Relying on the Free Market

by Mary

Posted by Mary

For the PNAC, Iraq was not just an exercise in demonstrating American power. It was also supposed to be a vehicle to show how a truly free market society would have a natural advantage over other governing philosophies (socialistic and/or mixed). The idealistic ideologues believe that an unregulated free market can transform humans into well-functioning, and well-organized societies. With the situation in Iraq deteriorating before our eyes, it seems like a good time to review the record of that idea.

After the collapse of USSR and the transformation of China from a communistic government to a market-driven society, the paragon of the free-market society has gained significant credit and in the United States, this ideal has permeated every aspect of our society. Today, the free-market is perceived as being a prime arbiter of what is good. And in the United States, this means that things that have been primarily the domain of the public sector are now being aggressively targeted for takeover by for-profit businesses. Under the Bush administration, the steady encroachment of profit-driven companies into the public sphere has accelerated. However, there continues to be significant resistance to turning over all matters to the free market, and this proves to be a point of frustration for the ideologues who believe that only the free market provides the tools to build a moral society (at least as defined by the conservatives).

For them, Iraq offered the opportunity to show how the ideals of a free-market society could be used to create a bulwark against the extremism of the Islamic fundamentalists. They believed that it would show the benighted liberals in the USA and throughout the world, why a free-market society was better for once and for all.

The Bush White House is convinced that the free market will transform Iraq into a valuable ally. Besides profiting the companies involved, they believe privatization is the key to their new and improved Iraq. They also expect to change how the USA provides economic aid to the third world.

McFarlane and Bleyzer co-wrote a recent commentary in the Wall Street Journal called "Taking Iraq Private." "We're all in there trying to figure out a different way to get effective American economic development assistance going over there, and AID is just not up to it," said Hoffmann, who is also chairman of the board of Mitretek Systems, a Virginia company that does technical research for the Defense Department and other government agencies. He said Rumsfeld "is very knowledgeable about this kind of development assistance" and once accompanied him on a trip to Ukraine to conduct a seminar on privatization.

"What I'd like to see over the next ten years is to really rebuild Iraq, and that means a market economy," said Bleyzer, adding that Iraq would have a "much better business environment if BP or Exxon-Mobil or Shell could invest. We want to set up a business environment where global companies like Coca-Cola and McDonald's could come in and create a diversified economy not dependent on oil." McFarlane, who said he has "no formal ties" with Bleyzer's fund, was enthusiastic about the work of his colleagues. "I hope their concepts are being digested inside the Administration," he said.

How extensive and deeply embedded this philosophy of society governed by the market, and how strong of a grip the military-industrial complex has on our government and our foreign policy was laid out in last Sunday’s New York Times Magazine article by Dan Baum.

Today, the man on the ground in Iraq is Jerry Bremer, a protégé of Kissinger and Reagan’s counterterrorism expert. He is tasked with getting Iraq up and running and providing the right atmosphere to allow the market to build the free society that the PNAC believes will result with the right incentives. As Naomi Klein reported early this month, Bremer is an excellent person to fill this role for the administration:

Like so many Bush foreign policy players, Bremer sees war as a business opportunity. On October 11, 2001, just one month after the terror attacks in New York and Washington, Bremer, once Ronald Reagan's Ambassador at Large for counterterrorism, launched a company designed to capitalize on the new atmosphere of fear in US corporate boardrooms. Crisis Consulting Practice, a division of insurance giant Marsh & McLennan, specializes in helping multinationals come up with "integrated and comprehensive crisis solutions" for everything from terror attacks to accounting fraud. Thanks to a strategic alliance with Versar, which specializes in biological and chemical threats, clients of the two companies are treated to "total counterterrorism services."

Unfortunately, when planning the war and setting the parameters for the aftermath, the primary Iraqi voices that the administration listened to were those of the exiles. Today, it appears that creating a free-market democracy is more difficult than they imagined as Bremer is isolated in his headquarters and Baghdad suffers without electricity.

Meanwhile, the march to privatize and corporatize Iraq continues unabated. And the resistance of the Iraqis continues to grow. One gets the sense of the clash of the titans watching the unfolding story.

The increasingly unstable environment in Iraq makes a mockery of the vision of the PNAC. The incompetence and arrogance of the administration and the war profiteers is astonishing. Their utopian society has as much chance of coming to fruition as that of Karl Marx. Neither vision allows the people affected to have a voice in the shaping of the society being imposed upon them and so is doomed to fail.

--Mary

Update: Tristero points to a risk analysis for Iraq by Kroll, a risk consulting company which states:

Post-War Iraq is delicately poised between a future that offers some stability for Iraqis and international business and a more unstable state where the country seeks to throw out U.S. and British forces, according to the latest report from Kroll.

They don't believe that Iraq will get to full stability very soon. Yet one more tipping point to watch.