IRAQ: THE DAY AFTER THE MILITARY WAR, THE ECONOMIC WAR STARTED.
Iraq was destroyed.
We better remember: this is what would happen to the USA should it give full power to a group of oligarchs blinded by an all mighty and its priests: the new economists. If Leo Strauss had given intellectual permission to invade Iraq, it was that other University of Chicago professor, Friedman […] who offered the manual on rebuilding a country secured by American troops. It was the consecration of the most ideological wing of the Bush administration. ?
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Let’s go back a decade or so before the Irak war, when a group of academics presented to the world a new model of governance.? This was not just another little group…
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The French economist, Jacques Garello, founder of the group of New Economists, recalled in an editorial entitled "Ideas lead the world": "This maxim of Keynes accounts for the importance of the message of Milton Friedman, the one who will precisely erase the Keynesianism of the world political landscape to replace it with the ideas of freedom. With Hayek, no one will have contributed so much to the advancement of economic science in the 20th century, no one will have had such an influence on the course of events. Many people share his opinion, including Paul Krugman who devoted a critical article to the master of the Chicago School. Friedman swung, he tells us, the pendulum from protectionism to free trade; from regulation to deregulation; from the government-mandated minimum wage to market-adjusted wages. Much more importantly, he continues, he persuaded the greats of this world that all changes in economic policy spearheaded the forces of progress and good. History reserves its judgement. After his death in 1996, when the president of the University of Chicago announced the creation of a $200 million Milton-Friedman Institute, more than a hundred professors signed a letter of protest: "Liberalism, seen by the Chicago School of Economics, has certainly not had a beneficial effect everywhere. Many believe that it had a negative impact on the entire population of the world. And Friedman received the second prize of the Dynamite Prize in Economics awarded to economists who contributed significantly to the global crisis of 2008 (Alan Greenspan received the first prize!). Everyone agrees at least on this point: he had and continues to have an immeasurable global impact. The general opinion is that Milton Friedman was brilliant, knowing how to find shocking, cookie-cutter formulas that could only seduce the power always willing to take simple advice on complex problems. Friedman was not stingy and willingly allowed himself to be quoted. But he offered the political world much more than the good slogans that enchant princes and crowds. He traveled the five continents, meeting presidents or prime ministers, drafting reform programs or quite simply inspiring concrete initiatives which changed for the better or for the worse the economic life of certain countries. This is what happened in Chile in 1975. At the invitation of a private foundation, he gave a lecture during which he declared that “the free market would destroy centralization and political control”. Enthusiastic disciples, called "Chicago Boys", trained at the Pontifical Catholic University of Chile in the framework of a partnership with the University of Chicago, applied the model of the School of Economics in three stages: economic liberalization, privatization of state companies and stabilization of inflation. Augusto Pinochet, whose power of persuasion is well known, passed the “funded pension” or the “education voucher”, thus helping insurance companies, banks and private schools to appropriate part of the public sector. Although these reforms led to a massive rise in poverty and unemployment, they were seen as a great success by the Encyclop?dia Britannica. Milton Friedman called the Chilean experience "comparable to the economic miracle of post-war Germany" - an interesting remark when one considers that this miracle occurred thanks to the interventionist ideas of Keynes on which Friedman and his school cast the anathema. This is one of the characteristics of ideologues: they have nothing to do with the principle of reality in general and the principle of contradiction in particular.
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This is no doubt why they are particularly fond of laboratories of ideas which make a clean sweep of costly habits and confused cultural values, thus allowing them to create a reality in accordance with their wishes. For the ideology that interests us, the opportunity arose almost forty years later in war-torn Iraq where power passed into the hands of the American military. The “clean slate” was almost complete: nothing remained standing, literally or figuratively. In a resounding article,
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Naomi Klein explains this experience which wanted to go back to the Marshall Plan (1) : “In a few months the post-war plan proposed by the neoconservatives was put in place: it was a question of transforming Iraq into a laboratory. If Leo Strauss had given intellectual permission to invade Iraq, it was that other University of Chicago professor, Friedman […] who offered the manual on rebuilding a country secured by American troops. It was the consecration of the most ideological wing of the Bush administration. ? In short, we wanted, interjected at the time The Economist, that Iraq, governed by the private sector, serve as a model for all the economies of the region and why not of the world. We did not look at the expense. The Bush administration advanced 20 billion dollars for the reconstruction of the country, the equivalent of two-thirds of its GNP. And Klein to continue: “All the policies were put in place that gave multinationals the green light to help them pursue their quest for profit: government reduced to its simplest expression, flexible workforce, open borders, minimum taxes […]. ? Two months before the war began, USAID [United States Agency for International Development] had begun drafting a contract with a private company that would oversee “Iraq's transition to a sustainable market economy” . The document stipulated that the company which would have the contract would seize “this unique opportunity to progress rapidly under the circumstances”…” And it was done. The diplomat Paul Bremer was appointed civilian administrator, reporting directly to the Secretary of Defense. His mission was to lead the American occupation until the country could once again be ruled by Iraqis. He accompanied US occupation troops to Iraq from May 2, 2003. He admitted that when he arrived “Baghdad was on fire, literally on fire.” “But even before the fires were completely extinguished, Bremer launched his shock therapy, forcing more difficult changes in this scorching summer than the International Monetary Fund imposed in thirty years in Latin America. […] He announced color by the immediate layoff of 500,000 state agents, most of them soldiers, but also doctors, nurses, professors, publishers and printers. Then he opened the borders wide: no customs tariffs, no inspections, no taxes. “Iraq,” Bremer declared two weeks after his arrival, “is open for business.” ?
