|The Shock Doctrine: The Rise of Disaster Capitalism
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Naomi Klein's The Shock Doctrine advances a truly unnerving argument: historically, while people were reeling from natural disasters, wars and economic upheavals, savvy politicians and industry leaders nefariously implemented policies that would never have passed during less muddled times. As Klein demonstrates, this reprehensible game of bait-and-switch isn't just some relic from the bad old days. It's alive and well in contemporary society, and coming soon to a disaster area near you.
"At the most chaotic juncture in Iraq'' civil war, a new law is unveiled that will allow Shell and BP to claim the country's vast oil reserves? Immediately following September 11, the Bush Administration quietly outsources the running of the 'War on Terror' to Halliburton and Blackwater? After a tsunami wipes out the coasts of Southeast Asia, the pristine beaches are auctioned off to tourist resorts? New Orleans residents, scattered from Hurricane Katrina, discover that their public housing, hospitals and schools will never be re-opened." Klein not only kicks butt, she names names, notably economist Milton Friedman and his radical Chicago School of the 1950s and 60s which she notes "produced many of the leading neo-conservative and neo-liberal thinkers whose influence is still profound in Washington today." Stand up and take a bow, Donald Rumsfeld.
There's little doubt Klein's book--which arrived to enormous attention and fanfare thanks to her previous missive, the best-selling No Logo, will stir the ire of the right and corporate America. It's also true that Klein's assertions are coherent, comprehensively researched and footnoted, and she makes a very credible case. Even if the world isn't going to hell in a hand-basket just yet, it's nice to know a sharp customer like Klein is bearing witness to the backroom machinations of government and industry in times of turmoil. --Kim Hughes
In this groundbreaking alternative history of the most dominant ideology of our time, Milton Friedman's free-market economic revolution, Naomi Klein challenges the popular myth of this movement's peaceful global victory. From Chile in 1973 to Iraq today, Klein shows how Friedman and his followers have repeatedly harnessed terrible shocks and violence to implement their radical policies. As John Gray wrote in The Guardian, "There are very few books that really help us understand the present. The Shock Doctrine is one of those books."
In her ground-breaking reporting from Iraq, Naomi Klein exposed how the trauma of invasion was being exploited to remake the country in the interest of foreign corporations. She called it “disaster capitalism.” Covering Sri Lanka in the wake of the tsunami, and New Orleans post-Katrina, she witnessed something remarkably similar. People still reeling from catastrophe were being hit again, this time with economic “shock treatment” losing their land and homes to rapid-fire corporate makeovers.
The Shock Doctrine retells the story of the most dominant ideology of our time, Milton Friedman’s free market economic revolution. In contrast to the popular 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 in so many parts of the world from Latin America and Eastern Europe to South Africa, Russia, and Iraq. At the core of disaster capitalism is the use of cataclysmic events to advance radical privatization combined with the privatization of the disaster response itself. By capitalizing on crises, created by nature or war, Klein argues that the disaster capitalism complex now exists as a booming new economy, and is the violent culmination of a radical economic project that has been incubating for fifty years.
- Reagan Was Confused
There have been so many excellent reviews of Naomi Klein's thesis and the wonderfully written book to support it that I can add no more to that aspect of review. Suffice it to say that her work may turn out to be one of the most significant works on economic and political realities to have been published in the last 100 years. The "Evil Empire" that Ronald Reagan alluded to, however, as she suggests was not anymore evil than the one he was the purported leader of.
Both Russia and the USA became mired in ideology during the last 100 years. Ideologies in and of themselves turn out to be dangerous when clung to in the face of all of the calamities that they inspire. Belief in a Christian myth, for instance, inspires belief in a God as well as a Devil. So one who is a believer may perform compassionate acts on the one hand when listening to their imaginary friend in the sky as well as they might drown their five children when they hear the voice of Beelzebub from below in his fiery homeland.
Klein's book establishes that Amerika's encroaching theory of Utopia is just as hateful and full of blood as the perfection sought in hard core Marxist doctrine. Capitalism must be restrained and modified in the same way that Marxism must be to create a workable and just society. Claims to the contrary ignore the established facts of history which she defines so well....more info
- If you only read one book this year, this should be it
This was a well-researched and stunning indictment of the forces shaping our world today. It is an absolute must-read for everyone on either side of the political aisle.
I think most of these reviewers are right on. The people who rated it one star probably didn't actually read the book. ...more info
- Shock Doctrine
It arrived without the paper cover, but I got it for super cheap, so I don't mind.
The Book peels back the layers of history that brought us to where we are today, and forbodes a dark future unless we realize what's really going on behind the scenes, independent of which party occupies the halls of power....more info
- Great Read, Well Researched and Well Written
This is a great book with some great insight and having read Naomi's No Logo, I would have to say this book is better. Well written and researched, you gotta read it!...more info
- The definitive guide book for the post-corporatist age
Klein's given the world a rare gift in "The Shock Doctrine." Well researched, finely crafted, easy to read and understand, yet deep and penetrative in its analysis, this book is a must-read for anyone looking to understand how, exactly, it all went wrong....more info
- J Gwinn
Will US citizens be subjected to "shock therapy" by the subprime crisis(a form of disaster capitalism) If you read Naomi Klein's book the faint outlines become very clear..very frightening...
Klein through a series of case studies documents how the IMF/world bank either take advantage of disasters or create them for the benefit of multinational banks/manufactures/mineral extraction/travel industry interests. The Chicago School of Economics theorists private the false economic doctrines & the Dictators/US Military/Homeland Security/ contractors provide the muscle.
>So we see fishermen on prime beach front property from Sri Lanka displaced by the tsunami only to return finding property off limits..Gotta make room for the Hotels/Resorts> The natives are left to fend for themselves in temporary shantytowns which much of the disaster relief subsidized.
>In South Africa Apartheid has been kept in place with increasing poverty rates. How? Former ANC activists contend they focused on reforming the government while not grasping the role of the IMF/World Bank conditionalites which totally undermined economic reforms. So we now see the government/parliment run by the black majority while the same discriminatory white business interests control the economy.
>In Russia, Yeltsin destroyed the parliament and by decree handed out state property to former communist party insiders as the Clinton administration & the Western Press cheered. Why? The property giveaway was the bridge to forming partnerships with western interests to gobble up property for pennies on the dollar.
