The Shock Doctrine: The Rise of Disaster Capitalism

NOTE: this review only covers Part 1 - Part 5 In The Shock Doctrine, Naomi Klein surveys the rise of and subsequent use of the "shock doctrine" as a method of instilling neoliberal policies into the governments of various countries from Chile to Russia. She traces the birth of this doctrine, its relation to shock therapy, and the way countless economics, dictators, and other officials have attempted to craft a new world order that never went according to plan. With a definite bias, Naomi Klein makes no apologies for her views, yet as radical as some might interpret her to be, she presents a compelling view of this political and economic philosophy that certainly resonates with current events, particularly the earthquake that devastated Haiti earlier this year. If there is one figure at the heart of Klein's narrative of neoliberal ideas it is Milton Friedman, the figurehead of neoliberalism, a man who counseled various foreign leaders in their attempt to implement the shock doctrine. The primary aim of the shock doctrine is to "shock" the economy of the country by drastically changing key policies that align with the neoliberal agenda. Most often, these times of drastic imbalance follow an uprising, coup, war, or the like. In this state, the citizens are already feeling a sense of distress and therefore, any additional shocks to the economy should not be a major issue. So, what Klein is attempting to do is to show that capitalism is not born of freedom and that "unfettered free markets go hand in hand with democracy" (pg. 22), but instead to challenge that "official story of capitalism" by demonstrating that capitalism, "has consistently been midwife by the most brutal forms of coercion, inflicted on the collective body politic as well as on the countless individual bodies" (pg. 23). Whether or not one subscribes to the beliefs of Naomi Klein, she does propose a very convincing look at the ways economics and political intertwine on a global scale. Beginning with the links between shock therapy and the shock doctrine, Klein basically suggests they work the same, both are aimed at erasing a "memory" if you will, to create a clean slate. In shock therapy, a new set of behaviors may be imprinted, in the shock doctrine, a new set of economic policies is to be enacted, specifically neoliberal policies - free trade, deregulation, privatization, etc. The chapter on this relationship between the two actually works to shock the reader, to show how unscrupulous these doctors were in trying to treat their patients, and these same doctors were coincidentally enough government funded for the most part. Without going into too much detail, subsequent chapter discussed the way the shock doctrine was executed (or attempted) in countries around the world; Klein uses Chile, Poland, South Africa, Russia, and China as prime examples. Each case follows a similar trajectory with a leader or faction in power that a certain cabal of insiders who wanted to shock the countries political and economic systems until they were replaced with neoliberal ideas, policies, and practices. In Chile, probably the best example from the book, a group of Chilean students taught at the University of Chicago (home to a neoliberal contingent of economists) formed a group called "The Chicago Boys," and these men infiltrated government positions and advised the military leaders who were planning a coup to force the president out of power. This scenario was repeated in several different incarnations around the world; Klein shows how governments from Communist to Democratic were all injected with a neoliberal agenda and how shocks in all the examined countries facilitated the changes that were to be necessarily to support a change. All cases, although very similar, are not always the same as the case of Russia and China illustrate. As these countries seemed to be transforming into democratic countries, underlying this adjustment was the shock doctrine, which was exercised differently than it was in the cases of the Latin American countries. Interestingly, as was the case in South Africa, and an example that stands out slightly, although Nelson Mandela and the ANC (African National Congress) came into power, their control over South Africa was more than show than an actuality. The men - white Afrikaners that had been in power for decades - continued to control the country's politics and economics behind the scene. But in all of these examples, the main point is that government coups, backhanding dealings, and other shady transactions were carried out to impose a new rule of law - that being neoliberalism. Part Five and one of the most interesting and compelling sections deals with the shock doctrine in the United States. Here, Klein weaves together the conjunctures between all the Bush era players, Bush Jr., Cheney, Rumsfeld, etc. and shows how each of these men had all the money in the world to gain from privatization efforts pre and post 9/11. The figures that Klein quotes Rumsfeld and Cheney making in their business ventures are mind boggling, and only reinforce the Bush administration's need to want to impose their own form of shock doctrine. What is most frightening about these figures is the example of Rumsfeld who was Chairman of Gilead Sciences, the company that patented Tamiflu. In other words, in any disaster where large quantities of Tamiflu were needed, and while people were suffering, Rumsfeld and the company would being doing financially well. Although this whole section was a little too "conspiracy theory" for my personal liking, Klein does you make one think more about the implications of those government officials being tied so closely to large for profit corporations. Overall, The Shock Doctrine is well researched, clear, well written and most of all a very, very compelling read. If you agree with Klein's views, you will love this book, if you are more of the neoliberal and conservative variety, you will probably not enjoying reading it and will certainly disagree with Naomi Klein and what she has to say. Overall, I think no matter one's political or ideological leanings, The Shock Doctrine makes the point of how tied together we are in a globalized world. Globalization does not just affect politics, economics, culture, or society. It doesn't just affect material goods, but it influences the way we all live our lives in the twenty-first century. As many reviewers have stated already, this book is eye opening, yet it offers the hope that maybe if we all become a little more educated about what is going on in the world, we could do something more to change it to the way we see fit.

