Naomi Klein:One of the things that’s most mysterious about this moment is “Why now?” People have been fighting austerity measures and calling out abuses by the banks for a couple of years, with basically the same analysis: “We won’t pay for your crisis.” But it just didn’t seem to take off, at least in the US. There were marches and there were political projects and there were protests like Bloombergville, but they were largely ignored. There really was not anything on a mass scale, nothing that really struck a nerve. And now suddenly, this group of people in a park set off something extraordinary. So how do you account for that, having been involved in Occupy Wall Street since the beginning, but also in earlier anti-austerity actions?

Yotam Marom: Okay, so the first answer is, I have no idea, no one does. But I can offer some guesses. I think there are a few things you have to pay attention to when you see moments like these. One is conditions—unemployment, debt, foreclosure, the many other issues people are facing. Conditions are real, they’re bad, and you can’t fake them. Another sort of base for this kind of thing is the organizing people do to prepare for moments like these. We like to fantasize about these uprisings and big political moments—and we like to imagine that they erupt out of nowhere and that that’s all it takes—but those things come on the back of an enormous amount of organizing that happens every day, all over the world, in communities that are really marginalized and facing the worst attacks.

So those are the two kind of prerequisites for a moment like this to take place. And then you have to ask, What’s the third element that makes it all come together, what’s the trigger, the magic dust? Well, I’m not sure what the answer is, but I know what it feels like. It feels like something has been opened up, a kind of space nobody knew existed, and so all sorts of things that were impossible before are possible now. Something just got kind of unclogged. All sorts of people just started to see their struggles in this, started being able to identify with it, started feeling like winning is possible, there is an alternative, it doesn’t have to be this way. I think that’s the special thing here.

NK: Do you feel that there is an organic discussion happening about fundamentally changing the economic system? I mean we know that there is a strong, radical, angry critique of corruption, and of the corporate takeover of the political process. There’s a really powerful calling out happening. What’s less clear is the extent to which people are getting ready to actually build something else.

YM: Yeah, I definitely think we’re in a unique moment in the development of a movement that’s not only a protest movement against something but also an attempt to build something in its place. It is potentially a very early version of what I would call a dual-power movement, which is a movement that’s—on the one hand—trying to form the values and institutions that we want to see in a free society, while at the same time creating the space for that world by resisting and dismantling the institutions that keep us from having it. Occupation in general, as a tactic, is a really brilliant form of a dual-power struggle because the occupation is both a home where we get to practice the alternative—by practicing a participatory democracy, by having our radical libraries, by having a medical tent where anybody can get treatment, that kind of thing on a small level—and it’s also a staging ground for struggle outwards. It’s where we generate our fight against the institutions that keep us from the things that we need, against the banks as a representative of finance capitalism, against the state that protects and propels those interests.

It’s surprising and it’s really encouraging because that’s something that has been missing in a lot of struggles in the past. You usually have one or the other. You have alternative institutions, like eco-villages and food coops and so on—and then you have protest movements and other counter-institutions, like anti-war groups or labor unions. But they very rarely merge or see their struggle as shared. And we very rarely have movements that want to do both of those things, that see them as inseparable—that understand that the alternatives have to be fighting, and that fighting has to be done in a way that represents the values of the world we want to create. So I do think there’s something really radical and fundamental in that, and an enormous amount of potential.

NK: I absolutely agree that the key is in the combination of resistance and alternatives. A friend, the British eco-and arts activist John Jordan, talks about utopias and resistance being the double helix of activist DNA, and that when people drop out and just try to build their utopia and don’t engage with the systems of power, that’s when they become irrelevant and also when they are extremely vulnerable to state power and will often get smashed. And at the same time if you’re just protesting, just resisting and you don’t have those alternatives, I think that that becomes poisonous for movements.

But I’m still wondering about the question of policy—of making the leap from small-scale alternatives to the big policy changes that allow them to change the culture. A lot of people have come to the realization that the system is so busted that it really isn’t about who you get into office. But one of the ways of responding to that is to say, “Okay, we’re not going to form a political party and try to take power, but we are going to look at this system and try to identify the structural barriers to real change, and advocate for political goals that might begin to mend those structural flaws.” So that means things like the way corporations are able to fund elections and the role of corporate media and the whole issue of corporate personhood in this country. It is possible to find a few key policy fights that could conceivably create a situation where, ten years down the road, people might not feel so completely cynical about the idea of change within the political system. What do you think about that?

YM: Well, I think you’re right that we have to find ways to do that, but ways that don’t compromise what’s been so successful about this movement and this moment so far, which is that it’s so broad that so many different people can find themselves in it.