Several other case studies focusing on New Orleans Poland,Chile,Bolivia,South Korea,Thailand etc
- Good book to read to open one's eyes.
I recently finished reading this book, and I would say that it opened my eyes quite a bit. I had read some of Friedman's doings, his economic policies, had even taken a class on it. But it wasn't until I read this book that I realized what kinds of damage his ideas could have. Violent oppression to make a few people rich? Putting our military under private organization answerable to no one? It made me curious about Keynes ideas and now am firmly in that economic camp, a little of this and a little of that, moderation in everything and all. Good book, too bad we live in such a messed up world....more info
- Eye & mind opener
This is one of the most shocking books I've ever read. It has opened my eyes to the corruption of government, and the propaganda that paints pure capitalism as a false god. Unfortunately, it has also shown me that the USA isn't the "good guys" we portray ourselves to be, but a bunch of greedy multinationals. I've long known that every war since the dawn of time has been started for greed; more land, more people, more religious converts, more money, more resources, more power, etc. However, I didn't know quite how ingrained it was, how tightly knit politics and economics really are. Everything one does affects the other. Now everything I see, read, and hear take on more meaning, and I understand more because I can read into the reality of it all, instead of just getting what's on the surface. I sometimes miss my blissful ignorance, but I truly am thankful for this book arming me with awareness. Well, this and other books, movies, and documentaries. Trust me, you want this book....more info
- Absolutely essential reading
There are very few books that actually fall into the "Must Read" category, but this is one of them. This is as powerful an indictment of the fallacies and real life errors of neoliberalism as has been published. Although the term "neoliberalism" is not widely known inside the United States, internationally it is known as the theory that markets can be self-regulating. The fundamental problem with such a theory is that markets never have been self-regulating. There is not a single example in all of human history of markets taking care of themselves. As early as 1944 in his classic THE GREAT TRANSFORMATION, Karl Polanyi carefully worked his way through not only human history but also prehistory to show that markets have never tended towards self-regulation -- which, if as the Vienna School argued, it was the natural way that economic institutions tended towards. In fact, markets throughout human history have involved tremendous cultural and political involvement.
The natural response of the Neoliberals has been that if only government would get out of the way, market economies would function according to their meticulously laid out theories. This response, Polanyi argued, pointed to the true nature of theories insisting that markets can be self-regulating: they are pure Utopian pipe dreams. Because the theories point to pure imaginaries, not anything that can ever be actual, they can always respond to any failure of free marketism that the problem was that the market was not sufficiently unregulated and unfettered.
But the brute truth is that there is no tendency for markets to self-regulate and that in fact they cannot so do. Naomi Klein's book details in horrific detail the attempts of a string of politicians and businessmen to attempt to make the impossible actual, with unvarying catastrophic results. She details one instance after another of groups of politicians forcing -- frequently at the ends of bayonets -- countries to embrace what has come to be known as The Washington Consensus, as Milton Friedman's version of the idea has come to be known. These men and women have held that nations' need to go through shocks to their economies, abandoning programs that protect markets, provide sustenance to the poor, liberalize their economies, and dismantle strong central governments. These "shocks" are often accompanied with tremendous suppression of individual liberties, torture of the political opposition, and the wholesale selling of national assets to foreign corporations. Nevermind that there are scant examples of The Washington Consensus actually working towards the economic well being of countries. Well, unless you define "well-being" as the dramatic weakening of the poor and middle classes, and stimulus of extraordinary economic inequality and creation of a narrow economic elite. I'll grant that neoliberalism is a wonderful tool for creating millionaires and billionaires, but the cost is that most citizens suffer loss and a lowered quality of life.
Reading Klein's book is like reading a series of horror stories. Over and over and over the same atrocities take place. Insanity like this should not exist, but because the IMF and the World Bank has institutionalized these insane economic theories, Friedman's ideas have achieved the status of received wisdom, despite their repeated failure when applied to real life.
Hopefully we are entering a period where these absurd economic ideas are jettisoned in favor of economic principles more closely attuned to the real world. Virtually every country in the world with a high standard of living features a managed economy, a form of capitalism in which the national government plays a strong role in managing and regulating. Over the past thirty years I've watched the quality of life in many other nations improve and improve while in the United States we've seen stagnation and decline and growing economic inequality. I've online friends in countries like Norway and Germany with superior healthcare to the US and with astonishing benefits, such as 8 weeks of vacation a year (not to mention unlimited sick days). They also can look forward to richer, more secure retirements. Most Americans are unaware of just how much we have been shortchanged by our economy. Given the Wall Street collapse the whole notion of a self-regulating economy (though inevitably the idiots who have pushed these nonsensical ideas at us in the past will concoct some silly narrative about how government and regulation was the cause of this mess, instead of the reverse) we are likely to see a short-term eclipse of free marketism. Right now Keynes looks like the great wise owl and Friedman a silly goose, but if we aren't on guard some will try to reverse that. John Kenneth Galbraith wrote that people's economic memories extend to about a decade. Sometime around 2018 people will forget the mess that the economic and political philosophies generated both domestically and abroad by the ideas of Friedman and his ilk. This is why books like Naomi Klein's are so valuable. Though The Washington Consensus is currently discredited, it will stage a comeback. We need this book to remind us why we should resist that. We've seen thought similar to neoliberalism on several prior occasions. It lay behind much of the economic thought that led to the economic catastrophes of the 1890s, the 1920s, and today. It will unquestionably rear its ugly head again in the future. But next time we need to fight and resist. And Klein's book will remind us precisely why we must....more info
- The Shock Doctrine audiobook
Not being an economist, I found this audiobook understandable and interesting. The author made the concepts clear, a point of view everyone should consider within the mix. ...more info
- Full of facts, overtly political and lacking in perspective
There are enough reviews posted that explain what the book is about that I will spare the reader the duplication. My bottom line is: this book is well researched, well written, well documented and well targeted. But I find the author lacking in perspective and too overtly political for my taste.
As I read the book I began to think of Klein as the "George Bush of the left". The two seem to share a dualistic belief that there are two choices in running economies: Chicago School capitalism and socialism. The book is clearly targeted to fans of the latter not the former. Much of the logic is typical of one with a political agenda. For example, since Pinochet was really bad, Allende must have been good. Want proof? Why under Allende, Chile inflation (barely) stayed under 200%, under Pinochet it was twice that! Clearly 200% inflation would prompt lots of people to sign up for a coup, and I cannot think of many people who brought on that kind of inflation who are revered by history. But Klein's conclusion is that because the Chicago boys doubled inflation and Pinochet was a despot AND there are only two choices, therefore, Allende must have been good.
