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Book Review: The Shock Doctrine: The Rise Of Disaster Capitalism by Naomi Klein

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"It's the economy stupid" was the phrase that supposedly kept Bill Clinton's campaign team focused on what they needed to do in order to win the 1992 election campaign. Pound away mercilessly on the woeful state of the economic union in post-Regan America, and lay the blame for it at his former Vice President, and incumbent President, George H. W. Bush.

What that consisted of was simply pointing out to Americans what they already knew. A great many of them were unemployed, real wages sucked, the government was billions if not trillions of dollars in debt, and the policy of cutting taxes and increasing military spending was ruinous beyond belief. Clinton's election over a sitting President was a major rebuttal to the supposedly free market, small government, and cutting of social programs measures practiced by the neo-conservatives who surrounded Ronald Regan.

Compared to the majority of industrialized nations in the world the United States has, depending on your point of view, lagged far behind in terms of the social safety net or led the way in cutting back on government interference in the economy. While the United States has never fully committed to either completely free markets or a real social safety net, it is the country where the two major contrasting schools of economic thought have battled it out on a regular basis.

John Maynard Keynes proposed government intervention in the economy in order to protect the populace from the vagrancies of economic fluctuations like recessions, depressions, and inflation. He advocated government run insurance programs to offer protection to people in times of vulnerability; unemployment, old age, and illness. His ideas formed the basis of what is known as the welfare state — which was never meant to be a derogatory term, by the way.
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At the complete opposite end of the economic spectrum was Milton Friedman who advocated that the economy must be allowed to proceed without any government interference at all. Only then would it be able to operate at maximum efficiency and provide plenty for everybody. It's Mr. Friedman's philosophies, and the manner in which they have been and are being implemented, that come under intense scrutiny in Naomi Klein's latest book published by Random House Canada through its Knoff Canada imprint, The Shock Doctrine: The Rise Of Disaster Capitalism

The title refers to Mr. Friedman's contention that for his theory to work, the economy has to be shocked back to a state of zero where there is no government ownership or involvement in the economy. It is Ms. Klein's contention that not only is Friedman's philosophy being implemented whenever opportunities present themselves, but that American policy over the last eight years has been geared to ensuring it's implementation when and where ever possible.

From the outset, Ms. Klein makes it clear that she doesn't believe Capitalism is an inherently evil system. What she does is systematically lay forth a damning and convincing case in support of her thesis. She has spent the last two years traveling the globe conducting interviews, and investigating situations and circumstances where the shock doctrine has been implemented.

In Sri Lanka and Indonesia after the tsunami, fishing villages that had been on the coasts for generations providing families with their livelihoods have seen their land sold out from under them to hotel, resort, and condominium developers, while they've been stuck in refugee camps. In New Orleans, the destruction of the Ninth Ward has been called an opportunity to start over again from a clean slate. Never mind the people who no longer have any place to live — think of the condominiums that can be built. Think of what can be privatized!

Of the 134 public schools that used to be under the control of the local board of education only four have not been turned into privately run institutions. Of course, with no students why should the schools be kept open? The fact that students have no homes to live in and are still scattered across the country is conveniently forgotten.

It's when she examines the situation in Iraq, and the "security" arrangements implemented in the name of Homeland Security that Ms. Klein builds her case against the Bush administration. It is her contention that in order for the type of economic shock treatment required to make the clean slate, a government needs to have dictatorial power over its population to curtail opposition.

She cites as an example the first time this type of economic experiment was attempted in practice, following the American backed military coup in Chile. Pinochet's government had eliminated most avenues of dissent through the simple expedient of killing any opposition voices during the coup. When they implemented the economic policies of complete privatization and cutting spending across the board they simply continued the practice of squelching opposition.

Ironically, the policy ended up being a complete failure. Pinochet was forced to start re-nationalizing industry in the 1980's, and many of the same social programs he had cut were re-introduced in order to stave off economic collapse.

In Iraq, the American team charged with rebuilding the country has been systematically selling all the country's industry and resources to American corporations. Contracts for everything from private armies to act as security forces to building swimming pools in public parks are awarded to American companies. Services like health care, electricity, and policing are all being removed from the governments control and contracted out into private hands

When the Vice President of the United States has gone on public record as saying he advocates the use of torture against enemies of the state, and there is an army occupying your country that has no qualms about shooting and killing anyone it feels like — how loudly would you be inclined to complain? Looking at the American "slogan" for this invasion — "Shock And Awe" — the connection between it and Shock Doctrine economics becomes all too clear, according to Ms. Klein.

The State control of personal freedoms in the United States itself may not be as obvious as troops in the street, but any person anywhere can be arrested without reason and denied access to a lawyer under provisions of the Homeland Security Act. The British perfected that years ago with their anti-terrorist legislation allowing them to hold anybody without charges or access to a lawyer just by saying the magic word "terrorism."