I think that within the broader movement, we do have different roles, and there is a particular role for Occupy Wall Street. I personally don’t want to have anything to do with people lobbying or running for office right now, nor do I want to focus all of my time winning small policy changes, and I don’t think that’s the role of Occupy Wall Street. But I sure as hell hope the people whose terrain that is do go and do it. I hope that they can recognize that what’s happening now is the creation of a climate where it’s possible for them to push left and win more. I’m not going to be happy with all the compromises those people have to make, and I don’t think we’re going to survive on reforms alone, but we need that too. If we want a real, meaningful social transformation, we need to win things along the way, because that’s how we provides people the foundations on top of which they can continue to struggle for the long haul, and it’s how we grow to become a critical mass that can ultimately make a fundamental break with this system.

And in the meantime, our role as Occupy Wall Street should be to dream bigger than that. I think it’s our job to look far ahead, to assert vision, to create alternatives and to intervene in the political and economic processes that govern people’s lives. We need to recognize that the institutions that govern our lives really do have power, but we don’t necessarily need to participate in them according to their rules. I think Occupy Wall Street’s role is to step in the way of those processes to prevent them from using that power, and to create openings for the alternatives we are trying to build. And then if politicians or others who consider themselves in solidarity with this movement want to go get on that, then they should use this moment to win the things that will help make us stronger in the long run, and they have a chance now to do that.

NK: You know, I’m torn about this. On one hand, OWS is so broad that a huge range of people has found a place in the tent. And there is certainly value in just having a very broad movement that is able to intervene in the political narrative at key junctures. Particularly because, looking at what is happening in Europe at the moment, I think we have to brace for the next economic shock. It’s a very big deal that when the next round of austerity measures comes down in the US, there will be a mass movement ready to say: “No way. We won’t pay—if you need money, tax the 1 percent and cut military spending, don’t cut education and food stamps.”

But we should be clear: that’s not making things better, it’s just trying to keep things from getting a whole lot worse. To make things better, there has to be a positive demand.

Look at the Chilean student protests, for instance. That’s a remarkable movement, and it’s historically hugely significant, because this is really the end of the Chilean dictatorship more than twenty years after it actually ended. Pinochet was in power for so long, and so many of his policies were locked in during the negotiated transition, that the left in Chile really did not recover until this generation of young people took to the streets. And they took to the streets sparked by austerity measures that were hitting education hard. But rather than just say, “Okay, we’re against these latest austerity cuts,” they said, “We are for free public education and we want to reverse the entire privatization agenda.” And that may seem like a narrow demand, but they were able to make it about inequality much more broadly. They did it by showing how the privatization of education in Chile, and the creation of a brutal two-tiered education system, deepened and locked in inequality, giving poor students no way out of poverty. The protests lit the country up, and now it’s not just a student movement. So that’s a completely different circumstance from OWS because it started with a demand. But it shows how, if the demand is radical enough, it can open up a much broader debate about what kind of society we want.

I think it’s more about vision than it is about demands. My worry is that there are so many groups trying to co-opt this movement, and trying to raise money off of its efforts, that the movement risks defining itself by what is not, rather by what it is or, more importantly, might become. If the movement is constantly put in a position of saying, “No, we’re not your pawn. We’re not this. We’re not that,” the danger is getting boxed into a defensive identity that was really imposed from the outside. I think some of that happened to the movement opposing corporate globalization post-Seattle, and I’d hate to see those mistakes repeated.

YM: I think you’re right about that. And you’re right about the question of demands versus vision. We don’t have demands in the way that other people want to hear them. But of course we have demands, of course we want things. When we reclaim a foreclosed home for a foreclosed-on family, or organize students to do flash mobs at the banks keeping them in debt, or environmental activists to do die-ins at banks that invest in coal, these are ways of speaking our demands in a new language of resistance. Occupy Wall Street is a really big tent that doesn’t have one voice, but that doesn’t mean all of our other groupings disappear when we enter it. There are still housing rights groups demanding an end to foreclosure, or labor unions demanding good jobs, and so on. We are trying to build a movement where individuals and groups have the autonomy to do what they need to do and pick the battles they need to pick, while being in solidarity with something much broader and far-reaching, something radical and visionary. And that’s part of the reason vision is so important, since it connects all those struggles.

But I do think we have to win things, you’re absolutely right about that. I guess the way I look at it is that we’re now about to make a transition, hopefully, from the symbolic to the real, both in the realms of creating the alternatives and fighting back. We need to reclaim homes, not just as symbols, but for people to live in them. Open the shut-down hospitals and put doctors in them. And same with the fighting: to actually disrupt business as usual, to move from protest to resistance. We’ll have an actual impact when Congress cannot pass those bills because there’s too much resistance, because there are people in the streets. We’ll have a real impact when it’s not only bank branch lobbies that we’re dancing around in but when we’ve blockaded the doors of the headquarters where they make their policies. We need to force policy-makers to re-evaluate their decisions, and we need to build power to eventually replace them altogether, not only in content but in form. If this is just about changing the narrative and it stops there, then we’re going to end up having missed an incredible opportunity to really affect people’s lives in a meaningful ways. This is not a game. A society where there are empty homes but people who don’t have homes is a fundamentally revolting thing and it’s unacceptable, can’t be allowed. You can say that for all the other things: for war, or for patriarchy, racism. We have an incredible responsibility.

