by Andrew Butter
The election of Alexis Tsipras is the best thing that happened to Greece in years. He is going to say “NO” to Milton Freidman “Shock” therapy, unless someone shoots him, which is a real possibility.
What’s wrong with the parts of Europe that don’t work is that they were forced to wholeheartedly embraced the Chicago-Boy theories most recently tested by Milton Friedman’s prodigy, Donald Goering Rumsfeld, in Iraq. What a mess, and what a mess Europe is in thanks those ideas.
Depending on your persuasion you can argue much with Friedman’s central thesis about monetary policy, de-regulation, or the idea originally penned by The Prophet Mohammed (PBUH) and picked up by Adam Smith 1,000 years later…”Only God Fixed Prices”, many are mainstream and pretty much proven to work. Where Friedman Fascism starts is on the implementation, both Friedman and his disciples believed in “shock and awe” – which in practice means paralyzing the economy by withdrawing public services so that the workers have no choice, rather than imposing and effective and equitable the Rule of Law first.
In that respect Friedman Fascism is no different from what Adolf Hitler did when he grabbed power from a feeble democracy in a broken-down Germany; that many forget, had sorted out the economic mess caused by hyper-inflation and was on the road to recovery. Clearly Hitler’s economic model worked; if it hadn’t he would not have been able to fund a military campaign that almost conquered the world.
And as Albert Einstein once remarked, if he hadn’t been such a lunatic, we would all be Nazi Party-members now. That doesn’t mean Hitler’s doctrine is the cure for economic ills, particularly when it means that an elite takes over and accumulates vast wealth at the expense of ordinary people and the democratic process; in the name of “The Greater Good” and “Nation-building”. Sure it’s “free-enterprise”, of a sort, except some are more free than others, and it’s the elites that fix the prices at the expense of everyone else.
There is good reason to suppose that a variation of Friedman Fascism is what caused the house-price bubble in U.S.A. along with everything that came after. Thanks to under-hand efforts of the loyal apostles Robert Rubin and Lawrence Summers to “de-regulate” the banking system to allow thievery; with Alan Greenspan playing the role of the clueless fall-guy.
The rejection of those ideas by Ben Bernanke, who quietly went away and printed a couple of trillion dollars to repair the damage, (without asking anyone’s permission…brave man); is how America recovered (partially) from that debacle. And all the while the “Austrians” were having apoplectic fits warning of hyper-inflation…which according to their theory, was inevitable. Milton Friedman once said the best test of an economic theory, is make a prediction, and see if it happens. OK Mr. Nobel-prize-winning economic guru…so where is the hyper-inflation?
Where the Europeans went wrong was first they printed too-little-to-late (this column correctly predicted they would print in the end, and how much, six months before they did), and second they didn’t kick out the elite that caused the problem, which to a great extent is what happened in America.
Friedman Fascism was invented in America. But where the Americans were smart was they exported it, just like they exported all those pretty toxic assets with AAA stamps on them, and sold them lock-stock-and-“read-the-small-print…its non-recourse-sucker” to corrupt elites in Europe chasing yield for their bonus schemes. But for all its flaws, America is a some approximation of a democracy, and leaving aside how they treat the blacks, there are limits to what the elites can get away with.
Not many people know that Friedman pitched his disciple Donald Goering Rumsfeld to Ronald Reagan as a running mate. Reagan sensibly passed, and Friedman sulked about that for years. Not many people know; Reagan was smarter than he pretended to be; he sensibly decided to let those great ideas get tried out on others, before testing them out at home, albeit that Rubin and Summers sneaked stuff through the back-door.
Friedman Fascism in its crudest form relies on violence and public torture, shock and awe!! First tested out in Chile by Margret Thatcher’s big-buddy Augusto Pinochet, it was later rolled out thanks to the help of Jeffrey Sachs and his buddy Lawrence Summers (him again), to put the Oligarchs in power in Russia.
Friedman Fascism provided a road map for Deng Xiaoping to pave the way for the enrichment of the elite of the sons-of-the-party to control the wealth of China, thanks to the brilliant success of the “Shock-and-Awe” Tiananmen Square massacre. It wasn’t “students” that were targeted in Tiananmen, it was workers who were gunned down and then hunted-down, to “send a message”; more people were killed sorry…tortured and then killed…in the purges that followed Tiananmen, than were killed on the day. It’s not common knowledge that the Deng’s economic road map was written by none other than Milton Friedman himself, the result; Chinese workers get paid less than anywhere in the world and have about the same human rights as the slave laborers had in Nazi Germany. Which explains the “economic miracle” that made 3,000 sons-of-the-party multi-billionaires. It will never be known whether or not Friedman pitched his “shock and awe” idea to Deng, could that be possible?
Friedman Fascism doesn’t need torture and murder to work – just that it helps; and boy did it help roll out the idea in Bolivia, Poland, and South Africa where the elite still rule and the ANC is neutered by the Chicago Boys. They don’t even have the right to decide who runs the central bank!! That was one of many compromises they were forced to agree with by the Chicago Boys employed by the elite, before they were allowed to “rule”.
The key sound-bites are “The Rule of Law” and “Public Order”. That was the line adopted by Friedrich Hayek’s prodigy Margret Thatcher…she used to write buddy-buddy letters to him, apologizing for paying lip-service to the idea of democratic due-process…when she mobilized thousands of mounted police armed with truncheons to beat the brains out of the miners…in the name of “The Law”…and mobilize MI5 to tap and monitor the phones of more than one thousand union organizers, in the name of “Homeland Security”, explained in glorious Technicolor by Naomi Klein in her great book about “Disaster Capitalism” published just before the financial crisis hit …in May 2008.
Listen to the sound-bites coming out of Germany and Brussels today. They say the Greeks must “obey the law” and meet the commitments made by their Fascist predecessors.
Greece has three problems that have consistently never been addressed, either in the beginning when they joined the Union…when a blind-eye was turned to the blatant corruption of the elite, or later. Come on all you purveyors of “Law and Order” in Brussels, the people who “made the commitments” were cooking the books from the beginning, and you pretended not to notice.
Greece was, and to a great extent, still is controlled for the benefit of an elite cadre of super-rich in cahoots with government unions. In return for paying no taxes, the rich lets the government incumbents get away with insane wages and pension schemes, and the money such as it is get’s spent buying riot gear and luxury police stations, so as to maintain “Law and Order”. And in the mean-time the legal system just doesn’t work, unless you have contacts in the elite who can direct you to a judge to pay-off.
It’s not the ordinary people or the 25% unemployed (50% of the young), that need a dose of Fascist Austerity; it’s the elites, in their yachts and the corrupt government officials they pay off, all protected by “The Law” because there isn’t one.
Let’s hope for the sake of everyone who are victims of the Chicago-Boy’s Big Idea, not just in Greece; that Alexis-the-Greek delivers on his promise.