The late Milton Friedman, the renowned economist, believed that democracy and a free-market economy went hand-in-hand, that the greatest threat to both was nationalization, government regulation, and social spending. He preached this philosophy to his disciples at the University of Chicago School of Economics, and they would go forth spreading the Gospel according to the Book of Milton. There is also the International Monetary Fund, an agency founded after World War II to help struggling countries and their economies get back on their feet. Many of its managers and policy makers will be graduates of the Chicago School of Economics, and they will begin to impose the Friedman creed wherever possible. There is only one thing wrong. No population seems to vote in the people who support their brand of economics. Its first success is when a socialist, democratically elected President of Chile, Salvador Allende, is overthrown and killed when the presidential palace is stormed by fascists. Augusto Pinochet comes into power and immediately places the "Chicago boys" in charge of the economy. With the death of price controls and lunch programs, Chileans find themselves spending one quarter of their monthly salaries just to buy bread. They will leave hours earlier for work than usual because they can no longer afford public transportation. Even Chile's social security program, once a model of efficiency is privatized, becoming virtually worthless overnight. Chilean children begin fainting in school from lack of food or milk and many stop attending altogether. The story of Chile will be repeated in Argentina, Bolivia, China, Peru, Poland, South Africa, Sri Lanka, and Russia where the IMF will demand that borrowers meet Draconian conditions before they lend money. In each case these austerity measures will be made overnight, all at once. A shocked population will come to their senses if such radical changes are made over time. They will be able to organize, mobilize and challenge the implementation of such policies. It has to come all at once, right after elections, a coup, or a hurricane when the population will be too dazed and disorganized to respond. This will be the shock, or as author Naomi Klein calls it, shock doctrine. For those who are still lucid, there is the next step in the shock doctrine, terrorize, torture, or make them disappear. In each case, in each country, prices on food and other common items will go through the roof, the number of destitute will increase exponentially, and democracy will be squashed. In China, the communist elite will impose these changes on the masses while ensuring that they will profit handsomely from the economic and social upheaval. President Clinton will cheer the economic shock doctrine instituted by Boris Yeltsin as he dissolves the Court and the Parliament, bringing the Russian army out to attack the latter, which killed more than 300 people and several deputies. A new class of super mega apparatchiks will emerge increasing the divide between the "have mores" and the "have nothings," and Russians will put up with a few KGB murders and disappearances for the promise of stability that Vladimir Putin will provide. The Polish people, fed up with the broken promises of Solidarity who succumbed to IMF demands to relieve them of their crushing debt, will be thrown out of office in 1996 elections. Nelson Mandela will focus so much on achieving political control of South Africa he will neglect the real political power of controlling the economic engines that run the nation. He soon discovers that without economic power, he has no political muscle. He becomes a slave of economic apartheid. Shanty towns will get larger and people will become poorer. The population is disillusioned with their new-found "equality." The tsunami in Sri Lanka will allow the hoteliers to make a deal with the government, and place security guards around the beaches of what once belonged to villagers who fished from there for hundreds of years. After all, what right did they have to be there? Besides, the smell of fish made their guests complain. They will be driven inland where they will be given boats and houses, just no access to water to fish. But that could never be allowed to happen here, or could it? One of the first things President George W. Bush does after he finally realizes what happened in New Orleans after Hurricane Katrina is remove union wage scale that contractors would have to pay to laborers. (After all, it is the corporations that must benefit the most from disaster capitalism, not the people of New Orleans). The shock has begun as developers are already seeing how they can take over the utterly destroyed neighborhoods of the poor and turn them into luxury condos and hotels. Charter schools are replacing the public schools and teachers. Contractors will wake up illegal laborers in the night to tell them that the Immigration officers are coming to arrest them. They will run away without having been paid. The Federal Emergency Management Agency, once a functional, effective, national emergency response unit, has had so much work farmed out to contractors, it cannot mount an effective response to the disaster. They will pay top dollar for roofing that can be done at a fraction of the cost. They will supply trailers for homeless that are made of material unsafe to breathe, and people will die in a stadium because no one can take care of them. In Iraq, the local population rose up after our invasion and began to elect their own leaders and councils. They announced plans to take over city governments, services and industry. When Iraqis were asked what they wanted more of when surveyed, they clamored for more government jobs. But L. Paul Bremer wasn't about to allow democracy to get in the way of disaster capitalism. He ordered the military to disband all local democratic initiatives, which he replaced with a council not chosen by the Iraqi people, but by him. George Bush talks democracy (in Iraq), but walks capitalism by performing a Marshal Plan in reverse. The original plan implemented right after World War II called for keeping foreign investors out of Germany. Our government wanted the Germans to be able to build up their own industry and wealth. Not so in Iraq. Unemployed and starving Iraqis watched how American contractors brought in cheap Asian labor to rebuild their country. Iraqi unemployment remains at approximately sixty percent. American oil companies and American banks make long-term contracts with the new Iraqi government, and the IMF wants Iraq to sell off its own oil industry to foreigners. The second largest military commitment in Iraq, after the Americans, will be mercenaries. Does anyone wonder why there is an insurgency? "No 'capitalization' without representation!" The author makes it clear. In every country that holds free elections, no one votes for the shock doctrine of disaster capitalism. No one will vote away social programs, controls, or selling off their industries and companies to foreign investors. Klein's conclusion? Capitalism and democracy are not inherently compatible as Friedman always believed. It was just the opposite. This book is powerful and moving. As I reread my review, I feel I have not done her book justice in relating the power and depth of Naomi Klein's words. Her documentation is exceptional. Her ability to craft together different events and present them in a coherent and believable hypothesis is necromantic. Once in a while you find a book, a special book, one you keep as a reference, a "go-to" one. This is such a text. It is one of the two most important I have read for 2008. I have enough admiration for this woman's work that I would buy anything she writes, without hesitation. Her writing will hold your attention. "The Shock Doctrine" is eye-opening and of course, absolutely shocking. July 14, 2008 Bastille Day--How Appropriate.