NK: And nobody knows how to do what we’re trying to do. You can point to Iceland or something that happened in Argentina. But these are national struggles, somewhat on the economic periphery. No movement has ever successfully challenged hyper-mobile global capital at its source. So what we’re talking about is so new that it’s terrifying. I think people should admit that they’re terrified and that they don’t know how to do what they dream of doing, because if they don’t, then their fear—or rather our fear—will subconsciously shape our politics and you can end up in a situation where you’re saying, “No, I don’t want any structure,” or, “No, I don’t want to be making any kind of policy demands or have anything to do with politics,” when really it’s that you’re just completely scared shitless of the fact that you have no idea how to do this. So maybe if we all admit we are on unmapped territory, that fear loses some of its power.

YM: Yeah, that’s really important. We’re all just making it up. What you just said kind of reminded me of this moment that we had that was really a turning point for me. About three weeks in, sitting and talking with a bunch of people I had only just met, we were thinking about the movement and where it might be headed, and I remember this crazy moment when it hit me: “Oh, we’re winning.” It was surreal. And then that thought was immediately followed by the question: “So what do we want?” You know, we hadn’t won much, and we still haven’t, and we’re nowhere near the society we want to live in, but it was still that feeling—that the narrative was shifting, that the whole world was watching, that there was a lot of possibility before us. It was the first time that I’ve ever experienced that and I think probably the first time that a lot of people who are alive today have. And that was an incredibly empowering moment, really changed my life, but it was also an unbelievably terrifying moment, because, holy shit, that means it’s real, this is high stakes, this is no joke.

So, then, following that thread of what’s possible: all of this was impossible a few months ago. All of this was inconceivable. And I felt that very personally and I was cynical and I learned a lot from that. Turns out we know very little about what is possible. And that’s really humbling and important and it opens a lot of doors. What do you think is possible?

NK: First of all, it’s a moment of possibility like I’ve never seen because we never had as many people on our side as this moment does. I mean in the Seattle moment, we didn’t. We were marginal. We always were because we were in an economic boom. Now, the system has been breaking its own rules so defiantly that its credibility is shot. And there’s a vacuum. There’s a vacuum for other credible voices to fill that, and it’s very exciting.

Personally, I think the greatest possibility lies in bringing together the ecological crisis and the economic crisis. I see climate change as the ultimate expression of the violence of capitalism: this economic model that fetishizes greed above all else is not just making lives miserable in the short term, it is on the road to making the planet uninhabitable in the medium term. And we know, scientifically, that if we continue with business as usual, that is the future we are heading towards. I think climate change is the strongest argument we’ve ever had against corporate capitalism, as well as the strongest argument we’ve ever had for the need for alternatives to it. And the science puts us on a deadline: we need to have begun to radically reduce our emissions by the end of the decade, and that means starting now. I think that this science-based deadline has to be part of every discussion about what we’re going to do next, because we actually don’t have all the time in the world.

We should also be aware that this kind of existential urgency could be a very regressive force if the wrong people harness it. It’s easy to imagine autocrats using the climate emergency to sa, “We don’t have time for democracy or participation, we need to impose it all from the top.” Right now, the way the urgency is used within the mainstream environmental movement is to say, “This problem is so urgent that we can only ask for these compromised cap-and-trade deals, since that’s all we can hope to achieve politically.” Talking about the links between economic growth and climate change is pretty much off the table because, supposedly, we don’t have time to make those kinds of deep changes.

But that was a pre-OWS political calculation. And as you pointed out, OWS is in the business of changing what is possible. So what I’ve been saying when I speak to environmental groups is: start to imagine what would be possible if the climate movement were not out there on its own but part of a much broader political uprising fighting a greed-based economic model. Because in that context, it is practical to talk about changing this system. It’s much more practical, in fact, than pushing corrupt plans like cap-and-trade, which we know don’t stand a chance of getting us where science tells us we need to go.

I’m also excited about the fact that, over the past ten years since the peak of the so-called anti-globalization movement, a lot of work has been done that proves that economic re-localization and economic democracy are both feasible and desirable. Look at the explosion of the local food movement, of community-supported agriculture and farmers markets. Or the green co-op movement. Or community-based wind and solar energy projects. And then you have cities like Detroit, Portland or Bellingham, which are working on multiple fronts to re-localize their economies. The point is that there are living examples that we can point to now of communities that have weathered the economic crisis better than those places that are still dependent on a few large multinational corporations, and could just be leveled overnight when those corporations shut their doors. Most importantly: many of these models address both the economic and ecological crises simultaneously, creating work, rebuilding community, while lowering emissions and reducing dependence on fossil fuels.

