Journalist Klein introduced the term "disaster capitalism." Whether covering Baghdad after the U.S. occupation, Sri Lanka after the tsunami, or New Orleans post-Katrina, she witnessed remarkably similar events: people still reeling were hit again, this time with economic "shock treatment," losing their land and homes to corporate makeovers. This book retells the story of Milton Friedman's free-market economic revolution. In contrast to the myth of this movement's peaceful global victory, Klein shows how it has exploited moments of shock and extreme violence in order to implement its economic policies. At its core is the use of cataclysmic events to advance radical privatization combined with the privatization of the disaster response itself. Klein argues that by capitalizing on crises, created by nature or war, the disaster capitalism complex now exists as a booming new economy, the violent culmination of a radical economic project that has been incubating for fifty years.--From publisher description.
It is perhaps easy to criticise that the author conflates what happened in Chile with what went on in the first years after the Iraq war under the banner of "disaster capitalism", associated with the "shock doctrine" and the search for "blank slates" and "clean canvas". She admits herself that the phenomena are different and the result of evolving processes; but, as is often the case, discourse analysis reveals that the underlying devices that produce these phenomena are indeed common.
What will irritate you when reading The Shock Doctrine is the cognitive dissonance it produces: if this is such, and the responsibles are still out there and up to the same old tricks, why are we not up in arms demanding real change?
This book looks in depth at the situations we have all heard of in various countries over the last 40 years. Chile in the 1970s when popular socialist leader Allende was overthrown by US backed General Pinochet is heralded as the first "experiment" in using shock tactics to bring in free-trade. It was also one of the most harsh on the general population. People were "shocked" into submission by violence, torture, imprisonment, and by being "disappeared" if they displayed so much as a skerrick of left-wing ideals. With the public silenced, the economy was transformed into what would eventually leave a few multi-nationals very very rich, and Chileans without government/military connections, very very poor.
It is very difficult not to cast America as the bad guy here. The IMF and the World Bank both had policies to make loans dependent on the implementation of the three aspects discussed above- known collectively as the Washington Consensus. They stepped in when countries were in crisis, and then had them by the balls for the foreseeable future. The IMF and World Bank were (and are?) populated by proponents of the Chicago School of Economics thinking. Right-wing free-trade-at-any-cost economists. These guys hold tight to the idea that without any government controls, economies not only flourish, but have unlimited growth (personally I have huge problems with this theory, not the least of which is the fact the unlimited growth is impossible based on the fact that there is a limit to natural resources).
The book goes on to discuss Argentina, Russia's transformation from communist state to extreme capitalist zone, Britain under Thatcher, Poland, China's opening up, South Africa, Sri Lanka post tsunami, Iraq war and Israel in great detail and providing a side of the story that you would never have read about in the papers. The lengths that were gone to to implement economic reform are incredible. The level of crony-ism and back room deals played out between politicians and US policy advisors, the IMF and business leaders is astounding.
This book reads like a thriller, one in which you cannot wait for the good guys to come in and rescue the masses. The idealist in me thinks the good guys are coming, but the realist in me knows that where there is multi-millions to be made, the greedy will not stop at any cost to feather their own nests.
Example: she jumps all over charter schools, but never really says whats wrong with them or that they aren't working. The only problem she sites is that the school unions are gone and that teachers don't like them. She implies that they are keeping the poor out of schools, but does not say it, because under a voucher system, students are funded to exactly the same level as under a non-charter system; they just get to choose what school they attend. IN otherwords, the public is still paying for a free education, but now students and their parents get to choose what school....but what's wrong with that? She doesn't say. Just says "it's bad for unions and teachers who worked in public schools before hate it" (though she doesn't actually site any teachers).
Example: she jumps all over Chile because "Pinochet was there" but never really makes a connection between Pinochet and the free market, other than to say "because they both happened at the same time, it must have been the free market that lead to all those people being tortured." What she doesn't mention is that Chile is the 8th most free economy in the world today and is ranked 3rd in the Americas (behind Canada and the US) and has experience 5% growth over the years from 2004-2009...but she doesn't ever talk about that or that today, after getting rid of Pinochet, Chile is one of the strongest, free-est, and fastest growing countries in South America, to say nothing of the world. Oh, she also forgets to mention that Pinochet is not in power any more but was ousted a long time ago.
