The Shock Doctrine Page #4

"In Britain we got our democratic institutions,

and with the need for a high degree of consense

some of the mesures adopted in Chile are quite unacceptable."

Thatcher's profound unpopularity

seemed to be probing once again,

that free market fundamentalism was simply too unpopular

to directly harmful to too many people, to survive in a democratic state

where governing requieres geting the consent of the government

unlike a military dictatorship.

What pulled Thatcher back from the abyss and ultimately saved the project

was a crisis. Indeed. was the ultimate crisis.

It was a war.

We are here because for the first time for many years

British soverign territory has been invaded by a foreign power.

The government has now decided, that a large task force will sail

as soon as all preparations are complete.

HMS invincible will be in the leed

Most people in Britain had never even herd of the Falklands.

But when Argentina invaded the small group of islands

thousands of miles away in the south atlantic

Thatcher seized the oportunity to prove her credentials as the "Iron Lady".

War was over in less than 3 months.

As the troops returned to Britain

a wave of patriotic celebrations swept the country.

Thatcher won the 1983 election with a massive majority.

She could now push trhough a form of the economic shock therapy

witnessed in Chile.

The most powerful union in Britain was the National Union of Mineworkers.

When National Carbon tried to close pits down.

The miners went on strike.

Parts of central London are brought to a

as thousands of miners and sympathisers march trhough de city

in support of the miners strike.

It's british longest and most bitter srtrike since 1926.

And the most expensive ever.

The strike lasted almost a year.

Thatcher used every means at her disposal to destroy the union.

Eventualy the miners were defeated.

Thatcher used this victory

bring the Chicago School revolution to Britain.

A series of glossy comercials promoted a massive program of privatizations.

Thatcher sold off the steal industry,

water,

electricity,

gas,

telecomunications,

airlines,

oil.

Public housing was sold off.

Council services put down to ?

In 1986, finantial and banking services were deregulated.

It was called the Big Bang.

No one here tonight needs reminding that the "Big bang" is only a beginning

In Britain, before Thatcher

a CEO won ten times as much as the average worker

by 2007, they earned more than 100 times as much.

In the US, before Reagan

CEO's earned 43 times as much as the average worker

in 2005, they earned more than 400 times as much.

Friedman openly acknowledged the importance of Thatcher and Reagan

in the spreading of Chicago School policies around the world.

The coincidence of Thatcher and Reagan being in office at the same time

was enormously important for the public acceptance worldwide

of a different aproach to economic and monetary policy.

What I'm describing now, is a plan of hope for the long term

the march of freedom and democracy

will leave Marxism, Lenninism, on the ashes heap of history

as is has left other tiranies

which stifle the freedom and ? the self expression of the people.

There, we all know the fairy tale about the fall of comunism.

That the west of Reagan and Thatcher looked so prosperous

to the people of the former comunist block,

that they themselves demanded radical free market policies.

Now, this really is a fairy tale.

Is true that people who had been living under autoritarian comunism

genuinely wanted democracy,

and it's also true that they wanted to be able to go and buy blue jeans

and have Big Mac's, that is true.

But that does not mean that they wanted the kind of "wild west" capitalism

of oligarcs gone mad and no social protection

so many eastern conuntries actualy ended up with

and suffer under to this day.

Thatcher had done everything she could to break the power of Unions in Britain

But in 1988, she went to Poland to

to show her support to the workers union "Solidarity".

Now you see the process, and where you are now,

to where you want to be.

Strikes in Poland, let to "Solidarity" being allowed to

contest a general election in June 1989.

This triggered a wave of demonstrations throughout eastern europe.

In the past, the Soviet Union had used military force

to crush democratic movements.

But the Soviet Union had a new tipe of leader

Mijail Gorvachov

who's commited to Glasnost and Perestroika.

He talked about a third way

a gradual transition to scandinavian style social democracy.

Something between free market capitalism and comunism.

Gorvachov charmed the public and politicians of the west.

He is a bold, and determined and corageous leader.

Gorvachov stood and watched as

one by one the old comunist regimes collapsed.

At the end of the year, the most famous symbol of the division of Europe

ended tumbling down.

For Friedman and the "Chicago boys"

a hole new world opened up.

In the Soviet Union

Gorvachov was hoping to see a gradualy reform of the economy.

In 1991, Gorvachov was invited to the G7 summit in London.

He was hoping for finantial support for his gradual economic reforms.

Instead, he was told that unless he embraced a radical Shock therapy

there would be no aid at all.

The next month, there was a coup attempt against him.

A group of Comunist Part hard liners

Placed Gorvachov under house arrest in his holiday home in Crimea.

Tanks surrouded the "White House", the russian parliament.

Amid the chaos of street clashes

it was obvious that to reinforce their position

hardliners would had to resort to violence.

Such action between the people and the security forces

has not been seen since the early days of the russian revolution.

By dawn this morning, amid a sea of debris

it was becoming clear that the coup was desintegrating.

The Russian parliament building was unscaved.

The military had not made their move,

and inside, Boris Yeltsin was more powerful than ever.

This was Yeltsin's finest ever.

Grovachov was released and he returned to Moscow.

But he had lost much of his power.

In december 1991, the Soviet Union was disolved.

A profound shock for the Russian people.

Yeltsin was now in charge of economic policy for the Russian Federation.

The free market came to Russia.

There was chaos.

The adoption of Chicago School policies in Russia

marked the beginning of a new chapter in the free market crusade.

It was all Shock, no Therapy

Despite the public efforts to promote popular capitalism

the reality was a small handful of businessman made vast fortunes.

State industries were sold of at a bargain ? prices.

The russian press called Yeltsin's advisers

the "Chicago boys".

Yeltsin's shock therapy, meant that in 1992

the average russian consumed 40% less than in 1991.

A third of russians fell below the poverty line.

And wages weren't paid for months.

One expert today predicted 140 million of russians

will soon be living below the poverty line.

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