Coming back to the idea of resistance and alternatives being the twin strands of DNA, I see a possible future where the resistance side of OWS could start to support the policies these economic alternatives need to get to the next level.

So, yeah, that’s where I see a lot of potential—both potential strength and also potential loss, lost opportunities. You?

YM: I think there is more possibility right now than I could have ever imagined. I think in the not-so-distant future, we can win a lot of things that actually improve people’s lives, we can continue to change the political landscape, and we can grow into a mass movement with the strength to propose another kind of world and also fight for it. I think we’re only in the beginning of that, and I think there is a ton of potential. And I also see that kind of possibility in the long term. I think we can win a truly free society. I think it’s totally possible to have a political and economic system that we have a genuine say in, that we democratically control, that we participate in, that is equitable and liberating, where we have autonomy for ourselves and our communities and our families, but are also in solidarity with one another. I think it’s possible, and necessary. That’s kind of the amazing thing about this moment and this movement, I guess. Right now, sitting here, I can’t even imagine the limits of possibility.

This piece first appeared in The Nation.

People are asking me where we are now – how the hell do I know? I’ve heard from several people who really are losing their retirement savings. It’s terrible, and their lives are going to change very dramatically. But our perception should be this is a rare opening.

The old order is crumbling. Politics right now is the fight of the old order, represented not just by Wall Street but other interests, to cling to their diminishing power. And up to now, they have been assisted and supported in that by both political parties and most ‘responsibles’, so called. But that, too, is changing rapidly.

So you have to now put aside the reflexive despair that people on the left usually experience, even about the election outcome and our new president, and look at it as a dynamic process that we can influence. It breaks all ideological and practical political barriers, and is a serious crisis for the nation and also the world, but is also liberating.

This is the moment when we talk about the society we want to help create, in the most ambitious terms. And I’m not being a pie-eyed optimist, I understand all the reasons why that may well fail, but this is a moment of history people rarely, rarely get, and we should try to make the most of it.

William Greider is the national affairs correspondent at The Nation and author of Secrets of the Temple, a history of the Federal Reserve

Frances Fox Piven

Like Bill, I think that there are a lot of unknowns. We aren’t quite clear about whether the government bailouts simply mean more redistribution of American wealth upward and more scapegoating of the poor for the crisis along the way – as, for example, mortgage lending to poor people is blamed for the collapse in the markets.

But I want to talk rather about the long-standing belief on the left that economic crisis, although it causes terrible things to happen, also generates new political possibilities.

Whenever we say that, we’re really thinking about the Great Depression, because it generated a lot of economic insecurity and real hardship, but that was combined with virtually a total discrediting of the economic ruling class. When the economy failed, we finally got a candidate, FDR [Franklin D Roosevelt], who railed against the economic royalists in his speeches, and then we got a Congress that hauled these people before Congressional committees and machine-gunned them with questions, and this had a huge impact on the political culture of the country.

For a big moment, maybe 10, 20 years, people were not in the grip of the ideas of the economic ruling class. Maybe something like that will happen now. The press, and Congress, have already moved away from their former idiotic worship of the Delphic statements of Alan Greenspan [ex-chairman of the Federal Reserve]. Now people are really angry about the terms of the bailout. And there was a Chicago sheriff who said he wasn’t going to evict anybody who defaulted on their mortgages. That’s what happens in this kind of crisis because who’s right, who’s wrong, the way the world is – everything is up for grabs.

So when the reigning ideas are questioned like this, deep economic reform becomes possible. Obama has brought out lots of new voters. And his election has got to be only the beginning of the period of transformation, not the end. In the New Deal, if that’s our model, it wasn’t FDR winning in 1932 that led to significant economic social and political change in the country; it was that FDR and his rhetoric – rhetoric designed to win elections – gave people a sense that they mattered, that they had influence, that they had hope. He created a climate which helped to encourage the great social movements of the 1930s: the movements of the unemployed, the farmers, the aged, and especially, of course, the labour movement. Those movements created a lot of social disorder, but also a lot of instability in the electoral system. And because they did, FDR responded to their demands.

Bill Greider said we should talk big, we should think big, we should think about how to reorganise the economy, we should think about the end of empire perhaps. I agree, but I don’t think we should overlook the more homely reforms that people will respond to. We don’t want a national health system that gives everything to the providers; we want to reign in the providers in our national health care system. We want good income support systems, a decent retirement system, and we want to regulate the unregulated economy.

In other words, if we really are in the middle of a new period of possibility, we should also be willing, not only to think big, but to take it one step at a time, building the institutional arrangements that empower ordinary people, and stand as levees, restraining the next episode of market plunder if it comes.