Example: she attacks free market implimentation in Iraq, but fails to mention that most countries don't have ANY economy after a war, and that implimentation of an economy in Germany and Japan after WWII and in Korea after the Korea War didn't do too bad for them...in fact, it made them three of the strongest economies in the world. Implimentation of a non-free market economy in the countries of Poland, Romania, East Germany, Czechoslovakia, Yugoslavia, Bulgaria, Lithuania, Estonia, and Belarus didn't exactly work out for them...just ask the millions of people who had to live through it, then go ask the millions in West Germany, France, Italy and Japan that did benefit from the free market after WWII (as well as Korea and Singapore)
Example: she lays blame for the Asian crisis at the doorstep of the free market, but what she doesn't say is that these countries were already free markets before, and that after they have rebounded faster than those that were affected by the crisis but were not free economies.
Example: she attacks the free market for Russia's woes, but the free market was never implemented there. The Kremlin has taken over control of the media and oil companies, as well as several other large conglomerates. A list of the fifty richest people in Russia is also a list of the KGB class of 1999 and the "friends of Putin."
Example: Tienanmen Square a precursor to the free market? This is a clear case of the tail wagging the dog. It is widely credited as being the crisis that took down the then current party leadership in favor of leadership willing to open up China to allow more economic freedom, not the other way around, as she proposes (that it was the suppression of all those masses who wanted democracy, not economic freedom, silly...why would they want that?).
So, I am eager to know what redemptive qualities are in the book. It reads like liberal drivel that one only believes if it provides supporting evidence for what one already believes.
Look for it on the discount rack of second hand book stores near you soon...
“The Shock Syndrome” is basically a history of economic colonialism during the last forty years. Klein researches everything in great detail, but the book never bogs down. It races all over the globe, from Chile
One thing that did shock me in reading this book is how anti-democratic the corporatist movement has been. Why am I shocked? I guess some part of me believed that “free markets” had something to do with general freedom to choose. But in so many instances, it’s been just the opposite. State assets, the last economic frontier, are often taken away from the community amid great outcry. And this outcry – and many other expressions of the community voice, including the ballot - are too often cruelly suppressed in order to facilitate a more corporate-friendly environment.
Democracy and the corporatist world are not natural allies. In fact, this book shows how feudal we’ve become in the last forty years – and in the last chapter, shows some efforts to move away from this model, and to reassert the will of the people over corporate ownership of all resources. Shocks do wear off.
If only life were that simple.
Most importantly, at no turn does it take in to account the fact that many of the 'shock treatments' described were entered in to or accepted willingly, and that the negative impacts were the result of corrupt implementors, not the treatment itself. Hence, there is almost always an example that runs counter to or disproves the point she is trying to make. Her bizarre views on the IMF alone provide several such examples. It is a rant, and a poorly written one at that, and I am embarrassed that, somewhere, there is a record of my having purchased it.
I read Friedman’s Free to Choose long ago. It was an easy introduction to his notions and influenced my thinking. That title, Free to Choose, represents a colossal irony if we accept Klein’s accusations of the way freedom and citizen welfare are sacrificed to achieve national economic and political transformation through the principles and prescriptions she attributes to the Chicago School. But, should we accept her accusations?
Four prominent demands of the Chicago School are as follows:
(1) Privatization of public enterprises and resources;
(2) Economic deregulation;
(3) Tax cuts;
(4) Deep cuts in government spending.
While people should debate the merits of these demands, I do not see anything inherently immoral about them if the efforts to implement them are done peaceably with consent.
However, as implemented in nations such as Indonesia, Chile, Argentina, Bolivia, Brazil, South Africa, China, Poland, Russia, Sri Lanka, and elsewhere, Klein’s version of the Chicago School’s Friedmanomics takes on the garb of some kind of ghoulish Freakishnomics. Her intent is to show that in these countries it meant all or some of the following:
(1) Overthrow of the ruling government, often by violence, even when that government was legally elected by voters in accord with their country’s constitution;
(2) Capture and torture of opponents or presumed opponents;
(3) Terrorist acts against the citizenry, including murder;
(4) Enrichment of the richest classes of the nation, with some high bureaucrats also becoming plutocrats themselves;
(5) Foreign takeover of profitable businesses and gaining of the right to exploit the nation’s natural resources;
(6) Impoverishment of workers;
(7) Discontinuation or diminishment of many social services;
(8) “Debt bomb” detonation to conquer the willfulness of governments resisting Chicago School policies.
All these actions, among other lapses of polite behavior, to be carried out in the interest of multinational corporations.
How about that for an eight-fold path? Feeling the Zen?
This isn’t a program citizens of conscience normally ask their leaders to pursue, so there’s one other crucial element: Sell it as an absolute necessity to the preserving of freedom, peace, prosperity, and security. But also, if doable, skimp on the selling and establish the package by coercive force brought with such speed and rude brutality that it will seem a reckoning brought forth by the gods. SHOCK, baby!
