The Shock Doctrine is the story of how “free market” policies have come to dominate the world. Klein systematically explores how neo-liberal economic policies have been pushed through following ‘shocks’ – typically either natural disasters or wars ore oppressive state apparatuses.
Klein argues that these policies work against the interests of the majority because they transfer wealth and power from the people to the global corporate elite, thus why elites need to implement these policies of in times of shock following disaster.
The book traces the origins of the ‘shock doctrine’ back fifty years, to the University of Chicago under Milton Friedman and follows the application of these ideas through contemporary history, showing in detail how the neo-liberal agenda has been pushed through in several countries following shocks.
Some of the events Klein covers include –
- Pinochet’s Coup in Chile in 1973,
- The Falklands War in 1982,
- The Tiananmen Square Massacre in 1989,
- The Collapse of the Soviet Union in 1991,
- The Asian Financial crisis in 1997
- The War in Iraq 2003
- Hurricane Katrina 2006
All of the above are cases where the Corporate Elite, often in conjunction with the US government and oppressive regimes in some of the countries above have sought to profit out of times of disaster. Most of feel sympathy for people at such times – neo-liberalists see opportunity.
Once again, for me, the most important argument Klein makes is that
Neo-Liberalists require situations of Shock to push through their policies of privatisation, deregulation and cut backs to public spending because the majority of people would not accept
such policies because they mean a transfer of wealth
and power to corporate elites.
Towards the end of the book, Klein talks about an extremely worrying trend in the USA – which is the privatisation of war and security – both of which are used in times of disaster – and we now have a situation where Capitalism benefits from disaster.
The Shock Doctrine: The Rise of Disaster Capitalism is a 2007 book by the Canadian author and social activist Naomi Klein. In the book, Klein argues that neoliberal free market policies (as advocated by the economist Milton Friedman) have risen to prominence in some developed countries because of a deliberate strategy of "shock therapy". This centers on the exploitation of national crises (disasters or upheavals) to establish controversial and questionable policies, while citizens are too distracted (emotionally and physically) to engage and develop an adequate response, and resist effectively. The book suggests that some man-made events, such as the Iraq War, were undertaken with the intention of pushing through such unpopular policies in their wake.
Some reviewers criticized the book for making what they viewed as simplifications of political phenomena, while others lauded it as a compelling and important work. The book served as the main source of a 2009 documentary feature film with the same title directed by Michael Winterbottom.
Synopsis
The book is divided into seven parts with a total of 21 chapters.
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. The second chapter introduces Milton Friedman and his Chicago school of economics, whom Klein describes as leading a laissez-faire capitalist movement committed to creating free markets that are even less regulated than those that existed before the Great Depression.
Part 2 discusses the use of "shock doctrine" to transform South American economies in the 1970s, focusing on the 1973 coup in Chile led by General Augusto Pinochet and influenced by a prominent group of Chilean economists who had been trained at the University of Chicago in the Economics department, funded by the CIA, and advised by Milton Friedman. Klein connects torture with economic shock therapy.
Part 3 covers attempts to apply the shock doctrine without the need for extreme violence against sections of the population. Klein says that Margaret Thatcher applied mild shock "therapy" facilitated 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 Klein thinks the shock doctrine was applied in Poland, China, South Africa, Russia, and the Four Asian Tigers. In Poland she discusses how the left-leaning trade union Solidarity won the country's 1989 legislative elections, but subsequently employed the shock doctrine due to IMF pressure. The section on China discusses the 1989 Tiananmen Square Protests, and the liberalization of China's economy. In South Africa she explains that the negotiations to end apartheid resulted in economic policy that went against the core of the Freedom Charter. In Russia she describes how Boris Yeltsin took power after the collapse of the Soviet Union and crafted economic policy that made the Russian oligarchs of 2020 possible. Finally she shows that during the 1997 Asian financial crisis the Tiger Nations were forced to sell off numerous state enterprises to private, foreign companies.
Part 5 introduces the "Disaster Capitalism Complex,” a complex series of networks and influence employed by private companies that allows them to profit off of disasters. She mirrors this new Disaster Capitalism Complex with the Military Industrial Complex and explains that both employ the blurring of the line between private and public, through tactics like the revolving door.
