a State of Shock is not just what happens to us when something bad happens it's what happens to us when we lose our narrative when we lose our story when when we become disoriented what keeps us oriented and alert and out of shock is our history so a period of Crisis like the one we is a very good time to think about history to think about continuities to think about Roots it's a good time to place ourselves in the longer human story of [Music] struggle The Story begins on June the 1st 1951 when representatives of Western intelligence agencies secretly met with academics at Montreal's Ritz carton Hotel this meeting contributed to military funded Research into the effects of sensory deprivation at McGill University sensory deprivation really is a way of producing extreme monotony it causes uh loss of critical capacity the thinking is less clear the uh subject complains that he can't even Daydream when and when you have college students that can't daydream they're in a bad [Music] way I began to think while we were doing our experiments it possible that uh something that involves physical discomfort or even pain might be more tolerable than simply the the deprivation conditions that we studied HEB decided to stop work on the research but I had no idea when I suggested that what a what a vicious weapon potentially vicious weapon this could this could be these are the days and hours are the occasion but experiments at McGill continued under the ambitious head of Psychiatry Dr Yan Cameron what he did was much more than what we had done we did our work strictly with the understanding this the subject could get up and walk over at any point he he wished to and some of them did Cameron's patients were not so lucky the Allen Memorial Institute where he worked began to resemble a ma prison where Cameron performed bizarre experiments on his psychiatric patients Cameron wanted to DN or WIP clean his patient mind so he could rebuild them from a blank slate Janine Huard was a young mother of four suffering from postnatal depression I used to shiver when they told me about you're going to get a shock tachment tomorrow I used to shiver I was so scared of it and I would wake up in another room all all mixed up and sad and it used to make me very sad after you're just like a zombie walking around Cameron combined shock therapy with Sleep Therapy and the repeated playing of taped messages it says Jan I mean you are running away from your responsibility you don't want to take care of your husband and children all the time the same thing it sounds like you were being interrogated yes interrogation but for what purpose it wasn't long before the CIA put Cameron's Research into practice many of his techniques appear in the agency's kubar Counter Intelligence interrogation manual these words are from the manual it's a fundamental hypothesis of this handbook that these techniques are in essence methods of inducing regression of the personality there is an interval which may be extremely brief of suspended animation a kind of psychological shock or paralysis experienced interrogators recognize this effect when it appears and know that at this moment the source is far more open to suggestion far likelier to comply than he was just before he experienced the [Music] shock at the same time as Yan Cameron was conducting his experiments in Montreal an exponent of another kind of shock was working not so far away Milton fredman was teaching economics at the University of Chicago he believed economic shock therapy could encourage societies to accept a pure form of deregulated capitalism in October 2008 in the midst of the biggest financial crisis since 1929 Naomi kin went to the University of Chicago to talk about Milton fredman when Milton fredman turned 90 the bush White House held a birthday party for him and everyone made speeches including George Bush but there was a really good speech that was given by Donald Rumsfeld my favorite quote in that speech from Rumsfeld is this he said Milton is the embodiment of the truth that ideas have consequences what I want to argue here is that the economic chaos that we're seeing right now on Wall Street and on Main Street and in Washington stems from many factors of course but among them are the ideal years of Milton Friedman the Wall Street crash of 1929 led to the depression of the [Music] 30s Central to freedman's thesis was his opposition to the New Deal announced by President Franklin Roosevelt in his inaugural [Music] speech our greatest primary task is to put people to work this is no unsolvable problem if we face it wisely and courageously let me assert my firm belief that the only thing we have to fear is fear itself influenced by the economist John Maynard KES Roosevelt started a program of public employment to get people back to work today depression is a fading memory millions of men and women have found employment and with it confidence and hope it wasn't that simple the depression lasted into World War II but after the war the Marshall Plan spread keynes's model of government regulation and intervention to [Music] Europe his principles were widely accepted but not in the economics Department of the University of Chicago no Freedman from this University waged a war against the New Deal fredman was a member of a group called The melan Society led by the Austrian Economist Friedrich Von haek they believed that if governments stopped providing services and stopped regulating markets the economy would correct itself in the 50s they were seen as cranks but over the last 30 years their ideas have become the dominant economic Doctrine this thesis of the shock Doctrine is that we've been sold a fairy tale about how these radical policies have swept the globe that they haven't swept the globe on the backs of freedom and democracy but they have needed shocks they have needed crisis they have needed states of