[R-G] Klein & Cusack: Build a frontier, you get cowboys

[Anthony Fenton]

Build a frontier, you get cowboys
rabble.ca

In Iraq and Afghanistan, companies like Blackwater and Halliburton  
perform ever more central functions of war fighting, while at home,  
Rumsfeld and Cheney oversaw the creation of the privatized homeland  
security state.
   	  	
   	  	
 >by Naomi Klein and John Cusack
October 11, 2007

Renown actor and filmmaker John Cusack recently sat down with Naomi  
Klein, whose new book The Shock Doctrine is on bestseller lists  
around the world. Cusack and Klein discuss the implications of the  
Blackwater scandal, and the shocking extent of the privatization of  
war and occupation in Iraq.

John Cusack: The Blackwater scandal broke just as you hit the US on  
your book tour. What do you make of the coverage?

Naomi Klein: It definitely feels like a watershed moment. There is  
this collective understanding that this wasn't an accident, it was  
inevitable: give a bunch of pumped-up guys guns, and send them to a  
place where they're above the law, and they'll act like cowboys. But  
what's missing from too much of the analysis is the obvious next  
point: this is true of the entire occupation.

Give a bunch of contractors billions of dollars with no  
accountability, while simultaneously eviscerating the Iraqi state (de- 
Baathification, laying off the army, flinging open the economy with  
no regulation) and they'll gorge. Give a bunch of Heritage Foundation  
interns control of an economy with no oversight and they'll try to  
privatize everything in sight. The entire disaster in Iraq was  
utterly predictable. But what I argue in the book is that not only  
was this predictable, it was the plan. The plan wasn't to destroy  
Iraq; it was to create a market frontier. And the reason you build a  
frontier is always the same: nothing is more profitable. Adam Smith  
wrote about it in The Wealth of Nations: on the colonial frontier,  
land can be grabbed, taxes are few, and capitalism can exist in its  
purest, most profitable form. That's why the Wall Street Journal has  
been comparing Iraq to a "gold rush" from the very first  
reconstruction conferences in 2003 – any frontier is a gold rush.

So what frustrates me about the current Blackwater scandal is the  
attitude of surprise in the media and congress – surprise that these  
companies are acting like "cowboys" in a "wild west." Of course they  
are – the occupation was built to be the Wild West. For four years  
the White House systematically fought every attempt at oversight of  
the contractors, specifically granted them immunity under Iraqi law  
and made no serious attempt to monitor their activities. And it's not  
just Blackwater – think of all the tens of billions of public dollars  
allocated to reconstructing Iraq. The money has all been given away  
to contractors while Iraq is in worse shape than ever – those  
contractors are cowboys too. And that's not even including the  
roughly $9 billion of Iraq's own oil money that has gone missing.

And what's even worse than the feigned astonishment we are seeing is  
this insistence on framing everything as an individual "corruption"  
scandal. Companies are built to profit from opportunity – to do  
everything they can get away with to make as much money as possible.  
It's their legal duty. So the scandal isn't Blackwater or Halliburton  
or Exxon; it's the vision of politics we have been living with since  
Reagan that holds that the central role of government is to be the  
executive chef for this corporate feeding frenzy. In the eighties and  
nineties, that meant chopping of major limbs of the state – water,  
electricity, the airwaves – and feeding them to corporations. Today  
the process has moved into the very core of the state: armies,  
interrogation, evacuations. But rampant corruption has always been  
part of these neo-colonial privatization frenzies – think of the  
instant billionaires in Latin America's privatization wave, when  
Carlos Slim, now the third richest man in the world, made his  
fortune, or the lawless rise of the Russian oligarchs during "shock  
therapy."

What I argue in The Shock Doctrine is that privatization is the post- 
modern frontier. Essentially, what shock therapy means is selling off  
as much as possible before the law catches up, just as an earlier era  
of conquistadors grabbed land and minerals and signed treaties after  
the fact. The same goes for today: after each one of these feeding  
frenzies, the same policy makers who opened up the neo-frontier turn  
around and act surprised and scandalized that the corporations who  
they themselves have liberated are caught scamming wildly. It's only  
then that we hear the pious lectures about the need for oversight and  
rules and regulations. My question is this: how does the capacity for  
corporate greed keep coming as a surprise? The politicians who  
designed this war are all supposed to be adherents to a philosophy  
that holds that there is nothing more powerful in the world than  
greed – that it should be the governing force in as many human  
interactions as possible. Isn't that what Milton Friedman wanted?  
Iraq's occupation was organized by the Bush Administration to unleash  
that instinct with absolutely no restraint.