I've read dozens (hundreds?) of books about what went wrong during the Bush administration (as well as books about what's continued to go wrong under Obama too). Some books are about specific things such as the Iraq war or GITMO. Others look at more overarching themes such as executive power or disregard for the rule of law. Most of such books have made some important points and contributed some valuable analysis, but I've usually been left feeling like the blind men arguing over what they've discovered. "It's a rope," says one. "No, it's a wall," says another. "You're both wrong, claims the third, "it's a tree trunk." Naomi Klein's "The Shock Doctrine" is the first book that correctly identifies the elephant. Now, perhaps Ms. Klein doesn't have the elephant quite right - maybe her elephant's ears are a tad too large, or perhaps its tail is a bit too short, but overall, she has described the elephant remarkably well. Following an introduction, Klein opens with the story of Dr. Ewen Cameron, a psychiatrist who believed that in order to "heal" his patients, he first needed to destroy their dysfunctional personality structure and "regress" them back to infancy in order to create a "clean slate" upon which to build a new, healthy personality. To accomplish this, he used a barrage of "treatments" from psychoactive drugs to extreme doses of electroshock therapy to sensory deprivation for weeks or even months at a time. The only problem, of course, is that he never successfully re-created fresh, healthy people - all he did was traumatize people and leave their old selves virtually destroyed. Now, it may seem a bit of a leap from one obscure Canadian psychiatrist to the global wave of "shock and awe" which has escalated especially in the last decade, but Ms. Klein has followed the trail carefully and plausibly. One of the first and most important stops along this trail is the economist Milton Friedman, the godfather of the "Chicago School" system of supply-sided free market capitalism. Friedman and his followers believe that if only there were purely unregulated, completely free markets, all or nearly all world problems would correct themselves through market "signals". Friedmanites believe that most if not all problems result from government regulations which distort the markets and confuse the signals. Their problem, especially during the height of New Deal Keynesian economics, was that no purely free market existed anywhere. In language eerily reminiscent of Ewen Cameron, Friedman wished to create a "clean slate" upon which "healthy" capitalism could be built. The next problem, however, was the pure capitalism was (and remains) deeply unpopular and, hence, difficult to implement in a democratic state. It turns out, fancy that, that given the choice, people *want* their government to protect them from rapacious corporate interests. The "Southern Cone" region of South America exemplified this problem. Having recently broken away from European colonial powers, nations like Chile and Argentina began building "developmentalist" economies - basically capitalistic economies protected by government regulations. Furthermore, these developmentalist economies were by and large successful. And wildly popular. The Friedmanites initially tried to overcome developmentalism (note, despite the rhetoric, the concern was never about communism) by sending hundreds of Chile's brightest students to study economics at the University of Chicago. These "Chicago Boys" were to return home and implement their newfound knowledge. But they weren't taken very seriously back home, since developmentalism was still in full-swing. Their chance came with the brutal and bloody overthrow of the democratically elected Salvador Allende by the U.S. backed Augusto Pinochet. In correspondence with Pinochet, Friedman urged Pinochet to use the window of opportunity created by the shock of the violent overthrow to implement "shock therapy". While the country was still reeling, and while dissidents were being actively and publicly silenced, Pinochet opened up nationalized companies to foreign private investors at fire sale prices. He repealed trade restrictions which resulted in a flood of cheap foreign goods which put many local companies out of business. In the name of "austerity" and reducing debt, he cut back on social programs for the poor and very young and old. Most Chileans were too busy trying to survive and put their lives back together to protest. Those who did tended to mysteriously disappear or simply get executed on the spot. Of course, even with the markets thrown wide open, the markets did not correct the ills of the country. In fact, things got significantly worse until some of the worst of the abuses were halted and some basic regulations restored. Meanwhile, over half of Chile's population descended into poverty and destitution. In country after country, Klein details how the same basic patterns repeated over and over again, with variations to account for the learning curve of the Chicago Bys and the different initial circumstances of each country. Indonesia, Argentina, Uruguay, Poland, Russia, South Africa, China and Iraq all experienced variations of "disaster capitalism" following (or during) wars, coups or revolutions, often in direct opposition to what the revolutionaries were fighting for. Time after time, nationalized industries were ripped from the people and pillaged by foreigners while governments cut back on aid to their own people. Time after time free market capitalism was implemented by brute force and shock therapy because it could not be implemented by democratic vote. Even the "developed" nations were not immune to the assault by the Chicago Boys. Both Margaret Thatcher in Britain and Ronald Reagan in the U.S. were ardent admirers of Milton Friedman, but both knew that they couldn't get away with what Pinochet and Suharto had. But both found their openings to begin making lasting changes - Thatcher used the Falkland's war while Reagan used the air traffic controllers strike, among others. Klein also shows how disaster capitalism gets implemented after natural disasters. Fishing families swept from their villages by the 2004 tsunami returned to find their beaches closed to them but wide open for luxury hotels and tourist resorts. Refugees from 2006 Hurricane Katrina returned to find no effort to rebuild their public schools, but charter schools already infested the city. Klein's book is a searing indictment of Milton Friedman and his followers, their morally bankrupt economic philosophy and the wide spread pain and suffering they have caused. This book is a must-read for anyone who wonders how we got where we are now. How it is that in the richest nation on earth, upwards of 10% of the population is unemployed, more than one in four children is food insecure and 49 million American don't have basic health coverage, while the top 1% own fleets of cars and boats and even entire islands. My only disappointment with the book is that it was published in 2007 - just before the Great Recession. I hope that Klein comes out with a follow up soon. In her final chapter, "Shock wears off", Klein talks about a number of hopeful signs, many coming from the first countries to be shocked and awed. It is her belief that as shock wears off, people become shock resistant and once more able to fight back. Perhaps that's what we're seeing with the Occupy movement. This far-reaching, wide-ranging and hard-hitting tour de force is also extensively documented in 100+ pages of end notes plus several asterisked footnotes. This book should be required reading for every high school and college economics class, if not for every American. I can't recommend it highly enough. Amazon only allows five stars, but I give it ten.