Frances Fox Piven is the author of The Breaking of the American Social Compact and Why Americans Still Don’t Vote

Doug Henwood

People say the credit crunch is not their problem; but it is ours, too. Some people say ‘let it all fall down’. I say that’s not politics, that’s nihilism. There is a temptation to echo what Edmund Wilson said after the 1929 crash: ‘one couldn’t help being exhilarated at the sudden, unexpected collapse of that stupid, gigantic fraud’. But the unemployment rate hit 25 per cent in 1933, and I don’t think we want to see a re-run of that.

But we can make the situation better.

First of all, equity infusions: the government should buy stock in the banks rather than asset purchases. There is a study by some IMF [International Monetary Fund] economists that looked at scores of banking crises around the world and they found that equity infusions, recapitalising the banks, is a much more effective way of dealing with this than buying bad assets and trying to sell them.

Next, financing it. Yes, it’s a giveaway to the bankers, but there is plenty of money at the top of society. The top 10 per cent of the population has 45 per cent of the income, the top 1 per cent about 16 per cent. The top 1 per cent has about $2 trillion in income – and we don’t have to take it all at once, but we can take bits of it over the course of several years…

Debt relief. The IMF study also showed that debt relief is an important part of getting out of any kind of financial crisis, so this is an instance in which economic efficiency and social justice coincide. So that is an important demand to make.

Re-regulate the financial system. The financial system is so sprawling, and complicated, global, and interconnected that it is a project that is going to take a long time, but has to be done so we don’t have a rerun of this nonsense five or ten years down the road.

If we are going to nationalise the banks, why not control them as well, and not just give them a blank cheque to run things as they were? There is an ideological opening; with the state getting so explicitly involved in rescuing the mess that finance brought on itself and us, there is an opportunity to push things in a better direction. Out of the wreckage we could create all kinds of new economic development institutions – non-profit, co-operative, locally owned. We can create institutions that provide low-cost financial services for people who are being fleeced at the moment.

And finally, just a few words on the politics at the moment. People are talking about the end of neoliberalism. Maybe so, though I see a lot more continuity between neoliberalism and the 400 years of capitalism that went before it than some people do. But that aside, there is an idea, popular among the left, right, and centre, that neoliberalism means that the state got out of the economy. The state never got out of the economy; markets are not the state of nature, they need to be established and maintained by state power. The nature of that state and what it does is what matters.

Doug Henwood’s books include Wall Street and After the New Economy. He is working on a study of the current American ruling class

Arun Gupta

I’m going to start with my conclusions first. I agree with Doug on nearly everything, though I think governments have got out of the markets. Their role is now only a supporting role, funnelling wealth to corporations – the crony capitalism that has run rampant.

Now we are in a severe economic crisis that requires dramatic action. It’s gone from the US to global and from the financial sector to the rest of the economy. The only institutions that can do anything about it are governmental, and there has to be global concerted action. Our role is to make sure that whatever the policies enacted, they are democratic, transparent, and accountable.

This failure and the need for systemic government interventions mean that our work is largely done on an ideological level in terms of arguing for the necessity of, for example, something like a green New Deal, or single-payer national health care, which are two proposals you hear a lot. That’s because it’s hard to argue against it when you have this massive intervention in the economy. This crisis might also end up doing what the anti-war movement hasn’t been able to do – bring about an end to the Iraq war.

But without a mass-based dynamic opposition with a clear vision, agenda and strategy, the neoliberal model will just reassert itself. And it is already reasserting itself. We see the US reportedly turning to the IMF for consultation, and Iceland going hat in hand to the IMF for a loan, and what they’ll get in return is a severe austerity program.

What we need is a poly-culture economy. Without it we’ll be vulnerable to other global contagions, and without diverse economic structures, whatever regulatory frameworks are put in place will just be undermined and overturned down the road. There is a huge opening for the left and anti-capitalists. I don’t think it’s that hard to come up with detailed programmatic proposals. What is much more difficult – and this is something we must tackle because the left does not like to think about it – is organisation and ideology.

I’ve been in a lot of meetings and discussions in the last few weeks around organising against the Wall Street bailout plan, and it comes up time and again. People don’t want to confront the need for organisation and the need to have a clear ideology because once you do it leads to political battles. But without it we can’t say who the agent of change is, and we don’t have anything to organise around.

Arun Gupta is the editor of the Indypendent, the newspaper of New York City’s Indymedia centre, and is currently writing a book about the decline of the American empire

Naomi Klein

One thing Arun didn’t talk about is the fact that he was the person who sent the email that led to the great protest on Wall Street – the email that made news all over before the protest even happened. Some of the signs at that demonstration, I think, give us an indication of where we might take this. My favourite was one which said ‘No socialism for the rich until the rest of us get some!’

