All language subtitles for The Shock Doctrine (2009) 1080p.WEBRip.x264.AAC5.1

A state of shock...

It's 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
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 are in,

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 struggle.

Our story begins on June 1st of 1951

when representatives of western
intelligence agencies

secretly met with academics, at
Montreal's Ritz-Carlton 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.

Causes loss of critical capacity

thinking is less clear

and the subjects complain that they
can't even daydream.

And when you have college students
that can't daydream

you're ahead the bad way.

I began to think while we were doing our
experiments, that it's possible that

something that involves physical
discomfort, or even pain

might be more tolerable than simply the
deprivation conditions that we studied.

Hebb decided to stop work
on the research.

I had no idea when I suggested that

what a vicious weapon, potentially
vicious weapon this could be.

But the experiments at McGill continued

on the hands of the ambitious head of
psychiatry Dr. Ewan Cameron.

What he did was much more than
what we had done.

We did our work strictly with the
understanding that the subject

could get up at any point he wished to,

and someone did.

Cameron's patients were not so lucky.

The Allan Memorial Institute where
he worked

began to resemble a macabre prison

where Cameron performed bizarre
experiments on his psychiatric patients.

Cameron wanted to "de-pattern" or
wipe clean his patients minds

so he could rebuild them from
a blank slate.

Janine Huard was a young mother of four

suffering from post natal depression.

I used to shiver when they told me about

"You are gonna get a shock treatment
tomorrow".

I used to shiver. I was so scared of it.

I would wake up in another room

all mixed up and sad

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.

Says: "Janine, Janine...

you're 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 CIA put Cameron's
research into practice.

Many of these techniques appear
in the agencies "KUBARK"

"counterintelligence interrogation
manual".

These words are from the manual:

It's a fundamental hypothesis
of this handbook

that this techniques are, in essence,

methods of producing a 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 recognizes
the fact 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 shock.

At the same time as Dr. Ewen Cameron was
conducting his experiments in Montreal

an exponent of another kind of shock
was working not so far away.

Milton Friedman was teaching economics
at the University of Chicago.

He believed economic shock therapy
could encourage society

to accept a purer form of deregulated
capitalism.

In october 2008

in midst of the biggest financial crisis
since 1929

Naomi Klein went to the University
of Chicago

to talk about Milton Friedman.

When Milton Friedman 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 on 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 on Washington

stands for many factors, of course,
but among them

are the ideas of Milton Friedman.

Wall Street crash of 1929 led to the
depression of the 30's.

Central to Friedmans thesis, was
his opposition to the New Deal

announced by president Franklin
Roosevelt in his inaugural 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 Keynes

Roosevelt started a program
of public employment

to get people back to work.

Today recession is a fading memory.

Millions of man and women have found
employment

and with it confidence and hope.

It wasn't that simple.
The depression lasted until World War II

But after the war, the Marshall plan
spread Keyneses model

of government regulation and
intervention to Europe.

His principles were widely accepted.

But not in the Economics Department
of the University of Chicago.

Milton Friedman, from this University,
waged a war against the "New Deal".

Friedman was member of a group
called the Mont Pelerin Society,

led by the austrian economist
Friederich von Hayek.

They believed that if governments
stopped providing services,

and stopped regulating markets,

the economy would correct itself.

In the 50's they where seen as cranks,

but over the last 30 years

their ideas had become the dominant
economic doctrine.

The thesis of the "Shock doctrine" is

that we've been sold a fairy tale

about how this 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 Friedman 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 laying around.

It was in Chile, that Friedman'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 50's and 60's

Chile's progressive developmental
policies

were a beacon in the region.

The Government invested in health,
education and industry.

American corporations were worried
their investments would suffer.

In response, the US State Department

began sponsoring students form Chile
and the rest of South America

to study free market economics
with Milton Friedman.

