The following is something I posted on the Ottawa Dissenters list. It may be of interest.
Ed -------------------------------------------------------------------------------- After listening to the interview with Naomi Klein about her recent book, "The Shock Doctrine, the Rise of Disaster Capital", I bought the book. I'm now about half way through it. My usual habit is not to finish a book, and I may just do that with this one. What I find frustrating is that it goes on and on, making the same points over and over, though in different geographic settings, and vilifying Milton Friedman, the Chicago School and even poor well-intentioned Jeffrey Sachs again and again. Everything that happens is a result of voracious capitalism, American style. Underpinned by Friedman and the work of Ewan Cameron, a McGill pyschiatrist funded by the CIA in the 1950s to research brain-washing techniques, American capital is out to consume the world. Perhaps it is, but I would need a stronger and more authoritative argument than Klein's to make me believe it. I was especially disappointed in the chapter on Russia. There was much more to it than Klein tells us about. I spent a month in Russia as a university level student in 1995 and had day to day contact with Russian academics. According to them, what had happened in the late 1980s was that the Soviet planned economy had begun to unravel because too much had been demanded of it and the Soviet planning bureaucracy had itself begun to collapse. Huge military expenditures had been necessary to continue the Cold War and support the Afghan war while, at the same time, an increasingly liberated and vocal populace wanted a greater abundance and higher standard of consumers goods. The planned economy and market could no longer cope by the time Gorbechev came along in the late 1980s. A "free" market -- a market not under central control -- was not a matter of choice. It was inevitable. But what form should it take? Who should own and control it? One idea was that it should be owned by the people at large -- everyone should have a stake in it. This resulted in the "voucher system", which, surprisingly, Klein doesn't mention. Citizens were given vouchers that permitted them to buy into productive assets. It didn't work. Apparatchiks buzzed around the country buying up the vouchers, often for little more than a bottle or two of vodka. Meanwhile, Yeltsin's government was running out of money because much of the economy had gone underground and beyond the reach of taxation. It started printing money which led to severe inflation. The value of the ruble fell from a ruble to a dollar in about 1991 to 500 rubles to a dollar when I was there in 1995. A common sight on the street was that of elderly people selling their belongings in order to live another day. The Russian government needed foreign loans to keep itself going and help stabilize its currency, but who would lend large amounts of money to a sinking and chaotic economy? Finally, Yeltsin was forced to make a deal with wealthy and connected Russians, later to be known as the "oligarchs". If they were able to get him money from abroad, he would give them shares to Russia's largest assets as collateral. This was the notorious "loans for shares" scheme documented in Chrystia Freeland's "Sale of the Century". Of course, the loans could not be repaid, so the lenders became the oligarchs, literally owning Russia. Things continued to go badly, and Yeltsin finally had to step aside in 1999 to let Putin step in. I've not been back to Russia since 1995 and I have no first hand knowledge of what Putin has done with it. But from what I've read, he has worked quietly to stabilize the economy, develop its exports of oil and gas, and reign in the oligarchs. The place seems to be working again. Ed
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