Power and Powerlessness (This excerpt is taken from a fuller review on "Susan's Blog") The Shock Doctrine is essential reading for a new generation of activists. Few books help us to understand the world. Even fewer do this in an accessible form. Klein explodes the lie that free people choose free markets. Given a choice, most people choose government regulations on business and government-funded social services like universal health care. Because democracy is the enemy of the free market, free-market fundamentalists must use the most brutal and shocking force to get their way. The weakness of the book is that Klein confuses the chicken of power with the egg of profit. She states, "I believe that the goal of the Iraq war was to bomb into being a new free trade zone." This is mistaken. Washington invaded Iraq to obtain a military base in a strategically important region of the Middle East. From this position, America can secure its global dominance by controlling a large portion of the world oil supply. Of course, enormous profits are being made in the process. But power comes first. American companies could never claim Iraqi oil without the U.S. military. Confusion concerning the relation between power and profit leads Klein to view the rise of disaster capitalism as something new, when it is the logical outcome of a system that has always sought profit at any price. What's new is the astonishing efficiency with which human lives and the environment are being destroyed. Klein advocates a Keynesian economy, where a "free market in consumer products" coexists with generous social services. However, such economies are an historical oddity that develop as a temporary response to social crisis. Examples include the American New Deal in response to the Great Depression and the post-war European welfare states. Once the threat of revolution is removed, the drive for profit resumes. The New Deal has been dismantled, and European states are privatizing their economies. Vulture capitalists are devouring Britain's welfare state, and Canada continues to privatize social services, despite annual government budget surpluses. Problems aside, The Shock Doctrine is a must-read. Klein reveals the deepening conflict between what most people want and where capitalism is taking us. She tells us that the world is descending into barbarism, not because of human nature, not because people don't care, not because we lost any argument, but because we have not yet organized in sufficient numbers to prevent it. The good news is that human beings not only suffer, we also rebel, and we can learn to rebel more effectively. Klein reveals three forces that can defeat capitalism: the organized working class, the politics of marxism and the principles of solidarity. Her conclusion is absolutely right. It's time to organize.

Naomi Klein's "The Shock Doctrine: The Rise of Disaster Capitalism" is a journalistic tour de force. Over nearly 600 pages of text, she traces the rise and implementation of neo-liberal economic ideology in many times and places: 1960s Indonesia under Suharto's coup and his allies in the Berkeley Mafia, in the Southern Cone in the 1970s and in particular in Pinochet's Chile, in Brazil, in Thatcher's UK, 1980s Bolivia, in China following Tiannamen, in Germany, Poland and Russia following the collapse of communism, in South Africa following the fall of Apartheid, in the Asian financial crisis, in post-9/11 USA with the homeland security bubble, in post-9/11 Israel with the same homeland security bubble, in the Iraq war, in New Orleans following Katrina, and in places like Sri Lanka that were victims of the 2005 Tsunami. The cases that get the most attention are Pinochet's Chile, Russia under Yeltsin and Iraq under the USA. As the book was put out in 2007, it does not include the current American financial crisis, it does say later on that the USA is headed toward economic collapse, something Klein might wish she had elaborated on. The narrative, which is primarily descriptive rather than analytical, is informative if nothing else. Readers will learn of the "Chile Project", a plan to have Chile's brightest economic students receive their graduate education at the University of Chicago. The plan was so successful that Pinochet's finance minister, Sergio de Castro, was one of the alumni, and it would be further implemented to impact the rest of Latin America. The reader will learn that Margaret Thatcher seemed unlikely to hold on to power, up to and until she decided to fight a war over a previously marginalized and neglected piece of land: The Falklands Islands. Following the war, Thatcher would go on to use the same propaganda tactics against coal miners, referring to them as "the enemy within", while the Friedmanite Junta in Argentina lost power. The comprehensive historical referencing is necessary for Klein's thesis. Her thesis is that neo-liberal economic philosophy has not been able to win support democratically, and that it has been implemented throughout the world via the use of shocks. Over time, the promoters of neo-liberalism have grown aware of this and have taken on an approach to incorporate that into their long-term planning, "instability is the new stability" and allow shocks to take place. She brings up the use of torture and makes it not only relevant but integral. She points out that many of the most economically "liberal" regimes were also the most repressive, and her argument is that it may be impossible to run economic liberalism without a police state to enforce it. Milton Friedman is quoted dismissing this notion as silly. Following his visit to China in 1989, he wrote a letter to a student newspaper asking them if they would critique him for supporting a regime like China, implied to be different from that of Pinochet's Chile [Friedman had visited Chile in 1975 and had said Pinochet's regime was off to a good start]. A few months later the Tiananmen massacre took place. Klein introduces the reader to a narrative of the massacre ignored by the North American press. An alternative narrative, advanced by - among others - Wang Hui in his 2003 book "China's New Order", is that it was not merely about "democracy versus communism," the protesters were against the corporatization of China's economy underg Deng Xiaoping. Milton Friedman was in fact supporting a regime much like Pinochet's Chile. Torture is not just used as a supporting device to neoliberalism, to keep dissidents in line. Klein argues that it's also a metaphor to the shock doctrine, what torture does to the individual, the shock doctrine does to societies. It was found in studies, conducted in the 1940s and 1950s, that an optimal interrogation strategy was to shift from sensory overload to sensory deprivation. With these methods, as opposed to rote sadism, victims might suddenly regress to behaving like children, crawling on all fours, being incontinent at both ends and sucking their thumb. Psychologists like Ewen Cameron believed that this was the blank slate, a fantasy neurological state of behaviorist psychology on which any psychology could be imprinted. By destroying the old individual, a new better individual