The University of Chicago had a
join arrangement

with the Catholic University of Chile

under which a great many Chilean
students

came to the University of Chicago,

were trained by us and received PhD's.

These students went back
and taught in Chile.

The Catholic University
economics department in Santiago

became a little Chicago School.

Arnold Harberger, the economist
in charge of the program

described himself as a
"seriously dedicated missionary".

In 1970, Salvador Allende's
Popular Unity government

won the election on a platform
of nationalisation

of large sectors of the economy.

Chile's phone company was
majority owned by US corporation ITT.

ITT headed the attempts
to stop Allende becoming president

it had the support of Richard Nixon
in the White House.

I was not there, but I can

tell you what we now know to be a fact.

He ordered the CIA to prevent Allende
from assuming the presidency.

Indeed, they tried to get me to lean on
the chilean military

right after Allende was elected.

Despite the efforts of the CIA, Allende
was sworn in as president.

Richard Nixon ordered the CIA director
to make the economy scream.

Preparations began
for the military coup.

Chilean "Chicago boys" started
to work on

an 500 pages economic blueprint
called "The brick".

With the US funding, everything was done

to destabilize the economy.

Truck drivers went on strike,

bringing factories and shops
to a standstill.

There was a failed coup attempt on
June the 29th 1973.

And then on September the 11th,

with General Pinochet leading the army.

The assault began on the presidential
palace.

Chile had enjoyed 41 years of
uninterrupted peaceful democratic rule.

Now, it has been violently overthrown.

Pinochet and his supporters
described the coup as a war.

It was certainly designed
to look like one.

It was a Chilean precursor of the
"Shock and awe"

The "Chicago boys"

delivered their economic blueprint,
The brick, to Pinochet.

In the days that followed

more than 13.000 opponent 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.

Less than a mont later FIFA
allowed Chile

to play a World Coup qualifier
in the very same stadium.

Their opponents, the Soviet Union,
refused to play there

then, Chile were allowed to score
into an open goal

and went through to the 1974
World Coup finals.

With the population in shock

Pinochet imposed the policies
recommended by the "Chicago boys":

removal of price controls, the sell of
state companies,

the removal of import barriers and
cuts to the government expenditure.

Friedman later openly acknowledge the
importance of the Chilean experiments.

It was the first case in which
you had a movement towards communism

which was replaced by a movement
towards free markets.

It didn't work. A year later,
inflation was 375% per year.

The highest in the world.

So in march 1975, Arnold Harbenger and
Milton Friedman 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 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.

Friedman wrote that General Pinochet
was sympathetically attracted

to the idea of the shock treatment.

but was clearly distressed at the
temporary unemployment it might cause.

It rapidly became clear that
Friedman's 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 bus fares or milk
became luxuries.

Pinochet got rid of free milk in school

a move that echoed the controversial
policy

of the young Education ministry
in Britain

who would later become his friend.

In order to enforce these
economic policies

there had to be an enemy to fear.

Friedman and Harberger argued
that free market economics

went hand in hand 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 Letelier.

Letelier had been Allende's ambassador
in Washington.

He spent a year on one of Pinochet's
prisons.

Before being exiled back to America.

In 1976, Letelier 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 3 years."

Less than a month later, Letelier
was killed by a car bomb.

A powerful bomb, today tore
through a car

that was driving along Washington's
usually quiet embassy road.

The chilean was Orlando Letelier,

who also had been Foreign minister
in the last months

of the late Salvador Allende's
marxist regime.

Michael Townley, a member of
Pinochet's 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 for Letelier's murder.

Pinochet ruled Chile as a
military dictator for 17 years.

But in a franc interview Harberger
remained in denial.

You can not have a repressive
government for long

within a genuinely free economic system.

In the same year
as Orlando Letelier's murder

Milton Friedman was awarded the
Nobel Prize of Economics.

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 there

and I refused to take them,
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,
am not an adviser to Chile

I have no commitments with
the government of Chile.

Friedman go home!

