Naomi Klein’s “Shock Doctrine” and Tom Friedman’s “Golden Straitjacket” characterize the policies needed to globalize a country’s economy. Both policies follow similar underlying themes, yet they take entirely different positions on whether or not these policies help or harm a country’s economic development.
The chapter given on Naomi Klein’s “shock doctrine”, discusses the use of “economic shock therapy” to remodel South American economies in the 1970s. The chapter focuses on the coup in Chile led by General Augusto Pinochet and a group of Chilean economists that had been trained at the University of Chicago in the Economics department. The department had been funded by the CIA and advised by Milton Friedman. Friedman, a big believer in ultra
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Countries must strap themselves in this jacket in order to receive the “golden” benefits of free trade and capitalism. Once on, the garment causes countries’ economies to grow and politics to shrink, but also limits the economic policy and government choices of those in power. The only way to get more room to maneuver in the Golden Straitjacket is by growing it, and the only way to enlarge it is by keeping it on tighter. That is its one major trait: the tighter you wear it, the more economic success it produces and the more padding you can then put into it for your …show more content…
According to Chapter 7 in The Lexus and the Olive Tree, “the global market today is an Electronic heard of often anonymous stock, bond and currency traders and multinational investors, connected by screens and networks.” If governments deviate too far from the golden rules, it will cause the herd to stampede away. If it accepts and adopts the “golden rules”, its country is rewarded by investment capital from the international financial markets. When and if a country decides not to bear the Golden Straitjacket, the herd flees and takes all their capital with them. They are able to do this through credit-ratings agencies such as Moody’s Investors Service and Standard & Poor’s. They are investigators for the Electronic Herd that roam through the worlds economies, constantly looking over countries and identifying those that are slipping out of the
The movie Shock Doctrine revolves around the concept of the same name. The film begins by discussing psychological research on the effects of shock therapy. It is evident that a person under extreme stress and anxiety commonly experienced during a crisis functions and performs inadequately. It is noted that the studies are conducted by a man by the name of Milton Friedman, from the University of Chicago; the studies took place in the past, and some of the subjects are still recovering in the aftermath. From this research, interrogation techniques were learned and the concept of the shock doctrine was formed. Essentially through causing a crisis, the population of a country can be shocked into complying with accepting laws that favors the United States and capitalism. This theory coexists with Friedman’s belief in that government regulation is bad, and through a crisis a country would better itself with deregulation. The video uses Chile as an example and shows how America allowed a crisis to occur in Chile, through coups, interrogations and subterfuge. In the end a new government is formed that allows capitalism. Unfortunately afterwards violence and riots occur, as the rich gain most of the wealth and poverty rises. In addition to Chile, Argentina, Russia and even Iraq underwent the shock doctrine. Almost in every account, poverty rises and violence ends up erupting. The movie ends by showing how the US was in the process of the shock doctrine, and still is but the population has taken notice. Protests such as Occupy Wall Street are some of the initiatives necessary to bring awareness to the problems of class inequalities in order to prevent capitalism from benefitting the rich and increasing the wealth gap among the classes.
Argentina, which was soon to become the economic powerhouse, quickly descends into a ghost town of abandoned factories and mass unemployment. President Carlos Menem transformed Argentina by selling out every public asset he could find; he privatized factories, and created many corporate handouts. The nation approved of Menem’s changes, and Washington said “This is the best thing ever” (The Take) What the citizens didn’t realize is that by transforming the nation this way, Menem was creating a capitalist wild west. This caused more than half the people to live under the poverty line, and they were at the point where being offered food for pay was the citizen’s only option.
Before the 1960s, four thousand six hundred nine miles southeast of Texas, Chile was known as a stable country compared other Latin American countries until 1962, when the Cold War took effect on this enormous country and Chile became a part of the Alliance for Progress. The Alliance for Progress was created to keep socialistic revolutions out of Latin American countries. In the 1960s, the president of Chile, Eduardo Frei was endorsed by the Johnson administration. Frei was required to pass a radical reform but with Chile becoming more industrialized, Labor Unions requested for higher and reasonable wages. In the end, the Labor Unions were not pleased with the wages that they were receiving which, lead to inflation and higher prices for man made items and labor. With an economic change occurring, the Chilean youth adopted a Leftist view and began to protest against the government with the labor unions. Both ...
In this paper, I argue that Neoliberalism is the product of an extreme leftist movement and US intervention that Chile’s former dictator, Augusto Pinochet who ruled between the years 1973 and 1990, used to transform Chile into an economic power during the wound down of the cold war era. This essay first analyses the US’s fears of communism taking root in Latin America and the extreme measures the US took throughout Latin America in brainwashing military personnel and promoting military coups. Secondly, I will identify and discuss the tipping points resulting from the left wing going too far. And Third, I will explain the contributing factors in the process by which neoliberalism was implemented in Chile by Augusto Pinochet as a tool to achieve his national project to remake Chile into a society that would uphold his values of private entrepreneurship and economic freedom that would keep the United States and Chileans at bay.
