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The Chicago boys' economy - consequences
The philosophy of the Chicago school, Mont Pelerin society etc claims that letting the pure, unfettered, global markets work without interference will entail prosperity, happiness, freedom and peace.
They claim to be freedom fighters. 'Freedom' in this philosophy is in reality the liberty for ordinary people to increase their debt and for multinational companies, big multinational brands and chain stores to wipe out local brands and small family stores, replacing them with global brands and megastores.

The rule is to maximise and privatise profits without taking responsibility for 'external' costs.
It is therefore important to convey the impression that there are no or very low environmental and social costs.
The main unspoken rule is the bottom line or 3MBAM = Make More Money By Any Means coupled with the imperative: Maximum freedom for the super-rich!

These companies as a general rule do not calculate the costs they impose on society.
Income that should have covered past and current costs of pollution damage, dismantling of condemned buildings, social costs, sickness, injuries and deaths and a fund to meet future such costs, is instead defined as profit and distributed to shareowners and others of the global elite of finance acrobats.
Instead of taking responsibility, they prefer investing in an army of lawyers especially trained to meet compensation demands with counter lawsuits.

As a matter of fact, many of these companies would never be able to show any real profits at all if they were to cover the costs they impose on third parties.
They steal natural and social capital from us all, and display their booty as 'profit'.
An example is BP and the gulf oil spills in 2010. BP does not operate more recklessly than any of the other operators.
All these companies are equally reckless, and speculate in that they are too big to be brought to book.
They all follow the neoliberal rules of maximising and internalising profits while minimising and externalising costs.
Health, environment and safety issues are always second or third priority, and are externalised as much as possible.
Externalisation of costs means that third parties (you) are asked to pick up the bill.



Littered beach, Bali. Photo: Lawrence Hislop
The Chicago boys have no good answer to the 'Pareto 80-20-rule' for wealth distribution, except their usual mantra of letting the free market rules work.
They have even less answers to the fact that the Pareto rule is a fallacy, as it is far too optimistic.
The reality is that less than 10% of 'the adults worldwide own 85% of global wealth, while less than 1% of the human population owns 40% of all resources, and their wealth keeps increasing to the detriment of ordinary people despite the claims of the Chicago school.


Multinational companies tend to build advanced systems for avoiding taxes.
"Every year crime, corruption, and tax evasion drain $1 trillion out of developing countries," said GFI director Raymond Baker, citing figures from GFI's 2008 report,

This report builds on the analysis put forward in our "Illicit Flows" report by more closely examining one particular form of financial outflow - trade mispricing - and showing how it removes money from a developing economy, in this case by depriving the government of tax revenue."


ENRON
The typical, maybe unintentional, 'child' of the Chicago school was / is ENRON.
See: ENRON famous for its expertise in 'doctoring' accounts to avoid taxes; fraud and deliberately stealing from its own employees. By massive use of PR-firms and planting disinformation wherever they could, they trained American business leaders in unethical business practice and misled the American people for decades, while keeping a very close and cosy relationship with e.g. the Bush dynasty. The Milton Friedman followers - the Chicago boys - are warriors for the corporate version of globalisation, meaning unrestricted freedom for the big multinational companies and in reality 'Enrons' of all sorts.

New Orleans and hurricane Katrina
The Chicago school followers believe in making clean slates and starting things from the bottom. They realise that the only way you can make people accept e.g. privatised education, police, social and health services is by force: either having a war or create situations similar to war, or take advantage of natural disasters to impose their 'shock doctrine'. Democracy does not function in this context. The Pinochet murder-, disappearance and torture way of doing things is a model to others.
The Chicago boys therefore in reality are not interested in investing in and maintaining public infrastructure like solid bridges, solid dikes and other flood protection devices, and will lobby for spending public money elsewhere.


Their policy of exploiting crisis and disaster succeeded well in e.g. New Orleans, where the dikes protecting the city against floods were not adequately maintained, and hurricane Katrina as a consequence had 'free access' to the city and its people. Public services miserably failed, while private, for-profit companies, such as Bechtel and Blackwater with their lethal forces 'assisted' the population accept privatisation of all public services amazingly quickly, masquerading activities as aid and reconstruction. President Bush simply poured money into these kinds of corporations - there was no competition - no open tendering - just pouring money into these companies, without any concrete results demanded, no factual reports nor real accounts from the field required.



Neoconservative / neoliberal think tanks
The Chicago School doctrine was in particular supported by Presidents Reagan and Bush, Henry Kissinger, Maggie Thatcher, the 'neo-'liberal' think tanks, like Heritage, Cato, Heartland, Marshal institutes, the leaders of Enron and similar entities. Their policies have undoubtedly opened up for lots of good businesses, but also, and maybe even more so, facilitated corruption, organised crime and crony capitalism world wide.
The Tea Party activists - a new force in American politics - is depicted as a grassroots movement, but is in fact financed and manipulated by extreme right billionaires like David Koch and media moguls like Robert Murdoch.