I said above that the book is well targeted. It is clearly intended for a left of center audience that likes right wing conspiracy theories. People like my step daughter who gave the book to me LOVE it. If you are left of center and like "preaching to the choir", you may enjoy it (Klein's writing is excellent). But I am not that audience (I am a pragmatic moderate), so I never really connected to it. I learned quite a bit from it (it seems to be well researched) but could never get past the logical similarity to a negative political campaign. It is hard to say if Klein is intentionally taking this path or simply lacking the perspective needed to find another. I suspect it is the latter....more info
- AMAZING REVIEW OF NEOCON TACTICS-The Shock Doctrine
The Shock Doctrine: The Rise of Disaster Capitalism
This is an amazing book. I am tagging and underlining in every page. It really covers the history of Neocon's and their disasterous effect of the world's economy. This is a must read for every working and middle class person who wonders what's happening to the world as they knew it. It is a great counterpoint to Rush Limbaugh, Fox News, and what we're hearing from CEO's. ...more info
- Kindly, Gentle, Grandfatherly Old Dr. Mengele - er - Friedman
There is a lot to be learned from The Shock Doctrine; in its pages one may discover many of the whys behind recent events. For example, I was mystified as to why President Bush could sink so low as to veto a bill forbidding torture. Now I understand that veto, albeit I certainly can't condone it. Torture is a major tool used to destroy someone's ability to comprehend what is going on while control of his or her property, and/or
means of livelihood is being turned over to someone more influential.
The facts Naomi Klein reveals will make you angry, and sad, and ashamed.
There is the little-known story of why, in Iraq, we snatched defeat from the jaws of victory, by suppressing the Iraqis' spontaneous excercise of democracy, replacing the representative bodies they elected with unrepresentative bodies appointed by Paul Bremer.
There is the story of why Federal aid after Katrina was delayed and misdirected, so that New Orleans' city government could be almost completely privatized.
And there is the story of the evil genius behind all of this and more, the mild-mannered Dr. Milton Friedman, late leading member of the economics department of the University of Chicago, whose public words were gentle and humanitarian, but whose private advice to dictators such as General Augusto Pinochet were more reminiscent of Dr. Josef Mengele of Aushwitz, except that Dr. Mengele didn't even appear mild-mannered; perhaps a better comparison would be to Oscar St. Just.
Several have commented that one should read Johan Norberg's critique of Klein. I have read it and found it worthless. It consists solely of unsupported assertions, whereas Klein cites her sources with 74 pages of notes (more than 10% of the entire book).
Norberg begins: "Naomi Klein's The Shock Doctrine purports to be an expose of the ruthless nature of free-market capitalism and its chief recent exponent, Milton Friedman." [Norberg correctly put 'The Shock Doctrine' in italics, which Amazon's text box does not permit] But Klein's book does not purport to be an expose of free-market capitalism; she does not claim that free-market capitalism is inherently ruthless or evil. What she amply demonstrates is the ruthlessness of a particular variety of free-market capitalism which she calls disaster capitalism, or Friedmanism, after its late leading exponent.
Norberg writes: "Klein's analysis is hopelessly flawed at virtually every level." but it is Norberg's critique that is hopelessly flawed. Norberg seems to be, to borrow a phrase from Eric Flint, 'logically challenged.' He writes: "Friedman's own words reveal him to be an advocate of peace, democracy, and individual rights. He argued that gradual economic reforms were OFTEN preferable to swift ones and that the public should be fully informed about them, . . ." [emphasis added] And whose own words revealed him to be a fervent advocate of freedom, which he extolled in almost every speech? Why, none other than the late Adolf Hitler! Also, what is often true is not necessarily always true. There is no logical inconsistency between "gradual reforms are often preferable" and "these circumstances (e.g. strong popular opposition) require that changes be made swiftly, without informing the public until it is too late to stop them"
Norberg writes: "Klein's historical examples also fall apart under scrutiny. For example, Klein alleges that the Tiananmen Square crackdown was intended to crush opposition to pro-market reforms, when in fact it caused liberalization to stall for years." Even if the consequences of the crackdown were as Norberg claims, that in no way disproves what Klein said about its intention. (Could it be that Norberg has led such a sheltered life that he has never heard of unintended consequences?)
Norberg goes on to write: "She also argues that Thatcher used the Falklands War as cover for her unpopular economic policies, when actually those economic policies and their results enjoyed strong public support. It is Norberg's argument, not Klein's historical example, that falls apart under scrutiny. On page 168, Klein writes: ". . . by 1982, the number of unemployed had doubled under [Thatcher's] watch, as had the inflation rate. She had tried to take on one of the most powerful unions in the country, the coal miners, and had failed. After three years in office, Thatcher saw her personal approval rating drop to only 25 percent . . . ." But then came the Falklands war. On page 170, Klein writes: "From a military standpoint, the eleven-week battle appears to have almost no historical significance. Overlooked, however, was the war's impact on the free-market project, which was enormous: it was the Falklands war that gave Thatcher the political cover she needed to bring a program of radical Capitalist transformation to a Western liberal democracy for the first time." And yes, the Falklands victory did give her strong public support that enabled her to get her proposals enacted, and that support continued for a short while afterwards, until the public had time to experience the full effects of Thatcher's 'reforms' and realize how badly they had been snookered. Norberg deceptively implies that the 'strong public support' was there all along, but it wasn't.
But at least there is some hope. As we see in the final chapter, there is hope: shock wears off, and some of those who survive have a tendency to trade places with their oppressors, putting the oppressors in jail and returning their country to the people.
- Required Reading
Let me start by saying that I am not in any way anti-capitalist. I work in the private sector, I have an MBA, and I believe that markets work. The Shock Doctrine is also not anti-capitalist, as many of the author's critics have claimed.