Within the context of the 1973 military coup d’état in Chile, it is clear that the Junta, headed by Pinochet, detained people without just cause, holding them for sustained periods of time, and subjecting them to poor physical conditions, under severe psychological pressures in order to flush out potential opposition. Therefore it is quite clear that the Junta intentiona...
Naomi Klein’s No Logo states that corporations have been championing globalization using the reasons that globalization allows U.S. consumers to benefit from cheaper products produced abroad, while developing nations benefit from the economic growth stimulated by foreign investments. The generally accepted belief is that governmental policies should be established in favor of the corporations to facilitate the trickling down of corporate profits to the end consumers and workers abroad. Klein, however, contends that globalization rarely benefit the workers in the developing countries.
As Americans we have to start to comprehend that the world around us is changing technologically, politically, and economically. In “The Last Superpower” an excerpt from the book The Post American World by Fareed Zakaria published in 2008. Zakaria emphasizes on these changes. Thomas Friedman the author of “The World is Flat” a piece from the book The World is Flat: A brief history of the twenty-first century published in 2005 also emphasizes on the same changes currently happening in the world. Zakaria and Friedman define these changes as globalization. The obvious common ground shared by both authors is their representation of globalization and the effects that it has and will continue to have on modern life. In contrast to sharing the same main topic both authors take a drastically different approach on how the relay their information to the audience. The differences displayed are mainly due to their personal and educational backgrounds, definitions of globalization as well as the individual writing styles of each author.
General Augusto Pinochet gained power during a blood-filled coup during 1973 when his militaristic, authoritarian rule began. He continued to rule in a brutal regime of repression and human rights abuse until 1989 when his regime was lifted in favor of a more democratic system. Since 1990, Chile seems to be on the right track to re-establishing a once strong democracy that will continue to strengthen in the future. The three factors that have increased the likelihood of this success are the tripartite party system, institutionalization of the party system, and reduction of the ideological polarization that gripped the country. Finally, some of the elements of change were present to ensure a successful push to instate democratic principles.
.... The US state department cut international credit to Allende’s government, thus making Chile’s inflation rise into triple digits. By 1973 Chilean tanks had taken to the streets and refused Allende’s safe passage out of the country. He was eventually killed by an attack of his own armed forces. He brought this upon his self when the working class wasn’t happy with the slow rate that companies were being nationalized. This up rise had become the bloodiest up rise in the history of Latin America. Many of the supporters of the communist party had been rounded up and were tortured and killed. Many of them were put into mass graves. The military was the government for 17 years. They got rid of the legislation. This government had the US support except for the Carter administration. The actions that Chile’s military took set the tone for other Latin American militaries.
By the fall of 1981, the Argentinean government under the leadership of General Galtieri and the military junta was experiencing a significant decrease of power. Economical...
In an interview with the Peterson Institute, Rodrik claims he is trying to create “a new narrative to shape the next stage of globalization, and to address the imbalance between the national scope of governments and the global nature of markets”, in many ways, this book does just that. As previously stated, Rodrik has diagnosed a “Political Trilemma of the World Economy”. The first point is that of Hyperglobalization, which is the ambitious agenda of “economic liberalization and deep integration” (17). In other words, it is a rapid and w...
Gilpin, Robert. Global Political Economy: Understanding the International Economic Order. Princeton: Princeton University Press, 2001. Print.
As Ian Fletcher pointed out in Free Trade Doesn’t Work: What Should Replace it And Why, nations need a well-chosen balance between openness and closure toward the larger world economy (Fletc...
The world is ever changing and has been that way even before humans dominated Earth. However, what we are interested in for this topic is in the last few decades where globalization has had an impact in the early 21st century, making the world "flat". The phrase that the world has become flat is a metaphor for viewing the world level in terms of commerce and competition, meaning a level playing field where everyone has an equal opportunity. However, opinions are divided on how much globalization has actually impacted the world as a whole. Critics argue that Friedman’s term "flat" is grossly exaggerated as his view is from an American perspective. This paper investigates major arguments for both sides.
In conclusion, Dani Rodrik believes that globalization works best when it is not pushed too far. This allows domestic governments to hold on to some authority over trade alongside policy-making space. Free-market trade going unchecked through hyper globalization would present a problem because people undermine the regulations that citizens are so used to being protected by. This would lead to a problem concerning legitimacy. One solution would be to impose a set of regulations among all countries, but that would be advantageous to some and disadvantageous to others, making it an unfair solution. Creating policy-making space provides governments with some ability to keep trade legitimate as globalization expands.