I'm very sorry for this incident

It could have been worse.

What I'm trying to do in
"The sock 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.

Friedman disciples held key positions
in Brazil

and advised the government of Uruguay.

Then, on March the 24th of 1976

a military coup overthrown
the government of Isabel Per�n

in Argentina.

A juncture of three generals
took over the country

led by general Videla.

Chicago Boys landed key economic posts
in the military government.

They seized the opportunity for major
economic and social engineering.

Within a year from 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 Pinochet'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.

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 disrobing,

to torture with pointed objects,

breaking of 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 a trial,

using the techniques that they may
have learnt in this establishment.

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 Junta
hosted the World Cup

The final was played in a stadium
less than a mile away

from the biggest detention camp
in the country,

where thousands of prisoners
were held in torture chambers.

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.

Those children, many of whom were raised
by families connected to the military

were a powerful reminder
of the Junta's project

to reengineer an entiere society.

While the Junta was still in power

a group of mothers and grandmothers
of the disappeared

started to protest at the Plaza de Mayo.

They turn detectives, searching for
the disappeared children.

After the Junta collapsed,
some were found

and reunited with their families.

Occasionally, they found remains.

Mostly they found nothing.

General Videla was found guilty
of murder, kidnaping and torture.

He was sentenced to life in prison.

These first experiments in Latin America
presented Friedman and his cohorts

with a serious ideological problem.

Friedman had promised that
these policies

would not just make the elites richer,

but they would create the freest
possible societies,

that this was a war against tirany,

that capitalism and freedom
went hand in hand.

But, here we see that in the 70's

the only countries putting
this ideas into practice

were military dictatorships.

Nixon had fully supported imposing

these types of
brutal free-market policies

in South American dictatorships.

But when it came to domestic
economic policy in the US

where Nixon had to worry of
being reelected.

it was a very, very different story.

Friedman 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.

But in 1971, with the economy in a slump

Nixon turned his back
on Friedman's ideas

and imposed the wage and price
control policy.

He put Rumsfeld in charge.

I have, for long, being opposed to
the wage and price control,

I believe it involves

government intervention
with the freedom of individuals,

and 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 Friedman.

Then in 1979, Margaret Thatcher was
elected Prime Minister of Britain.

Her intellectual guru was
Friedman's old mentor

Friederich von Hayek.

And just over a year later,
Ronald Reagan

was elected President of the US.

Both Britain and America were now ruled
by unabashed Friedmanites.

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 and stable
monetary policy

to bring down inflation.

Within the first 3 years in office

unemployment doubled in post
of the economy,

leading to waves of strikes.

Thatchers personal approval ratings
swamped to 25%

There were riots in Britain's
major cities

Even Margaret Thatcher's admirers
had their doubts.

The economic performance through the
Thatcher's government has been mixed

To those waiting with bated breath

for that favorite media catch phrase,
"the U turn"

I have only one thing to say:

you turn if you want to

"The Lady" is not for turning.

Friederich von Hayek urged Thatcher

to copy Pinochet's economic
shock therapy policies

Thatcher replied:

"In Britain we got democratic
institutions,

and we do need for a high degree
of consent:

some of the measures adopted in Chile
are quite unacceptable."

Thatcher's profound unpopularity

seemed to be proving once again,

that free market fundamentalism
was simply too unpopular,

too directly harmful to too many people

to survive in a democratic state

where governing requires getting the
consent of the governed,

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 herd of the Falklands.

But when Argentina invaded the
small group of islands

thousands of miles away in the
South Atlantic

Thatcher seized her opportunity

to prove her credentials as
the "Iron Lady".

The war was over in less than 3 months.

As the troops returned to Britain

a wave of patriotic celebrations
swept the country.

Thatcher won the 1983 election
with a massive majority.

She could now push through a form
of the economic shock therapy

witnessed in Chile.

The most powerful union in Britain was
the National Union of Mineworkers.