could be built. Cameron achieved great success at destroying individuals, but never anything other than failure in rebuilding newer, better individuals. Upon destroying the individual, rubble and ruins are left behind, not a plain field. While this was shown in the case of individuals, it was not shown, or rather it was shown and not widely understood, in the case of societies. When the USA moved into Iraq with its aptly named "Shock and Awe" campaign, one of the leaders dismissed accusations of "nation building". He said it was "nation creating", the implication that Iraq was a blank slate. Another major figure, John Agresto, director of higher education reconstruction for the occupation, commented that he had never read any books on Iraq, because he wanted to lead with as open a mind as he could have. A Mormon missionary thought that the Book of Mormon would open eyes in Iraq, and that he would eventually be a hero of Iraqi history for spreading his gospel. The reader is informed that the military knew that museums, holding ancient Mesopotamian artifacts, might be looted, but that the leadership deliberately chose not to protect them. The National Museum of Iraq lost 80% of its 170,000 objects. Meanwhile, some saw the looting as a form of rapid privatization... it would accelerate the destruction of the country, allowing a new country to be rebuilt on Friedmanite grounds. "I thought the privatization that occurs sort of naturally when somebody took over their state vehicle, or began to drive a truck that the state used to own, was just fine," said Peter McPherson, the senior economic adviser to Paul Bremer (Klein, page 427). The Iraq war ties into the Homeland Security Bubble, a Bush-era source of "economic growth" in the USA which is never mentioned in the mainstream media. Both Rumsfeld and Cheney had at least tens of millions of dollars of assets coming into their positions, with many of those held on. This gave them a direct interest in privatizing the military, a position Rumsfeld advocated in a September 10, 2001 speech to US generals, where he compared the Pentagon bureaucracy to the Soviet Union. As of the book's publishing, the Pentagon sends US$ 270 billion to private contractors. Washington became the next silicon valley. There were 2 security-oriented lobby firms in 2001, but by mid-2006 there were 543. Cameras, data mining, image recognition are a tough business. The CEOs of the top 34 defense contractors enjoyed a 108% compensation increase between 2001 and 2005, compared to a 6% average at other large American companies in that period. As an aside, the book also benefits from the best explanation I've seen of the collapse of the Israeli-Palestinian peace process. What is known is that there was some popular support for peace in Israel in the 1990s, and that this support went away and was replaced by a more hardline outlook. I've never seen this explained in a satisfying manner in the mainstream press, and I was interested in Klein's two points on this regard. Following the collapse of the Soviet Union, ironically caused by "Washington Consensus" shock policies such as privatization, there was an influx of nearly 1 million Russians into Israel, equivalent to a ~20% increase in population. At this point, Israeli businesses no longer needed Palestinians for cheap labour. The borders would often be closed off, leading to catastrophic economic problems in the Palestinian territories, amplified by Israel's refusal to allow Palestinians to trade with other countries, which in turn fed terrorism. Additionally, following the 9/11 WTC bombings, there was a homeland security bubble throughout the world, a bubble I've also never seen mentioned in the mainstream press (only the housing bubble is discussed) but well documented in The Shock Doctrine. Israel's leaders, who previously had a vision of themselves as the Singapore of the Middle East, now had another vision, that of a futuristic fortress. Israeli corporations benefit from the media analysis of their anti-terrorism dealings because it is free marketing for their police state technologies. In its December 12th, 2005 issue, Forbes magazine declared Israel "the go-to country for anti-terrorism technologies". Here's a link to the article: [..] This comprehensiveness is depressing. The book was a page turner, in my case, but also a teeth gnasher. The dominance of neoliberal philosophy appears to be total, and it succeeds virtually wherever it goes in the period 1965-2005. Solidaire was hijacked in Poland, and the African National Congress turned its freedom charter, which it had held on for nearly forty years, into a joke once it achieved power. It's begun undermining the very apparatus of its enforcement, the united states military, an entity that was largely privatized under Rumsfeld. Every so often when individuals do end up leaving the fold, they don't go very far, for example Jeffrey Sachs going to debate war with his former friends to argue that more foreign aid is the solution... as if there are no complete ideological alternatives. Perhaps there aren't. * In the 1980s, Sachs was a young Harvard celebrity professor, who brought the shock doctrine to Bolivia, where inflation went down and unemployment went up, which he calls a success. * He was brought to Poland in the early 1990s. They liked the way he was able to raise foreign aid with his connections. He did the same in Poland, moving the Soldaire party to the right, though it took time to convince them. * He tried to do the same in Russia, they got the shock doctrine but to his surprise he wasn't able to raise foreign aid this time. In her interviews with Sachs, he apparently believes that they (the IMF economists) were lazy in not analyzing the Russia situation, which he thinks warranted a Marshall Plan. Klein implies that Sachs is blind, and that the IMF crowd didn't give aid to Russia because they wanted it to fail. * He is now in open ideological disagreement with the IMF crowd and advocating debt forgiveness. He has moved from Harvard's economic department to Columbia's. If I had written a book like this I might have contemplated suicide. I suspect this is where her last chapter "Shock Wears Off" originates... perhaps her publisher told her that her text was too gloomy, and she needed at least some bloomy to compensate. In her last chapter, she argues it is difficult to pull off the shock doctrine on the same population multiple times. She argues that the current socialist successes in Latin America are largely due to the excesses of the Juntas in the 1970s and 1980s. If true it's a nice story, but I wonder if there's more. Are there truly more successes in Latin America now than there were in other parts of the world in other decades? Is the region better protected than South Korea, Thailand, etc were before the Asian Financial Crisis hit? If Valenzuela is such a beacon of socialism, how has the US military not yet bombed the country? I guess history will tell. I do want to believe Klein's final conclusion, that shock wears off, but it is hard to do so following her encyclopedic cataloguing of their skill at manipulating the world over the previous four decades.