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And a month later, he unveiled the centerpiece of his reforms. Prior to the invasion, Iraq's non-oil economy was run by some 200 state-owned companies that produced everything from cement to paper to washing machines. Bremer, Naomi Klein tells us, announced the immediate privatization of all these companies. It was, he said, shifting inefficient state enterprises into private hands. This is essential, he explained, to Iraq's economic recovery. This was the largest liquidation of state enterprises ever undertaken after that which took place in the Soviet Union. But that was only the beginning of the economic engineering seen by Bremer, as Naomi Klein explains. In September, in order to attract foreign investors to Iraq, he passed extremely generous laws for multinationals. Law 37 reduced their taxes from 40% to 15%. Law 39 gave ownership of Iraqi assets to investors in all sectors except oil and refinery. And investors could repatriate all the profits. They would have no obligation to reinvest them and they would be exempt from taxes. Law 40 stipulated that foreign banks would be welcome to open shop under the same conditions. The only laws that remained were those imposed by Saddam Hussein that limited unions and collective bargaining. ? Contracts were signed enthusiastically. A director of Procter & Gamble understood that the acquisition of the rights for his company represented a goldmine. 7-Eleven calculated that just one of its stores with a good stock could replace thirty small Iraqi stores. As for Wall Mart, he was making plans, as usual, to occupy.
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Like many social laboratories, this one ended in disaster. Money literally fell from the sky: in May 2004, a first cargo plane made the trip to the United States with 2.4 billion dollars in its holds, all in bricks of 100 dollar bills. And twenty other planes followed! And this was repeated over several years, bringing down a godsend on the markets finally freed from the unbearable constraints on their growth. The money then gravitated to the basements of one of Saddam Hussein's former palaces and military bases, and then was distributed to various US government departments and contractors in the field, all without any scrutiny. It was, according to the Los Angeles Times, “the greatest theft of funds in history.” In January 2005, an official report by the Inspector General for Iraq Reconstruction, Stuart Bowen, reported that US$9 billion earmarked for Iraqi reconstruction had disappeared in fraud, corruption and other malfeasance. They were not lost to everyone. A mentality emerged in the economic sermon to the glory of the business world: defrauding the government was seen as good business, a source to be exploited, like rivers, oceans, space. Exploitation justifies everything since it creates wealth. This probably partly explains why the resounding failure of the Iraqi economic plan did nothing to dampen the determination of those who then advised President George W. Bush, referred to in the United States as neocons, which refers to neoconservatives. supporters of totalitarian laissez-faire economics, coupled with a moral return to what they call true "values", which include a certain contempt for the authority of science and the reality principle. The Iraqi failure was not seen as proof or even as a test, and we quickly turned one of those pages of history that we never consult. Science or not, neither the Chileans nor the Iraqis had a choice in the decisions imposed on them manu militari. And we will be careful not to mention these cases when it comes to denouncing government spending. The cost of the two wars was never mentioned. The laissez-faire rule of the state In other countries, the passage from theory to practice was less brutal but sometimes just as devastating. Prepared by superbly orchestrated propaganda over decades, it took place not only democratically but with blind enthusiasm. This was the case, for example, in Iceland where a great admirer of Milton Friedman, Davíe Oddsson, who became Prime Minister in 1991, implemented a program based on his main ideas: fiscal and monetary stabilization, privatizations, strong tax reduction (taxation on corporate profits fell from 45% to 18%) and finally the liberalization of capital and currency markets, which will lead the country to bankruptcy in 2008.
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1] .???Pillaging Iraq in pursuit of a neocon utopia?? dans Harper’s Magazine, Baghdad year zero, septembre 2004.
[2] .En Juin 2004 Earl Shorris publia dans Harper’s Magazine un article intitulé ??Ignoble liars: Leo Strauss, George Bush, and the philosophy of mass deception?? qui faisait le lien entre la guerre en Irak et le philosophe Leo Strauss. Ce philosophe (1899-1973), réfugié aux états-Unis dans les années 1930, fut selon certains, l'inspirateur des politiques de Georges Bush. Au point où l'on qualifie maintenant certains néo-conservateurs de ?Leo-Cons?! Le philosophe québécois Daniel Tanguay, de l'Université d'Ottawa, est plus nuancé. On lira avec intérêt l’article qui lui est consacré dans Le Devoir https://www.ledevoir.com/culture/livres/28717/l-aire-des-idees-leo-strauss-responsable-de-la-guerre-en-irak
[3] .???????? ??If it all works out, Iraq will be a capitalist’s dream??, The Economist, 25?septembre 2003?; https://www.economist.com/node/2092719 .
[4] .????????? Naomi Klein, art. cit.