Either greed belongs in a war zone, or it doesn't. You can't unleash  
it in the name of sparking an economic boom and then be shocked when  
Halliburton overcharges for everything from towels to gas, when  
Parsons' sub, sub, sub-contractor builds a police academy where the  
pipes drip raw sewage on the heads of army cadets and where  
Blackwater investigates itself and finds it acted honourably. That's  
just corporations doing what they do and Iraq is a privatized war  
zone so that's what you get. Build a frontier, you get cowboys and  
robber barons.

Cusack: This notion of the frontier seems important to understanding  
the occupation. It reminds me of what Garry Wills said in his great  
book by the same name: it's John Wayne's America. And it seems that  
exploiting the frontier mythology has been key to selling what you  
call the Shock Doctrine to the public – drawing on its whole  
aesthetic, so central to the American identity. Ideas of rugged  
individualism, tribal but not collective loyalties, the freedom  
archetype – the cowboy as symbolized by Wayne, who is still seen as  
the greatest of American icons some 30 years after his death. He's a  
killer, a tamer of lands – principled and ruthless, but ultimately  
benevolent and kind. First and foremost, of course, he is a law unto  
himself. Which is exactly how the occupation has been sold – as you  
say, an attempt to build a model state in someone else's land. And  
rugged cowboy idealism was the packaging for the whole murderous and  
lawless project.

So let's talk about Paul Bremer, who single-handedly imposed many of  
the laws that are still on the books in Iraq, including the one  
giving Blackwater and other private contractors immunity from  
prosecution – in effect putting them above the law. He set the tone,  
as well as the legal structure for what's happening now, yes?

Klein: He did – but with the full support of Rumsfeld, from whom he  
was getting his orders directly, and from Bush. Blaming Bremer is  
kind of an easy out, which is probably why some of the war's  
architects have taken to scapegoating him for everything that has  
gone wrong. Richard Perle said in late 2006 that "the seminal  
mistake" was "bringing Bremer in." David Frum now says that they  
should have had "any kind of an Iraqi face" on the remaking of Iraq  
right away.

Of course none of these guys complained about it publicly during that  
whole first year of the occupation, when there was just Paul Bremer,  
holed up in Saddam's turquoise-domed Republican Palace, receiving  
trade and investment laws by email from the Department of Defense –  
usually drafted by private companies like KPMG's Bearing Point, which  
had the contract to rewrite much of Iraq's economic architecture.  
According to his own memoirs, Bremer would print out the laws, sign  
them and impose them by fiat on the Iraqi people – less the king of  
Iraq than the CEO of Iraq Inc. And he was completely in-your-face  
about it, criss-crossing the country in a Blackhawk helicopter,  
flanked by his ubiquitous Blackwater guards and always in his  
perfectly pressed Brooks Brothers suits and army boots – the uniform  
of the disaster capitalism complex.

Cusack: It's a good look. Why did Bremer go with Blackwater in the  
first place, why not be protected by U.S. Marines?

Klein: Apparently he thought he would be safer with a private  
company, and he may well have been right. Because unlike soldiers,  
Blackwater has never had to worry about a broader mission of securing  
Iraq. The company's job with Bremer was just to bodyguard the CEO –  
which has a brutal simplicity to it.

And Bremer and Blackwater made the perfect match. Blackwater's  
mission was to protect Paul Bremer at all costs – “protect the  
principal." Bremer was protecting a principal too, his principal was  
the disastrous and ultimately failed project of forcibly transforming  
Iraq into a "model free-market," which was code for a wild-west  
utopia for western multinationals.

Cusack: But Bremer wasn't just a rogue, or an errand boy. That would  
be too convenient, as you say. He played a more significant  
historical role than that, trying to implement the broader vision of  
privatized government, pioneered by Milton Friedman and taken to its  
apotheosis by his acolyte Donald Rumsfeld... with the full approval  
and blessings of the entire Bush administration and the other  
intellectual architects of this disastrous war. Even within that  
context, however, Rumsfeld was quite the visionary.

Klein: Yeah, in the sixties, Rumsfeld used to attend seminars at the  
University of Chicago, and he described Milton Friedman and his  
colleagues as "a cluster of geniuses," while he and other "young  
pups" would "come in and learn at their feet." I think Rumsfeld's  
pedigree as a corporatist ideologue has really been lost in the focus  
on his military failures. Especially because even if he was a flop as  
a military strategist, from a business perspective, he was remarkably  
successful – he oversaw the creation of a booming new economy in  
disaster.

