Standing Ovation at Stanford for No to Neoliberalism

Neoliberalism, the economic view that emphasizes the importance of economic growth and asserts that social justice is best maintained by free market forces with minimal government interference, is a myth. Naomi Klein began her speech at Stanford University last night with this sentiment.

Americans used to call it Reaganomics, while Brits have dubbed it Thatcherism. Ms. Klein reminded the audience that the French may have the best expression for it,"savage capitalism".

Stanford is no Berkeley but the speaker had a standing room-only crowd of sympathetic listeners. Perhaps the economists in the audience were keeping a low profile. Ms. Klein told the audience that when she spoke at the University of Chicago, home to Milton Friedman die-hards, everyone connected with the Department of Economics seemingly boycotted her appearance.

The crowd at Kresge Auditorium contained largely students but was open to the larger Stanford community and a few notable local activists were in the audience. Applause broke out at several points throughout Ms. Klein’s speech, particularly when she said, “We the people never voted for this,” and “we have been living in a fairytale tactic that relies on us not knowing about it.”

Ms. Klein is the author of Shock Doctrine, a book meant to be a wake-up call and prompt what Klein calls “acute intellectual disaster preparedness”. Ms. Klein dubs toxic debt “a financial weapon of mass destruction.” President Bush said of the crisis that Wall Street got drunk; Klein says Bush was the Bartender-in-Chief.

Her jibes sparked amusement in the audience but no one was laughing when she painted a picture of what might be coming after the recent corporate bail-outs. “Things could get bad,” she said, “they could get very, very bad.” The massive debts the public is accumulating to bail out banks and financial institutions will, she predicts, become part of a global budget crisis that will be the rationalization for deep cuts to social programs. There will be a renewed push to privatize what is left of the public sector. Venture capital money that has gone into green technology is a product of boom times. With boom times gone, we will be told that a green future is just too costly. Nonetheless, as bad as the current global economic crisis is, Ms.Klein feels the climate crisis is worse.

Stanford students working on a campaign for living wages for Stanford employees and others interested in immigrant rights were saddened to hear that Ms. Klein predicts that people will soon focus only a small part of the blame on bankers. She fears that they will jump on CNN’s Lou Dobbs’ wagon and be quick to blame immigrants for the problems that neoliberalism has created. Klein has tough criticism for CNN, too. “They sold the bail-out so hard,” she said. CNN acted as an arm of the Department of the Treasury, just as it was an arm of the Pentagon when it sold the US the idea that we should invade Iraq, claims Klein.

It was the “get it while you can mentality” that led hedge fund financiers (who, by the way, Paulson has not yet precluded from the possibility of bail-outs) to lead the nation and the world to this point. Klein holds Alan Greenspan responsible for national fiscal naivete, saying, “when he decided not to regulate derivatives, one thing he didn’t count on was dishonesty of bankers.”

So, what is to be done?

Speaking to a largely younger audience, Ms. Klein’s overarching message was to “question what you are learning.” Business schools hold some responsibility for not preparing students with a broader view, which in part may have led to the economic crisis. Economics has been taught as a hard science when it is a collection of theories. Ms. Klein says of herself that she is “haunting the ghost of Milton Friedman.”

Question anyone that explains away problems by saying, “stuff happens”. That is what the Bush administration says about the economic crisis, and what they said before about the cause of Hurricane Katrina.

Question when a country’s economy improves and it is called a success, but human rights suffer. The two coexisting is not, in Klein’s view, a coincidence. Latin America is a study in the disaster that neoliberalism has wrought. Free market economists hailed Chile as an economic success while Pinochet tortured and murdered civilians. According to Klein’s Shock Doctrine theory, economic success for a minority of the population while the majority is financially and socially oppressed is part and parcel of neoliberalism.

Interestingly, Latin America may hold the answers for today’s activists wondering what can be done now? Ms. Klein was in Argentina in 2001-2002 during an economic crisis of major proportions. Protestors attacked neoliberalist ideology out in the open. They swarmed into a major plaza and banged pots and pans until the president had to flee in a helicopter.

A Stanford student commenting after the event said he is ready to take up Ms. Klein’s suggestion that Americans push the next US president (Obama is a centrist, says Klein) and work to “move the center to the left”. He will
encourage fellow activists to appeal to elected representatives to restore social services and fight claims that those services must be reduced. He agrees that it is a good idea to press MoveOn.org to return to its anti-war position and push for a real end to war, rather than a move from Iraq to Afghanistan. He will question theories, economic or otherwise, taught in classes at America’s universities.

Older activists may pick up on a different tactic in the fight against “savage capitalism” mentioned by Ms. Klein. Shirley Powers is a member of the Raging Grannies group that is active on and around the Stanford campus. Granny Shirley listened intently to Klein's speech, then said: "My pots and pans have been ready for a long time."