The Shock Doctrine
On the flight to California, where I am spending my Christmas vacation, I began reading Naomi Klein’s new book, The Shock Doctrine: The Rise of Disaster Capitalism, which just came out in paperback this summer. Many of you probably already know Klein from her articles in Harper’s, The Nation, and The Guardian or from her well-known first book No Logo, which I have taught in several of my classes over the past few years including my class on theory. Her new book has been reviewed by some prominent individuals, including Joseph Stiglitz [here], a Nobel-prize winner and former chief economist of the World Bank. She was recently profiled (rather lamely) by The New Yorker [here] and was a guest on both the Colbert Report [here] and C-SPAN [here]. One should pay attention when a book gets reviewed twice in two days in the same newspaper, especially a newspaper like the New York Times; in addition to Stiglitz’s mostly positive review published Sept. 30, 2007, there is also Tom Redburn’s negative one published the day before [here]. One can of course find a list of most of the reviews, responses, and retaliations to the book through Wikipedia [here], along with a brief summary of those responses.
Klein’s thesis is rather straightforward. Fundamentalist free market policies promoted by the economist Milton Friedman and his followers are rarely popular with the majority of people, and so in order to put these policies into effect, the infamous Washington Consensus has taken advantage of various disasters in order to push their agenda. Friedman’s belief is that government gets in the way of natural economic forces, and so he advocates radical deregulation, privatization of government programs including health care and schools, cuts in government spending, and a flat income tax rather than a progressive tax. The Washington Consensus came into being in the 1980s when the Reagan and Thatcher governments and the IMF began to adopt a fundamentalist free-market ideology instead of the mixture of free market, Keynesian, and structuralist economics that were popular (and often successful) before. Worldwide, this ideology has been called “neoliberalism,” and those in the United States who believe that neoliberal economics should be aggressively pushed onto other countries have been called “neoconservatives.” (All of this vocabulary is admittedly strange and, in my view, indicates a strange history that begs to be understood.)
Ideologically, neoliberals and neocons believe that market freedoms and democratic freedoms go hand-in-hand, but in actual practice this is rarely the case because the vast majority of the world’s population is resistant to the privatization of such essentials as water, basic education, and security. Most of us are glad that such things as the minimum wage and the right to unionize are protected, and prefer certain services to be accountable to public scrutiny (e.g., the police just to name one of the more obvious public institutions that neocons have actively sought to privatize.) Consequently, Milton’s economic agenda is often achieved not through democratic means but through draconian, repressive regimes, and these regimes are only able to push through their policies when the general population is “shocked” by some disaster such as a coup d’etat, war, or hurricane. (See my earlier post on the James Bond movie and globalization theory for more on this.) Because market fundamentalism believes that local cultures are an impediment to the universal truths of markets, Klein argues, its proponents perform something analogous to electroshock therapy — attempting to wipe the cultural slate clean just as shock therapy is supposed to wipe the psychic slate clean. In each chapter of her book, Klein’s book carefully narrates how the “shock doctrine” was applied at different times and in different countries around the world. In essence, her book is a history of the dark side of global capitalism, starting with the infamous Pinochet regime in Chile in the 1970s and ending with the recent Iraq war and Hurricane Katrina.
In my opinion, everyone ought to read The Shock Doctrine and take it seriously. And especially now, a year after the book’s publication, as 2008 comes to a close and we are experiencing yet another economic shock, her thesis is particularly relevant. Klein is a terrific writer, and everything she says is backed up with solid research, all of which is carefully cited. The endnotes themselves are worth glancing at because I discovered some other books I’d like to read. (And I suspect that many of her reviewers did not bother to look at the notes.) Nevertheless, although I am a devoted fan of Klein, I do have some problems with it.
I would agree with Stiglitz that her analogy between electroshock therapy/torture techniques and economic shock policy is a bit tenuous, but I would also agree with Stiglitz that our problems with Klein’s metaphor shouldn’t distract us from the main thrust of her argument. In Stiglitz view, Klein’s version of history is basically correct, and in fact he thinks she understates her case rather than overstates it (and in this respect, Stiglitz presents a strong challenge to the main argument of the anti-Klein backlash.) I would also agree with Alexander Cockburn [here] that Klein’s emphasis on the shock doctrine doesn’t account for the other ways that neoliberalism has become the hegemonic ideology of our time. Klein is selective with the stories she tells, and Cockburn is right to ask, what about India? Since the 1990s, India would seem to have gradually begun to adopt the neoliberal agenda democratically, as the journalist Thomas Friedman has talked about at length in his well-known book, The World is Flat — a book that celebrates neoliberalism but ignores many of its consequences. And many cultural theorists would agree with Cockburn that cultural and economic hegemony is most effectively achieved below the radar of an unsuspecting public, rather than through the manipulation of crises and through violent repressive tactics.
However, I think Klein’s main point is often missed. While the political oppression of the Stalinist and Maoist governments are always linked to their Communist economic agenda, the mainstream media oddly refuses to see the linkages between neoliberal economic policy and the past forty years of political oppression and other human rights and environmental disasters. Her book convincingly makes that connection and presents us with a historical memory that can be used to enable people to resist future attempts by neocon governments to force their policies upon unsuspecting publics. In addition, Klein charts the “rise of disaster capitalism,” observing that a radical change occurred in the late 1990s. Until then, most economic theory since Adam Smith’s famous treatise The Wealth of Nations has argued that war and crisis were bad for the overall economy, but Klein shows how neoliberal policies have gradually, over the years, created a very large market for crisis — multinational corporations such as Halliburton specializing in the related industries of destruction and reconstruction. For instance, paradoxically, since the late 1990s, Israel’s stock market index has gone up during violent engagements with Palestine or Lebanon rather than down as it once did…. This is scary because the recent privatization of military operations by the Israeli and U.S. governments is creating a market incentive for violence.
There’s more to say, but my blog post is quite long enough, and my modest goal is simply to encourage everyone to read this book. Despite all its flaws, Klein’s book tells a history everyone really ought to know already.
I want to conclude with two open questions that I plan to address in future blogs. First, missing from her book is the continent of Africa. She talks at length about Latin America, Russia, Eastern Europe, Southeast Asia, China, and Palestine, but except for a brilliant chapter on South Africa, she has nothing to say about the rest of that continent which contains many of the poorest countries in the world. And the stories of many African countries — most obviously the Congo whose democratically elected president was assassinated by the United State’s Central Intelligence Agency — would support her thesis. So, how might her discussion of disaster capitalism be useful to my work with the Oromo struggle that I’ve talked about previously in this blog [here] and [here]?
Second, what about our current capitalist disaster? Her book was published almost a year before the collapse of our economy. It seems that Klein was somewhat prophetic about the inherent weakness of neoliberal economics. Several months ago, I began to analyze this economic collapse [here], but was overwhelmed by its complexity and was too busy working. Do I agree with how Klein has applied her “shock doctrine” thesis to the housing market fiasco and stock market crash in her recent articles (which you can access [here])?
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