The father of the Shock Doctrine is the late Milton Friedman, economist at the University of Chicago School of Economics beginning in the 1950s. In his counterrevolution against the New Deal of economist John Maynard Keynes, Friedman foisted on the world his policies of privatization, free trade, and slashed social spending. His first experiments were in Chile (where he consulted with Pinochet) and Argentina. After laying waste to those two countries, Friedman and the "Chicago Boys" carried their destructive policies to Poland, South Africa, Russia, Sri Lanka, and other hapless countries. More recently we have seen the disastrous results of his policies in Iraq, New Orleans, and the current financial crisis in the U.S. Donald Rumsfeld was one of Friedman's adoring students. Rumsfeld didn't pull the phrase "shock and awe" out of the air when attacking Iraq. Friedman's theory is to either create disaster (Iraq War) or take advantage of disaster (9/11, tsunami, Katrina) and use the disorientation of the populace to put in place your new programs, namely corporate control. Journalist Klein chronicles decades of these disasters, country by country. Likening free-market shock therapies to torture by electroshock, she demonstrates how free-market ideologues welcome, and provoke, the collapse of other people's economies. Her conclusion is a powerful populist indictment of the current economic orthodoxy. In Klein's words: ". . the real track record of the free-market crusade: the dismal reality of inequality, corruption, and environmental degradation left behind when government after government embraced Friedman's advice, given to Pinochet all those years ago,that it was a mistake to try `to do good with other people's money'." Klein documents that when some of the populace come out of the shock, become lucid, and begin to challenge the implementation of the policies (such as the loss of democracy, prices through the roof), the next step of shock doctrine is to terrorize, torture, or to make the challengers disappear. Klein also tells about the International Monetary Fund, founded after World War II to help struggling countries and their economies recover. Many of its managers and policy-makers have been graduates of the Chicago School of Economics and have imposed the Friedman creed wherever possible. Davison Budhoo, an IMF staffer, became a whistle-blower in 1988 and wrote a scathing letter of resignation. He resigned, he said, after twelve years of ". . hawking your bag of tricks. To me resignation is a priceless liberation, for with it I have taken the first big step to that place where I may hope to wash my hands of what in my mind's eye is the blood of millions of poor and starving peoples. . . Sometimes I feel that there is not enough soap in the whole world to cleanse me from the things that I did do in your name." Klein says that the endless war with "Terrorism" that George W. Bush proposed was an expression of the Friedman doctrine. It is not a war that can be won. Winning is not the point. The point is "to create `security' inside fortress states bolstered by endless low-level conflict outside their walls." She holds up Israel as the most advanced example of such a fortified, gated community. "This is what a society looks like when it has lost its 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." Klein's summation of the Chicago School experiment: "It has been one of mass corruption and corporatist collusion between security states and large corporations, from Chile's piranhas, to Argentina's crony privatizations, to Russia's oligarchs, to Enron's energy shell game, to Iraq's `free fraud zone.' The point of shock therapy is to open up a window for enormous profits to be made very quickly -- not despite the lawlessness but precisely because of it. It is impossible to do Klein's book justice. It has been highly praised by many with such words as: brilliant, brave, terrifying, epic, masterful, stunning, required reading. I like this one best: written with perfectly distilled anger.

"The Shock Doctrine" is a must-read for anyone who wants to get a clearer picture about what the US has done in Iraq relating to the 2003 invasion, from an economic perspective. The book begins decades before, from the lens of Milton Friedman and his advocates' approach to laissez faire, free-trade corporatist economics and government's role in making it happen. She does seem to come from a viewpoint as seeing free trade, etc mostly just punishing the less fortunate. It should be noted that Milton Friedman did advocate a negative income tax to replace welfare. So, it is not that he and some of his advocates are either totally misguided or heartless. However, there are indeed excesses by many in powerful positions who really are either misguided or heartless or both. From tsunamis to Hurricane Katrina to changes in government in Chile, the Soviet Union, Argentina, etc and the 'shock and awe' in Iraq, there are people with power who either wait for or effect some cataclysm to panic everyday people to accept what is really not in their best interest and looks to reward the well-connected. I'll just mention a few things from the book which come to mind and I feel noteworthy: 1. The author uses the term, 'useful crisis', like with the Canadian debt crisis in the 90's, to create a sense of panic to justify potential cuts to social programs. This term is appropriate in generalizing what has happened around the world in different situations. 2. Donald Rumsfeld was a board member of ASEA Brown Boveri, the Swiss firm that sold nuclear technology to North Korea. Interesting! 3. Rumsfeld was Chairman of the Board of Gilead Sciences, maker of Tamiflu, the preferred treatment for bird flu, setting up Gilead to make tons of money as the government which he became a part of, then stockpiled the drug while Americans were warned of a possible mass outbreak of the disease. When Rumsfeld left the government, the value of the Gilead stock he still owned had gone up 807%. Interesting! 4. The 2006 Defense Authorization Act grants the president the power to employ the armed forces, overriding the wishes of state governments during a 'public emergency' which could include hurricane, mass protest or public health situation. Previously, the president could only invoke martial law in case of insurrection. 5. US orchestrated foreign coups seeking to protect corporate favorites, can sometimes try to sell the coup because the country is being alien to Americans simply because it is alien to an American company and thereby trying to undermine the US. 6. Paul Bremer, given the responsibility to remake Iraq, enacted a 15% flat tax and allowed foreign companies to own 100% of the profits in Iraq, not re-invest in Iraq and not be taxed. Plus, 40 year leases for foreign investors so any future Iraqi governments would be stuck with the deals. 7. The author reminds the reader of what the political scientist, Michael Wolf, had to say that conservatives never govern well because they believe that government, itself, is bad. Surely not always true, but it is certainly a thought to keep in mind when evaluating a conservative candidate for office. 8. The White House ignored most of the Iraq Study Group's recommendations except to now allow companies like Shell and BP to get long oil leases and keep most of the profits, something not even Bremer permitted, effectively keeping millions of Iraqis in perpetual poverty. This book is well documented with references and definitely a must-read.

