In the column, Axis of Depression, Paul Krugman explains the real motives of the Republicans.

So what’s really motivating the G.O.P. attack on the Fed? Mr. Bernanke and his colleagues were clearly caught by surprise, but the budget expert Stan Collender predicted it all. Back in August, he warned Mr. Bernanke that “with Republican policy makers seeing economic hardship as the path to election glory,” they would be “opposed to any actions taken by the Federal Reserve that would make the economy better.” In short, their real fear is not that Fed actions will be harmful, it is that they might succeed.

If this isn’t another perfect example of Greenberg’s Law of Counterproductive Behavior, then I don’t know what is.

At the beginning of the Iraq occupation by the U.S., many Iraqis were thrown out of work.  In their stead, the U.S. spent billions of dollars on no-bid contracts with well connected U.S. firms.  These firms did not hire unemployed Iraqis. Instead, they flew in mercenaries from the U.S. to do work at $100,000 salaries, that the Iraqis would have been pleased to do for much less.  Gainfully employed Iraqis rebuilding their country are much less likely to join the insurrection than those who are unemployed while non-citizens are paid exorbitant amounts to do the same work they are willing and able to do.

I wondered how obtuse Paul Bremer would have to be to not see the damage his policies were causing. Now that I have formulated Greenberg’s Law of Counterproductive Behavior, it came as no surprise when I read the explanation  in the book The Shock Doctrine: The Rise of Disaster Capitalism.

In describing a conference held by the U.S. State Department in Baghdad in the early months of the occupation, author Naomi Klein focused on one of the main speakers [page 432].

One of the main speakers was Marek Belka, Poland’s former right-wing finance minister who worked under Bremer in Iraq for several months. According to an official State Department report on the gathering, Belka pounded the Iraqis with the message that they had to seize the moment of chaos to be “forceful” in pushing through policies that “would throw many people out of work.” The first lesson from Poland, Belka said, was that “unproductive state-owned enterprises should be sold off immediately without efforts to salvage then with public funds,”  (He failed to mention that popular pressure had forced Solidarity to abandon plans for rapid privatization, saving Poland from a Russian-style meltdown.)  His second lesson was even bolder.  It was five months after the fall of Baghdad, and Iraq was in the midst of a humanitarian emergency.  Unemployment was at 67 percent, malnutrition was rampant and the only thing holding off mass starvation was the fact that Iraqi households still received government-subsidized food and other essentials, just as they had under the UN-administered oil-for-food program during the sanctions period. Belka told the Iraqis that these market-distorting giveaways had to be scrapped immediately. “Develop the private sector, starting with the elimination of subsidies.” He stressed that these measures were “much more important and divisive than privatization.”³

3. Jane Mayer, “Contract Sport,” The New Yorker, February 16, 2004

According to Greenberg’s Law, what I thought was counterproductive behavior, was really not.  I just had misunderstood what the players in this sport were trying to accomplish.

One of the failings of true believers in absolute free-markets is their failure to account for the passage of time.  Even if you could argue that the people would be better off in the long run, they fail to account for the fact that people could starve to death while waiting.  Unlike docile Americans, starving Iraqis didn’t just sit idle and slowly starve to death.  They started fighting back.

The presentation by Belka explains why the Coalition Provisional Authority could believe that it was a good thing to throw so many people out of work and not subsidize them while unemployed.  That does not explain why they hired U.S. Contractors and allowed them to hire foreigners instead of Iraqis.  We’ll have to look for other ulterior motives.  Perhaps it was plain old greed that motivated them.  Greed is supposed to be good according to absolutist free market enthusiasts.

To think that George W. Bush wondered why they hated us.

Here is the statement of the new Greenberg’s Law of Counterproductive Behavior:

If you see a behavior that seems to you to be counterproductive, perhaps you have misunderstood what the actor was trying to produce.

Corollary 1:

If you try to use logic to argue against the seemingly obvious motive for the behavior, you will fail. You need to find an argument against the actor’s actual motive.

The  use of torture to gain information has been the subject of several recent posts.  Experts agree that torture does not garner reliable information.  Despite George W. Bush’s repeated claims, the people conducting the interrogations that did garner the useful information Bush talks about, claim that they did not use torture to get the information.  They claimed the information flow stopped when torture began.

The torture regresses the subjects to an infantile state and has a tendency to erase memories from their minds.  If you want to get information from somebody, you’d think that mind erasure would be the last thing you would want.

Here is where Greenberg’s Law of Counterproductive Behavior comes in. We who argue against torture have fallen into the trap of believing the motive for torture is to gain information.

As described in the book The Shock Doctrine: The Rise of Disaster Capitalism, the purpose of the torture is more to induce terror in the compatriots of the victims than it has to do with gaining information.

Another use of these torture techniques, according to the book,  was specifically for erasing the memories of the victims.  Sometimes the hope is to rebuild the victim into a person whose ideas meet the approval of the torturer.  You can see this motive at work in claims by George Bush. The former president writes, “His understanding of Islam was that he had to resist interrogation only up to a certain point. Waterboarding was the technique that allowed him to reach that threshold, fulfill his religious duty, and then cooperate.” Bush goes on to claim succcess for waterboarding in that Zubaydah, his torture victim, gave him (Bush) a direct instruction, “You must do this (torture) for all the brothers.”

In South America during the period when many countries were being ruled by military juntas, torture was used to try to change the minds of citizens who objected to the extreme free market economics that the dictators were imposing on their countries.  The people who objected to these economic policies were considered to be a cancer on the society,  They had to be either cured or removed.

Up until the time of the military takeovers, the University of Chicago economics department under Milton Friedman had been training South American economists to foster pure free market economics in South America. When years of these attempts had failed, they had to resort to military takeover and then brute force and torture. This is how the students of Milton Friedman finally gained the power over economic policy that they had been seeking.

When you hear today’s Republicans touting the virtues of unfettered free market capitalism, you should bear in mind what could happen if you don’t go along with the idea.