Part 6 discusses the use of "Shock and awe" in the 2003 invasion of Iraq and the subsequent occupation of Iraq, which Klein describes as the most comprehensive and full-scale implementation of the shock doctrine ever attempted, with mass privatization of Iraqi state-owned enterprises (including thousands of men being laid off) which is argued as contributing to the insurgency, since many of the unemployed became embittered toward the US as a result and joined insurgent groups afterward.
Part 7 is about winners and losers of economic shock therapy – how small 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. Klein describes economic policy after Hurricane Katrina, the 2004 Sri Lanka Tsunami, and the Apartheid-style policy of the Israeli government toward Palestinians.
The Conclusion details the backlash against the "shock doctrine" and economic institutions which, in Klein's view, encourage it – like the World Bank and IMF. South America and Lebanon post-2006 are shown in a positive light, 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.
Naomi Klein’s The Shock Doctrine ties together history, economics, globalization, natural disasters and geopolitics into one bleak picture. Klein’s thesis is that the Shock Doctrine, also called Disaster Capitalism, has been put into practice all over the world, supported by Milton Freidman and his Chicago Boys. The shock doctrine is a theory that in order to put into practice the highly unpopular tenets of a free market economy, the implementation of such policies must happen directly after a shock to the national conscious. Such shock can take the form of a terrorist attack, national disaster or coup d’état. According to Klein, the population is so disoriented that they cannot adequately defend themselves against sudden drops in wages, high inflation and the privatization of social services like education and health care.
While the disorientation of the masses allows policies to be implemented, it does not eradicate all opposition. In order to fully achieve that, the primary shock is coupled with a second, more literal one. Those who oppose free markets are abducted, tortured, killed or forced into exile. This is not, however, a project separate from the economic policies. Milton Friedman and his Chicago School Boys attempt to elevate their aims to a scientific level whenever possible in order to minimize the human element.
Originally, the idea was that free markets and democratic politics go hand in hand, but as their experiments in Latin America unfolded, it became evident to them that an authoritarian regime was the only kind fully able to use the military might to enforce the kind of full-scale terror necessary to degrade the population to the point where it is incapable of protesting, where it has lost all connection to its culture and values.
To the outside world, the poverty and disappearances are often invisible. Wealth is consolidated into the hands of the corporate elite. The country’s GDP grows, and an economic miracle is pronounced while health care becomes nonexistent and starvation and torture are rampant. Corporations are able to buy up previously nationalized markets at incredibly low prices. Trade unionists are detained and tortured throughout the country, and sometimes on-site at their own jobs. Even the corporate elite are not safe, as any who oppose the new regime can be dismiss, deported or worse.
Finally, an essential point of Klein’s Shock Doctrine is the failures of free market economies. The economic policies implemented are typified by selling off national markets, like fuel, to the lowest bidder, as well as privatizing education, health care and the postal service. Inflation skyrockets, wages plummet and the people starve en masse. No one protests because they have been shocked into submission by a national disaster of some sort, just as their friends, family and neighbors have been literally shocked into submission.
In order to demonstrate its thesis, the book asks and answers these five questions: What is corporatism? Where did the methods for these two types of shock come from? Was systematic state terror carried out in these case studies? Who was killed and why? Does free market economics work?
The most horrifying question of this book is where did the methods for these two types of shock come from? The first section of the book is largely devoted to answering this question. First, she deals with the literal, torturous shock treatment. The method of using shock to erase the “diseased” parts of a human being’s personality so that they can be replaced with healthy portions was developed by the psychiatrist Dr. Ewan Cameron at McGill University in Montreal, Canada. He experimented on patients, funded by the CIA, in the hopes of finding a way to reprogram a human being. The CIA’s interest was in finding a way to deprogram Marxism out of human beings, in the hopes of reshaping them as capitalists.
Dr. Cameron’s methods included all manner of sensory deprivation, from isolation to using hoods to block out light. People were put in small isolated chambers, and were served meals at bizarre times of the day in order to further disorient them. These findings were later indoctrinated into CIA handbooks for torture, which were used as a guide for the torture taking place in Latin America. This idea of psychological regression and reprogramming is interesting because the idea of shocking and rebuilding an economy ultimately stems from it.
