconde, that the US government were concerned: ‘not only about the loss to the copper companies, but also about the precedent that the Chilean action would set for the nationalisation of other big American interests throughout the developing world’.
Several banks were also nationalised while in early 1972 the government announced its intention to take over 91 key firms which accounted for around half of Chile’s output. A British Conservative Party briefing paper noted that British companies had been affected by nationalisation ‘but it was generally considered at the time that where nationalisation of British assets had taken place the compensation agreed upon had been fair’. In a despatch just eight days before the coup, British ambassador Seconde admitted that Chile: ‘has at least caught her social problems by the tail: many people in the poorer and most depressed sections of the community have, as a result of President Allende’s administration, attained a new status and at least tasted, during its early days, a better standard of living, though it has been eroded by inflation’.
Seconde concluded that ‘this is a major achievement and has set Chile apart from most other Latin American states’.
Just three months after Allende assumed office, the Joint Intelligence Committee was concluding that ‘Washington is clearly very perturbed by developments in Chile’. As well as nationalisation of US business interests, ‘the United States must view the prospect of a moderately successful extreme left-wing regime in Chile with considerable misgiving if only because of the effect this might have elsewhere in Latin America’.
The JIC also expressed the same fear from a British perspective, saying that the course of events in Chile is likely to have ‘important repercussions throughout Latin American and perhaps beyond’. ‘Allende’s victory has been hailed as strengthening the prevailing radical, anti-American trend in Latin America’ and may lead to a bloc of ‘like-minded states comprising Chile, Bolivia and Peru whose negative attitude towards foreign investment has already been demonstrated’.
Seconde and other British officials also convinced themselves, however, that the Allende government’s policies were leading the country to economic ruin and political chaos. They failed to mention that this had been aided by the US destabilisation campaign, as well as some of the Allende government’s own failings and disunity. The basic concern was the threat to Western business interests. Seconde noted that one future option for Chile was a coup: ‘If this were to be followed by a military-guided regime’, he noted, it would likely lead to US aid; therefore ‘it is on this that the business community are pinning their hopes’.
The wishes of the business community – along with the US and British governments – were fulfilled. On 11 September, the Chilean military effected what British officials described as a ‘cold-blooded’ and ‘ruthless’ coup, which was immediately followed by wholesale repression. Allende’s palace was rocketed by the military and the President apparently committed suicide. Thousands of prisoners were taken, Congress was suspended and all political parties and the trade union movement banned.
Summary executions took place throughout the country while the Junta, in the words of the Conservative Party briefing paper two months after the coup, ‘is hunting down the former leaders of the Left in order to, in the words of [Junta member, Air Force General] General Leigh, ‘extirpate the Marxist cancer from the country’’.
The coup was widely condemned throughout the world as an illegitimate, violent and repressive overthrow of a progressive democratically-elected government. It elicited much public outrage, including in Britain, especially as the Heath government did nothing in public to strongly condemn the coup. Had the British public known what it was doing in secret, public outrage would have been even greater.
The files clearly show that British planners in Santiago and London totally welcomed the coup and immediately set about conducting good relations with the military rulers as repression increased, even secretly conniving with the junta to mislead the British public.
British officials were completely aware of the scale of atrocities. Three days after the coup, Ambassador Seconde reported to the Foreign Office that ‘it is likely that casualties run into the thousands, certainly it has been far from a bloodless coup’. Six days after, he noted that ‘stories of military excesses and mounting casualties have begun increasingly to circulate. The extent of the bloodshed has shocked people’.
But it did not appear to shock Seconde and his staff in Santiago. He immediately reported that ‘we still have enough at stake in economic relations with Chile to require good relations with the government in power’. However, ‘it would not be in anyone’s interests to identify too closely with those responsible for the coup’ – ie, those good relations should be kept secret. After cabling London about casualties reaching into the thousands, Seconde further told the Foreign Office that ‘whatever the excesses of the military during the coup’ the Allende government was leading the country into ‘economic ruin’. Therefore, Britain should welcome the new rulers since ‘there is every reason to suppose that they will now… try to impose a period of sensible, orderly government’. Indeed, Seconde effectively condoned the political repression, noting that ‘the lack of political activity is, for the time being, no loss’.
The ambassador also told the Foreign Office that ‘most British businessmen… will be overjoyed at the prospect of consolidation which the new military regime offers’. British companies, such as Shell, he added ‘are all breathing deep sighs of relief’. ‘Now is the time to get in’, he recommended, while urging the British government to provide early diplomatic recognition of the new regime.