When National Carbon 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 miners strike.

It's british longest and most
bitter strike since 1926.

And the most expensive ever.

The strike lasted almost a year.

Thatcher used every means
at her disposal to destroy the union.

Eventually the miners were defeated.

Thatcher used this victory

bring the Chicago School revolution
to Britain.

A series of glossy comercials promoted
a massive program of privatizations.

Thatcher sold off the steal industry,

water,

electricity,

gas,

telephones,

airlines,

oil.

Public housing was sold off.

Council services put out to tender.

In 1986, financial and banking services
were deregulated.

It was called the Big Bang.

No one here tonight needs 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.

In the US, before Reagan,

CEO's earned 43 times as much
as the average worker.

By 2005, they earned more than
400 times as much.

Friedman 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 being
in office at the same time

was enormously important for the
public acceptance worldwide

of a different approach to economic
and monetary policy.

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 muzzle
the self expression of the people.

There, 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 and buy blue jeans
and have Big Mac's.

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 day.

Thatcher 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".

Now you see the process from where
you are now,

to where you want to be.

Strikes in Poland, let to "Solidarity"
being allowed

to contest a general election
in June 1989.

This triggered a wave of demonstrations
throughout eastern Europe.

In the past, the Soviet Union
had used military force

to crush democratic movements.

But the Soviet Union had a new type
of leader:

Mikhail Gorbachev,

who is committed to Glasnost
and Perestroika.

He talked about a third way

a gradual transition to
scandinavian-style social democracy.

Something between free market capitalism
and communism.

Gorbachev charmed the public
and politicians of the West.

He's a bold and determined and
corageous leader.

Gorbachev stood and watched

as one by one
the old communist regimes collapsed.

At the end of the year, the most famous
symbol of the division of Europe

came tumbling down.

For Friedman and the "Chicago boys"

a whole new world opened up.

In the Soviet Union

Gorbachev was hoping to gradually
reform the Russian economy.

In 1991, Gorbachev 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 a radical Shock therapy

there would be no aid at all.

The next month, there was a coup attempt
against him.

A group of Communist Party hardliners

placed Gorbachev under house arrest
in his holiday home in the Crimea.

Tanks surrounded the "White House",
the Russian parliament.

Amid the chaos of street clashes

it was obvious that to reinforce
their position

the hardliners would had 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 Yeltsin was more powerful
than ever.

This was Yeltsin's finest ever.

Gorbachev 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.

Yeltsin 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
businessman made vast fortunes.

State industries were sold off
at bargain-basement prices.

The Russian press called
Yeltsin's advisers

the "Chicago boys".

The Yeltsin shock therapy meant
that in 1992

the average Russian consumed 40% less
than in 1991.

A third of Russians fell below the
poverty line.

And wages weren't paid for months.

One expert today predicted
140 million of Russians

will soon be living below
the poverty line.

Corruption was rife.

Organized crime boomed.

Moscow became the new wild West.

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
that had given to Yeltsin.

Yeltsin declared the state of emergency.

The Constitutional Court ruled that
it was illegal.

On September 21st, Yeltsin took
the "Pinochet option"

and disolved Parliaments.

The West "threw his whip"
behind Yeltsin.

We feel that Boris Yeltsin is

the best hope for democracy in Russia

Two days later, Parliament voted
to impeach Yeltsin

by 636 votes to 2.

Thousands of supporters of the
Parliament

gathered outside the White House

and marched on the television station.

It looked like the supporters of
Parliament were winning.

Yeltsin flew back to Moskow from
his holiday home.

That night 100 demonstrators were killed

as the Yeltsin authorities fought back.

On the 4th of October, he ordered
troops to stone the White House

shelling the very building he had
defended 2 years earlier.

Warren Christopher, the US
Secretary of State said:

"The US does not easily support
the suspension of Parliaments,

but these are extraordinary times."

Yeltsin now had absolute power.