Why, one might as well revert to Aristotle’s contention in the Politics that “hunting ought to be practiced—not only against animals, but also against human beings who are intended by nature to be ruled by others and refuse to obey that intention—because war of this order is naturally just.” Klein might say that’s exactly what has happened.
The question becomes how fair and correct her account is. For example, her reports of better economic outcomes in some countries with “managed” economies come across as supported by cherry-picked data, a common fault of those engaged in political persuasion. Suppose she has done this? Is it enough to justify rejecting her outrage and accepting the shocking eight-fold path she describes? Do her misjudgments about leaders such as Hugo Chavez wholly invalidate the critique?
Prior political inclinations will do much to color how one responds to this book. It’s not perfect. Ambitious books, passionately argued, aren’t. To some readers it will feel like a defamation, which reaches its height in Klein’s account of the war in Iraq. It attempts to revolutionize some of our most confidently (complacently?) held ideas about U.S. and corporate behavior throughout the world. If you are ill-disposed to accepting Klein’s biases or theses, focusing on the acts she describes and asking, “IS THIS WHAT I’D WANT ANOTHER NATION TO DO TO MY OWN COUNTRY?” can still make The Shock Doctrine an informative, dynamic, even necessary reading experience.
The book's anti-hero is Milton Friedman, the recently deceased Nobel-winning economist who championed "free markets" while deriding any and all government control over big business. For this Friedman was lionized by coporate America (of course), and by the seventies his disciples had control of the U.S. government...which is proof, among other things, that government is merely the shadow cast by big business over society (as said John Dewey).
Friedman's scorched-earth economic theories are often championed as a force for "freedom," but Klein lays out the plentiful evidence that "free markets" really only create freedom for capital and the tiny minority that controls it -- everyone else is left destitute. So how have they come to dominate large sections of the globe, from Russia to Asia to South America? Through shocks -- coups, economic blackmail (cf. the IMF and World Bank), natural distasters like the recent tsunami, 9/11, and so on. Basically, since policies that benefit the few at the expense of the many cannot be made attractive to a democratic majority, democracy must be subverted in order to set markets free.
Klein explicitly compares economic shock to the torture methods developed for the CIA in the 20th century, the same ones we are using in Iraq and at Guantanamo right now...the techniques an economic/military power like the Bush Administration must use in order to enforce the kind of free-market subcontractor zone we've created in Iraq. People will not accept slavery, not even economic slavery, unless broken -- and so proponents of Chicago School ecomomics have happily collaborated with despots like Pinochet and Yeltsin, calmly accepting the murder of innocents and the impoverishments of millions as the cost of creating a pure, unfettered marketplace (for themselves).
A lot of things made a lot more sense to me once I read this book -- economics is not a science (no matter what economists say), but it is truly dismal, and my ignorance of free-market theory made it impossible for me to understand a many that have hapened in my lifetime. The Shock Doctrine is an essential book, in my opinion. We need to understand the forces arrayed against us, and the religious faith in the purity of greed that animates them. If you'd like a taste of what the book is all about, Naomi Klein and Alfonso Cuaron (director of Children of Men) have made a short film about it....
One of the prime examples Klein offers is that of Chile, which in 1973 was taken over in a coup by repressive dictator Auguste Pinoche. She further connects how regime change and economic shock, has often been followed by a subsequent shock wave of torture, human rights abuses and repression of anyone in the society who speaks out against the new movement.
She further connects the dots to the corporatization/privatization undertaken by the Bush administration in Iraq, as well as the torture and human rights abuses of Guantanamo and Abu Ghraib.
This is an excellent, very well-written book by an articulate, knowledgeable writer. Highly recommended.
An insightful read for anyone interested in the state of modern democracy, and the adverse effects of combining privatization, government deregulation and deep cuts to social spending.
Instead, Klein shows how – from Augusto Pinochet's dictatorship in Chile, to the post-Soviet corruption of Russian oligarchs, to the modern-day corporatization of government by Halliburton, et al – Friedman's belief in restoring economies to their "natural," deregulated state has been the motivating force for some of the worst violations of human rights and civil liberties in recent memory. The "Shock Doctrine" Klein describes is the recognition, by powerful economists and policy-makers, that the kind of dismantling of social programs needed to completely "free" the economy from government control is impossible to impose on free people without the presence of some sort of shock, whether natural or man-made. "Temporary" suspensions of democracy, torture, and "Shock and Awe" warfare are all part of the Shock Doctrine arsenal. So, too, is the tactic of imposing economic policies on debt-ridden countries in the wake of natural disasters, which has begun to spark protests against the International Monetary Fund (IMF) and World Trade Organization (WTO).