Naomi Klein has written an essential book that examines the ideological origins, and the methods of implementation, of the ideas which have been central to the global economic transformation of the last 40 years, which is often associated with terms such as "globalization," "free trade," and "unfettered free market capitalism." It is an immense and complex subject, and whose eyes do not begin to glaze over when the subject of GATT, or WTO talks is raised, but Klein has done a most impressive job of offering the reader an erudite and lucid exposition of this transformation. She has meticulously researched the subject, and has coupled that with interviews of some key actors in the transformational events. The book is accompanied by 75 pages of footnotes, a few of which I verified for accuracy. Klein starts her work in an unlikely place: the basement of the Allan Memorial Institute at McGill University in Montreal, Canada. It was there in the 1950's that Dr. Ewen Cameron, an American who was one time was president of the American Psychiatric Association, conducted experiments which were eventually funded by the CIA, on mentally-ill, and not so mentally-ill patients. Klein's interview with one of the survivors of Cameron's experiments was truly horrifying. Purportedly the CIA was funding such experiments "for a good cause," that is, to help captured American soldiers survive "brainwashing," which were conducted during the Korean War. In actuality, the CIA was to adopt many of the techniques that Cameron pioneered in its efforts to maintain "friendly" regimes throughout what was once called the Third World. The pictures of prisoners at Gitmo, with ear-mufflers and thick gloves, all in an effort to reduce sensory stimulus, are a direct result of Cameron's work. Electroshock therapy was also a central Cameron technique, and Klein uses an incisive epigraph from Ernest Hemingway, shortly before his suicide: "Well, what is the sense of ruining my head and erasing my memory, which is my capital, and putting me out of business? It was a brilliant cure but we lost the patient." Yes, the critical point is that none of this worked, despite all the pain inflicted. The central theme of the book is about what Klein calls "the other doctor shock." She is referring to Milton Friedman, and the school of economic thought known as the Chicago school (since Friedman taught at the University of Chicago), with its three part formula of: deregulation, privatization and cutbacks. He has been one of the stellar and most successful proponents of the now all too widely accepted "government is bad; free markets are the best of all possible worlds" thesis. And he doesn't believe in gradual transformation; it must be traumatic in order to overcome "political" obstacles, which is shorthand for the will of the vast majority of the people, who will be harmed by his policies. Klein does not particularly make this point, but I kept thinking, is not what she is describing the flip side of Communism? A rigid ideology, promoted by devoted and unquestioning acolytes who deem deviation from the "party line" heresy, requiring a revolution to obtain its objectives, and which involves much short-term immediate pain coupled with a promise of a better life in the hazy future. Klein devotes chapter after chapter in a veritable "tour-de-force" of the implementation of the Chicago school's economic policies. Each chapter is a brilliant summation of the transformational events in a number of countries throughout the world. Friedman's first chance to implement his "clean slate" policies was Chile, when the CIA overthrew the democratically elected government of Salvador Allende, and imposed General Pinochet's reign of terror on the country in 1973. For the Chicago school, the implementation of its policies must be made through non-democratic means, and usually accompanied by violence; a point Klein makes again and again. As Thomas Frank says in his What's the Matter with Kansas?: How Conservatives Won the Heart of America , it is the French revolution in reverse, with economic wealth becoming concentrated, the few reaping vast rewards, the vast majority losing. That objective is not accomplished democratically. Klein goes on to detail the implementation of these polices in the other countries of what she calls the "southern cone," that is, Argentina, Uruguay, and Bolivia. She again selects a wonderful epigraph by Eduardo Galeano: "People were in prison so that prices could be free." In the `80's, a partial implementation of Friedman's policies occurred in both the United States and Britain, under Ronald Reagan and Margaret Thatcher. Thatcher's policies were so unpopular with the electorate that she was sure to lose the election, but the "foreign adventure," the last gasp of empire jingoism, the Falklands War bailed her out. The author says that next step in the global transformation occurred with: "the colonization of the World Bank and the IMF by the Chicago School was a largely unspoken process, but it became official in 1989 when John Williamson unveiled what he called `the Washington Consensus'". The policies were thereby exported to Poland, Russia, and South Africa, each receiving its own chapter. The betrayal of the stated goals of the African National Congress, and the acceptance of the previous debt by the black-majority government, was particularly heart-breaking. The standard technique is to claim that the economic policies are not political, but technically and scientifically objective. Natural disasters, such as Katrina in New Orleans, and the tsunami in Sri Lanka, are likewise viewed as `opportunities' to "shock" the populace into accepting Chicago School doctrines, such as school privatization and fancy beach resorts. Klein also covers the economic "homeland security bubble" in the States, and does a brilliant job describing how these same policies were implemented in Iraq, a country with intermittent electric and water supplies, but a 15% flat tax rate was implemented, and constitutional changes were made so that it would be hard to reverse the "free market" policies, including selling off their oil reserves. The last chapter is devoted to the increasing resistance developing to such policies. Her book was completed prior to the economic melt-down in the United States in 2008, so, no doubt, it is greater now, but the political implementation of that discontent is still held in abeyance. Klein's book has garnered numerous 1-star reviews; I've read them all, and could find very little of merit. Mainly they were the standard attacks from true-believer acolytes of the "magic" of the markets, despite the evidence, in particular of the last two years. Klein has written a remarkable, lucid book on why we are in the fix we are: Definitely 6-stars.

