The Shock Doctrine: The Rise of Disaster Capitalism

Author	Naomi Klein
Country	Canada
Language	English
Subject	Economics
Genre	Non-fiction
Publisher	Knopf Canada (first edition)
Publication date	4 September 2007
Media type	Hardcover, Paperback
Pages	672 (first edition)
ISBN	978-0-676-97800-1 (hardcover) Parameter error in {{ISBNT}}: invalid character
OCLC	74556458

The Shock Doctrine: The Rise of Disaster Capitalism is a 2007 book by Canadian author Naomi Klein, and is the basis of a 2009 documentary by the same name.^[1]

The book argues that the free market policies of Nobel Laureate Milton Friedman have risen to prominence in some countries because they were pushed through while the citizens were reacting to disasters or upheavals. It is implied that some man-made crises, such as the Falklands war, may have been created with the intention of being able to push through these unpopular reforms in their wake.

Synopsis

The book has an introduction, a main body and a conclusion, divided into seven parts with a total of 21 chapters.

The introduction sketches the history of the last thirty years where economic shock doctrine has been applied throughout the world, from South America in the 1970s to New Orleans after Hurricane Katrina. Klein introduces two of her main themes.

1. That practitioners of the shock doctrine tend to seek a blank slate on which to create their ideal free market economies, which inevitably requires a usually violent destruction of the existing economic order.
2. The similarities between economic shock doctrine and the original shock therapy – a psychiatric technique where electric shocks were applied to mentally ill patients.

Part 1 begins with a chapter on psychiatric shock therapy and the covert experiments conducted by the psychiatrist Ewen Cameron in collusion with the Central Intelligence Agency: how it was partially successful in distorting and regressing patients' original personality, but ineffectual in developing a better personality to replace it. Parallels with economic shock therapy are made, including a digression on how government agencies harnessed some of the lessons learned to create more effective torture techniques. Torture, according to Klein, has often been an essential tool for authorities who have implemented aggressive free market reforms – this assertion is stressed throughout the book. She suggests that for historical reasons the human rights movement has often portrayed torture without explaining its context, which has made it frequently appear as pointless sadism. The second chapter introduces Milton Friedman and his Chicago School of Economics, who Klein describes as leading a movement committed to free markets even less regulated than before the Great Depression.

Part 2 discusses the use of shock doctrine to transform South American economies in the 1970s, focusing on the coup in Chile led by General Augusto Pinochet. The apparent necessity for the unpopular policies associated with shock therapy to be supported by torture is explored.

Part 3 covers attempts to apply the shock doctrine without the need for extreme violence against sections of the population. The mild shock therapy of Margaret Thatcher is explained as being made possible by the Falklands War, while free-market reform in Bolivia was possible due to a combination of pre-existing economic crises and the charisma of Jeffrey Sachs.

Part 4 reports on how the shock doctrine was applied in Poland, Russia, South Africa and to the tiger economies during the 1997 Asian financial crisis.

Part 5 introduces the Disaster Capitalism Complex where the author describes how companies have learnt to profit from disasters. She talks about how the same personnel move easily from security-related posts in US government agencies to lucrative positions in corporations.

Part 6 discusses the occupation of Iraq, which Klein describes as the most comprehensive and full-scale implementation of the shock doctrine ever attempted.

Part 7 is about the winners and losers of economic shock therapy, how narrow groups will often do very well by moving into luxurious gated communities while large sections of the population are left with decaying public infrastructure, declining incomes and increased unemployment.

The Conclusion is about the backlash against the shock doctrine and economic institutions that propagate it like the World Bank and IMF. South America and Lebanon post-2006 are focused on as sources of positive news where politicians are already rolling back free-market policies, with some mention of the increased campaigning by community-minded activists in South Africa and China.