The Shock Doctrine is a groundbreaking and eye-opening account of the manner in which the brand of supposedly free-market capitalism we see today - manifested in the housing crisis and the current economic meltdown - has propagated throughout the world. It details extensively that - contrary to popular mythology - laissez-faire doctrine did not spread because it has triumphed fairly in the marketplace of ideas and demonstrated that it is good for the many. Rather, it has too often been imposed through stealth, extortion and exploitation, and more often than not, for the benefit of the few.
The result of this corporatism - in literally every case - has been widespread disenfranchisement, massive increases in poverty and unemployment, the destruction of shared wealth, and the tremendous enrichment of a very few. It is a legacy of shame, coercion and hypocrisy that provides a telling insight into the tension between developed and developing nations, and one with which every American who doesn't understand why the rest of the world doesn't love us unconditionally needs to become intimately familiar....more info
- Magnificent, as Far as Ms. Klein Goes
Naomi Klein has written a 'must read' book. If you want to understand the last thirty years, DIGEST this book. As far as she goes, she deserves an 8 out of 5 stars. It is that good. (Though, I wanted to throw something about every five paragraphs. Be prepared to get angry at what you read.)
However, I am giving her work 4 stars because she refuses to go far enough. If you think of a squid or octopus, she has gone as far as identifying the tentacles (Milton Friedman's Chicago School policies, the World Bank and the IMF) and moving up to their attachment muscles (revolving-door political/corporate interests and intelligence agencies). She refuses to move into the central body. I am glad that I had already evaluated various levels of 'conspiracy theories' beyond her limits, in order to connect the dots as I read. I have not visited any website of hers, so I have no idea 'why' this limitation.
On the most basic 'semi-public' level, Ms. Klein never mentions the Royal Institute for International Affairs (RIIA), the Council on Foreign Relations (CFR) [actually once in passing, about a paper], the Bilderbergers, Trilaterals, and all of the spin offs of these groups.
Next level up (beyond the public face above) are (upper level) Freemasonry, the Zionists, Illuminati-descendants, international banker families/groups, and other controllers. Beyond that, you get into David Icke territory.
This book went to press in 2007. As such, it just missed the U.S. financial meltdown. Reading the following quote (remember, 2007 at the latest), I ask the Gentle Reader to ponder the U.S. situation as of the time I write, including the bankster bailouts. Phenomenally prescient, or maybe she is 'on' to the next scam...
"What [Orlando Letelier, Allende's former defense minister] could not know at the time  was that Chile under Chicago School rule was offering a glimpse of the future of the global economy, a pattern that would repeat again and again, from Russia to South Africa to Argentina: an urban bubble of frenetic speculation and dubious accounting fueling superprofits and frantic consumerism, ringed by the ghostly factories and rotting infrastructure of a development past; roughly half the population excluded from the economy altogether; out-of-control corruption and cronyism; decimation of nationally owned small and medium-sized businesses; a huge transfer of wealth from public to private hands, followed by a huge transfer of private debts into public hands."
In the following quotes, I tried to give a flavor of the book. Believe me, I could have easily made it ten times longer. So many 'aha's' and new info. If you read it all (sorry), you will begin to understand what has been done to the world. (Remedies at the end...) Kudos to Ms. Klein for outstanding work!
(Bracketed info [ ] is for clarity.)
"I [N.K.] discovered that the idea of exploiting crisis and disaster has been the modus operandi of Milton Friedman's movement from the very beginning -- this fundamentalist form of capitalism has always needed disasters to advance." Then, "Seen through the lens of this doctrine, the past thirty-five years look very different."
"The three trademark demands -- privatization, government deregulation, and deep cuts to social spending -- tended to be extremely unpopular with citizens..."
"The bottom line is that while Friedman's economic model is capable of being partially imposed under democracy, authoritarian conditions are required for the implementation of its true vision. For economic shock therapy to be applied without restraint -- as it was in Chile in the seventies, China in the late eighties, Russia in the nineties and the U.S. after September 11, 2001 -- some sort of additional major collective trauma has always been required, one that either temporarily suspended democratic practices or blocked them entirely. This ideological crusade was born in the authoritarian regimes of South America, and in its largest newly conquered territories -- Russia and China -- it coexists most comfortably, and most profitably, with an iron-fisted leadership to this day."
"When the September 11 attacks hit, the White House was packed with Friedman's disciples, including his close friend Donald Rumsfeld."
"In the attempt to relate the history of the ideological crusade that has culminated in the radical privatization of war and disaster, one problem recurs: the ideology is a shape-shifter, forever changing its name and switching identities. Friedman called himself a 'liberal', but his U.S. followers, who associated liberals with high taxes and hippies, tended to identify as 'conservatives', 'classical economists', 'free marketers', and, later, as believers in 'Reaganomics' or 'laissez-faire'. In most of the world, their orthodoxy is known as 'neoliberalism', but it is often called 'free trade' or simply 'globalization'. Only since the mid-nineties has the intellectual movement, led by the right-wing think tanks with which Friedman had long associations -- Heritage Foundation, Cato Institute, and the American Enterprise Institute -- called itself 'neoconservative', a worldview that has harnessed the full force of the U.S. military machine in the service of a corporate agenda."
"All these incarnations share a commitment to the policy trinity -- the elimination of the public sphere, total liberation for corporations, and skeletal social spending -- but none of the various names for the ideology seem quite adequate. Friedman framed his movement as an attempt to free the market from the state, but the real-world track record of what happens when his purist vision is realized is rather different. In every country where Chicago School policies have been applied over the past three decades, what has emerged is a powerful ruling alliance between a few very large corporations and a class of mostly wealthy politicians -- with hazy and ever-shifting lines between the two groups. In Russia the billionaire private players in the alliance are called 'the oligarchs'; in China, 'the princelings'; in Chile, 'the piranhas'; in the U.S., the Bush-Cheney campaign 'Pioneers'. Far from freeing the market from the state, these political and corporate elites have simply merged, trading favors to secure the right to appropriate precious resources previously held in the public domain -- from Russia's oil fields, to China's collective lands, to the no-bid reconstruction contracts for work in Iraq.
"A more accurate term for a system that erases the boundaries between Big Government and Big Business is not liberal, conservative or capitalist but corporatist. Its main characteristics are huge transfers of public wealth to private hands, often accompanied by exploding debt, an ever-widening chasm between the dazzling rich and the disposable poor, and an aggressive nationalism that justifies bottomless spending on security. For those inside the bubble of extreme wealth created by such an arrangement, there can be no more profitable way to organize a society. But because of the obvious drawbacks for the vast majority of the population left outside the bubble, other features of the corporatist state tend to include aggressive surveillance (once again, with government and large corporations trading favors and contracts), mass incarceration, shrinking civil liberties, and often, though not always, torture."