Foreign Secretary Alec Douglas-Home sent an official ‘guidance’ memo to various British embassies on 21 September outlining British support for the new junta. It said: ‘For British interests… there is no doubt that Chile under the junta is a better prospect than Allende’s chaotic road to socialism, our investments should do better, our loans may be successfully rescheduled, and export credits later resumed, and the sky-high price of copper (important to us) should fall as Chilean production is restored’.
The Foreign Office decided to go to extraordinary lengths to assure the Chilean junta of the British desire for good relations. Eleven days after the coup, Ambassador Seconde met Admiral Huerta, the junta’s new Foreign Minister. Seconde’s briefing notes for this meeting state that: ‘I shall put it to him frankly that HMG [Her Majesty’s Government] understands the problems which the Chilean armed forces faced before the coup and are now facing: this is a particular reason why they are anxious to enter early into good relations with the new government’.
Then Seconde said he would refer to ‘our own problems of public opinion at home. It would therefore help us if he [ie, Huerta] could agree that we should be able to say something to reassure public opinion at home’. Seconde’s record of his meeting with Huerta confirms that he said that the British government ‘understood the motives of the armed forces, intervention and the problems facing the military government’ – diplomatic language for support for the junta. Seconde then gave Huerta a draft form of wording to be used in public by the British government, to which Huerta was asked to agree!
This agreed statement is an apologia for what the military junta was then doing, undertaken in order to placate public opinion in Britain that the government was doing something to express concern about the situation in Chile. It said that Britain accepts that the internal situation in Chile ‘is of course a matter for the Chilean government only’ and that the British ambassador had expressed ‘the very strong feeling which exists in many quarters in Britain over the deaths of President Allende and others and over the many people arrested’. It added that ‘the Chilean government offered assurances that they will deal in a humane manner’ with those in detention and in political opposition – an obvious lie, since Seconde and Whitehall were perfectly aware of the scale of atrocities being committed.
Foreign Secretary Alec Douglas-Home was delighted with Seconde’s success in reaching agreement with the junta on a form of words. He cabled the ambassador praising him for carrying out a ‘difficult brief’, adding: ‘the statement helped us to defend our relatively early recognition of the new government against domestic criticism’. This is another example, therefore, of secretly conniving with a military regime in a joint strategy to mislead the public at home, similar to British policy in the Nigerian civil war.
A Foreign Office brief noted that ‘our major interest in Chile is copper’ which accounts for one third of the UK’s copper imports. The disruption in Chile and ‘fear for the future’ had recently meant large rises in copper prices which was costing the UK an extra £500,000 in foreign exchange. ‘We therefore have a major interest in Chile regaining stability, regardless of politics’.
For ‘regardless of politics’ read: ‘regardless of the people of Chile’. The fact that the loss of half a million pounds was deemed more important than the overthrow of a largely successful democratically-elected government recognised even by British officials as improving the condition of the poor, says a lot about the priorities and values of British elites. Indeed, there is simply no concern whatever – anywhere in the hundreds of files at this time that I looked through – for the removal of a democratic government.
According to the government files, there was only one mention in the Cabinet of the coup – when on 13 September: ‘the Foreign and Commonwealth Secretary said that following a coup in Chile, President Allende was reported to have committed suicide and a military junta had taken over. It was not yet clear whether the junta was in effective control of the country but he proposed that the question of recognising the new regime should be determined in accordance with the usual criteria’. That’s it.
Indeed, the overthrow of democracy was conveniently explained away by our man in Santiago. He said in a reflective 20 page dispatch three weeks after the coup that ‘the overthrow of constitutional government was not what it may seem in Britain’ and that while he recognised that the armed forces were being widely condemned internationally ‘this must be put into its proper perspective’. Seconde’s analysis referred to the regular defeats that Allende’s government suffered in the Congress and the government’s retention of power on the basis of a 36 per cent vote, which, he was convinced, would never happen in Britain.
As for the new military junta, Seconde noted that ‘circumstances also will push them into directions which British public opinion will deplore’ and ‘the next few years may be grey ones, in which freedom of expression may suffer’. ‘But this regime suits British interests much better than its predecessor’. Translated: this regime will be repressive and in British interests. ‘The prospects for British business in Chile are clearly much brighter under the new regime’, he added. ‘The new leaders are unequivocally on our side and want to do business, in the widest sense, with us’.
