by Naomi Klein
Prior to the military coups, the Ford Foundation’s primary role in the Southern Cone had been to fund the training of academics, mostly in economics and agricultural science, working closely with the U.S. State Department.16 Frank Sutton, the deputy vice president of Ford’s international division, explained the organization’s philosophy: “You can’t have a modernizing country without a modernizing elite.”17 Although squarely within the Cold War logic of attempting to foster an alternative to revolutionary Marxism, most of Ford’s academic grants did not betray a strong right-wing bias—Latin American students were sent to a wide range of U.S. universities, and funding for graduate departments was provided to diverse Latin American universities, including large public ones with left-leaning reputations.
But there were several significant exceptions. As discussed earlier, the Ford Foundation was the primary funder of the University of Chicago’s Program of Latin American Economic Research and Training, which churned out hundreds of Latino Chicago Boys. Ford also financed a parallel program at the Catholic University in Santiago, designed to attract undergraduate economics students from neighboring countries to study under Chile’s Chicago Boys. That made the Ford Foundation, intentionally or not, the leading source of funding for the dissemination of the Chicago School ideology throughout Latin America, more significant even than the U.S. government.18
When the Chicago Boys came to power in a hail of gunfire alongside Pinochet, it did not reflect particularly well on the Ford Foundation. The Chicago Boys had been funded as part of the foundation’s mission to “improve economic institutions for the better realization of democratic goals.”19 Now the economic institutions that Ford had helped build in both Chicago and Santiago were playing a central role in the overthrow of Chile’s democracy, and its former students were in the process of applying their U.S. education in a context of shocking brutality. Making matters more complicated for the foundation, this was the second time in just a few years that its protégés had chosen a violent route to power, the first case being the Berkeley Mafia’s meteoric rise to power in Indonesia after Suharto’s bloody coup.
Ford had built the economics department at the University of Indonesia from the ground up, but when Suharto came to power, “nearly all the economists that the program produced were recruited into the government,” a Ford document notes. There was practically no one left to teach the students.20 In 1974, nationalist riots broke out in Indonesia against “foreign subversion” of the economy; the Ford Foundation became a target of popular rage—it was the foundation, many pointed out, that had trained Suharto’s economists to sell Indonesia’s oil and mineral wealth to Western multinationals.
Between the Chicago Boys in Chile and the Berkeley Mafia in Indonesia, Ford was gaining an unfortunate reputation: graduates from two of its flagship programs were now dominating the most notoriously brutal right-wing dictatorships in the world. Although Ford could not have known that the ideas in which its grads were trained would be enforced with such barbarism, uncomfortable questions were nonetheless raised about why a foundation dedicated to peace and democracy was neck-deep in authoritarianism and violence.
Whether as a result of panic, social conscience or some combination of both, the Ford Foundation dealt with its dictatorship problem the way any good business would: proactively. In the mid-seventies, Ford transformed itself from a producer of “technical expertise” for the so-called Third World to its leading funder of human rights activism. That about-face was particularly jarring in both Chile and Indonesia. After the left in those countries had been obliterated by regimes that Ford had helped shape, it was none other than Ford that funded a new generation of crusading lawyers dedicated to freeing the hundreds of thousands of political prisoners being held by those same regimes.
Given its own highly compromised history, it is hardly surprising that when Ford dived into human rights, it defined the field as narrowly as possible. The foundation strongly favored groups that framed their work as legalistic struggles for the “rule of law,” “transparency” and “good governance.” As one Ford Foundation officer put it, the organization’s attitude in Chile was, “How can we do this and not get involved in politics?”21 It wasn’t just that Ford was an inherently conservative institution, accustomed to working hand in hand, and not at cross purposes, with official U.S. foreign policy.* It was also that any serious investigation of the goals served by the repression in Chile would inevitably have led directly back to the Ford Foundation and the central role it played in indoctrinating the country’s current rulers in a fundamentalist sect of economics.
There was also the question of the foundation’s inescapable association with the Ford Motor Company, a complicated relationship, especially for activists on the ground. Today, the Ford Foundation is wholly independent of the car company and its heirs, but that was not the case in the fifties and sixties when it was funding education projects in Asia and Latin America. The foundation was started in 1936 with donations of stock from three Ford Motor executives, including Henry and Edsel Ford. As the foundation’s wealth expanded, it began to operate independently, but its divestment of Ford Motor stock was not completed until 1974, the year after the coup in Chile and several years after the coup in Indonesia, and it had Ford family members on its board until 1976.22
In the Southern Cone, the contradictions were surreal: the philanthropic legacy of the very company most intimately associated with the terror apparatus—accused of having a secret torture facility on its property and of helping to disappear its own workers—was the best, and often the only, chance of putting an end to the worst of the abuses. Through its funding of human rights campaigners, the Ford Foundation saved many lives in those years. And it deserves at least part of the credit for persuading the U.S. Congress to cut military support to Argentina and Chile, gradually forcing the juntas of the Southern Cone to scale back the most brutal of their repressive tactics. But when Ford rode to the rescue, its assistance came at a price, and that price was—consciously or not—the intellectual honesty of the human rights movement. The foundation’s decision to get involved in human rights but “not get involved in politics” created a context in which it was all but impossible to ask the question underlying the violence it was documenting: Why was it happening, in whose interests?
