Blogs > Liberty and Power > Naomi Klein: Free-Market Ally?

Oct 16, 2007 9:01 am

Naomi Klein: Free-Market Ally?

I haven't read Naomi Klein's book The Shock Treatment: The Rise of Disaster Capitalism (or her other books). But based on what I've read about it, she's probably going to be misunderstood by some libertarians and free-market economists. Although apparently an attack on corporatism (fascism), the book is bound to be seen as a criticism of the free market. I assumed that Klein would promote such understanding by an imprecise use of terms -- and to some extent she apparently does so. But perhaps I've underestimated her. I caught her appearance on Bill Maher's program the other night, and during her interview she explicitly said that practitioners of crony capitalism have hijacked the rhetoric of the free market to advance their self-serving cause. She drew a sharp distinction between the two systems."[I]t's certainly not the free market. ...Ironically, it's the free-market ideology that gets used to propel this [corporatist] vision forward. It's not free for anybody but the contractors." (The interview is here.)

Her thesis is that crony capitalists use crises to foist their"reforms" on otherwise unwilling people. Sounds like it should be read in conjunction with Robert Higgs's Crisis and Leviathan. Although Klein is not an advocate of a true free market, she seems to be an ally in struggle against corporatism. We should cultivate that alliance in public statements about her book and reinforce her inchoate view that being for the market is far from the same thing as being for capitalism.

Cross-posted at Free Association.

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Tim Sydney - 10/18/2007

Jesse Walker's assessment is reinforced by looking at her older anti-globalization stuff, before she got on to the relatively 'libertarian' "fascist threat" warning stuff. Her take on globo is pretty normal technocratic social democrat stuff, essentially the more internationalised inter-government controls, the better.

Jesse Walker - 10/17/2007

I haven't read Klein's book, but I've watched the short film she wrote with Alfonso Cuaron. She is a very confused woman whose argument falls apart in virtually every place. At one point she seems to argue that Thatchernomics were enabled by the Falklands War -- i.e., a conflict that erupted three years after Thatcher started enacting her economic agenda.

As for her politics: Her reporting from New Orleans and Latin America seemed to suggest an anarchistic outlook, but based on the interviews I've seen her give recently I'd say she's a garden-variety technocratic social democrat.

Craig J. Bolton - 10/17/2007

I believe that Murray's comments on the "Friedmanites" was typical Murray - a lot of surface flash, not much core substance.

In fact the people at Chicago during Milton's high point knew exactly what they were doing, and what they were doing had nothing to do with economic technocracy or regarding the state as a neutral instrumentality. It had to do with shifting the world in the direction of free markets.

Each of the Chicago School members had different fields of attack. In Milton's case it was Keynesian economics.

Neoclassical economists, like the popularist Henry Hazlitt, had long pointed out that Keynesianism was presented by Keynes himself as simply a short run expedient justifying temporary extraordinary expenditures and deficits in a context where factor prices were not downward flexible. The neoclassicals had also pointed out that this was not a "general theory," but was rather the opposite - a specialized theory for special circumstances in a special institutional context. None of direct criticism on the limits of Keynesianism stuck. Governments continued to wave the flag of Keynesianism to justify what they wanted to do - tax more and spend more.

What Friedman did was simple. He got inside of the Keynesian analytic framework and kicked it apart. "Proper analytic modifications" of the theory [like his work on the consumption function] converted a view justifying ever expanding government and great discretion in the hands of policy makers into a view requiring attention to the effects of policy on long run wealth production and tied the hands of policy makers.

That is what Chicagoism was about. It was about changing the world through the analytic technique of saying to the dominate collectivists "Granted everything you've said, how about the following as refinements of your world view...."

Tim Sydney - 10/17/2007

Certainly Naomi Klein has shown some awareness of crony capitalism. I heard her interviewed about 'the coming American fascism' too and there was much in that interview that a libertarian could agree with.

Still when it comes between choosing between Naomi Klein and Milton Friedman as a potential 'free market ally', I'd take Milton anytime.

I'm saying that fully aware that in Austro-libertarian circles there are justifiable criticisms made of Friedman.

I think the best and most incisive critique of Friedmanism was made by Murray Rothbard in his 1972 "New Banner" interview. (See here).