What constitutes a threat to security anyway? I'm sure a case could be made for disrupting the economy being construed as a threat to national security — don't you? Without a healthy economy, how can all those necessary security measures be paid for, after all?

Naomi Klein has written a very lucid and convincing argument in support of her thesis that governments around the world are taking advantage of natural disasters to implement drastic changes in economic policy at the expense of their populations' well being. What's even more disturbing is the fact that she just as clearly outlines how governments are creating the circumstances enabling those situations to develop and taking steps to ensure that opposition to the changes is suppressed.

This is a book for people of all political stripes to read. Even if you disagree with Ms. Klein's politics, that won't matter. This is a book about "economics, stupid," and not about whether you are on the left or the right.

Canadian readers can purchase a copy of Shock Doctrine: The Rise Of Disaster Capitalism either directly from Random House Canada or from an online retailer like Amazon.ca.

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About Richard Marcus

Richard Marcus is the author of two books commissioned by Ulysses Press, "What Will Happen In Eragon IV?" (2009) and "The Unofficial Heroes Of Olympus Companion". Aside from Blogcritics his work has appeared around the world in publications like the German edition of Rolling Stone Magazine and the multilingual web site Qantara.de. He has been writing for Blogcritics.org since 2005 and has published around 1900 articles at the site.
  • bliffle

    Yes, the shouts of “free markets” by certain characters (some even here on BC!) ring hollow when they turn around and demand that the Fed save the stock market from collapse, or that Katrina ‘relief’ funds be routed through privatization channels that drain off all thos tax dollars before they can reach the intended recipients.

    Or that the government undertake a trillion dollar war to preserve their oilfields.

    Or that the SSA be prohibited from negotiating prices for drugs.

    In fact, Crisis Capitalism is a great thing for wannabees who haven’t the ability to start and grow a successful business. A crisis like Katrina means the instant flow of billions of unchecked dollars that are never audited and never accounted for.

    Same for Department Of Homeland Security.

    Same for a large distant war.

    Same for every big project these jokers advocate.

    With their ability to enable crises and openhanded crisis budgeting this admin has unparalleled control over all of our markets.

    They’ve succeeded in sovietizing the US economy.

  • Bill

    I’m pretty sure you mean President Reagan.

    Regan means king. Reagan means farmer.

    Don’t do him the courtesy.

  • Frank Fortune

    Naomi Klein’s greatest talent is for self-publicity. I would say that is her greatest genius. But even as she admits with No Logo, her works lack the depth and insight that is heralded by the publicity. While she packs the back of her books with a laundry list of facts and a toilet roll of figures, such a technique is as old as the hills. Selective fact hoarding does not bring the truth.

    The Naomi Klein Project – to become a rich and famous writer – is going to plan. But what do her interventions really offer to those who follow her? Her disturbing egging on of violence at international fora prior to 9/11, provoked a severe backlash from governments around the world, and gifted activists the constrained atmosphere they now live with.

    She admits the vapid thinness of No Logo’s attacks on brands and logos, but will she in a few years admit the ahistorical and lazy thinking behind the Shock Doctrine? It is a long-standing observation of human behaviour dressed up as a revelation: that humans exploit weakness to get their way.

    Most disturbing, however, is what she is trying to achieve as a political project. She calls herself a neo-Kenysian just when such economics are as dangerous and shot through with failure as the market fundamentalists. Do people really wish for more management of their lives by the state, or are they in fact seeking liberation from both the state and heavy-handed corporations? As a case study, the UK’s Labour Party has been engaged in just such a project to disasterous ends: people are rebelling against this suffocating state micro-managing and gross waste of public funds. In many ways, Klein panders to an audience of neo-Marxists pining for a new era of state growth. But a quick look around the world at what people really want, will show a far different picture: a global population straining to be made free.

  • Lucas T Nascimento

    “Economics, politics, culture… these are the elements that make up a glorious symphony, which we call the world. But for much too long, we have been forced to listen to the music being conducted by the powerful and wealthy few. For much too long we have listened to the shrill voices spewing the same failed ideas time and time again. Those ugly ideas have grown strong over time, the off-spring of blind and stubborn repetition. Now, these ideas have long arms which quickly stuff the pockets of the elite at the expense of the masses. At the same time, they have found ideologues to conduct our world’s symphony in a way that is soothing only to their small, deft ears. The ear-splitting tension thereby created has nearly drowned out any inkling of dissent, as we continue to beg for it to stop, stop, Stop! Trying only to put an end to such horrific madness, however temporary, we would give in to the wailing cry for a more deregulated, unfettered, “free-market”, disaster capitalism.

    Ann Klein’s book “The Shock Doctrine” gently lifts the wool that has been slowly pulled over our eyes for decades. She lays out a different tune, and allows us to see and hear the truth that is behind these horrendously cacophonous sounds. She stares unflinchingly at decades of inequality, injustice, and oppression. All so that we can see a little bit clearer. So that we can begin to hear again the beautiful sounds of a symphony, which we call the world.”