As Doug said, crises are not new, and we may be in uncharted territory but we have experienced these bursting bubbles before. I have a chapter in The Shock Doctrine about the Asian financial crisis of 1997-98 called ‘Let it Burn’, because the very same banks that have been so anxious to get bailouts from US taxpayers now, at the time were saying, and this was a quote, that ‘what Asia needs is more pain’. Because, of course, Citibank, Goldman, Morgan Stanley, went into Asia after the crisis reached bottom and bought up the crown jewels of the Asian ‘tiger’ economies.

Anyway, what I wanted to quote to you from the book is something Alan Greenspan said at the time. He said that what he thought was being witnessed with the Asian financial crisis was ‘a very dramatic event towards a consensus of the type of market system which we have [in America]‘. In other words, Greenspan thought that the crisis was a lesson being taught to the Asian tigers for daring to protect their national industry. And, of course, the IMF imposed structural adjustment programmes which forced them to lower those barriers – which allowed the very Wall Street firms at the centre of this crisis to go in and engage in what the New York Times Magazine at the time called ‘the world’s biggest going out of business sale’.

Michel Camdessus, the head of the IMF at the time, agreed. He saw the crisis as Asia being reborn into American-style free markets. He said economic models are not eternal: very sanguine! There are times when they are useful and other times when they become outdated and must be abandoned. Once again, he saw it as a lesson.

And I think what’s interesting about that is that maybe it’s time for progressives to think of themselves as a sort of people’s IMF, though in more democratic terms, as we now really have evidence that this market model is broken. And clearly what is needed is some dramatic structural adjustment in the USA. So let’s play IMF.

Again in Argentina in 2001 the IMF tried to use the economic crisis to push through more structural adjustment, but the problem was that just a few months earlier they had been holding up Argentina as their model student – and they had already privatised everything. Also, the country itself had been very much indoctrinated in the idea that they were the model student, that they had followed the rules. And so it was much harder to sell the idea that you needed more neoliberal structural adjustment, and instead what you had was a popular revolt – and I think this is really important in this moment – against the entire expert class.

The slogan which was in the streets is a really good slogan for this moment: ‘Que se vayan todos’ – all of them must go. This was the period where they went through five presidents in three weeks, but it wasn’t just the politicians who went, it was the pundits, the economists, and because they had boasted so much about the miracle of Argentina, they found themselves bereft of the usual tools. Now, I think the United States in this moment is experiencing something a little bit similar in the sense that there is this consensus, and Obama has turned his election campaign into a kind of referendum on Friedmanite economic policies. Whether or not he is actually going to do it I think depends very much on the forces that we’re talking about in this room.

I want to talk about some short-term structural adjustment – the kind of pressure that can be placed on Obama right now.

Bob Rubin, Larry Summers – recently implicated in a fantastic piece in the New York Times, which I never thought I would read, questioning the Greenspan legacy, and pairing Rubin with Greenspan at every turn in creating the crisis we have now – have got to go, this is really crucial. I’m not just trying to make a popular point here, these guys are advising Obama on a day-to-day basis. When he wants to say that he has great people surrounding him, he talks about Bob Rubin.

And then, of course, we need to make the best of a bad situation: this terrible piece of legislation [the bank bailout]. But as Doug said, there is room to be arguing for equity instead of the buying of billions of dollars of this terrible debt. One of the things that’s incredible that’s happening now is they’re handing out no-bid contracts to the very companies that created this mess.

I’ve been writing about the expanding economy, going from Iraq to Hurricane Katrina, just feeding off the next disaster – well, the next frontier of disaster capitalism is cleaning up after capitalism. It’s a $700 billion industry, and expanding.

We know that this crisis is being transferred from Wall Street to Washington, and that all of these bad debts that are now on the public books are going to be used by the right to argue that the next president can’t afford to keep their campaign promises. Think of this as Republican insurance against an Obama presidency.

Everything he’s saying ‘Yes, we can’ to, they say ‘No, you can’t’. You can’t because we just dumped this huge crisis on your lap, and Obama is already capitulating – huge surprise. He’s already said, well, maybe I can afford some things like green energy and so on, but we’ll have to phase them in.

Here’s a big idea: I’ve been calling for the nationalisation of Exxon. Because I think if nationalisation is on the table, let’s go big – let’s not just nationalise junk, let’s nationalise the biggest corporate criminals of them all, the people who have left us with the biggest crisis that we face, which is climate change. And now we’re going to hear that we can’t afford the investments to address this crisis, to change course, that addressing climate change is a luxury we can no longer afford. This is the fight we have to win.

And, actually, we can’t nationalise them, because how would you tell the difference between a nationalised oil company and what you have right now? So we need to internationalise them: there needs to be an international trust and these huge profits won by the oil and gas industry have to be the money that we use to transform to a sustainable economy.