That omission has played a disfiguring role in the way the history of the free-market revolution has been told, largely absent any taint of the extraordinarily violent circumstances of its birth. Just as the Chicago economists had nothing to say about the torture (it had nothing to do with their areas of expertise), the human rights groups had little to say about the radical transformations taking place in the economic sphere (it was beyond their narrow legal purview).
The idea that the repression and the economics were in fact a single unified project is reflected in only one major human rights report from this period: Brasil: Nunca Mais. Significantly, it is the only truth commission report published independently of both the state and foreign foundations. It is based on the military’s court records, secretly photocopied over years by tremendously brave lawyers and Church activists while the country was still under dictatorship. After detailing some of the most horrific crimes, the authors pose that central question so studiously avoided by others: Why? They answer matter-of-factly: “Since the economic policy was extremely unpopular among the most numerous sectors of the population, it had to be implemented by force.”23
The radical economic model that took such deep root during dictatorship would prove hardier than the generals who implemented it. Long after the soldiers returned to their barracks, and Latin Americans were permitted to elect their governments once again, the Chicago School logic remained firmly entrenched.
Claudia Acuña, an Argentine journalist and educator, told me how difficult it had been in the seventies and eighties to fully grasp that violence was not the goal of the junta but only the means. “Their human rights violations were so outrageous, so incredible, that stopp
ing them of course became the priority. But while we were able to destroy the secret torture centers, what we couldn’t destroy was the economic program that the military started and continues to this day.”
In the end, as Rodolfo Walsh predicted, many more lives would be stolen by “planned misery” than by bullets. In a way, what happened in the Southern Cone of Latin America in the seventies is that it was treated as a murder scene when it was, in fact, the site of an extraordinarily violent armed robbery. “It was as if that blood, the blood of the disappeared, covered up the cost of the economic program,” Acuña told me.
The debate about whether “human rights” can ever truly be separated from politics and economics is not unique to Latin America; these are questions that surface whenever states use torture as a weapon of policy. Despite the mystique that surrounds it, and the understandable impulse to treat it as aberrant behavior beyond politics, torture is not particularly complicated or mysterious. A tool of the crudest kind of coercion, it crops up with great predictability whenever a local despot or a foreign occupier lacks the consent needed to rule: Marcos in the Philippines, the shah in Iran, Saddam in Iraq, the French in Algeria, the Israelis in the occupied territories, the U.S. in Iraq and Afghanistan. The list could stretch on and on. The widespread abuse of prisoners is a virtually foolproof indication that politicians are trying to impose a system—whether political, religious or economic—that is rejected by large numbers of the people they are ruling. Just as ecologists define ecosystems by the presence of certain “indicator species” of plants and birds, torture is an indicator species of a regime that is engaged in a deeply anti-democratic project, even if that regime happens to have come to power through elections.
As a means of extracting information during interrogations, torture is notoriously unreliable, but as a means of terrorizing and controlling populations, nothing is quite as effective. It was for this reason that, in the fifties and sixties, many Algerians grew impatient with French liberals who expressed their moral outrage over news that their soldiers were electrocuting and water-boarding liberation fighters—and yet did nothing to end the occupation that was the reason for these abuses.
In 1962, Gisèle Halimi, a French lawyer for several Algerians who had been brutally raped and tortured in prison, wrote in exasperation, “The words were the same stale clichés: ever since torture had been used in Algeria there had always been the same words, the same expression of indignation, the same signatures to public protests, the same promises. This automatic routine had not abolished one set of electrodes or water-hoses; nor had it in any remotely effective way curbed the power of those who used them.” Simone de Beauvoir, writing on the same subject, concurred: “To protest in the name of morality against ‘excesses’ or ‘abuses’ is an error which hints at active complicity. There are no ‘abuses’ or ‘excesses’ here, simply an all-pervasive system.”24
Her point was that the occupation could not be done humanely; there is no humane way to rule people against their will. There are two choices, Beauvoir wrote: accept occupation and all the methods required for its enforcement, “or else you reject, not merely certain specific practices, but the greater aim which sanctions them, and for which they are essential.” The same stark choice is available in Iraq and Israel/Palestine today, and it was the only option in the Southern Cone in the seventies. Just as there is no kind, gentle way to occupy people against their determined will, there is no peaceful way to take away from millions of citizens what they need to live with dignity—which is what the Chicago Boys were determined to do. Robbery, whether of land or a way of life, requires force or at least its credible threat; it’s why thieves carry guns, and often use them. Torture is sickening, but it is often a highly rational way to achieve a specific goal; indeed, it may be the only way to achieve those goals. Which raises the deeper question, one that so many were incapable of asking at the time in Latin America. Is neoliberalism an inherently violent ideology, and is there something about its goals that demands this cycle of brutal political cleansing, followed by human rights cleanup operations?