emergencies Milton Freedman understood the utility of Crisis only a crisis actual or perceived produces real change when that crisis occurs the actions that are taken depend on the ideas that are lying around it was in Chile that fredman's disciples first learned how to exploit a large-scale shock or crisis usually the official storytellers of neoliberalism the official publicists don't even mention Chile they start the story with Thatcher and Reagan because it's much more flattering that way in the 50s and 60s Chile's Progressive developmental policies were a beacon in the region the governments invested in health education and Industry American corporations were worried their Investments would suffer in response the US state department began sponsoring students from Chile and the rest of South America to study free market economics with Milton Friedman the University of Chicago had a joint arrangement with Catholic University of Chile under which a great many Chilean students came to theity univ of Chicago were trained by us and received phds these students went back and taught in Chile the Catholic University economics Department in Santiago became a little Chicago School Arnold harburger The Economist in charge of the program described himself as a seriously dedicated [Music] missionary in 1970 Salvador ende's popular Unity government won the election on a platform of nationalization of large sectors of the economy Chile's phone company was majority owned by the US Corporation it its spearheaded attempts to stop iend becoming president it had the support of Richard Nixon in the white house I was not there but I can uh tell you what we now know to be a fact he uh ordered the CIA to prevent endi from assuming the presidency and indeed they tried to get me to lean on the Chilean military right after I Endy was elected despite the efforts of the CIA iend was sworn in as president Richard Nixon ordered the CIA director to make the economy scream preparations began for the military coup the Chilean Chicago boys started work on a 500 page economic blueprint called The Brick with us funding everything was done to destabilize the economy truck drivers went on strike bringing factories and shops to a stand there was a failed coup attempt on June the 29th 1973 [Applause] and then on September the 11th with General pinet leading the Army the assault began on the presidential Palace Chile had enjoyed 41 years of uninterrupted peaceful Democratic Rule now it was being violently [Music] overthrown pese and his supporters described the coup as a war it was certainly designed to look like one it was a Chilean precursor to shock and all [Music] oh [Applause] [Music] for the Chicago boys delivered their economic blueprint the brick to [Music] penate in the days that followed more than 13,000 opponents were arrested and imprisoned thousands of prisoners were held in the National Stadium many were tortured Chile became notorious around the world at the beginning of November 5,000 prisoners were released the 900 they left behind were transferred to other detention centers [Music] less than a month later FIFA allowed Chile to play a World Cup qualifier in the very same stadium their opponents the Soviet Union refused to play there so Chile were allowed to score into an open goal and went through to the 1974 World Cup finals [Music] with the population in shock pese imposed the policies recommended by the Chicago boys removal of price controls the sale of State companies the removal of import barriers and cuts to government expenditure fredman later openly acknowledged the importance of the Chilean experiment here was a first case in which you had a movement toward communism which was replaced by a movement toward free markets it didn't work a year later inflation was 375% per year the highest in the world so in March 1975 Arnold harburger and Milson fredman flew into Santiago he used a phrase that had never before been used in a real world economic crisis he called for shock treatment he said said that he was like a doctor that was going to help a country that was suffering an epidemic and he was simply prescribing the medicine fredman wrote that General pinet was sympathetically attracted to the idea of a shock treatment but was clearly distressed at the temporary unemployment it might [Music] cause it rapidly became clear that freed economic policies benefited the wealthy at the expense of the poor it was calculated that a family trying to live on the average wage had to spend 74% of its income on bread items such as bossar or milk became luxuries and pinier got rid of free milk in school a move that echoed the controversial policy of the young education minister in Britain who would later become his friend thank you in order to enforce these economic policies there had to be an enemy to fear [Music] [Music] [Music] Freedman and harburger argued that free market economics went hand inand with freedom and democracy but in Chile where their ideas were being implemented within the context of a military dictatorship the opposite was true many in Latin America saw a direct connection between the economic shocks that impoverished millions of people and the epidemic of torture inflicted on those who believed in a different kind of society one of those was Orlando latelier had been ende's Ambassador in Washington he spent a year in one of pin's Prisons before being exiled back to America in 1976 latelier wrote the economic plan has had to be enforced and in the Chilean context that could only be done by The Killing of thousands the establishment of concentration camps all over the country and the jailing of more than 100,000 persons in three [Music] years L than a month later theia was killed by a carbomb good evening powerful bomb the day tore through a car as it was driving along Washington's usually quiet Embassy Road the chillian was Orlando laler