"In the torrent of words written in eulogy to Milton Friedman, the role of shocks and crises to advance his worldview received barely a mention. Instead, the economist's passing provided an occasion for a retelling of the official story of how his brand of radical capitalism became government orthodoxy in almost every corner of the globe. It is a fairy-tale version of history, scrubbed clean of all the violence and coercion so intimately entwined with this crusade, and it represents the single most successful propaganda coup of the past three decades."
"This book is a challenge to the central and most cherished claim in the official story -- that the triumph of deregulated capitalism has been born of freedom, that unfettered free markets go hand in hand with democracy. Instead, I will show 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 -- better understood as the rise of corporatism -- was written in shocks."
"But what of the contemporary crusade to liberate world markets? The coups, wars, and slaughters to install and maintain pro-corporate regimes have never been treated as capitalist crimes but have instead been written off as the excesses of overzealous dictators, as hot fronts of the Cold War, and now of the War on Terror. If the most committed opponents of the corporatist economic model are systematically eliminated, whether in Argentina in the seventies or in Iraq today, that suppression is explained as part of the dirty tight against Communism or terrorism -- almost never as the fight for the advancement of pure capitalism."
"I am not arguing that all forms of market systems are inherently violent. It is eminently possible to have a market-based economy that requires no such brutality and demands no such ideological purity. A free market in consumer products can coexist with free public health care, with public schools, with a large segment of the economy -- like a national oil company -- held in state hands. It's equally possible to require corporations to pay decent wages, to respect the right of workers to form unions, and for governments to tax and redistribute wealth so that the sharp inequalities that mark the corporatist state are reduced. Markets need not he fundamentalist."
"Keynes proposed exactly that kind of mixed, regulated economy after the Great Depression, a revolution in public policy that created the New Deal and transformations like it around the world. It was exactly that system of compromises, checks and balances that Friedman's counterrevolution was launched to methodically dismantle in country after country. Seen in that light, the Chicago School strain of capitalism does indeed have something in common with other dangerous ideologies: the signature desire for unattainable purity, for a clean slate on which to build a reengineered model society."
'In that year and a half, many of [Chile]'s business elite had had their fill of the Chicago Boys' adventures in extreme capitalism. The only people benefiting were foreign companies and a small clique of financiers known as the 'piranhas', who were making a killing on speculation. The nuts-and-bolts manufacturers who had strongly supported the coup were getting wiped out."
"It's clear that Chile never was the laboratory of 'pure' free markets that its cheerleaders claimed. Instead, it was a country where a small elite leapt from wealthy to super-rich in extremely short order -- a highly profitable formula bankrolled by debt and heavily subsidized (then bailed out) with public funds. When the hype and salesmanship behind the miracle are stripped away, Chile under Pinochet and the Chicago Boys was not a capitalist state featuring a liberated market but a corporatist one."
"What Chile pioneered under Pinochet was an evolution of corporatism: a mutually supporting alliance between a police state and large corporations, joining forces to wage all-out war on the third power sector -- the workers -- thereby drastically increasing the alliance's share of the national wealth. That war -- what many Chileans understandably see as a war of the rich against the poor and middle class -- is the real story of Chile's economic 'miracle'."
"By 1988, when the economy had stabilized and was growing rapidly, 45 percent of the population had fallen below the poverty line. The richest 10 percent of Chileans, however, had seen their incomes increase by 83 percent. Even in 2007, Chile remained one of the most unequal societies in the world -- out of 123 countries in which the United Nations tracks inequality Chile ranked 116th, making it the 8th most unequal country on the list."
"In Chile, if you were outside the wealth bubble, the miracle looked like the Great Depression, but inside its airtight cocoon the profits flowed so free and fast that the easy wealth made possible by shock therapy-style "reforms" have been the crack cocaine of financial markets ever since."
"Both [Milton] Friedman and Arnold Harberger gladly took credit for the economic miracles performed by their Latin American Chicago Boys. ... When it came to considering the human costs of the 'miracles' their students performed, however, both men suddenly saw no relationship."
"[Milton Friedman] conveniently ignored the fact that the central hypothesis for which he was receiving the [1976 Nobel for Economics] prize was being graphically proven false by the breadlines, typhoid outbreaks and shuttered factories in Chile, the one regime ruthless enough to put his ideas into practice."
"...it seemed as if, with the two Nobel prizes [Amnesty International won the Nobel Peace Prize], the most prestigious jury in the world had issued its verdict: the shock of the torture chamber was to be forcefully condemned, but economic shock treatments were to be applauded--and the two forms of shock were, as Lacher had written with dripping irony, 'entirely unrelated'. This intellectual firewall went up not only because Chicago School economists refused to acknowledge any connection between their policies and the use of terror. Contributing to the problem was the particular way that these acts of terror were hauled as narrow 'human rights abuses' rather than as tools that served clear political and economic ends."
"Understandably unwilling to go to war with the Washington institutions that owned their debts, crisis-struck new democracies had little choice but to play by Washington's rules. And then, in the early eighties, Washington's rules got a great deal stricter. That's because the debt shock coincided precisely, and not coincidentally, with a new era in North-South relations, one that would make military dictatorships largely unnecessary. It was the dawn of the era of 'structural adjustment' -- otherwise known as the dictatorship of debt."
"When countries were sent spiraling into crisis in the eighties, they had nowhere else to turn but the World Bank and the IMF. When they did, they hit a wall of orthodox Chicago Boys, trained to see their economic catastrophes not as problems to solve but as precious opportunities to leverage in order to secure a new free-market frontier. Crisis opportunism was now the guiding logic of the world's most powerful financial institutions. It was also a fundamental betrayal of their founding principles."
"The World Bank and the IMF...were given the explicit mandate to prevent future economic shocks and crashes like the ones that had so destabilized Weimar Germany. The World Bank would make long-term investments in development to pull countries out of poverty, while the IMF would act as a kind of global shock absorber, promoting economic policies that reduced financial speculation and market volatility. When a country looked as though it was falling into crisis, the IMF would leap in with stabilizing grants and loans, thereby preventing crises before they occurred. The two institutions... would coordinate their responses. John Maynard Keynes, who headed the U.K. delegation, was convinced that the world had finally recognized the political perils of leaving the market to regulate itself."