The relevant passage is:

"This is one of the problems with Friedmanites – they have no political theory of the nature of the state. They think of the state, and this is true of Milton and the whole gang as far as I can see, as another social instrument. In other words, there is the market out here and then there is the state, which is another friendly neighborhood organization. You decide on which thing, which activity, should be private and which should be state on the basis of an ad hoc, utilitarian kind of approach. "Well, let's see, we'll feed the thing through the computer. We find that the market usually wins out, that the market is usually better." So, most of the time they come out in favor of the market on things like price control or government regulations, but they really think of the state as just another social instrument. And so when they come out in favor of the state, they go all out. In other words, there is no limitation. Well, they say, the state will do this. The state will run the educational system or whatever the cop-out happens to be. So, they feed the thing in – we'll have controls for a while and then they will die out – it's not very important anyway. You see, they really think they can put through Friedmanism, let's say, just by educating Nixon. The sort of thing I said before jocularly, about Nixon reading Atlas Shrugged and being converted. That is really the sort of theory of social change the Friedmanites have. You see the President once in a while, you talk to him and you convince him that there shouldn't be price controls, the ICC should be eliminated, or whatever – and then he goes ahead and does it. But it just doesn't work that way. They have no realization that the state is essentially a gang of thieves and looters. That they are exploiting the public, that they have a whole bureaucratic apparatus of exploitation, and that they are not just going to give it up. In other words, there is the whole problem of power involved which the Friedmanites refuse to face. They don't realize that the state is not a social instrument. It's an inimical organization which is hostile to society, plundering it, which has to be confined, whittled away, reduced and hopefully ultimately abolished. They have no conception of that at all. They just think of it as another friendly, corner grocer kind of thing which you either use or don't use."

Naomi Klein's "theory of the state" would seem to me to be closer to that of the Friedmanites (and the Crony Capitalists) than that of libertarian free marketeers. Maybe where we and she may have something in common is in "the theory of social change" that Rothbard alludes to. The Friedmanites see themselves as counsellors to the ruling elite, where Klein at least sees elite power as part of the problem. Still Klein's proposed "let's try democracy one more time" "solution" would seem to be even worse advice than that the Friedmanites are whispering into the incurably deaf ears of their soverign.

Sheldon Richman - 10/16/2007

We shouldn't pander, but we shouldn't needlessly alienate either. If she gets something right, we should say so. If her analysis of corporatism is on point, we should say that too. If she shows a misunderstanding of truly free markets, let's explain how they would work if allowed to. You never know what will prompt a given person to pay attention to libertarian ideas. Let's not sound like the folks at the Heritage Foundation. At least Klein despises corporatism -- for-profit, state-sponsored exploitation -- which has wrought so much damage and war. That's more than I can say for the conservatives.

Brad Spangler - 10/16/2007

I stand corrected on that point. Thanks.

Robert Higgs - 10/16/2007

It's a myth that Friedman was "almost single-handedly responsible" for the institution of income-tax withholding. He was only one among many promoting this idea at the time, and by no means the most important one. In the circumstances of the government's frantic search for revenues in connection with its massive increase in spending during World War II, the adoption of withholding was almost inevitable--it had been done during the first few years of the modern income tax after 1913, it was done by governments elsewhere, and it was a natural idea to help the government get more revenue quickly. If Friedman had never existed, this system would have been adopted anyhow. (Yes, he was involved, and as he explains in his memoirs, he did so only as an effort to help fund the war and at the time gave no thought to how the system would assist the growth of government in the long run.)

Brad Spangler - 10/16/2007

Yeah, well, Milton Friedman's rep as a purported defender of "free markets" was a fraud anyway. Just for starters, the guy was almost single-handedly responsible for the advent of income tax payroll deduction. If massive government spending (naturally, to politically favored contractors) isn't a cornerstone of corporatism, what is?

John Kunze - 10/16/2007

I have not read her book, but from reviews and video clips she seems very clever but without principle or productive purpose.

If she understands the difference between the free market and crony capitalism, she nevertheless dishonestly tries to indict Milton Friedman for all of the crimes of the latter. Her approach is very much of the big lie practiced by Lyndon LaRouche.

She doesn't offer an alternative political vision but just attacks anything and everything. She doesn't sincerely try to understand political ideas.

Shock Treatment debuted in last place on the NYT bestseller list. Let's not help it climb by giving it more attention than it deserves.