who also had been foreign minister during the last months of the late Salvador yund's Marxist regime Richard Roth reports Michael Townley a member of penish secret police was behind the bombing he'd entered the US on a false passport with the knowledge of the CIA despite his confidence Townley was extradited to the US and convicted of lelia's murder P ruled Chile as a military dictator for 17 years but in a Frank interview harburger remained in denial you cannot hear a repressive government for long within a genuinely free economic [Music] system in the same year as Orlando later's murder Milton Friedman was awarded the Nobel Prize for economics I don't you know you people have such a distorted idea of what went on let me tell you some facts number one I was offered two honorary degrees by universities in Chile before I went down I refused to taken because those universities were being supported in part by public funds and I did not want to appear in any way to provide any support to the political system in Chile I'm not a representative of Chile I'm not an adviser to Chile I have no commitments to the Government of Chile I now turn to you Professor Milton Freedman [Music] I am very sorry for this incident it could have been [Applause] worse what I'm trying to do in the shock Doctrine is tell an alternative history of how this Savage stream of pure capitalism that we've been living capitalism unrestrained came to dominate the world Chile wasn't the only country in South America to adopt Chicago school policies fredman's disciples held key positions in Brazil and advised the government of Uruguay then on March the 24th 1976 a military coup overturned the government of Isabelle Pon in Argentina a Jun of three generals took over the country led by General via Chicago boys landed key economic posts in the military government They seized the opportunity for major economic and social re-engineering and within a year of the coup wages lost 40% of their value factories closed poverty spiraled just as in Chile people had to be terrorized into accepting these economic policies videla learned from Pen's experience he adopted the tactic of Disappearing people striking a balance between public and private horror disappearances were often carried out in broad daylight but could always be denied [Music] [Music] only many of the techniques used by the Chilean and Argentinian military had been learned in the US run School of the Americas torture techniques taught from rape to uh drin to torture with with uh pointed objects breaking of uh extremities poking eyes out branding in Latin America there are various regimes which at the moment are abusing human rights political murder torture deportations imprisonment without trial using the techniques they may have learned in this establishment uh you may be right if you can say that the skills which we've taught here have been applied I can't deny that the use of torture of a known enemy soldier to gain some kind of military Advantage I think is justifiable and smart to go beyond that to use torture techniques merely to intimidate people is completely wrong unethical and immoral but in Argentina and Chile these techniques were not used just on soldiers or terrorists they were used on students and union members they were used on anyone who opposed the free market economic policies of the regime in 1978 the Argentine J hosted the World Cup the final was played in the stadium less than a mile away from the biggest detention camp in the country where thousands of prisoners were held in torture chambers [Applause] [Music] and Argentina took their Terror regime one step further than Chile among the Disappeared were hundreds of pregnant women women who were allowed to give birth before being murdered [Music] [Music] those children many of whom were raised by families connected to the military were a powerful reminder of the jun's project to re-engineer an entire [Music] Society while the J was still in power a group of mothers and grandmothers have the disappeared started to protest in the plaza de [Music] Maya they turned detective searching for the Disappeared children after the Jun collapsed some were found and reunited with their families occasionally they found remains mostly they found nothing General vidala was found guilty of murder kidnapping and [Applause] [Music] torture he was sentenced to life in [Music] prison early experiments in Latin America presented fredman and his Co bords with a serious ideological problem fredman had promised that these policies would not just make the elites richer but they that they would create the freest possible societies that this was a war against tyranny that capitalism and freedom went hand inand yet here we see that in the 70s the only countries putting these ideas into practice were military dictatorships Nixon had fully supported imposing these types of brutal free market policies on in South American dictatorships but when it came to domestic economic policy in the United States where Nixon had to worry about getting reelected it was a very very different [Music] story Freedman enjoyed a friendly relationship with Nixon several of his Chicago School colleagues and disciples were recruited to work for the government Donald Rumsfeld was one of them so help me gu congratulate but in 1971 with the economy in a slump Nixon turned his back on fredman's ideas and imposed a wage and price control policy he put Rumsfeld in charge is essentially a problem of supply and demand I have for long been opposed to the wage and price control I believe it involves government intervention with the freedom of individuals I think it's intolerable the Keynesian policy was a success and Nixon won a second term with a landslide majority it was a blow for fredman then in 1979 Margaret Batcher was elected prime minister of Britain her intellectual Guru was Milton Friedman's old