The mafia and trade in garbage and toxic waste
The American mafia surged under the Bush period, and is closely connected to the Cosa Nostra in Italy, the Bulgarian and the Balkan mafias. Whoever actively opposes or competes with them, risk assassination by professional hit men brought in from e.g. Italy. The assassins fly out the same day they kill somebody, and American police has great difficulties in tracing them back to Palermo, Belgrade and Napoli. (See the movies 'The Godfather' and 'Sopranos')

The mafia, among other trades, specialise in the handling of garbage and toxic waste worldwide. They have no hesitation in e.g. driving tank trucks with tonnes of liquid toxic chemicals into dirt roads on the American farmland areas in the mid west and conveniently see to it that the tankers suddenly leak. They even drive entire tank trucks into marshlands and swamps and sink them there to avoid investigation. This is well documented, but as usual, it is very hard and dangerous to investigate and prove anything with organised crime. Witnesses and investigators tend to vanish mysteriously.



The coup in Chile 9/11 1973
It was the Chicago School that with the backing of Henry Kissinger and President Nixon helped organise the military coup in Chile 9/11 1973 through CIA and with the aid of coup leader Colonel Agosto Pinochet. Ever since, big multinational companies have had free access to Chile's free market.


The Argentina junta oppressed their own people, made 30 000 people simply disappear, were ardent followers of the Chicago school, and were advised by Henry Kissinger and the Chicago School.


Russia
Argentina was regarded as a Chicago boys' success story for several years (Naomi Klein, 2007: The shock doctrine, Penguin).
Two years after stopping a Communist Party coup in Moscow, Boris Yeltsin in 1993 staged a coup against the Russian parliament himself, and as a result gave free reigns to the notorious 'Oligarchs' of Russia, now more or less controlled by the former head of KGB/Russian mafia, Putin, also one of the major oil dealers of the world.


China
In the 1980's Milton Friedman had long talks with prime minister Deng Xiao Ping. Deng introduced the Chicago style capitalism, but without democracy (Also called 'Market Leninism').
Protests against this policy ended in the Tiananmen Square massacre, Beijing, in 1989.
Since then, there has been an amazing economic growth, and undoubtedly many millions of people have improved their standard of living.

BUT: The price tag is heavy:
The Chinese environment has suffered badly, and the 'Princelings' have also thrived, amassing multimillions of dollars, severely polluting huge areas of land, allowing anything from selling poisonous baby formula to hopelessly inappropriate building materials in earthquake prone areas, encouraging authorities to torture or kill anyone who protests.Whether the wealth will ever reach the broad masses of the Chinese population is an open question. Maybe the reality is that while 250 million people undoubtedly have increased their consumption rates, and have accumulated capital, 400 million people have paid the heavy price through the loss of livelihood when their farms have been polluted or lost its water supply, when poisonous air and water have made them refugees in their own country. There are more than 200 million 'vagrant workers' desperately seeking jobs, other hundreds of millions toil in slave-like jobs, while others simply have fallen into destituion, since their traditional land has lost its ability to produce, or has been stolen by ruthless princelings. In the chinese system, ordinary people who leave their home area will lose their social rights. The Chinese communist party knows full well that their market-leninism politics have created maybe even more poverty and utter destitution than wealth, and imposes draconian laws against human rights activist to keep the innumerable protests and revolts under control.
The corruption is so rampant, and the pollution and depletion of productive land and natural resources so severe that China might never be able to reach the superpower status it strives for.


"In 1979, Deng Xiao Ping started market reforms in China, which over the quarter century lifted hundreds of millions of people out of poverty. In the same year, Margaret Thatcher was elected Prime Minister in Britain, and initiated her radical reforms and a long period of growth. A year later, Ronald Reagan was elected President of the United States and also embraced free market policies. All three of these leaders professed inspiration from the work of Milton Friedman " A. Schleifer, professor

No doubt neo-liberalism without democracy has changed China - for the better for a few - but for grief for at least as many.

Chinese dream - posters in Shenyang, Manchuria. Photo: Åke Bjørke
In Chile and Latin America the 'Piranhas' are making ethical business problematic.

Pioneers
In the US the Bush-Cheney groups established the 'Pioneers'. The Pioneers and similar groups in America have grasped the opportunities that the 9/11 attacks gave them with both hands to privatise as many public services as possible.