With the advise of the "Chicago boys"

he ruled through a form of
crony capitalism.

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 72 million.

Meanwhile Moscow would go on

to have more billionaires than
any other city in the world.

Good afternoon. Thank you for
coming. Today it is my...

honor to announce that I'm submitting
the name of Donald Rumsfeld

to be Secretary of Defense.

I look forward to serving our country
again.

Rumsfeld 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 terms are here.

I'm not saying the Russians
are 10ft tall,

I'm saying they used to be

5.3 and are now 5.9 and a half
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 Friedman would have been proud.

He said: "The topic today is an
adversary that poses a threat,

a serious threat to the security
for the USA.

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.

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.

We were not living in the world that
we thought we've 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
magically appeared.

That we were in a
"clash of civilizations".

That's the world that we suddenly
lived in.

That there was an "axis of evil",

and that we were fighting a war
against terror.

This abstract un-winnable war

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 130 billion dollars

to private contractors.

This is the disaster capitalism complex.

A new economy built on fear.

This would 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 detainees

that we can use for
collecting intelligence.

Guantanamo was the first time that the
techniques of the KUBARK manual

were explicitly and publicly being used
by American forces

officially sanctioned by the
White House.

Isolation, both physical
and psychological,

must be maintained from the moment
of apprehension.

The capacity of resistance is diminished
by disorientation.

Prisoners should maintain silence
at all times.

They should never be allowed
to speak to each other.

3 of the prisoners were
Asif Iqbal, Rhuhel Ahmed

and Shafiq Rasul, 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.

Sitting there, you being in your thought
all the time thinking:

"What the hell's going on?
Where the hell am I?

Are we gonna be stayin' here
for the rest of our lives?

Are we ever going back home?

Will we ever see our family again?"

Of the 779 prisoners that had been
held in the Guantanamo bay

only 3 have ever been convicted
of any offense.

Now, 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 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 world.

Now about the Defense Department
war plan

It is not like the other Gulf war

it's more along the line to the
Panama invasion in 1989

CBS news is been told it would start
on what's called "A-day".

"A" as in "airstrikes".

Airstrikes so devastating

they would leave Saddam's soldiers
unable or unwilling to play.

The idea is to rain down the thunder
so hard as to create, quote:

"Shock and awe".

If the Pentagon sticks to its card war
plan, one day on March

the Airforce and Navy will launch
between 3 and 400 cruise missiles

at targets in Iraq.

More than were launched in the entire
40 days of the first Gulf War.

The sheer size of this has
never been seen before,

never been contemplated before.

Halla Ullman is one of the authors of
the "Shock and awe" concept,

which relies on large numbers of
"precision guided weapons".

So that you have this
simultaneous effect

rather like nuclear weapons
at Hiroshima:

not taking days or weeks, but a minute.

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 in 2, 3, 4, 5 days

they're physically, emotionally, and
psychologically exhausted.

Last night, a square mile in central
Baghdad seemed like hell on earth.

During the first wave of the bombing

The citizens of Baghdad suffered the
version of "sensorial deprivation"

described in the KUBARK manual.

In the chaos that followed the
overthrown of Saddam Hussein

the US did little to stop the looting.

Some US officials even 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 the Iraqis were literate.

By contrast, in New Mexico,
John Agresto's home state

46% of the population were
functionally illiterate.

Iraq had three distinct forms of shock

they 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,

very rapid economic shock, grew

you had the shock of enforcement,
including torture.

Three different kinds of shock.

In may 2003

Paul Bremer was appointed
the US envoy to Iraq.

Two weeks after he arrived

he declared the country
"open for business".

We consider that the coalition
has very broad authorities

to determine the direction
of the Iraqi economy.

Bremer 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

Bremer spent the first four months

passing classic Chicago School laws.

Rumsfeld 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 Bremer

was to fire 500.000 state workers.

This was partly an act of
De-Ba'athification

by slashing governments,
was also owed to Friedman.