Naomi Klein is the author of the international best seller The Shock Doctrine: The Rise of Disaster Capitalism, which discusses the harmful policies being asserted during moments of crisis

This is an edited transcript of ‘An Offer We Can’t Refuse? Progressives Respond to the Wall Street Crisis’, an emergency discussion at the Brecht Forum, New York, held by The Nation magazine on 10 October 2008 Transcription: Carole Ludwig and Mary Livingstone
Author photographs by Marlowe Mason (marlowenyc@yahoo.com)

I was living in Buenos Aires, Argentina, and we were shooting a scene on the roof of an occupied factory when the Iraq war began. This was the root of The Shock Doctrine. The analysis of the war in Argentina and many parts of Latin America was ‘this is what happened to us’ – neoliberalism came to Latin America with blood and fire and was now being brought to the Middle East by the same means. Being there in that moment and seeing the war through a Latin American lens is what drew me to this historical look at the very real use of shocks to impose shock therapy.

There was something else, too, about watching the war from Latin America. We were there because Argentina was in the midst of a very dramatic national rejection of the Washington Consensus – the economic model that promotes the policies of privatisation, the evisceration of public services and, eventually, the remaking of the state in the interests of foreign investors. At the very moment when Argentina, this former model student of neoliberalism, was rejecting this economic model, we were seeing its imposition in Iraq by brute force.

I wrote my first column about Iraq at that time, called ‘Privatisation in disguise’. It was about how the global rejection of neoliberalism had led to the ramping up of the force that was needed to impose it. Whereas WTO, IMF and World Bank meetings still displayed the veneer of consent, suddenly the approach became ‘don’t even bother asking, just seize what you want on the battlefield of pre-emptive war’.

So, when I set out to write this book I never saw it as a change of topic. I believed that I was tracking the transition from free trade light to free trade heavy, from the arm-twisting and the quasi-peaceful imposition of this model to the overtly violent imposition of what I call ‘disaster capitalism’. This use of pre-emptive war and large-scale natural disasters to build corporate states from the rubble took place in the most anti-democratic situation you could imagine – when people were scattered, disoriented, in shock.

I thought I was going to write a book about a change, but when I looked back at the history of neoliberalism, I realised that at all of the key junctures where this ideology took its leap forward – including Chile in 1973, China in 1989, Poland in 1989, Russia in 1993, and the Asian economic crisis in 1997 and 1998 – the same logic of exploiting a moment of trauma was at work.

In the introduction to The Shock Doctrine you cite Milton Friedman’s claim that ‘only a crisis – actual or perceived – produces real change’ as the core tactical nostrum of contemporary capitalism. But many Marxists have articulated similar ideas about crises as an opportunity for change. Do you think this is also dangerous, or can crises offer the potential for positive transformation?

I think it is always dangerous, whether on the left or the right, when people say that things have to get worse before they get better. That is when the left loses its core identity of being pro-humanity and starts almost delighting in loss of life, and in pain, because that will bring about the great cataclysm. Both the left and the right have suffered from this way of thinking, but the right have been in the ascendancy for at least 35 years, so they are the ones currently capitalising on crises.

Milton Friedman’s work was shaped in opposition to Keynesianism and developmentalism rather than Marxism. More specifically, he set himself against what he perceived as the Keynesians’ successful exploitation of the crisis of the Great Depression, the market crash of 1929, which led to the imposition of the New Deal and projects like it around the world.

As far as Friedman was concerned, as he wrote in a letter to Pinochet, that is where history took its wrong turn. He contested the idea that the Great Depression was caused by deregulated markets and argued that it was caused by too much regulation of markets. He also studied how the Keynesian forces were ready with their ideas for that crisis. I think the right-wing project around the world needs to be understood as an attempt to emulate that, using extremely well funded corporate think tanks as ovens to keep ideas warm for when that crisis breaks out.

Bringing this question back to the case of Argentina is also interesting, because the collapse of the economy at the end of 2001 is what opened up space for alternatives to emerge. In fact, that is what our film The Take was about, these wonderful exciting democratic experiments that were happening in factories where, instead of allowing them to shut down, the workers were putting them back to work.

While crisis was important to the Argentinean experiment, the way of thinking of the people involved was very different to that of the shock therapists and the blank-slaters who are always dreaming of the clean sheet to start over. The people whose stories we were documenting in Argentina had a completely different idea in starting from scrap, not from scratch. It was not an ideology of erasing everything and starting over, but starting from where you are, in the rusty bits of former economic projects, and piecing them together into something new. This is more of a patchwork approach that really puts human lives and dignity at the very centre.

Some of the most exciting economic alternatives at the moment have this quality of ‘starting from scrap’, which I think emerges from learning from the past mistakes of the totalitarian left.

You mention the shift from shock therapy to shock-and-awe, but there are also attempts to soften the image of neoliberalism. Jeffrey Sachs, the economist who pioneered shock therapy, wrote his latest book on The End of Poverty. Is there any more to this than a rebranding exercise?