The scene was thus set not only for British business as usual with the new military rulers but deepened relations now that the heretic democratic government had been removed. This was in the context of clear recognition by British planners that ‘torture is going on in Chile’ and also of the ‘allegedly quasi-fascist inclination of the new leaders’. It was also recognised, as Seconde noted above, that the new regime was going to continue to be repressive for a long while. As one Foreign Office official noted: ‘it seems very hard to foresee a return for many years to anything like democratic government of the kind to which Chile has been accustomed for many years to come.’
Foreign Office minister Leo Amery made clear in private meetings with Judith Hart, Labour’s shadow minister for overseas development, that the British aid programme and credit lines would not be suspended, as some donors had done. In reply to a parliamentary question, the Foreign Office drafted: ‘Our priorities in Latin America are determined largely by our trading and investment interests… On the recent events in Chile, our public policy is to refuse to be drawn into the controversy of the rights or wrongs of President Allende’s government or the new military government’.
The issue of British arms exports to the junta was especially interesting since Hawker Hunter aircraft supplied by Britain had been used in the coup to attack President Allende’s place and his residence. The ambassador noted that during the coup ‘Hawker Hunters swept down with their aerial rockets, directed with remarkable accuracy at the Palace, which was severely damaged and set on fire’.
With the junta in power, British officials made clear that arms contracts agreed with Allende would be honoured, involving 8 Hawker Hunters and other equipment worth over £50 million. But they went further, saying in the secret files that ‘we shall want in due course to make the most of the opportunities which will be presented by the change in government’. Expectations were for new requests for arms from the junta but ‘we shall wish to play these as quietly as possible for some time to come’ owing to widespread public opposition. The Heath government defied calls from the Labour party to impose an arms embargo on Chile and all the Hawker Hunters had been delivered by the time of the 1974 general election.
A further major task was to counter the British and international opposition to the military regime’s atrocities. One extraordinary note by Foreign Office official Hugh Carless to Seconde, in December 1973, states that ‘unfortunately, there is (as you have pointed out to us) a good deal of fact behind the atrocity stories and that alone makes it impossible for us to counter the propaganda’. ‘We can do little about the press’, he added ‘but you can assure them [the Chilean junta] that we and our Ministers do understand the facts’. Carless also mused that ‘Chileans must be wondering why on Earth… so much unfair attention is being paid to their change of government’. Due to the emergence of a worldwide Chile Solidarity Movement, which was likely to remain while the junta remained, ‘this means we shall, occasionally, have to adopt a lower profile than we would like’ especially in providing arms, to help the junta with debt relief and ‘rescue them from being pilloried in international meetings’.
The impact of the coup on Chileans was harsh. But the coup may also have had another effect beyond the country – as well as showing to the world the US willingness to crush a heretic government that had improved the lot of many of its poorer people, it also signalled that the peaceful, democratic path to improving the position of the poor would be met by violence. Indeed, this was conceded by British planners at the time. Ambassador Seconde noted in a despatch after the coup that ‘the final seal of failure has now been put on this experiment by the Chilean armed forces’. ‘This has some obvious advantages’, he noted, but also disadvantages, one of which was that ‘it will be widely concluded that violent revolution is the only effective way to communism’. Foreign Secretary Douglas-Home similarly suggested that ‘the overthrow of Allende has ruined prospects for social change to be achieved democratically in Latin America’.*******
Disaster Capitalism in Action: Iraq
Peter Galbraith, U.S. Adviser to Kurds, Stands to Reap Oil Profits
James Glanz and Walter Gibbs, New York Times, November 12, 2009
"Now Mr. [Peter] Galbraith, 58, son of the renowned economist John Kenneth Galbraith, stands to earn perhaps a hundred million or more dollars as a result of his closeness to the Kurds, his relations with a Norwegian oil company and constitutional provisions he helped the Kurds extract.
"In the constitutional negotiations, he helped the Kurds ram through provisions that gave their region — rather than the central Baghdad government — sole authority over many of their internal affairs, including clauses that he maintains will give the Kurds virtually complete control over all new oil finds on their territory....
"Some officials say that his financial ties could raise serious questions about the integrity of the constitutional negotiations themselves. 'The idea that an oil company was participating in the drafting of the Iraqi Constitution leaves me speechless,' said Feisal Amin al-Istrabadi, a principal drafter of the law that governed Iraq after the United States ceded control to an Iraqi government on June 28, 2004. In effect, he said, the company 'has a representative in the room, drafting.'"*******
The Gipper, The Iron Lady & Disaster Economics