Money was promised for reconstruction.

Our investment in the future
of Afghanistan and Iraq

is the greatest commitment of this kind
since the Marshall plan.

But in fact it was just the opposite.

Whereas the Marshall plan was inended
to boost european industries

USA money in Iraq was spent
on US corporations.

If work came to Iraqis

came at the bottom of a series
of subcontractors.

"Creative Associates" received contracts
worth 100 million dollars

to draft the curriculum and print new
textbooks for the new education system.

Management and technology
consultant "Bearing Point"

was awarded contracts worth
240 million dollars

to build a market-driven system in Iraq

North Carolina based RTI
(Research Triangle Institute)

received contracts worth
466 million dollars

to advise on bringing democracy to Iraq.

And "Halliburton" was awarded 20 billion
dollars in cost plus Iraqi contracts.

"Parsons" was handed 186 million
dollars to build 142 health clinics.

Only 6 were ever completed.

Basic electricity and water supplies
hardly improved

despite billions being spent
in the 4 first years.

We're gonna succede here.
And when we succeed here

we'll have done something important.
Not just for 25 million of Iraqis,

we will have done something it serves
western interests in this whole region

Even the new Iraqi currency
was printed abroad.

Let me show you an example
of this notes.

The US even paid private contractors

to monitor the work
of the private contractors

who had won contracts.

WE WANT JOB!

I was in Baghdad in 2004

and this is the period when bombs
started to go off regularly in Baghdad

and in fact, the night that I arrived,
a bomb went off really near our 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 on the street,
protesting.

19 killed and 100 injured in Najaf

And what they were demanding,
at this time, was elections.

Their right to actually have a say

in what the post-Saddam era
would look like

In the early days of the occupation,
the protests were peaceful.

But as time went on, and the protests
didn't have an effect

More and more Iraqis joined
the armed resistance.

The violence spun out of control.

As in South America 3 decades earlier

bodies were often dumped by the
road side as a warning to others.

These were Iraq's "disappeared".

Extremely aggressive measures were
needed to suppress the opposition.

The first 3 and a half years
of the occupation

61.500 Iraqis were captured.

By spring 2007, 19.000
remained in custody.

In prison they were interogated
using techniques

that could be traced to those
devised by the CIA

from Ewan Cameron's experiments
in the 50's.

According to the Red Cross

US military officials admitted

that between 70 and 90% of arrests
in Iraq were mistakes.

The chaos in Iraq 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 dollars per year.

As long ago in 1961, president
Eisenhower, not a noted liberal

warned of the danger of a
too powerful military.

On this conjunction of an immense
military establishment

and a large arms industry is new
in the American experience

and we must guard against the
acquisition of unwanted influences

wether sought or unsought

by the military industrial complex.

We must never let the weight
that 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
1 military contractor.

In 2003, at the beginning of
the war in Iraq

for every 100 soldiers there were
10 contractors.

By 2006, for every 100 soldiers there
were 33 contractors.

A year later, for every 100 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 army forces, the courts,

and some of your roads and highways.

One of the most high-profile contractors

was "Blackwater USA".

During the April 2004 uprising in Najaf

Blackwater assumed command
over US Marines.

Dozens of Iraqis were killed
during the operation.

US had indemnified the private
contractors against any of Iraqi laws.

So they were operating in a law-free
bubble, a little like Guantanamo.

I asked your Secretary of Defense
a couple months ago

what law governs their actions. I...

I'm gonna ask him. Go ahead.

Help!

Just as Cameron Shock therapy
left his patients confused and broken,

so the multiple shocks inflicted on Iraq

reduced the country to a lawless,
violent, sectarian mess.

By the time of Saddam Hussein's
execution in 2006

1000 Iraqis would've been killed
each week.

By april 2007, the UN High Commission
for Refugees

estimated that 4 million people
had had to leave their homes,

hundreds of thousands of Iraqis
had died.