Mentor friederick Von haek and just over a year later Ronald reag was elected president of the United States both Britain and America were now ruled by unabashed Freeman [Music] knites Margaret Thatcher's program when she came in had four planks cut government spending cut tax rates reduce government ownership and operation of Industries or regulation of industry and have a moderate stable monetary policy to bring down inflation within her first three years in Office Unemployment doubled in parts of the economy leading to waves of strikes Thatcher's personal approval rating slumped to 25% there were riots in Britain's major cities even Margaret Thatcher's admirers had their doubts the economic performance to the thater government has been [Music] mixed to those waiting with baited breath for that favorite media catchphrase the U-turn I have only one thing to say you turn if you want to the ladies not for turning Fredick van haek urg thata to copy Pen's economic shock therapy policies thater replied in Britain with our Democratic institutions and with the need for a high degree of consent some of the measures adopted in Chile are quite unacceptable Thatcher's profound unpopularity seem to be proving once again that free market fundamentalism was simply too unpopular too directly harmful to many people to survive in a democratic state where governing requires getting the consent of the government unlike a military dictatorship what pulled Thatcher back from the abyss and ultimately saved the project was a crisis indeed it was the ultimate crisis it was a war we are here because For the First Time for many years British sovereign territory has been invaded by a foreign power the government has now decided that a large task force will sail as soon as all preparations are complete HMS Invincible will be in the lead most people in Britain had never even heard of the fanss but when Argentina invaded the small group of islands thousands of miles away in the South Atlantic thata seized her opportunity to prove her credentials as The Iron Lady gentlemen I've just heard that the white flag is flying over [Applause] Stanley the war was over in less than 3 months as the troops return to Britain a wave of patriotic celebration swept the [Music] country thater won the 1983 elections with a massive majority she could now push through a form of the economic shock therapy witnessed in [Music] Chile the most powerful Union in Britain was the national Union of M workers when the national C board tried to close pits down the miners went on strike parts of Central London are brought to a halt as thousands of Miners and sympathizers March through the city in support of the minor strike it's Britain's longest and most bitter since 1926 and the most expensive ever the strike lasted almost a year fer used every means at her disposal to destroy the [Applause] union eventually the miners were defeated thater used this Victory to bring The Chicago School Revolution to Britain [Music] a series of glossy commercials promoted a massive program of privatizations Thatcher sold off the steel industry water electricity gas telephones Airlines oil public housing was sold off Council Services put out of tender in 198 6 financial and banking services were [Music] deregulated it was called the big bang no one here tonight needs a reminding that the Big Bang is only a beginning in Britain before Thatcher a CEO earned 10 times as much as the average worker by 2007 they earned more than 100 times as much [Music] in the US before Reagan CEOs earned 43 times as much as the average worker by 2005 they earned more than 400 times as much fredman openly acknowledged the importance of Thatcher and Reagan in the spreading of Chicago school policies around the world The Coincidence of Thatcher and Reagan having been in office at the same time was enormously important for the public acceptance worldwide of a different approach to economic and monetary policy thank you very much what I'm describing now is a plan and a hope for the long term the march of freedom and democracy which will leave Marxism leninism on the ash heap of history as it has left other tyrannies which stifle the freedom and musle the self-expression of the [Applause] people now we all know the fairy tale about the fall of Communism that the West under Reagan and Thatcher looked so prosperous to the people of the former communist block that they themselves demanded radical free market policies now this really is a fairy tale it is true that people who had been living under authoritarian communism genuinely wanted democracy and it's also true that people wanted to be able to go out and buy blue jeans and have Big Macs that is true but that does not mean that they wanted the kind of wild west capitalism of oligarchs gone mad and no social protections that so many Eastern block countries actually ended up with and suffer under to this [Music] day thater had done everything she could to break the power of the unions in Britain but in 1988 she went to Poland to show her support for the Workers Union solidarity how do you see the process from where you are now to where you want to be strikes in Poland led to solidarity being allowed to contest a general election in June 1989 this triggered a wave of demonstrations throughout Eastern Europe [Applause] in the past the Soviet Union had used military force to crush Democratic movements but the Soviet Union had a new type of leader Mikel gorbachov who was committed to glasnost and peris Striker he talked about a third way a gradual transition to Scandinavian style social democracy something between free market capitalism and communism gorbachov Charmed the Publican politician of the West he's a bold a determined and courageous [Music] leader garv stood and watched as one by one the old communist regimes [Music] [Applause] collapsed at the end of the year the most famous