We forget that he was very open about this goal when he took office,  
Fortune magazine ran an article at the time titled "Mr. CEO Goes to  
Washington" all about how he was going to bring a corporate-style  
downsizing and outsourcing revolution to the Pentagon. And of course  
Rumsfeld himself is a quintessential disaster capitalist – he was  
chair of the board of Gilead Sciences, a drug company that owns the  
patent on Tamiflu, which is the treatment for Avian Flu. With every  
pandemic scare, Gilead's stock rises. So Rumsfeld, who held on to his  
Gilead stocks throughout his term in office – watching their value  
soar as he recused himself from every meeting about drug supplies for  
flu pandemics – knows all about this booming market.

More importantly, Rumsfeld was coming out of the private sector at a  
time when it was very trendy for corporations to unburden themselves  
of factories and full-time workers and focus exclusively on marketing  
and design – the so-called Nike model. And that's pretty much what he  
did when he took over at the Pentagon: he downsized the full-time  
troops to the bare minimum and outsourced and contracted-out  
everything in sight. That freed his hand to focus on the military  
equivalent of marketing – the shock and awe projection of U.S. power  
to the world.

And the outsourcing orgy he sparked keeps blowing up in the face of  
the administration: in Iraq and Afghanistan, companies like  
Blackwater and Halliburton perform ever more central functions of war  
fighting, while at home, Rumsfeld and Cheney oversaw the creation of  
the privatized homeland security state. The first stage was to give  
themselves special powers to detain, spy and authorize torture; the  
second stage was to outsource the performing of these functions to  
private companies. We only catch glimpses of this through scandal –  
like the private contractors exposed during the Abu Ghraib  
controversy. Or remember the debacle about the conditions at Walter  
Reed? That was because the hospital's management was in the midst of  
being outsourced.

The stats on this new disaster economy are incredible:  
Counterintelligence Field Activity, a new intelligence agency created  
under Rumsfeld that is independent of the CIA, outsources 70 percent  
of its budget to private contractors. In 2003, the U.S. government  
handed out 3,512 contracts to companies to perform security  
functions; in the twenty-two-month period ending in August 2006, the  
Department of Homeland Security had issued more than 115,000 such  
contracts. The global "homeland security industry" - economically  
insignificant before 2001 – is now a $200 billion sector, bigger than  
Hollywood or the music industry. And the private companies performing  
these functions are a kind of shadow state, with extraordinary power  
and very little oversight, since the details of most of these  
contracts are completely obscured under the blanket of "classified"  
intelligence. In other words, extraordinarily sensitive state  
functions are being privatized – but we can't know about it because  
they are too sensitive.

Cusack: That's always the Catch-22. On Blackwater, I would make the  
case that these privatized modern-day Hessians are illegal, and in  
every way an affront to the very idea of this country – operating  
completely outside the checks and balances of the constitutional  
structure of the Republic. I mean, if privatizing homeland security  
and letting mercenaries go totally unregulated in Iraq is ok – with  
no possible chance of the hired guns being prosecuted by state,  
federal or international law aren't we sanctioning roving corporate  
armies? Where does it end? This is really deeply down the rabbit  
hole. And the sickest part, in a weird way, is that this  
privatization revolution is not even a free market, it's entirely  
corporate welfare – corporations taking our tax dollars to fund their  
private illegal armies.

Klein: Most people, when they learn about it, completely agree that  
what is going on is insane and surreal. Where this fits in with the  
thesis of my book is that the Disaster Capitalism Complex was  
launched without public debate - the startup phase was after the  
extraordinary shock and disorientation of 9/11, and it was taken to  
market under the cover of crisis management in Iraq. It's why I am  
obsessed with disasters. They enable these leaps forward for  
corporate rule, precisely because debate is supposedly impossible  
during a state of emergency. So Rumsfeld's radical corporate  
downsizing and outsourcing of the military was never openly discussed  
while it was happening. Instead, we heard a lot about troop levels  
for the war and occupation – it was basically reported as a numbers  
game, and as a power struggle between Rumsfeld and the generals or  
Rumsfeld and Powell, when something much more profound was going on:  
the birth of a new economy.

In retrospect we can see that Rumsfeld's "mistakes" were extremely  
profitable for a small group of crony capitalists, and continue to  
be. It began when Rumsfeld rejected all solutions that required  
increasing the size of the army in Iraq. That meant the military had  
to find other ways to get more soldiers into combat roles. So private  
security companies flooded into Iraq to perform functions that had  
previously been done by soldiers -- security for diplomats and other  
officials, guarding bases, escorting other contractors. Once they  
were there, their roles expanded further in response to the chaos. As  
Jeremy Scahill argues in his excellent book, Blackwater: The Rise of  
the World's Most Powerful Mercenary Army, the company's original  
contract in Iraq was to provide private security for Bremer, but a  
year into the occupation, it was engaging in all-out street combat.  
During the April 2004 uprising of Moqtada al-Sadr's movement in  
Najaf, Blackwater actually assumed command over active-duty U.S.  
marines in a daylong battle with the Mahdi Army, during which dozens  
of Iraqis were killed.