Critical response

Praise

Nobel Laureate and former Chief Economist of the World Bank, Joseph Stiglitz wrote a review of The Shock Doctrine for the New York Times, calling the parallel between economic shock therapy and the psychological experiments conducted by Ewen Cameron "overdramatic and unconvincing" but also saying, "the case against these policies is even stronger than the one Klein makes" and that the book contains "a rich description of the political machinations required to force unsavory economic policies on resisting countries."^[2] Paul B. Farrell from the Dow Jones Business News stated "you must read what may be the most important book on economics in the 21st century".^[3] 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."^[4] William S. Kowinski of the San Francisco Chronicle wrote, "Klein may well have revealed the master narrative of our time,"^[5] and it was named one of the best books of 2007 by the Village Voice,^[6] Publishers Weekly,^[7] The Observer,^[8] and the Seattle Times.^[9] The Irish Times describes Klein’s arguments as "compelling" with Dr. Tom Clonan reporting that she "systematically and calmly demonstrates to the reader" the way in which neocons were intimately linked to seismic events that "resulted in the loss of millions of lives". Near the end of the review Dr. Clonan’s offers a précis for Klein’s central argument—that the neoconservative project is not about "implanting of democracy" but a repressive prescription for the maximising of global profit for a small elite. "Neocons see the ideal ratio of super-rich to permanent-poor as consistent with an uber-class of business oligarchs and their political cronies from the top 20%". The remaining 80% of the world’s population, the "disposable poor", would subsist in "planned misery" unable to afford adequate housing, privatised education or healthcare.^[10] The Independent called the book "a compelling account of the way big business and politics use global disasters for their own ends",^[11] while Stephen Amidon of the New York Observer calls it a "compelling study of the dark heart of contemporary capitalism."^[12]

Mixed

Shashi Tharoor in the Washington Post says that The Shock Doctrine takes Klein's criticism of capitalism an important step further, but also says that Klein "is too ready to see conspiracies where others might discern little more than the all-too-human pattern of chaos and confusion, good intentions and greed".^[13]

Criticism

In the London Review of Books, Stephen Holmes criticized its perceived naïveté and for conflating "'free market orthodoxy' with predatory corporate behaviour."^[14] John Willman of Financial Times describes it as "a deeply flawed work that blends together disparate phenomena to create a beguiling—but ultimately dishonest—argument."^[15] Tom Redburn in the New York Times states that "what she is most blind to is the necessary role of entrepreneurial capitalism in overcoming the inherent tendency of any established social system to lapse into stagnation".^[16] Jonathan Chait wrote in The New Republic that Klein "pays shockingly (but, given her premises, unsurprisingly) little attention to right-wing ideas. She recognizes that neoconservatism sits at the heart of the Iraq war project, but she does not seem to know what neoconservatism is; and she makes no effort to find out." ^[17] Robert Cole from The Times said, "Klein derides the “disaster capitalism complex” and the profits and privatisations that go with it but she does not supply a cogently argued critique of free market principles, and without this The Shock Doctrine descends into a muddle of stories that are often worrying, sometimes interesting, and occasionally bizarre."^[18] Economist Tyler Cowen, who called Klein's rhetoric "ridiculous" and the book a "true economics disaster", says that the book contains "a series of fabricated claims, such as the suggestion that Margaret Thatcher created the Falkland Islands crisis to crush the unions and foist unfettered capitalism upon an unwilling British public."^[19] Fred Kaplan said that Naomi Klein's depiction of the 1993 Russian constitutional crisis as a "clash between Chicago-style capitalists and honorable, fledgling democrats is ludicrous".^[20]

Awards

• Winner of the Warwick Prize for Writing (2008/9)

See also

• Chicago school of economics
• Criticism of capitalism
• Political economy
• Shock therapy (economics)

Notes and references

External links

• Official website
• Mini-site from guardian.co.uk
• Naomi Klein debates Alan Greenspan on Democracy Now — Iraq War, Bush's Tax Cuts, Economic Populism, Crony Capitalism and More
• Video interview of Naomi Klein by John Cusack on HuffingtonPost
• Video, War Inc. by John Cusack, inspired by Naomi Klein's book
• A Review by Ron Stouffer and Rosie Skomitz
• Naomi Klein Issues Haiti Disaster Capitalism Alert: Stop Them Before They Shock Again - video report by Democracy Now!

Reviews & Interviews

• Awe, shocks! - review from Left Business Observer
• Positive commentary by Arianna Huffington
• News from Within Podcast: Naomi Klein's The Shock Doctrine in the Israeli Context., an audio interview with Naomi Klein.
• Dead Left by Jonathan Chait. A review by The New Republic