There are multiple versions of capitalism, some of them healthier than others. However, the general modus operandi for the global economy is neoliberal “free” market capitalism. This form of capitalism was defined by economist Milton Friedman.
Friedman’s definition of libertarian, “free” market capitalism is deregulated capitalism. It is anti-government and opposes all social programs, except for the socialized military and police force. Neoliberalism inherently creates enormous wealth inequality, and massive security forces are needed to protect the interests of millionaires and billionaires from the poorer masses.
As Noami Klein details in her book “The Shock Doctrine,” this current species of capitalism began capturing the planet after the United States government helped overthrow one of the most democratic governments in modern South American history.
On Sept. 11, 1973, President Richard Nixon and the CIA assisted military commander Augusto Pinochet in a coup d’état to overthrow Chilean President Salvador Allende. Consequently, we helped establish one of the most brutal military dictatorships in modern South American history.
The U.S. government and multinational corporations — particularly the U.S. manufacturing company ITT Corp., which owned 70 percent of the Chilean Telephone Co. — opposed the Allende government because it supported nationalizing various segments of the economy. They feared he would create a public telephone system that would undermine ITT profits. Both the U.S. government and ITT spent millions of dollars to overthrow Allende.
In 1970, Nixon directly ordered the CIA to depose Allende with Project Fubelt, a project for manufacturing an economic crisis that created conditions favorable for a right-wing coup.
After Pinochet took over, his death squads immediately murdered and tortured thousands of political opponents, and imprisoned 40,000 in the National Stadium of Chile. In the next three years, the number of politically imprisoned Chileans rose to 130,000.
Pinochet subsequently worked with a group called the “Chicago Boys” to establish the prototype neoliberal capitalist economy. The Chicago Boys were Chilean economists who studied the radically new “Chicago School” economic theory at the University of Chicago under Milton Friedman. With funding from the Ford Foundation, the Chicago Boys formulated a market “liberalization” doctrine called “The Brick.”
The market reforms of The Brick entailed privatizing all the public industrial sectors and public programs, including social programs that helped the poor. One of the most sickening examples of how evil this ideology is entails Pinochet’s elimination of the social program providing milk to school children, which led to a significant increase in child malnourishment and disease. The same thing would happen here if neoliberal ideology succeeded in eliminating food stamps, which some proponents would love to do.
Defenders of the neoliberal transformation argue that the economy began to improve after the coup, and that from 1978 to 1981 the Gross National Product grew 6.6 percent annually.
However, as Robert Kennedy Jr. brilliantly pointed out in a 1968 speech: “(GNP) counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”
When the Chilean market was “liberalized” and industries and natural resources were opened up for multinational corporate privatization and exploitation, of course the GNP will increase. After natural resources are depleted for a quick buck today, GNP increases dramatically. However, GNP is a disastrous economic indicator because it does nothing to measure the happiness, health, education, or long-term sustainable economic health of a people.
Klein’s book also carefully documents how the United States facilitated the global spread of neoliberalism after Sept. 11, 1973. The disease only became a global pandemic after the regimes of Ronald Reagan and Margaret Thatcher helped force it down the throats of virtually every nation on Earth, making it the de facto Global Operating System.
We have covered the neoliberal protocol for coups, but the other method was to manufacture economic crises by manipulating currency and inflation values or primary export commodity prices through control of international trade regulations.
After an economy is in political turmoil and the “shock” of extreme duress, the International Monetary Fund would offer billions of dollars in loans that the nation was forced to accept given the situation. However, the loans included stipulations that required market “liberalization” and privatization. This IMF-loan con game is also used after natural disaster shocks like the recent Indonesian tsunami and Haitian earthquakes.
It must be understood that current libertarian capitalism is quite divergent from global-capitalist thought prior to Friedman, and divergent from that described by the godfather of capitalism Adam Smith. Smith said people and industry must be given freedom to pursue their competing interests “as long as (they do) not violate the laws of justice.”
This is an extremely important point because justice is based on morality and political interpretation of morality, and fundamentally the Supreme Justice is the Divine Law of Love. Thus, people and business must be free so long as they do not harm each other.
If we are going to perpetuate a capitalist economy with powerful corporations, we need wise regulation of business with social and environmental justice in mind.
We need regulations to take away unjust freedom for corporations to do massive harm. We must powerfully regulate Wall Street banks and corporate monopolization. We need regulations to protect water, soil, air and ecosystems. We need regulations to protect workers’ health and safety, and living wages for workers. We need public health care, education and food for the poor.
With myopic short-term profit calculations, deregulated corporations are polluting and sucking the life out of our natural planetary resources, destroying the long-term sustainable economy. The current economic system is collective suicide, but I have fearless faith that we are preparing to turn the page on this painful nightmare.