"The IMF and the World Bank ... allocated power ... on the size of each country's economy--an arrangement that gives the United States an effective veto over all major decisions, with Europe and Japan controlling most of the rest. That meant that when Reagan and Thatcher came to power in the eighties, their highly ideological administrations were essentially able to harness the two institutions for their own ends, rapidly increasing their power and turning them into the primary vehicles for the advancement of the corporatist crusade."
"Officials with the World Bank and the IMF had always made policy recommendations when they handed out loans, but in the early eighties, emboldened by the desperation of developing countries, those recommendations morphed into radical free-market demands. When crisis-struck countries came to the IMF seeking debt relief and emergency loans, the fund responded with sweeping shock therapy programs, equivalent in scope to `The Brick" drafted by the Chicago Boys for Pinochet and the 220-law decree cooked up in Goth's living room in Bolivia. The IMF issued its first full-fledged 'structural adjustment' program in 1983. For the next two decades, every country that came to the fund for a major loan was informed that it needed to revamp its economy from top to bottom."
"The principle was simple: countries in crisis desperately need emergency aid to stabilize their currencies. When privatization and free-trade policies are packaged together with a financial bailout, countries have little choice but to accept the whole package. The really clever part was that the economists themselves knew that free trade had nothing to do with ending a crisis, but that information was expertly 'obfuscated'."
"The [Chinese Politburo] party wanted to open the economy to private ownership and consumerism while maintaining its own grip on power -- a plan that ensured that once the assets of the state were auctioned off, party officials and their relatives would snap up the best deals and be first in line for the biggest profits."
"Like the Polish supporters of Solidarity, 67 percent of Russians told pollsters in 1992 they believed workers' cooperatives were the most equitable way to privatize the assets of the Communist state, and 79 percent said they considered maintaining full employment to be a core function of government."
"After only one year, shock therapy had taken a devastating toll: millions of middle-class Russians had lost their life savings when money lost its value, and abrupt cuts to subsidies meant millions of workers had not been paid in months. The average Russian consumed 40 percent less in 1992 than in 1991, and a third of the population fell below the poverty line."
"Under pressure from voters, the country's elected parliament -- the same body that had supported Yeltsin's rise to power -- decided it was time to rein in the president and his ersatz Chicago Boys. In December 1992, they voted to unseat Yegor Gaidar, and three months later, in March 1993, the parliamentarians voted to repeal the special powers they had given to Yeltsin to impose his economic laws by decree. The grace period had expired, and the results were abysmal; from now on, laws had to go through parliament, a standard measure in any liberal democracy and following the procedures set out in Russia's constitution."
"[Yeltsin] retaliated against the parliament's 'mutiny' by going on television and declaring a state of emergency, which conveniently restored his imperial powers. Three days later, Russia's independent Constitutional Court (the creation of which was one of Gorbachev's most significant democratic breakthroughs) ruled 9-3 that Yeltsin's power grab violated, on eight different counts, the constitution he had sworn to uphold."
"Until this point, it had still been possible to present 'economic reform' and democratic reform as part of the same project in Russia. But once Yeltsin declared a state of emergency, the two projects were on a collision course, with Yeltsin and his shock therapists in direct opposition to the elected parliament and the constitution. Nevertheless, the West threw its weight behind Yeltsin..."
"In the spring of 1993, the collision drew closer when parliament brought forward a budget bill that did not follow IMF demands for strict austerity. Yeltsin responded by trying to eliminate the parliament."
"...Yeltsin, confident that he had the West's support, took his first irreversible step toward what was now being openly referred to as the 'Pinochet option': he issued decree 1400, announcing that the constitution was abolished and parliament dissolved. Two days later, a special session of parliament voted 636-2 to impeach Yeltsin for this outrageous act (the equivalent of the U.S. president unilaterally dissolving Congress)... Some kind of armed conflict between Yeltsin and the parliament was now inevitable."
"After they witnessed Solidarity get pounded at the polls, it was obvious to Yeltsin and his Western advisers that early elections were far too risky. In Russia, too much wealth hung in the balance: huge oil fields, about 30 percent of the world's natural gas reserves, 20 percent of its nickel, not to mention weapons factories and the state media apparatus with which the Communist Party had controlled the vast population. Yeltsin abandoned negotiations and moved into war posture."
"A clear signal from Washington or the EU could have forced Yeltsin to engage in serious negotiations with the parliamentarians, but he received only encouragement. Finally, on the morning of October 4, 1993, Yeltsin fulfilled his long-prescribed destiny and became Russia's very own Pinochet..."
"But Russia wasn't a repeat of Chile -- it was Chile in reverse order: Pinochet staged a coup, dissolved the institutions of democracy and then imposed shock therapy; Yeltsin imposed shock therapy in a democracy, then could defend it only by dissolving democracy and staging a coup. Both scenarios earned enthusiastic support from the West."
"Following the coup, Russia was under unchecked dictatorial rule: its elected bodies were dissolved, the Constitutional Court was suspended, as was the constitution; tanks patrolled the streets, a curfew was in effect, and the press faced pervasive censorship, though civil liberties were soon restored. So what did the Chicago Boys and their Western advisers do at this critical moment: ...liberated from the meddling of democracy, they went on a law-making binge."
"With the country reeling from the attack, Yeltsin's own Chicago Boys rammed through the most contentious measures in their program: huge budget cuts, the removal of price controls on basic food items, including bread, and even more and faster privatizations -- the standard policies that cause so much instant misery that they seem to require a police state to stave off rebellion."
"In theory, all this wheeling and dealing was supposed to create the economic boom that would lift Russia out of desperation; in practice, the Communist state was simply replaced with a corporatist one: the beneficiaries of the boom were confined to a small club of Russians, many of them former Communist Party apparatchiks, and a handful of Western mutual fund managers who made dizzying returns investing in newly privatized Russian companies. A clique of nouveaux billionaires, many of whom were to become part of the group universally known as 'the oligarchs" for their imperial levels of wealth and power, teamed up with Yeltsin's Chicago Boys and stripped the country of nearly everything of value, moving the enormous profits offshore at a rate of $2 billion a month."