The Shock Doctrine was an eye-opener for me. I read the news, consider myself politically and historically savvy, but I was amazed to learn how so much of recent history has been driven by ideologues who placed capitalist theory (and self-interested profit) above human lives. Klein's ability to draw connections and analyze facts made a history of modern economic policy come to life in vivid technicolor. Not an easy feat.
In the end, the book is more than a well-researched piece of journalism. It's cautionary tale, and a wake-up call. Klein's striking examples made me think about what the consequences could be when our governments talk about privatization, deregulation, or free corporate trade. In her conclusion, Klein highlights the steps brave men and women are taking around the world to make sure the people in their communities are in control of their own livelihoods. This sense of hope and belief in the power of ordinary people is what kept me reading despite the sometimes chilling descriptions and saddening tales of loss. Overall, The Shock Doctrine is a must-read book for anyone interested in the forces that shape the world we're living in.
Full of glaring errors and blatant distortions (her take on Freidman's Tyranny of the Status Quo suggests she hasn't even read the blurb) the book shows no understanding at all of the economics
The book suggests that 'Chicago School' economics 1) Is something homogeneous and 2) Replaced something which was working perfectly well. Neither is true.
In the first place Freidman and Hayek disagreed strongly over both methodology and monetary theory. Klein doesn't understand monetary theory so its no shock she gets this so wrong but then why did she write about it?
Secondly, at no point anywhere does Klein suggest there might have been a problem with the Keynesian paradigm the 'Chicago' paradigm replaced in economics and public policy. In fact, by the late 1970s, Keynesian economics was obviously failing very badly. People turned to the ideas of Freidman and co because the alternative wasn't working.
And turn they did. Klein shows no understanding of British politics in the period suggesting that Margaret Thatcher was unpopular (she won three elections) and that the miners had widespread support. They never, in fact, at any stage had such support.
In short, a good book if you have a prejudice towards liberal economics but look elsewhere for factual and informed analysis of the liberal revival of the last thirty years.
By citing numerous well-researched examples from Latin America (during the era of US-propped dictatorships in the 1970s) to Eastern Europe and Russia (after the fall of Communism), and right on to the US's own backyard, New Orleans after Katrina, and to the biggest mess disaster capitalism has wrought, the Iraq War, Klein makes vivid and and convincing her argument that unfettered capitalism has and will not hesitate to have blood in its hands.
Good: long essays/short books on the history of 'the Chicago School' of economics, particularly as it relates to the World Bank/IMF/WTO; on outsourcing by, and hollowing out
Bad: mind bendingly stupid analogy between the use of electro-shock by psychiatrists on the one hand, and the use of 'shock therapy' by economists and central bankers on the other; tiring anti-Bush rhetoric; bizarre insistence that Milton Friedman = Chicago School Economics = Neo-liberalism = Neo-Conservatism = corporate welfare; completely unnecessary, Procrustean bed made up of these three bad things.
Klein writes very well, her journalism is first rate, and much of the narrative history is excellently done. Quite why she needs to find a Villain to pin it all on (i.e., Milton Friedman) is beyond me: her book should have been about how free-market capitalism, as ever, makes democracy impossible, with a number of *very different* examples to show as much. Instead it often reads as if Milton Friedman pulled the strings in every major event of the late twentieth century, which, loathe his theories as I do, he did not do.
NB: I read this with a friend, who points out that sometimes it's okay to be unsubtle, particularly when the injustice you're describing is so monstrous. I would prefer that not be the case, but suspect that it is, and there's no doubt that you'll get more from this book of Klein's than you will from dozens of other books. So take my complaints as those of a hopeless ivory tower dwelling mandarin, and read this book for the many facts it contains.
Going one further than the 'military industrial complex' she argues 'disaster capitalism' is the pinnacle of Friedman-esque politics, which is a series of right-wing leaning corporations and bodies which have exploited (or in the case of Iraq engineered) disasters, man-made and natural, to push through their very unpopular economic model.
The books sweeping style narrative helps show how 'free market' politics has developed from its early unpopular perception to now becoming a sinister cabal of think tanks and the grey area where the political class and corporations seem to inhabit. The books analogy with psychiatric shock treatment I thought was taken too far to be of any help, Klein has a habit of concluding a point twice (as if once wasn't enough) and the book is probably fifty plus pages too long. That said the book helps give enough cause for concern and the chapters on South Africa, China, Iraq and Russia are written so well they will make you want to wet your appetite further.