I think the historians will write,
very clearly,

that we did a great and noble
thing here.

When hurricane Katrina hit New Orleans
in August 2005

the world was shocked to witness
a sort of "disaster apartheid".

The economically secured
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 Friedman died in 2006,

his very last public policy
recommendation

was an "article" that he wrote for
the Wall Street Journal

3 months after Katrina.

He said: "Those New Orleans schools
are in ruins

as are the homes of the children
who have attended them.

The children are now scattered
all over the country.

This is a tragedy, but this is also
an opportunity to radically reform

the Education System".

He was applicating the whole
sell privatization

of the school system of this city.

It was his sort of, "Swan song".

I witnessed a similar process
in Sri Lanka

in the aftermath of the 2004 tsunami.

People who'd lived on the beaches
for generations

were prevented from returning

so that the land could be privatized
and sold off to luxury 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 interest.

Maybe the first act of resistance

is to refuse to allow our
collective memory to be wiped.

In 2008, Naomi Klein visited
Villa Grimaldi

with Isabel Morel, the widow
of Orlando Letelier.

Villa Grimaldi is a memorial to
the cruelty of the Pinochet regime

and to his eventual defeat.

It's not that I loved Pinochet

but I think that he was our teacher
in many things.

We learned about evil.

In 1998, Pinochet was arrested
while he was in London.

His old allied Margaret Thatcher
stood by his side.

I know how much I owe to you.

It took 30 years
for the economic experiment

originally test driven by Pinochet

to make its way around the globe
to Iraq.

But the similarities between past
and present are startling.

Between Pinochet's concentration camps

and Bush's Guantanamo detention center.

Between the disappeared in Chile
and those in Iraq.

Between the experiments of Ewen Cameron

and the torture on the prisoners
of Abu Ghraib.

He erased all the past, that's why
he gave electroshock,

all the past from the patient,
and he would implant new ideas.

But Janine resisted.

In 1998, the CIA agreed to pay
compensations to Janine

and other victims of Ewan
Cameron's experiments.

Janine, are you proud that
they tried to break you

and that you had fought so hard,
and won?

In a way I am, in a way, I am.

Because I must have some
will power seeds in me.

It's very very hard to fight
a government.

People would tell me: "Janine,
you don't fight the 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 80's

there have been a number of
market shocks.

In 1987 there was "black monday".

Markets fell spectacularly.

It was the largest 1-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
"contraction".

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 wide spread loss
of confidence.

On September the 15th,
Lehman brothers filed

for chapter 11 bankrupcy protection.

Yet, only one week later

it was announced that workers
in their New York offices

would share 2.5 billion $ in bonuses.

It is estimated that Wall Street firms

paid 18,4 billion $ in bonuses
last year.

The year of the crash
(2008).

Despite the tore 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.

[Alan Greenspan - Former President
of US ferderal reserve]

We are in the midsts

of a one in a once-in-the-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 US it was the financial crisis
that secured Obama's victory.

Americans wanted a change of course.

This crisis is clearly understood,
by almost everyone

as being the direct result
of this particular ideology

of deregulation an 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 that this tactic is getting tired.

Because that element of surprise
is no longer there.

We're onto them and it's not working.

We're becoming shock resistant.

The last time the world suffered
a financial crisis as severe as this

people turned 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 innauguration speech.

Many journalists made comparisons
with FDR

It's been a lot of talk recently

about comparing Obama to
Franklin Delano Roosevelt.

So I want to talk a little bit
about FDR,

because there is this great FDR story

(and it could be an apocryphal one)

When he would be visited by

some progressist organization,
or union,

and they would be proposing
some new progressist policy

that they wanted to be part
of the New Deal,

and he would hear them out,
he would listen to them,

and in 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'd leave us to a world
that is healthier,

that is more just,
that is more peaceful,

we are gonna have to go out there,

and make them do it.
Thank you.