symbol of the division of Europe came tumbling down [Music] [Applause] down for Freedman and the Chicago boys A Whole New World opened up in the Soviet Union gorbachov was hoping to gradually reform the Russian economy in 1991 gorbachov was invited to the G7 Summit in London he was hoping for financial support for his gradual economic reforms instead he was told that unless he embraced radical shock therapy there would be no Aid at all thank you Mr that a little close the next month there was a coup attempt against him a group of Communist party hardliners placed garbach under house arrest in his holiday home in the Crimea tanks surrounded the White House the Russian Parliament [Music] I bid the chaos of Street clashes it was obvious that to reinforce their position the hardliners would have to resort to violence such action between the people and the security forces has not been seen since the early days of the Russian Revolution by Dawn this morning amid a sea of debris it was becoming clear that the coup was disintegrating the Russian Parliament building was unscathed the military had not made their move inside Boris yelton was more powerful than ever this was yelton's finest Hour garbach was released and he returned to Moscow but he had lost much of his power in December 1991 the Soviet Union was dissolved a profound shock for the Russian people yelim was now in charge of economic policy for the Russian Federation the free market came to Russia there was chaos the adoption of Chicago school policies in Russia marked the beginning of a new chapter in the free market Crusade it was all shock no therapy despite the public efforts to promote popular capitalism the reality was a small handful of businessmen made vast fortunes state industries were sold off at Bargain Basement prices the Russian press dub yon's advisers the Chicago boys yelon shock therapy meant that in 1992 the average Russian consumed 40% less than in 1991 third of Russians fell below the poverty line and wages weren't paid for months one expert today predicted 140 million Russians will soon be living below the poverty line corruption was rif organized crime bomed Moscow became the new Wild West [Music] the majority of Russians opposed the Chicago boys radical vision for their country in March 1993 Parliament made a crucial decision it voted to repeal the special powers it had given to yelin yelon declared a state of [Music] emergency the Constitutional Court ruled that it was [Applause] illegal on September 21st yelon took the pinet option and dissolved Parliament the West threw its we behind yelon we uh we feel that Boris yelson is uh uh the best hope for democracy uh in Russia two days later Parliament voted to impeach yelin by 636 votes to two thousands of supporters of the parliament gathered outside the White House and marched on the television [Music] [Applause] station it looked like the supporters of parliament were winning yelon flew back to Moscow from his holiday home that night 100 demonstrators were killed as the yelson authorities fought [Applause] back on the 4th of October he ordered troops to storm the White House shelling the very building he had defended 2 years earlier for I [Applause] Warren Christopher the US Secretary of State said the United States does not easily support the suspension of parliaments but these are extraordinary [Applause] times yelen now had absolute power with the advice of his Chicago boys he ruled through a form of crony capitalism ISM even more state industries were sold off creating a new class of billionaire businessmen with huge political influence the oligarchs by 1998 80% of Russian Farms were bankrupt and 70,000 State factories were closed in 8 years the number of people living in poverty increased by 7 2 million meanwhile Moscow would go on to have more billionaires than any other city in the [Music] world good afternoon thank you for coming today it is my uh honor to announce that uh I'm submitting the name of Donald Rumsfeld to be Secretary of Defense I look forward to serving our country again rosfeld had been Secretary of Defense before under Gerald Ford then the enemy we were supposed to fear was the Soviet Union I'm not saying with certainty that the Russians are coming I'm saying the trends are here I'm not saying the Russians are 10t tall I'm saying they used to be 5'3 they're now 5 9 and A2 and they're growing now there was a new enemy closer to home on September the 10th 2001 Rumsfeld made a speech laying out his plans to privatize much of the US military Milton fredman would have been proud he said the topic today is an adversary that poses a threat a serious threat to the security of the United States of America this adversary is one of the World's Last bastions of central planning it governs by dictating 5-year plans perhaps this adversary sounds like the former Soviet Union but that enemy is gone this adversary is closer to home it's the Pentagon bureaucracy today we declare war on bureaucracy the next day American Airlines flight 77 crashed into the Pentagon killing 184 people [ __ ] oh my God [ __ ] chist think about that feeling after those attacks who are these people where did they come from why do they hate us there was a total loss of collective narrative this we were not living in the world that we thought we lived in and we kept hearing from our political leaders that everything we thought we understood before the attacks no longer applied there was a new phrase pre- 911 thinking and what happened in that moment is that suddenly new stories sort of magically appeared that we were in a clash of civilizations that's the world we suddenly lived in that there was an axis of Evil and that we were fighting a war against Terror this abstract unwinable War has had huge Economic Consequences before 2001 Homeland Security barely registered as an industry today it is bigger than Hollywood and