A lot of people are under the impression that Jeffrey Sachs has renounced his past as a shock therapist and is doing penance now. But if you read The End of Poverty more closely he continues to defend these policies, but simply says there should be a greater cushion for the people at the bottom.

The real legacy of neoliberalism is the story of the income gap. It destroyed the tools that narrowed the gap between rich and poor. The very people who opened up this violent divide might now be saying that we have to do something for the people at the very bottom, but they still have nothing to say for the people in the middle who’ve lost everything.

This is really just a charity model. Jeffrey Sachs says he defines poverty as those whose lives are at risk, the people living on a dollar a day, the same people discussed in the Millennium Development Goals. Of course that needs to be addressed, but let us be clear that we’re talking here about noblesse oblige, that’s all.

Do the tools exist for reconstructing a more just society exist?

Many of them do, and we see how deliberately they’re attacked in these moments of disorientation. Look at what has happened to New Orleans in the years since Katrina struck. The city was turned into a laboratory for these right-wing, corporate-funded think-tanks. I start The Shock Doctrine by discussing an op-ed written by Milton Friedman, written three months after the levees broke in New Orleans, in which he calls for the privatisation of the city’s schools. Well, this has really happened – following a particular form of privatisation that is favoured in the US called ‘charter schools’.

Two years after Katrina, the subsidised housing projects that allowed low-income people to live in downtown New Orleans rather than be exiled to the margins are the ones slated for demolition to be turned into condos. The original idea behind the city’s largest public health facilities, like the Charity Hospital, was also one of closing the gap, although they had been allowed to decay for decades.

These are the bridges, and it is the bridges that get bombed first by this ideology – the public housing, the public health facilities, the public schools. The central message of my book is that we’ve been told that our ideas have been tried and failed but, in fact, it is the opposite. Our ideas work, but they cost. They are very good for economic growth but they really eat into super-profit, and that is why there has been such an aggressive attempt to paint them as failures.

It sounds as though you’re also talking about the degradation and closure of public spaces, but this can go wider than using traumatic events. Take the example of the preparations for the Olympics. It is not a ‘shock’, but the mega-event of the Games ends up being used to displace communities and gentrify whole neighbourhoods.

That’s a good point, and it fits into the idea of states of exception. Leszek Balcerowicz, the former finance minister who worked with Jeffrey Sachs to impose shock therapy in Poland in 1989, said that the ideology advances in moments of extraordinary politics. He listed these moments of extraordinary politics as ends of war and moments of extreme political transition. But you are absolutely right that even Games can play that role, because they are moments of exception when our cities are no longer our cities, when other rules apply. We are going through that same thing now in Vancouver in preparation for the 2010 Winter Olympics. It is interesting because there are two states of exception that are really transforming that city. One is the increasing Canadian involvement in the war in Afghanistan and the other is the Winter Olympics. It is games and guns.

What opportunities for hope do you see in today’s world?

The project kind of came full circle. It began in Argentina on the roof of an occupied factory. I looked back at these moments of extraordinary politics, when the dream of a real alternative emerges, a non-New Labour third way between totalitarian communism and savage capitalism. Looking back at those junctures, the dream that has come up again and again is this idea of cooperatives.

This idea of co-operatives did not fail – it was never tried. Solidarity never got a chance to enact its real economic programme in Poland before those dreams were betrayed with shock therapy. In Russia there was a very clear choice not to democratically remake the economy, despite the fact that 67 per cent of Russians stated that their preferred means of privatising state companies was to hand them over to the workers as workers’ cooperatives.

I find it tremendously hopeful to realise that these ideas that we have been told are impractical did not fail. The notion that our ideas are already discredited is the major source of weakness on the left. It is what makes us tentative in key moments. Pulling these lost worlds out of the narrative of our last 35 years shows that what the vast majority of people wanted in South Africa, Poland, Russia and China did not fail, but was crushed. It was crushed by military tanks and crushed by think tanks.

Knowing how shock works can help you to steal yourself against it. Once prisoners understand how shock works as an interrogation technique they can resist these methods. I think the same is true on a mass scale. Societies that have learned from their past traumas – and many Latin American societies fit into that category – are more shock resistant, and its harder to exploit them in moments of trauma.

What we witnessed in Argentina – with the collapse of its economy and citizens suddenly being locked out of their banks – was as traumatic for Argentineans as the Great Depression. The president declared a state of siege on 19 December 2001, saying ‘everybody stay in your homes, the country is under threat, trust me’. The people poured out of their homes with pots and pans and overthrew him. If you ask everyone there why, they tell you that this had happened to them before and they weren’t going to let it happen again.

Meaning: we know how shock works and we were not going to return to a state of fearful regressed acceptance of people in positions of authority. I draw my hope from that example.

The Shock Doctrine: The Rise of Disaster Capitalism is published by Penguin, price £25