One of the most moving testimonies on this question comes from Sergio Tomasella, a tobacco farmer and secretary-general of Argentina’s Agrarian Leagues, who was tortured and imprisoned for five years, as were his wife and many friends and family members.* In May 1990, Tomasella took the overnight bus to Buenos Aires from the rural province of Corrientes in order to add his voice to the Argentine Tribunal against Impunity, which was hearing testimony on human rights abuses during the dictatorship. Tomasella’s testimony was different from the others. He stood before the urban audience in his farming clothes and work boots and explained that he was the casualty of a long war, one between poor peasants who wanted pieces of land to form cooperatives and the all-powerful ranchers who owned half the land in his province. “The line is continuous—those who took the land from the Indians continue to oppress us with their feudal structures.”25
He insisted that the abuse he and his fellow members of the Agrarian Leagues suffered could not be isolated from the huge economic interests served by the breaking of their bodies and destruction of their activist networks. So instead of naming the soldiers who abused him, he chose to name the corporations, both foreign and national, that profit from Argentina’s continued economic dependence. “Foreign monopolies impose crops on us, they impose chemicals that pollute our earth, impose technology and ideology. All this through the oligarchy which owns the land and controls the politics. But we must remember—the oligarchy is also controlled, by the very same monopolies, the very same Ford Motors, Monsanto, Philip Morris. It’s the structure we have to change. This is what I have come to denounce. That’s all.”
The auditorium erupted in applause. Tomasella concluded his testimony with these words: “I believe that truth and justice will eventually triumph. It will take generations. If I am to die in this fight, then so be it. But one day we will triumph. In the meantime, I know who the enemy is, and the enemy knows who I am, too.”26
The Chicago Boys’ first adventure in the seventies should have served as a warning to humanity: theirs are dangerous ideas. By failing to hold the ideology accountable for the crimes committed in its first laboratory, this subculture of unrepentant ideologues was given immunity, freed to scour the world for its next conquest. These days, we are once again living in an era of corporatist massacres, with countries suffering tremendous military violence alongside organized attempts to remake them into model “free market” economies; disappearances and torture are back with a vengeance. And once again the goals of building free markets, and the need for such brutality, are treated as entirely unrelated.
PART 3
SURVIVING DEMOCRACY
BOMBS MADE OF LAWS
An armed conflict between nations horrifies us. But the economic war is no better than an armed conflict. This is like a surgical operation. An economic war is prolonged torture. And its ravages are no less terrible than those depicted in the literature on war properly so called. We think nothing of the other because we are used to its deadly effects…. The movement against war is sound. I pray for its success. But I cannot help the gnawing fear that the movement will fail if it does not touch the root of all evil—human greed.
—M. K. Gandhi, “Non-Violence—The Greatest Force,” 1926
CHAPTER 6
SAVED BY A WAR
THATCHERISM AND ITS USEFUL ENEMIES
Sovereign is he who decides the state of emergency.
—Carl Schmitt, Nazi lawyer1
When Friedrich Hayek, patron saint of the Chicago School, returned from a visit to Chile in 1981, he was so impressed by Augusto Pinochet and the Chicago Boys that he sat down and wrote a letter to his friend Margaret Thatcher, prime minister of Britain. He urged her to use the South American country as a model for transforming Britain’s Keynesian economy. Thatcher and Pinochet would later become firm friends, with Thatcher famously visiting the aging general under house arrest in England as he
faced charges of genocide, torture and terrorism.
The British prime minister was well acquainted with what she called “the remarkable success of the Chilean economy,” describing it as “a striking example of economic reform from which we can learn many lessons.” Yet despite her admiration for Pinochet, when Hayek first suggested that she emulate his shock therapy policies, Thatcher was far from convinced. In February 1982, the prime minister bluntly explained the problem in a private letter to her intellectual guru: “I am sure you will agree that, in Britain with our democratic institutions and the need for a high degree of consent, some of the measures adopted in Chile are quite unacceptable. Our reform must be in line with our traditions and our Constitution. At times the process may seem painfully slow.”2
The bottom line was that Chicago-style shock therapy just wasn’t possible in a democracy like the U.K. Thatcher was three years into her first term, sinking in the polls and not about to guarantee a loss in the next election by doing anything as radical or unpopular as Hayek was suggesting.
For Hayek and the movement he represented, it was a disappointing assessment. The Southern Cone’s experiment had generated such spectacular profits, albeit for a small number of players, that there was tremendous appetite from increasingly global multinationals for new frontiers—and not just in developing countries but in rich ones in the West too, where states controlled even more lucrative assets that could be run as for-profit interests: phones, airlines, television airwaves, power companies. If anyone could have championed this agenda in the wealthy world, it would surely have been either Thatcher in England or the American president at the time, Ronald Reagan.