the music industry combined between September the 11th 2001 and 2006 the Department of Homeland Security handed out a130 billion to private contractors going toot this is the disaster capitalism complex a new economy Builds on fear this will be a Monumental struggle of good versus evil the best defense against terror is a Global Offensive Against Terror wherever it might be found the first phase of this war was the bombing of Afghanistan the Taliban government was quickly overthrown the aftermath of the war was more complicated our fight against terrorism began in Afghanistan but it will not end there we're primarily looking at daines that we can use for collecting [Music] intelligence Guantanamo was the first time that the techniques of the kubar manual were explicitly and publicly being used by American forces a officially sanctioned in the White House and openly broadcast on television around the world isolation both physical and psychological must be maintained from the moment of apprehension the capacity for resistance is diminished by disorientation prisoners should maintain silence at all times they should never be allowed to speak to each other three of the prisoners were aik Bal Ru armed and shafik razul from Tipton in England they spent more than 2 years in Guantanamo before being released without charge mentally yeah you couldn't speak to nobody you couldn't do nothing you couldn't stand up and just sitting there lo you be in your thoughts all the time thinking what the hell's going on where the hell am I and we going to be staying here for the rest of our lives and we going to be going back home will we ever see our family again of the the 779 prisoners that have been held in guantan MO Bay only three have ever been convicted of any [Music] offense well the only thing I know for certain is that these are bad people it was a message to the whole world and the message was clear it was this is what happens to you if you get in our way the war on terror is not about one man and it is not about one country there were many justifications given for the invasion of Iraq but if the US had really wanted to attack a country where the leaders of al-Qaeda were thought to be hiding which had nuclear weapons and were selling nuclear technology to other countries then Pakistan would have been the obvious choice it had close connections to the Taliban and was being run by a military dictator instead George Bush chose to Target Iraq a country with the third largest oil reserves in the [Applause] world now about the defense Department's War plan it is not like that for the Gulf War it's more along the lines of the Panama invasion of 1989 CBS News has been told it would start on what's called a day a as in air strikes air strikes so devastating they would leave saddam's soldiers unable or unwilling to fight the idea is to rain down the thunder so hard as to create quote shock and awe if the Pentagon sticks to its current War plan one day in March the Air Force and navy will launch between 3 and 400 cruise missiles at Targets in Ira more than were launched during the entire 40 days of the first golf War the sheer size of this has never been seen before never been contemplated before Haren Omen is one of the authors of the shock and awe concept which relies on large numbers of precision gu weapons so that you have this simultaneous effect rather like the nuclear weapons at Hiroshima not taking days or weeks but in minutes you also take the city down by that I mean you get rid of their power their water and You Begin this Relentless campaign to wear them down so that two two 3 four 5 days they are physically emotionally and psychologically exhausted last night a square mile in central Baghdad seemed like hell on [Music] Earth during the first wave of the bombing the citizens of Baghdad suffered a version of the sensory deprivation described in the cubar manual in the chaos that followed the overthrow of Saddam Hussein the US did little to stop the Looting some us officials even thought thought it gave them a head start on dismantling the Iraqi State John agresto director of higher education reconstruction said he saw the Looting of schools as the opportunity for a clean start in fact before sanctions Iraq had the best education system in the region 89% of Iraqis were literate by contrast in New Mexico John ago's home state 46% of the population were functionally illiterate Ro you had three distinct forms of shock that were all working together and reinforcing each other you had the shock of the war which was immediately followed by economic shock therapy imposed under Paul Bremer and as resistance to that economic transformation that very rapid economic shock grew you had the shock of enforcement including torture three different kinds of shock in May 2003 Paul brema was appointed us Envoy to Iraq 2 weeks after he arrived he declared the country open for business we consider that the Coalition had very broad authorities to determine the direction of the Iraqi econom brema knew little of Iraq but he knew about disaster capitalism he had launched crisis Consulting practice at the start of the homeland security boom today is a very important day in Baghdad bremma spent the first four months passing classic Chicago School laws Romell described Iraq as having some of the most enlightened and inviting tax and investment laws in the Free World one of the first acts of bremma was to fire 500,000 state workers this was partly an act of deification but slashing governments was also vintage fredman money was promised for reconstruction our investment in the future of Afghanistan and Iraq is the greatest commitment of its kind since the Marshall Plan but in fact it was just the opposite whereas the Marshall Plan was intended to boost European Industries us Aid money in Iraq was spent on us corporations if work came to Iraqis it came at the bottom of