So, how do you take advantage of people when they are
1. You need some kind of crisis--natural disaster (tsunami, hurricane, earthquake...anything!), political revolution, economic crisis...
2. You need to have a plan of action BEFORE the disaster so that when it hits, you jump in with your plans when everyone else is still in shock. (HINT: This is a great opportunity to use the disaster for something you may have been trying ot do for a long time. Example: Are you upset that public schools aren't privatized, then wait for a hurricane, and rather than rebuild public schools, create charter schools....[New Orleans])
3. Once the changes are made, have zero tolerance for protests, democractic voting on the issues or even questioning your plan. To achieve this, you can illegally arrest, detain, and torture people, kill them or even just make them disappear. For examples, see: Chile, Argentina, Guantanomo Bay, Russia. This step often involves the psychological shock as well--sensory deprivation, hallucinagens, disruption of food/sleep patterns (for more details on how to do this, check the U.S. CIA-funded research of Ewen Cameron, Canadian psychiatrist).
4. When the economy tanks, thousands are out of jobs and without food, DON'T GIVE UP! You are almost your way to completely devastating a country/region/group. The key: MORE privitization! Let multinational companies buy up and take over whatever remaining public-sector jobs you have (probably laying off those workers in the process) and charging you more to do the same work (IF they even do it).
5. Remember when protests start you must terrorize and shock the people into not protesting. Make them more afraid of what you will do to them than of what they want the most: autonomy, freedom, food and shelter.
6. After a few decades, if the economy hasn't gotten better, change government types/parties, and blame whoever comes in, NOT your policies. The key here is to be strong and repetitive in your statements: YOU didn't cause massive hunger and poverty--the socialists did.
7. At this point, you should have made your billions, go ahead and move on to the next crisis and repeat. No need to change up your strategy--it works all over the world repeatedly.
Sound cynical? Perhaps unreal? Shocking? I agree. Klein uses a strong voice to show her disapproval of US funded economic strategies all over the world that mostly ended in the simple manner of the rich getting richer and more becoming poor. For all of the Shock and Awe that Klein writes of committed by the government, her book is also shocking. As a reader, I can't help but hurt for the people who first suffer a natural disaster, but then are hit again with policies aimed to cheat them out of their jobs, homes, and well being.
Fascinating read...I just wish I could say it were fiction.
As a righteous kicking of the theories that have dominated the Western world for the past thirty years or so it’s glorious and overdue. Klein’s at her strongest when she points out how these ideas had no traction before they were imposed undemocratically, and always with painful consequences for the countries affected. She traces how the ideas spread from their first adoption by Pinochet in Chile, through to the IMF imposing them on nations as a consequence of asking for aid. Although it’s clearly flavoured against Friedman’s ‘shock doctrine’ it’s a fascinating history of how an idea can spread with or without popular demand, simply by having the right idea available to the right people at the right time.
I’d be nodding along happily but for two points. The first, the most obvious, is the heavy handed torture metaphor. Klein draws a parallel between physical and economic torture, linking them explicitly by the actions of regimes using the Chicago School ideas. It’s an arresting opening and a blatant attempt to get the reader onside because how many civilised people could disagree about torture’s a terrible, unconscionable thing? Not me. But where you stand on Chicago School economics is an ideological thing, and this comes across as going straight for the reptile brain, to bypass thought. Klein’s on firmer ground when detailing the consequences of how those ideas affected economies and then the further reaching consequences (particularly with the outsourcing mania under the Bush regime).
The other point is a minor factual one. Klein credits Guardian columnist Seamus Milne for background work on the Thatcherite reforms in Britain. It uses the Falklands War to fit into her conflict driven thesis. Unfortunately Milne must have had his ideological blinkers on when helping out with the detail, because the Falklands narrative, though predominant, is total bollocks. It’s a narrative supplied by a triumphant press of the 1980s which was overly sympathetic to Thatcher. It played a small role in helping her get re-elected, but the bald electoral facts tell another story. Thatcher lost support in the 1980 election, but her landslide victory was down to the split in the left wing vote caused by the formation of the SDP. The combined left wing vote was greater than the unsplit right wing vote. That’s what granted Thatcher’s government the political space to enact their ideas – being in the right place at the right time. With some little work it could be reconstructed to fit the narrative, one closer to Reagan’s adoption of the ideas in the US, but that Klein accepts received wisdom leads the reader to doubt where else she may have fudged details to fit the grand sweep.
A fascinating read then, but a flawed one. Caveat lector!