"The scandal wasn't just that Russia's public riches were auctioned off for a fraction of their worth -- it was also that, in true corporatist style, they were purchased with public money. As the Moscow Times journalists Matt Bivens and Joitas Bernstein put it, 'a few hand-picked men took over Russia's state-developed oil fields for free, as part of a giant shell game in which one arm of government paid another arm.' In a bold act of cooperation between the politicians selling the public companies and the businessmen buying them, several of Yeltsin's ministers transferred large sums of public money, which should have gone into the national bank or treasury, into private banks that had been hastily incorporated by oligarchs. (The two major oligarch-connected banks were Mikhail Khodorkovsky's Bank Menatep and Vladimir Potanin's Uneximbank.) The state then contracted with the same banks to run the privatization auctions for the oil fields and mines. The banks ran the auctions, but they also bid in them -- and sure enough, the oligarch-owned banks decided to make themselves the proud new owners of the previously public assets. The money that they put up to buy the shares in these public companies was likely the same public money that Yeltsin's ministers had deposited with them earlier. In other words, the Russian people fronted the money for the looting of their own country."
"...as a business prospectus to the nascent disaster capitalism complex...winning [a war] is not the point. The point is to create 'security' inside fortress states bolstered by endless low-level conflict outside their walls. In a way, it is the same goal that the private security companies have in Iraq: secure the perimeter, protect the principal. Baghdad, New Orleans and Sandy Springs provide glimpses of a kind of gated future built and run by the disaster capitalism complex."
"It is in Israel, however, that this process is most advanced: an entire country has turned itself into a fortified gated community, surrounded by locked-out people living in permanently excluded red zones. This is what a society looks like when it has lost its economic incentive for peace and is heavily invested in fighting and profiting from an endless and unwinnable War on Terror. One part looks like Israel; the other part looks like Gaza."
"Israel's case is extreme, but the kind of society it is creating may not be unique. The disaster capitalism complex thrives in conditions of low-intensity grinding conflict..."
"This discarding of 25 to 60 percent of the population has been the hallmark of the Chicago School crusade since the 'misery villages' began mushrooming throughout the Southern Cone [southern South America] in the seventies. In South Africa, Russia, and New Orleans the rich build walls around themselves. Israel has taken this disposal process a step further: it has built walls around the dangerous poor."
"The powerful rejection of what the French call 'savage capitalism'..."
"Despite the Bush administration's claim that the twentieth century ended with a 'decisive victory' for free markets over all forms of socialism, many Latin Americans understand perfectly well that it was authoritarian communism that failed in Eastern Europe and parts of Asia. Democratic socialism, meaning not only socialist parties brought to power through elections but also democratically run workplaces and land holdings, has worked in many regions, from Scandinavia to the thriving and historic cooperative economy in Italy's Emilia-Romagna region."
"The dirty secret of the neoliberal [in U.S. lingo, neoconservative] era is that these ideas were never defeated in a great battle of ideas, nor were they voted down in elections. They were shocked out of the way at key political junctures. When resistance was fierce, they were defeated with overt violence..."
"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."
"...Latin America's contemporary movements are not direct replicas of their predecessors. Of all the differences, the most striking is an acute awareness of the need for protection from the shocks of the past -- the coups, the foreign shock therapists, the U.S.-trained torturers, as well as the debt shocks and currency collapses of the eighties and nineties. Latin America's mass movements, which have powered the wave of election victories for left-wing candidates, are learning how to build shock absorbers into their organizing models. They are, for example, less centralized than in the sixties, making it harder to demobilize whole movements by eliminating a few leaders."
"Latin America's new leaders are also taking bold measures to block any future U.S.-backed coups that could attempt to undermine their democratic victories."
"The new leaders in Latin America are also becoming better prepared for the kinds of shocks inflicted by volatile markets. One of the most destabilizing forces of recent decades has been the speed with which capital can pick up and move, or how a sudden drop in commodity prices can devastate an entire agricultural sector. But in much of Latin America these shocks have already happened, leaving behind ghostly industrial suburbs and huge stretches of fallow farmland. The task of the region's new left, therefore, has become a matter of taking the detritus of globalization and putting it back to work. For the [democratically-run Argentina business] cooperatives, there is no fear of facing an economic shock of investors leaving, because the investors have already left."
"...rather than auctioning off pieces of the state to large corporations and losing democratic control, the people who use the resources are given the power to manage them, creating, at least in theory, both jobs and more responsive public services."
"Latin America's most significant protection from future shocks (and therefore from the shock doctrine) flows from the continent's emerging independence from Washington's financial institutions, the result of greater integration among regional governments. The Bolivian Alternative for the Americas (ALBA) is the continent's retort to the Free Trade Area of the Americas, the now buried corporatist dream of a free-trade zone stretching from Alaska to Tierra del Fuego. Though ALBA is still in its early stages, Emir Sader, the Brazil-based sociologist, describes its promise as 'a perfect example of genuinely fair trade: each country provides what it is best placed to produce, in return for what it most needs, independent of global market prices.' So Bolivia provides gas at stable discounted prices; Venezuela offers heavily subsidized oil to poorer countries and shares expertise in developing reserves; and Cuba sends thousands of doctors to deliver free health care all over the Continent, while training students from other countries at its medical schools.
"...the major benefit is that ALBA is essentially a barter system, in which countries decide for themselves what any given commodity or service is worth, rather than letting traders in New York, Chicago or London set the prices for them. That makes trade far less vulnerable to the kind of sudden price fluctuations that devastated Latin American economies in the recent past. Surrounded by turbulent financial waters, Latin America is creating a zone of relative economic calm and predictability, a feat presumed impossible in the globalization era."
"When one country does face a financial shortfall, this increased integration means that it does not need to turn to the IMF or the U.S. Treasury for a bailout. That's fortunate because the 2006 U.S. National Security Strategy makes it clear that for Washington, the shock doctrine is still very much alive..."
"...Venezuela has emerged as a major lender to other developing countries, allowing them to do an end run around Washington. The results have been dramatic. Brazil, so long shackled to Washington by its enormous debt, is refusing to enter into a new agreement with the IMF, Nicaragua is negotiating to quit the fund, Venezuela has withdrawn from both the IMF and the World Bank, and even Argentina, Washington's former "model pupil," has been part of the trend."