a series of subcontractors creative Associates receiv received contracts worth $100 million to draft the curriculum and print new textbooks for the education system management and Technology consultant bearing point was awarded contracts worth 2 $40 million to build a market driven system in Iraq North Carolina based RTI received contracts worth $466 million to advise on bringing democracy to Iraq and halberton was awarded $2 billion in Cost Plus Iraqi contracts Parsons was handed $186 million to build 142 health clinics only six were ever completed basic electricity and water supplies hardly improved despite billions being spent in the first four years we're going to succeed here and when we succeed here we will have done something important not just for 25 million Iraqis we will have done something that serves Western interests in this whole region even the new Iraqi currency was printed abroad let me show you an example of these notes the US even paid private contractors to monitor the work of the private contractors who won contracts I was in Baghdad in 2004 and this is the period when bombs started to go off regularly in Baghdad in fact the night that I arrived a bomb went off very near a hotel but what was really striking to me in this period was that despite the violence and despite the chaos the next day Iraqis were out in the streets protesting 19 killed and 100 injured in n and what they were demanding at this time was elections the right to actually have a say in in what the post Saddam era would look like now in the early days of the occupation the protests were peaceful But as time went on and the protest didn't have an effect more and more Iraqis joined the armed resistance the violence spun out of control [Music] as in South America three decades earlier bodies were often dumped by the roadside as a warning to others these were a Rex disappeared [Music] extremely aggressive measures were needed to suppress the [Music] opposition the first 3 and A2 years of the occupation 61,500 Iraqis were captured by Spring 2007 19,000 remained in custody in prison they were interrogated using techniques that could be traced to those devised by the CIA from you and Cameron's experiments in the 50s according to the Red Cross US military officials admitted that between 70 and 90% of arrests in Iraq were mistakes [Music] the chaos in AR seems like a defeat for shock therapy but in Iraq disaster capitalism moved on now the disaster itself provided the opportunity for profit US military spending has almost doubled since 2001 nearing $700 billion per year as long ago as 1961 President Eisenhower not a noted liberal warned of the danger of a two powerful military now this conjunction of an immense military establishment and a large army arms industry is new in the American experience we must guard against the acquisition of unwarranted influence whether sought or unsought by the military industrial complex we must never let the weight of this combination endanger our liberties or Democratic processes the war in Iraq is the most privatized war in modern history the green zone in Baghdad is an extreme version of what is happening around the world a privatized secure World protected from the chaos outside in 1991 in the first Gulf War for every 100 soldiers there was one military contractor in 2003 at the beginning of the war in Iraq for every hundred soldiers there were 10 contractors by 2006 for every 100 soldiers there were 33 contractors a year later for every hundred soldiers there were 70 contractors by July 2007 there were more contractors than soldiers in Iraq this was going beyond what even Milton Friedman had dared to hope the only things I would not denationalize are the armed forces the courts and some of your and your roads and highways one of the most high-profile contractors was Blackwater USA during the April 2004 Uprising in najaf Blackwater ested command over US Marines dozens of Iraqis were killed during the operation the US had indemnified the private contractors against any Iraqi laws so they were operating in a lawf free bubble a little like onano I asked your secretary of defense a couple months ago what law governs their actions uh Mr I ask him go ahead help well I was just as Cameron's shock therapy left his patience confused and broken so the multiple shocks inflicted on a wreck reduced the country to a lawless violent sectarian Miss by the time Saddam Hussein's execution in 2006 a thousand Iraqis were being killed each [Music] week by April 2007 the United Nations High commission for refugees estimated 4 million people had had to leave their homes hundreds of thousands of Iraqis had died I think the historians will write very very clearly that we did a great and Noble thing here [Music] [Music] when Hurricane Katrina hit New Orleans in August 2005 the world was shocked to witness a sort of disaster apartheid the economically secure drove out of town while tens of thousands of the vulnerable were stranded with little or no help from the state I went to New Orleans while the city was still underwater and what I saw was that what I had witnessed in Iraq was repeating not in the aftermath of a war but in the aftermath of a tremendous natural disaster Milton Freeman died in in in 2006 his very last piece of public policy recommendation was an oped he wrote for the Wall Street Journal three months after Katrina he said most New Orleans schools are in Ruins as are the homes of children who attend who have attended ended them the children are now scattered all over the country this is a tragedy it is also an opportunity to radically reform the education system he was advocating the wholesale privatization of the school system of this city it was his sort of swan song hey hey hey hey i' witnessed a similar process in Sri Lanka in the aftermath of the 2004 tsunami people who lived on the beaches for Generations were