In the book, I call this "corporate mission creep" and the numbers  
tell the story. At the start of the occupation of Iraq, there was one  
contractor for every ten soldiers – already far more than during the  
first Gulf War. Today, private contractors outnumber U.S. soldiers,  
making this the most privatized war in modern history. Once again, a  
sea change that was never debated – it just happened. The worse  
things get in Iraq, the more the market in private warfare expands  
into new territory.

These days, everyone is beating up on Blackwater. But at the time  
this new economy was being built, the press treated the corporate  
mission creep as absolutely normal, unworthy of serious examination  
except in extreme cases when a contractor was caught stealing. The  
financial press, of course, was raving about the so-called "Baghdad  
boom" in private security, urging investors to get a piece of the  
action.

Before the current scandal, Blackwater had been working incredibly  
hard to present itself as a kind of friendly, McMercenary company,  
with nothing to be ashamed of, just patriotic soldiers out to fight  
terrorism. They have hired aggressive Washington lobbyists to erase  
the word "mercenary" from the public vocabulary, launched a line of  
Blackwater fashions, and Erik Prince likes to compare what he is  
doing to the military to what FedEx did to the post office.

Cusack: See now that's not a joke – the man actually said that. The  
man actually compared running a for-profit occupation to delivering  
the mail. And there is no function of the state that they don't want  
to turn into a business, is there?

Klein: I think the short answer is no. Not once you've already opened  
up prisoner interrogation, wiretapping, and border patrol – what’s  
left? As you know, in the book I talk about how evacuation from  
disasters is a burgeoning industry. A company in Florida called  
HelpJet is urging people to turn "a hurricane evacuation into a jet- 
setter vacation." Even military recruiting, which has always been  
seen as the job of soldiers, has become a for-profit business. A new  
generation of soldiers is being recruited by private headhunting  
firms like Serco, or the weapons giant L-3 Communications. The  
private recruiters are paid bonuses every time they sign up a  
soldier, so one company spokesperson bragged, "If you want to eat  
steak, you have to put people in the army." It's like Amway with  
sidearms.

All of this is ripe for corruption, for the most obvious of reasons.  
If recruitment is on commission, quantity will outweigh quality. If  
"intelligence" is a service provided to the government by a private  
contractor, then the customer is always right. And that's pretty  
scary when the customer is Dick Cheney. Want to prove Iraq has WMDs?  
Right away, sir. Anything else I can do for you, sir?

The other thing that happens when the working philosophy of the  
country's leaders is that private is always better is that the public  
sector is left to erode and atrophy - in-house equipment falls out of  
date, the best people leave, the skills are no longer there. The CIA  
has lost so many staffers to the privatized spy sector that it has  
barred contractors from recruiting in the agency dining room.

The end result is that you have Blackwater being asked to investigate  
its own alleged massacre in Baghdad, or CH2M Hill given a contract in  
Iraq to oversee other contractors. And remember that when Katrina  
hit, FEMA had to hire a contractor to award contracts to contractors.  
My favorite example is that when it came time to update the Army  
manual on the rules for dealing with contractors, the Army outsourced  
the job to one of its major contractors, because it no longer had the  
in-house expertise. The Department of Homeland Security is paying  
Boeing $2.5 billion not just to build a "virtual fence" on U.S.  
borders but also to design the entire border initiative because,  
according to the department's inspector general, the DHS "does not  
have the capacity needed to effectively plan, oversee, and execute  
the program."

Governing is reduced to running an ATM machine – awarding contracts  
to private players. And increasingly, we are hearing about the  
contracts themselves being written by the companies that eventually  
win the contracts, while another company is contracted to see that  
the contract is fulfilled. Under George W. Bush, the state still has  
all the trappings of a government – the impressive buildings,  
presidential press briefings, policy battles – but it no more does  
the actual work of governing than the employees at Nike's Oregon  
headquarters actually stitch running shoes.

Naomi Klein is the author of The Shock Doctrine: The Rise of Disaster  
Capitalism. John Cusack is an actor, filmmaker, writer, and blogger  
for The Huffington Post, where this article originally appeared.