Shock Doctrine: The Rise of Disaster Capitalism

Over Spring Break I devoted myself to plowing through Naomi Klein’s Shock Doctrine: The Rise of Disaster Capitalism. She and Alfonso Cuaron (Children of Men) produced a short film for the book. Her central thesis is that neo-conservative economics (ie, laissez faire economics) is fundamentally incompatible with democracy. To impose drastic free market reforms on an unwilling public, neo-cons wait for a disaster or crisis — “actual or perceived” in Milton Friedman’s words — and seize upon the ensuing disorientation, the shock, that inevitably follows a trauma.

Friedman and his Chicago School cohorts proposed a radically free market that consisted of a “three-part formula of deregulation, privatization and cutbacks” of social programs. As Friedmanite Paul Bremer pointed out, this always leads to “the creation of unprecedented wealth” for a few, but has “immediate negative consequences for many.” Consequences like “growing income gaps and social tensions,” though Bremer is putting it mildly. Since the lower and middle classes always out-number the upper class, true democracy simply can’t push through the economic policies these neo-cons want. Klein writes that “it is precisely because the dream of economic equality is so popular, and so difficult to defeat in a fair fight, that the shock doctrine was embraced in the first place.”

Klein likens the shock doctrine to that of torture in the interrogation room. She writes:

“Torture is a set of techniques designed to put prisoners into a state of deep disorientation and shock in order to force them to make concessions against their will… But torture is more than a tool used to enforce unwanted policies on rebellious peoples; it is also a metaphor of the shock doctrine’s underlying logic… [it is] a logic that leads ineluctably toward violence… The shock doctrine mimics this process precisely, attempting to achieve on a mass scale what torture does one on one in the interrogation cell.”

Thus just as interrogators attempt to re-make the world of their prisoner, so too do neo-cons (in a merger of Big Government and Big Business) look for opportunities to re-make economies while their people are still in shock and awe. Thus, disaster capitalism: “Orchestrated raids on the public sphere in the wake of catastrophic events combined with the treatment of disasters as exciting market opportunities.”

Her case against Friedmanite ideology (which takes many names) begins with the damning cases in South America, particularly Chile, where Friedman first got his shot at proving his theories could work in the real world, and not just in his theoretical simulations at the University of Chicago. In Chile, however, the Chicago Boys discovered that “democracy was always a hindrance to the market plan” and since “democracy had been inhospitable,” they would quickly learn that a “dictatorship would prove an easier fit” — hence, the CIA-backed rise of Augusto Pinochet. From Chile & Argentina, Klein takes us on a whirlwind tour of the last 35 years through Indonesia, Poland, Russia, South Africa, China, Korea, etc etc. In every case Klein demonstrates that free market reforms always rely on a shock (allowed, nurtured, or created) to push through their deeply unpopular policies. The results are always extremely favorable for a wealthy few but devastating for the country at large — ex-Friedmanite Andre Gunder Frank termed it “economic genocide.”

Within the last 5 years disaster capitalism (also described as “barbarian” or “savage” capitalism) has now been tragically on display in Iraq, Katrina, and the tsunami-devastated regions of Sri Lanka and Thailand. Of course, for Americans 9/11 is an almost too vivid example of Klein’s entire thesis. She writes that “just as the Internet had launched the dot-com bubble, 9/11 launched the disaster capitalism bubble.

“The late French theorist Jean Baudrillard described terrorist events as an ‘excess of reality’; in this sense, in North America, the September 11 attacks were, at first, pure events, raw reality, unprocessed by story, narrative or anything that could bridge the gap between reality and understanding. Without a story, we are, as many of us were after September 11, intensely vulnerable to those people who are ready to take advantage of the chaos for their own ends.”

In the midst of our intense national vulnerability, a calculating few saw their opportune moment to begin gutting the government from the inside while erecting an ever-enlarging exterior shell, enslaved to a “worldview that has harnessed the full force of the US military machine in the service of a corporate agenda.” By now the details should be familiar (No End in Sight is also an excellent resource here), but over the years Bush’s goal has become more readily apparent: “wage privatized wars abroad and build a corporate security complex at home.”

Ultimately, The Shock Doctrine is disturbingly successful in challenging the central claim in the official Friedmanite story: “that the triumph of deregulated capitalism has been born of freedom [and] that unfettered free markets go hand in hand with democracy.” For this reason the book is often difficult to read: not because of its length (466 pages) or meticulously-documented research (another 59 pages of citations), but because it throws back the curtain on more than a few cherished narratives. Klein demonstrates that “this fundamentalist form of capitalism has consistently been midwifed by the most brutal forms of coercion, inflicted on the collective body politic as well as on countless individual bodies. The history of the contemporary free market is better understood as the rise of corporatism, a history that was written in shocks.”

In an oft-quoted review of her book, Joseph Stiglitz (author of Globalization and Its Discontents) accused Klein of sometimes oversimplifying complex economic theory. Yet vast ignored is Stiglitz’s next claim: “the case against these policies is even stronger than the one Klein makes.” Which is a disturbing thought considering how strong Klein’s case already is and how urgently needed is a book like Shock Doctrine.
God Bless America, Inc.

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