prevented from returning so that the land could be privatized and sold off to luxury [Music] hotels and this is exactly what I mean by the shock Doctrine the systematic raiding of the public sphere in the aftermath of a disaster when people are too focused on the emergency on their daily concerns to protect their [Music] [Music] interest maybe the First Act of resistance is to refuse to allow our Collective memory to be wiped in 2008 Naomi kleene visited Villa gamaldi with Isabelle Morell the Widow of Orlando latelier Villa gamaldi is a memorial to the cruelty of the pen regime and to its eventual defeat [Music] it's not that I loved P but I think that he was our teacher in many things we learn about [Music] evil in 1998 penay was arrested while he was in London his old Ally Margaret thater stood by his [Music] side I know how much we owed to you it took 30 years for the economic experiment originally test driven by Pinay to make its way around the globe to Iraq but the similarities between past and present are startling between pin's concentration camps and Bush's Guantanamo Detention Center between the Disappeared in Chile and those in Iraq between the experiments of you and Cameron and the torture Meed out on the prisoners of Abu grab these are the days and ours he erased all the past that's why you gave Electro shocks all the passs from the patient and he would implant some new IDs but Janine resisted in 1988 the CIA agreed to pay compensation to Janine and another victims of viewing Cameron's experiments Janine are you proud that they tried to break you and that you have fought so hard and won in a way I am in a way I am because uh I must have some willpower seats in me it is very very hard to fight a government and people would tell me J you don't fight a government what's the matter with you they're too big but I had faith that we would win it is in the nature of unregulated markets to be volatile bubbles are allowed to inflate and then inevitably they burst since the deregulation of the Big Bang in the'80s there have been a number of Market shocks in 1987 there was Black Monday markets fell spectacularly it was the largest one-day percentage decline in stock market history in 1992 there was black Wednesday when currency speculators made fortunes betting against the pound in 1997 there was the Asian contagion in one year $600 billion disappeared from the stock markets of Asia and then in September 2008 the financial markets imploded the market is not functioning properly there has been a widespread lost of [Music] confidence on September the 15th lame and brothers filed for chap 11 bankruptcy protection yet only one week later it was announced that workers at their New York office would share 2 and a half billion do in bonuses it is estimated that Wall Street firms paid $18.4 billion in bonuses last year the Year of the crash despite the torrant of populist rhetoric about taking on the fat cats and standing up for the little guy and saving Main Street not Wall Street we are witnessing a transfer of wealth of unfathomable size it is a transfer of wealth from public hands from the hands of government collected from regular people in the form of taxes into the hands of the wealthiest corporations and individuals in the world needless to say the very individuals and corporations that created this crisis we are in the midst of a once in a Century Credit tsunami I found a flaw I don't know how significant or permanent it is but I've been very distressed by that fact in the United States it was the financial crisis that secured Obama's Victory Americans wanted to change [Applause] course hello this crisis is clearly understood by almost everyone as being the direct result of this particular ideology of deregulation and privatization the scale of the crisis offers the hope of change the shock Doctrine as a strategy relies on us not knowing about it for it to work and what I find most hopeful about the current economic crisis is is that this tactic is getting tired because that element of surprise is no longer there we're on to them and it's not working we're becoming sharp [Applause] resistant the last time the world suffered a financial crisis as severe as this people turn to the Keynesian policies of the new deal let me assert my firm belief that the only thing we have to fear is fear itself more than a million people came to Washington to hear Obama's inauguration speech many journalists made comparisons with FDR now there's been a lot of talk recently about comparing Obama to Franklin delanor Roosevelt so I want to talk a little bit about FDR because there's a great FDR story and it could be an apocryphal one about when he would be visited by uh some Progressive organization or a union and they would be proposing some new Progressive policy that they wanted to be part of the new deal and he would hear them out he would listen to them and then at the end he would say now go out there and make me do it and they did in 1937 which was a pivotal year for the New Deal do you know how many strikes there were in this country 4,740 strikes lasting an average of 20 days do you know how many strikes there were in 2007 21 now the other reason to remember this history of struggle is that it tells us something very important something that we need to remember at this moment when so much is at stake it teaches us that if we want responses to this economic crisis that leave us with a world that is healthier that is more just that is more peaceful we are going to have to go out there and make them do it thank [Applause] you next week's exclusive new true story is Nursery University more for Tuesday night at 10:00 and stay with us for the story of the rise and down exle of Enron the smartest guys in the room [Applause] [Applause] [Applause] [Music] [Applause] [Music] [Applause] our [Applause] [Music] [Applause] [Music] [Applause] [Music] he