Such attitudes would reappear with a vengeance during Yeltsin’s shelling of a recalcitrant, anti-shock-therapy parliament. By then Jeffery Sachs was ensconced at Yeltsin’s side, where he supported the assault. That Sachs did not have a problem attacking democratic institutions was something he had made clear earlier in his career as a neoliberal advisor/guru in Bolivia. It was this early chapter of Sachs’ career that led one Solidarity leader at the time of the Warsaw debate to declare, “I would love to see Bolivia. I’m sure it’s very lovely, very exotic. I just don’t want to see Bolivia here.”
Understanding why the Poles might not want to emulate Sachs’ Bolivian experiment requires reviewing what really happened there under Sachs’ tutelage in the mid-80s. In The Shock Doctrine, Klein offers a fuller version of the story than is usually presented in gushing recaps of Sachs’ career.
Sachs was a 30-year-old academic with no experience in development economics when he arrived in La Paz with a radical plan to conquer that country’s runaway inflation. Fancying himself a latter-day Keynes, he wrote a plan calling for the usual litany: free trade, privatization, and the elimination of price controls, subsidies, and most social spending. When he and the new Bolivian government showed the still-secret plan to the local IMF office, the representative was beside himself, and replied, “This is what every official at the IMF has dreamed about. But if it doesn’t work, luckily I have diplomatic immunity and I can catch a plane and flee.” As would later reoccur in Poland, most of the government was horrified by the plan. But Sachs promised it would work, and if not, well, in Latin America there are always means to control people who get it the way of progress.
Although the center-left government that enacted the Sachs plan was democratically elected, Klein explains that it was not elected on a platform of shock-therapy, and thus kept the plan a secret until the last minute. When the Sachs plan—known as the “brick”—was finally announced, unions and other groups spilled into the streets to oppose it. The government then fell back on other kinds of shocks, imposing what Klein calls a “junta-lite,” much as Yeltsin later would. As the reform program went into effect, martial law was imposed; schools, radio stations, and union halls were raided; and, taking a page from Pinochet, opposition leaders were flown to remote prisons in the Amazon.
|"Russia? Never heard of the place. Ask Bob Rubin."|
Sachs doesn’t mention any of this when describing his work in Bolivia. Klein notes that Sachs’ bestselling 2005 book, The End of Poverty, completely glosses over the repression that accompanied his reforms (as well as the large role cocaine played in reviving the Bolivian economy). Perhaps the only thing Sachs likes to talk about less than repression in Bolivia is Russia in the 90s.
Klein interviewed Sachs extensively for The Shock Doctrine, and probably should be given some sort of journalism award just for getting him to talk about the Russia years. Sachs is notorious for threatening to hang up on journalists who push the sensitive subject, and the colossal failure of shock-therapy in this country probably contributed in no small part to Sachs' transformation from a Friedmanite crusader into an aid and development do-gooder. Still, it took some banging on the door to get Sachs to open up. At first, the superstar academic acted as if he had no role whatsoever in the disaster that befell Russia in the 90s. “I was right and they were wrong,” he told Klein. “Ask Larry Summers [what went wrong], don’t ask me; ask Bob Rubin; ask Clinton, ask Cheney…” Anyone but Jeffery Sachs!