Several of the accounts from victims of the state-sponsored terror recall hearing the voices of gringos, or seeing white men in the interrogation rooms. They were often described as giving “pointers” and helping with the methods of torture. Additionally, these regimes were often taught by American CIA, and received funding from them.
With regards to the methods of economic shock, the ideas are clearly from various Americans associated with the Chicago School of Economics. With Milton Friedman as their leader, he and his disciples pursued a policy of open, privatized markets with religious zeal. In order to spread these ideals and practice them on something other than mathematical models, The Ford Foundation and government funding helped send dozens of Latino scholars to Milton Friedman’s school. They then brought their economic ideals with them to Indonesia and Latin America. Unfortunately for them, the diplomatic process was not receptive to their ideals, as Latin America in the 1970s was very left-leaning. Its democratic process elected people like Salvador Allende, and its culture revered the likes of Pablo Neruda.
Their economic policies marginalized in the open, democratic debate, it became clear that a more aggressive stance would be necessary. This is the point at which the two kinds of shock became inextricably linked. Just as the McGill patients had regressed into a confused, childlike state, unable to protect themselves, so would be any country who had experienced a similar trauma. And thus, the method was born.
First, a shock to the country, which would confuse the population into a state where it would be incapable of preventing change. Economic reform like cutting state spending and selling off public goods was immediately taken into effect, as well as the second shock: torture. Any segments of the population that would not fit into the new order of individualistic, free-market capitalism would be disappeared, tortured, killed. This included trade union leaders, priests, nuns, activists, artists, musicians, writers, workers and peasants.
The question concerning where the plan came from is important because we must find a way to stop if from continuing to be carried out. As Americans have largely been implicated in the book, it should be of utmost concern to Americans. It is our government, our foundations, our academics who have propelled such horror into existence. If we are to learn from the past and improve our future, we must understand the role we have played. We must correct it, not through revisionist history like Milton Friedman tried to, but by spreading the knowledge. As the short film adaptation made by Alfonso Cuarón and Naomi Klein emphasizes, knowledge is power, and it is the only way to put an end to the Shock Doctrine.
Klein’s thesis is a thorough examination of a cold-hearted, skillful implementation of free market economics. Her thesis is enlightening in that she illuminates the connections the CIA, the Ford Foundations, MNCs and the University Of Chicago School Of Economics have to these shocks worldwide. The author is clear in showing that it was not merely good economic advisors who happened to work for men who violated human rights. Rather, she shows the violations as a means to the economic policies, not an end.
Prior to reading this book, I had learned about Shock Treatment as a method of helping an underdeveloped country become developed, along with Foreign Direct Investment, Structural Adjustment, Export-Oriented Industrialization and Import Substitution Industrialization. I had also been taught about the bloody regimes of dictators, the torture in Abu Ghraib and the corporate mercenaries in Iraq. Never before, however, had they been taught together, as policies intrinsically connected to one another. In fact, the names of the countries’ leaders were never mentioned when discussing methods of economic stimulation.
A major success of this book is the format used to prove its theory. After outlining the fundamental theory, the complex origins of the phenomenon are described. The rest of the book is used to show several in-depth case studies from the past half-decade, from all over the world. A broad variety of shocks are shown, from military coup to natural disaster. As the case studies progress through time, there is also a clear link to Milton Friedman and his disciples, as well as various American institutions.
A common criticism of this book is that it vilifies Milton Friedman. I agree, Friedman is vilified, but I do not criticize Klein for it. It is clear from the evidence here that he was in contact with many world leaders throughout his life. They valued his opinion, he visited their countries, and he sent them his protégés. It seems laughable to acknowledge Friedman as an intelligent man and at the same time claim he cannot be held responsible. There is more than one way to kill a man, and Freidman and his Chicago Boys helped find many. They may not have tortured with electric shock, but lowering wages and causing the price of bread to skyrocket will just as surely torment and kill the population.