Kosovo
In Kosovo, since 1999, after the NATO takeover, the only really well functioning organisations are the mafia, smuggling weapons, women and drugs to Europe; and private 'aid' for profit organisations like Bechtel and Blackwater. The same story we see in Iraq, but much worse.

Iceland
In the recent financial crisis, Iceland was one of the countries that experienced what unfettered capitalism means: In order to get loans from the International Monetary Fund (IMF), (dominated by 'Chicago boys economists') the ordinary people of Iceland have to pay the debts that the richest people accumulated.

Those who staged the 'casino capitalism' in Iceland, could just resign and strangely enough seem to have kept their mega profits. The state has to sell off public companies cheaply, and privatise. Deep cuts in social spending and opening up for multinational companies are the new rules. The result: a severely reduced middle class, a few megarich, the vast majority impoverished and indebted, while multinational corporations take home the big profits. All in line with the Chicago school philosophy. Iceland and Icesave

Dangerous pollution. Svetca factories, Kosovo. Photo. Åke Bjørke
The shock doctrine
When the normal social fabric (even a bad one) is dissolved by war or natural disaster, the followers of the Chicago school move in. Wherever the US military dominates, private for-profit organisations, like Halliburton, Bechtel, Blackwater, Monsanto etc tend to get the juicy contracts.

Halliburton alone made a net profit of more than USD 20 billion on the Iraq war in 2006. Strangely enough, there seems to be a consensus that everything is getting worse in Iraq, except the profits of big multinational corporations.
The Bush dynasty established the for-profit reconstruction and homeland security industry, a complex dominated by the USA, but it is global. Companies in this complex immediately move in after wars and disasters under the pretext of being aid and reconstruction organisations. They have maximum profit as a goal, and see the UN and other aid organisations as competitors.
(Naomi Klein, 2007: The shock doctrine, Penguin).

These types of companies make huge profits on 'reconstruction' and other business, and continue the Enron business practices, with cynical business methods and 'crony capitalism'. George Schultz, top politician in the Bush government, Caspar Weinberger, Donald Rumsfeld, Richard Perle, Condoleeza Rice and several other Bush aides have close ties with these companies and 'big oil'.
See Crony capitalism': Crony capitalism

Speculation in disasters?
The for-profit aid and reconstruction companies now get set for the mega-profits that the rapid increases in natural disasters caused by climate change will bring. They will continue to produce and disseminate all kinds of disinformation, false research reports and strange websites to make people believe that the coming disasters are 'acts of God' or maybe caused by aliens from outer space, and in no way influenced by human activity. These companies will do their best to prevent any mitigation of emissions of greenhouse gases and climate change, and will speculate in megaprofits that will increase with every coming war and disaster. This strange new doctrine - that economic growth no longer depends on stable societies, but actually expands with crisis - has been called the 'Davos dilemma'


Wars always lead to environmental disasters - that some companies know to profit from. Kosovo Polje. Photo: Åke Bjørke


The Chicago school is the closest humanity has ever come to a world dominating ideology and control system. The ideology, maybe unintentionally, in reality promotes a new kind of apartheid society based on personal income and the pure, free market, where each individual negotiates with giant corporative multinational companies. The system encourages the emergence of a small, megarich elite and a middle class; 15-30% of the population, living in constant fear of becoming poor. Then there is the big majority of expendable, miserable poor. The dwindling middle class lives in constant fear of the poor, and spends an increasing amount of their income on security walls, surveillance systems and biometric ID devices, all delivered by multinational Israeli-American security specialists and private security companies.

Organised crime, corruption and trafficking
Since the state is weakened, there is an increasing window of opportunity for corruption and organised crime, especially in the areas of garbage handling, security, trafficking and aid- and reconstruction. (Eva Joly: Des heroes ordinaires. Un livre d'espoir, Les arenes, 2009). Corporative globalisation may have reduced the number of inter-state conflicts. But internally, many countries seem to be heading towards a status that looks more like civil war.

This kind of society is emerging in Russia, China, Indonesia, India, large parts of Africa, as well as in North America. Parts of the EU may also be vulnerable to this development.


When problems become increasingly evident, the Chicago boys as a rule accusingly and indignantly point their fingers at the results of their own policy: illegal immigration and inefficient 'big' government conspiring against its own people. Lack of competition, meaning inviting the big international corporations, is also a favourite 'explanation'.

Other ways to challenge the neo-liberalist/neo-conservative hegemony
The American system is fairly robust, and sooner or later, the Enron style companies with associates will probably be brought to justice. The nations in the third world might face a harder struggle than the Americans. There is, however, an emerging reaction to the Chicago school and the unfettered casino-or predator capitalism of the neo-liberalists, especially in Latin America. A united, determined and persistent people fighting for human rights, ethical business, healthy environment, dignity and democracy can probably prevail in the long run.
Examples: