O Canada! When right-wing crisis-engineering came out of the closet

If you’ve read some of my other posts, you’ll know that I’m re-reading ‘The Shock Doctrine’ by the very excellent Naomi Klein. I can’t encourage you enough to get and read this book – it will change your worldview forever, and provide you with a prism for understanding what you see going on in the UK and elsewhere that will make it all clear. Horribly clear – but ignorance is not bliss.

If you’ve read what I and others write about our current government – that it’s following a classic neoliberal/neocon tactic by using the current ‘crisis’ as an excuse and tool to dismantle our cherished state provisions such as the NHS and the protections for those who need them, claiming that the ‘crisis’ means it’s unavoidable – you might be forgiven for thinking that it sounds a little far-fetched. Surely nobody would that that coldly cynical, that deliberately heartless, as to take things away from our most disadvantaged people and give the money to those who already have plenty, if there wasn’t really a crisis, if it wasn’t really necessary?

Well, the people who subscribe to the extreme free-market, right-wing, dog-eat-dog view that neoliberalism represents are nothing if not arrogant. The current Tory leadership might sing a different song to make their actions seem inevitable if not palatable, but in the right context, where they’ve felt able to say what they really think, neoliberals have admitted not only that they will take advantage of a crisis to do exactly this, but also admitted to the desirability of deliberately engineering crises specifically for this purpose.The first place where this was done and admitted to was in Canada in 1993. More of that in a moment, but first we need to look just a little further back to a conference in Washington DC in January 1993, where the idea was first discussed openly. This conference was arranged by John Williamson (who shaped the goals of both the World Bank and the IMF – never make the mistake of thinking those organisations are neutral and benign), a powerful economist. This conference included current and former finance ministers and central bank heads – the very kind of people who today are orchestrating the response to the Greek/Italian/Spanish/Irish crisis, and possibly also the crisis itself. The conference had the very bland title of ‘The Political Economy of Policy Reform’, but was described as a conference on ‘Machiavellian Economics’ by participants.

During this conference, the keynote lecture was given by Williamson. His words were chilling, prophetic – and extremely revealing:

One will have to ask whether it could conceivably make sense to think of deliberately provoking a crisis so as to remove the political logjam to reform..Presumably no one with historical foresight would have advocated..that Germany or Japan go to war in order to get the benefits of the supergrowth that followed their defeat. But could a lesser crisis have served the same function? Is it possible to conceive of a pseudo-crisis that could serve the same positive function without the cost of a real crisis?

As Klein so perfectly observes: ‘In a room filled with enough finance ministers and central bank chiefs to hold a major trade summit, the idea of actively creating a crisis so that shock therapy could be pushed through was now being openly discussed.

One month later, in Canada, the idea was put into practice. In February 1993, Canada was in the grip of a major financial crisis as it hit a ‘debt wall’ where public spending became unsustainable. Or so you would have believed from the statements by politicians and reports on TV and in the print media. A banner headline read ‘Debt Crisis Looms‘, while TV coverage predicted that in the next year or two the ‘deputy minister of finance is going to walk into cabinet and announce that Canada’s credit has run out‘.

If the situation wasn’t corrected by dramatic cuts to unemployment and health spending, Canada would lose its ‘AAA’ credit rating and investors would pull their money out of the country. Sound familiar? It should – these are the very same threats that we hear from the coalition government.

You won’t hear this mentioned in any of the coverage of the UK ‘deficit crisis’, but in 1995 investigative journalist Linda McQuaig exposed incontestably that the sense of crisis had been created, stoked and carefully manipulated by a small number of right-wing think-tanks funded by the biggest banks and corporations in Canada.

An honest Moody’s analyst in charge of the country’s credit rating, Vincent Truglia, revealed that he had come under constant pressure from Canada’s corporate executives to downgrade the country’s rating and issue grave warnings. He refused, because he considered Canada an excellent and stable investment, and got so tired of the pressure that he went so far as to issue a ‘special commentary’ stating that Canada’s spending was not out of control at all, and that ‘reports have grossly exaggerated Canada’s fiscal debt position‘ as well as criticising the bad economic maths practised by the right-wing think-tanks who were fanning the ‘crisis’ flame. When he published the commentary, someone ‘from a very large financial institution called me up on the telephone screaming at me, literally screaming at me‘ for messing up the plan.

It was too little, too late. By the time the nature of the deception was understood, the damage was done – Canada’s welfare and health spending had been hugely eroded and has not recovered since. In September 1995 a video was leaked of Canada’s minister of education John Snobelen telling a closed meeting of civil servants that creating a climate of panic was necessary so that unpopular ‘reforms’ could be pushed through: ‘creating a useful crisis’.

So, there you have it. If you want to see all the details, buy the book. Buy the book anyway. It’s that essential.

But if you’ve read this far, it would be hopelessly or wilfully naive to think that the current crop of Tory ministers wouldn’t do something as evil as talking down the British economy, creating the impression of a crisis when there isn’t one, exaggerating the scale of the problem to create a climate of fear where people will put up with being robbed of hard-won social provisions – or even of creating, manipulating or deliberately worsening a crisis to allow them to push through their ‘help the rich’, scorched-earth policies while they have chance.

It’s a matter of public record that the philosophy they’re in love with considers it perfectly acceptable.

Now you know what to look for, and how to understand it when you find it.

(If, like me, you’re outraged now, please express your contempt for this government and for its damage to our social structure by signing these two petitions and getting your friends to do the same:



Thank you!)

8 responses to “O Canada! When right-wing crisis-engineering came out of the closet

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