After reading this book, it has come up in other classes and I have discussed it with many students and teachers. A common experience is that it seems to explain so much about what is going on in the world right now. One has a better understanding of American politics, both foreign and domestic. This also illuminates the truth of its case studies, and leaves the reader with an odd feeling. That is, many educated people are aware of the various factors: economic “development,” the human rights abuses, the disasters that took place, electroshock treatment, torture and US interference. However, no one has ever pulled all the evidence together in this way, and thus drawn these conclusions. Having completed the book, it seems strange that Klein’s connection was never made before.
In conclusion, Klein’s Shock Doctrine should be required reading. It shows a side of capitalism that we like to ignore: inflation, wage hikes, kickbacks, corporatism, and violence. Capitalism is not inherently evil, but it is also not an innocent, pure science, to be revered like religion. Friedman’s crucial error was to ignore the human element as negligible, and it is anything but.
It is because of the human element that free market capitalism is not worthwhile, and due to that same human element that it cannot coexist with democracy. Reading Klein’s work allows us all to feel like one of Dr. Cameron’s patients for a little while. Suddenly, we understand why our world has been so strange: we have unknowingly been the subject of experiments, and those experiments have failed.
Book Review: "The Shock Doctrine" by Naomi Klein (2007) - Inquiries Journal
There are a handful of books — Howard Zinn’s A People’s History of the United States comes to mind — that should be read by every teacher and teacher educator. Naomi Klein’s The Shock Doctrine is one of these. From the 1973 Chilean coup — the other September 11 — through today, Klein demonstrates how shock has been used by global elites to push through a radical agenda of privatization and “free trade.”
This disaster capitalism, as she calls it, is the global context that frames our conditions of teaching and learning, our students’ lives, and everything from the wars we wage to the food we eat.
Will our future be one of social and ecological responsibility or increasing inequality and selfishness? For those of us who would prefer the former, Klein’s book will help us chart the course.
Endorsements
“Naomi Klein has written a brilliant, brave and terrifying book. It’s nothing less than the secret history of what we call the ‘Free Market.’ It should be compulsory reading.” —Arundhati Roy
“With a bold and brilliantly conceived thesis, skillfully and cogently threaded through more than 500 pages of trenchant writing, Klein may well have revealed the master narrative of our time. And because the pattern she exposes could govern our future as well, The Shock Doctrine could turn out to be among the most important books of the decade.” —William S. Kowinski, San Francisco Chronicle
Table of Contents
Introduction | Blank is beautiful: three decades of erasing and remaking the world
-
Part 1
| Two doctor shocks: research and development :
The torture lab: Ewen Cameron, the CIA and the maniacal quest to
erase and remake the human mind — The other doctor shock:
Milton Friedman and the search for a Laissez-Faire laboratory
-
Part 2
| The first test: birth pangs: States of shock: the blood birth of
the counterrevolution — Cleaning the slate: terror does its work
— “Entirely unrelated”: how an ideology was cleansed of its crimes
-
Part 3
| Surviving democracy: bombs made of laws: Saved by a war: Thatcherism
and its useful enemies — The new doctor shock:
economic warfare replaces dictatorship — Crisis works: the
packaging of shock therapy
-
Part 4
| Lost in transition: while we wept, while we trembled, while we danced
: Slamming the door on history: a crisis in Poland, a massacre in
China — Democracy born in chains:
South Africa’s constricted freedom — Bonfire of a young
democracy: Russia chooses “the Pinochet option” — The capitalist
id: Russia and the new era of the boor — Let it burn: the
looting of Asia and “the fall of a
second Berlin wall”
-
Part 5
| Shocking times: the rise of the disaster capitalism complex:
Shock therapy in the U.S.A.: the Homeland Security bubble — A
corporatist state: removing the revolving door, putting in an archway
-
Part 6
| Iraq, full circle: overshock: Erasing Iraq: in search of a “model” for the Middle East
— Ideological blowback: a very capitalist disaster — Full circle: from
blank slate to scorched earth
-
Part 7
| The movable green zone: buffer zones and blast walls — Blanking the
beach: “the second tsunami” — Disaster apartheid: a world of
green zones and red zones — Losing the peace incentive: Israel as
warning
-
Conclusion
| Shock wears off: the
rise of people’s reconstruction.