"'There is life after the IMF,' [Argentina President Nestor] Kirchner declared, 'and it's a good life.'"
"The IMF, a pariah in so many countries where it has treated crises as profit-making opportunities, is starting to wither away. The World Bank faces an equally grim future."...more info
- From the lady who called Bush: "extortionist-in-chief", brilliant work!
Naomi Klein explains the shock doctrine as the political stratigy that exploits crisis and desperation of the masses to create a magical way out of a crisis and enact policies that would never be approved in "normal times". The shock doctrine frequently applies to a situation where developing countries need foreign aid, because they're facing a disaster, and that presents an opportunity to promote extremely unpopular pro-corporate policies. As a result of governments' deception, the majority of people will suffer declining incomes and increased unemployment, while few parties benefit disproportionately from the situation
Klein discusses the similarities between the political/economic shock doctrine and psychiatric shock therapy in terms of torture and failure to improve the state before and after the shock.. She gives numerous examples over the last 30 years of history, where the shock doctrine was applied: The seventies where the shock doctrine was used to transform South American economies, the Falklands during Margaret Thatcher's times, and natural/economic disasters where the shock doctrine was used in Poland, Russia, Asia and Africa.
Brilliantly, Klein elucidates the "disaster capitalism complex" where companies profit from these disasters and shows how the invasion of Iraq was a full scale use of the 9/11 shock. The evidence that most people choose to ignore is detailed in this book; the result of pushing the Iraqi parliament to accept a US-backed oil law gave oil companies the ability to manage 75%of the oil fields and leaving only 25% for Iraqis. As Klien puts it in one of her recent interviews; what happened in Iraq is a "daylight robbery".
During these difficult economic times, This is one book that everyone should read. Hard working American citizens wonder why our economy is falling apart after the war and this book helps explain why. It is sadder yet when good Americans who are loyal to their government refuse to understand that Iraq's oil fields were one of the reasons behind the war. These good hearted people defend their government saying: if the oil was the reason, how come the oil prices are high and why is our economy suffering now that the American troops are in Iraq? This book helps answer these questions. Neither the American citizens nor the American soldiers' families ( and for sure not the Iraqi people) are benefiting from the war, but other some major corporations and daylight thieves are.
In these hard times, when companies are still using economic shock to sell us more fake solutions; Viagra's commercials, for instance, tell us that during these hard times of foreclosures and unemployment, a man should be hard too. Sadly, it's a very funny commerical, and there are numerous other examples of products being pushed in the market to distract and numb the shocked masses . The escape from this economic disaster can not be found in magic products or new distractions. Open your eyes! Read this book and you will understand the reasons behind this situation. Highly recommended.
- Awesome Read
Great Book. I loved it. Best thing I've read in a long time. A bit slow in the middle, but what a story!
If you've ever thought Republican economic theory was crazy evil wrong-headed nonsense here's 30 years worth of nefarious history to refute any right wing nutters you may be forced to deal with. Klein's book is a blistering refutation and indictment of right-wing neo-liberal economic theory.
Incredibly salient book in our current economically trying times. Klein's book provides history, context, an idealogical underpinning, and points the way to the culprits of our current mess. Let's keep our fingers crossed and pray all that despite some discouraging cabinet picks, Obama can finally bury the Friedmanite policies of the past 30 years which reached its most absurd and pure expression in this country during the Bush nightmare, and restore Keynesian economic polices and fiscal sanity to our poor long suffering country. ...more info
- The Shock is for you
Ms. Klein's book is such an unnerving shock in and of itself. If you have been wondering what was the method behind the madness of world economic and political change over the past 40 years, then this book is a must read. Her research into the repeating patterns of change due to the implementation of fundamentalist capitalism reveals why throughout the world we are still regarded as the "Ugly Americans"....more info
- Some good points. Finishes weekly.
Very interesting topic and history. The author raises some great points about changes being jammed through with fear and shock. What I don't think she ever challenges is that there are some serious short comings to other systems not just the free market economies. I also think she was identified problems but may oversimplify by blaming it all on the free traders and not enough on incompotent politicians and academians. I thought the there were some good topics (History of Argentina and Russia) in the book but she did not tie it completely together for me. Worth a read but I think she may assign too much blame to free trade and not enough where it may squarely lie....more info
This well-researched book is clearly written and should be read by anyone wanting to understand world politics and economics....more info
- Is current global economic crisis actually part of a plan?
This book is prelude to the present.....
Today's economic crisis may be part of a master plan. Read up on the Bilderberg Group ~~ Trilateral Commission ~~ Council on Foreign Relations ~~ New World Order and decide for yourself.
Two key players from these groups come immediately to mind:
Alan Greenspan - former Fed Chairman whose policies significantly contributed to both the stock bubble/crash in the late 90s and the recent housing bubble/burst and accompanying global economic meltdown. Could Sir Alan have been simply stupid, or was it intentional?
David Rockefeller - Founding member of all three organizations. JP Morgan/Chase: "winner" of Bear Stearns, Washington Mutual sweepstakes). Of all the mega banks, why would they be the chosen one? Perhaps because of Rockefeller's role in the bank?...more info
- I Feel Validated
I have the audio and I keep it in my car. This a must read (or listen).
I remember as a young man in Vietnam being told that we were there to stop the spread of communism and to spread democracy. What I was being
told was not what I was seeing. This country was embracing rightwing dictators and while claiming to hate commmiunist dictators. Then later I
learned that we had overthrown elected governments.
In college I started out majoring in economics and when I got into the
intermediate and advance courses, some of the [...] didn't make sense to
me. I thought it was my inability to grasp concepts my doctor professor
was trying to teach me. Economics was suppose to be an empiracal science?
Based on the assumption that man is rational? If Milton Freidman thinks
that if you let market work free without any interference from government,
then why does he think so-called rational men need to be bombarded with
slick ad campaigns and heavy indoctrinating students to accept his way of
thnking? Rational men should be manipulated, but markets should be unregulated? The stuff didn't make sense then, but now I know why!
All in all Ms Klein does a great job is exposing the Orwellian lies about
the virtues of Free Market Capitalism/Privatization and its ugly twin sister Free Trade Globalization. These are just euphemisms for Neo Feudalism/Fascism and Neo Colonialism/Imperialism. The Freidmanistes' agenda is to dismantle the New Deal. ...more info