Wondering how government services always get worse? This book details how large corporations use natural disasters to screw both governments and citizens for profit.

Wer sich in den letzten Jahrzehnten immer wieder über das Auftreten der Weltbank oder des IMF aufregen konnte, wenn irgendwo auf der Welt eine Katastrophe eingetreten war und die Agenten dieser Institutionen zwar einerseits mit viel Geld, aber andererseits mit einem absurden Forderungskatalog um die Ecke kamen, der wird sich gleich nicht mehr wundern, warum dieses so war und so ist. Es zieht sich wie ein roter Faden durch die aktuellen Krisen der Menschheit, egal ob es Erdbeben oder Tsunamis, politische Umstürze, Kriege oder Wirtschaftskrisen sind. Der organisierte Weltkapitalismus geht stets mit einem Besteck der Re-Organisation vor, das im eigenen Hause entwickelt wurde und seither Anwendung findet. Die kanadische Journalistin Naomi Klein - ihre Eltern verließen aus Protest gegen den Vietnam-Krieg die USA - hat das System des Wiederaufbaus nach Katastrophen untersucht. In ihrem lesenswerten Buch The Shock Doctrine hat sie den Guru der radikalen Marktwirtschaft sehr schnell lokalisiert. Es war der Chef der Chicago School of Economics Milton Friedman, der mit seinen radikalen markttheoretischen Schriften zunächst in den USA kaum jemanden begeistern konnte, der aber in Jahrzehnten kontinuierlichem Lobbyismus das Feld bereitete für den Siegeszug des totalitären Kapitalismus. Mit beeindruckender Stringenz seziert Naomi Klein das System: Zunächst tritt die Katastrophe ein. Die Bevölkerung ist traumatisiert und damit das Terrain für die Invention des neuen Systems bereitet. Das so genannte weiße Blatt liegt jungfräulich auf dem Tisch und alle Institutionen, die der betreffenden Gesellschaft einmal das Dasein erleichtert haben, sind ausradiert worden, um Raum zu schaffen für den ungezügelten Kapitalismus. Denn das ist die Doktrin Milton Friedmans und seiner Chicago Boys. Der Spähtrupp der Schock-Doktrinäre sind tatsächlich immer wieder IMF und Weltbank, die sofort nach dem Desaster auf der Matte stehen und folgenden Deal ausmachen wollen: 1. Das betreffende Land belässt es beim Wiederaufbau aller öffentlichen Institutionen, die der Staat betrieben hat, um den Markt zu beschränken. Damit gemeint sind auch Schulen, Krankenhäuser und Sicherheitsorgane. Diese Dienste werden privatisiert. Alle Regulierungen des freien Marktes werden revidiert. 2. Der Staat betreibt eine strikte Politik des Schuldenabbaus, damit er keine Perspektive mehr hat, sich einzumischen. 3. Sind diese Bedingungen erfüllt, ertränken IMF und Weltbang das Land mit Krediten, um eine dauerhafte Schuldknechtschaft zu gewährleisten und die Bedingungen der Radikalliberalisierung dauerhaft zu erhalten. In beeindruckender historischer Analyse dokumentiert die Autorin das nach und nach zutage tretende System. Egal, welche historischen Desaster zur Grundlage genommen werden, sie haben immer die gleichen Implikationen, ob beim Pinochet-Putsch in Chile, ob die Nutzung des Falkland-Krieges durch Thatcher im eigenen Land, ob bei den vielen Kriegen im Nahen Osten, speziell im Irak, ob nach den Tsunamis in Asien und ja, auch nach dem Massaker auf dem Tienanmen in Peking oder der Niederschlagung der Revolte in Moskau. Das Vorgehen zum Wiederaufbau, der keiner ist, stammt aus dem Regiebuch Milton Friedmans. Interessant ist, dass die USA innenpolitisch langfristig von dieser Doktrin verschont geblieben waren, wenn man einmal von den Verwüstungen absieht, die die Reagan-Ära in kurzer Zeit angerichtet hatte. Doch mit den Anschlägen auf das World Trade Center war auch dort der Schock eingetreten, den George W. Bush exzellent und konsequent unter dem Slogan der Homeland Security zu nutzen wusste. Ein Debakel, an dem das Land, wie alle, die einmal unter dieser Behandlung leiden mussten, noch lange laborieren wird. Naomi Kleins Bilanz ist gigantisch: Betrachtet man den Ansatz konsequent, so stehen die Verwüstungen, die Verfechter eines totalitären Kapitalismus bereits angerichtet haben, den großen Monstern der Geschichte in nichts nach.

This extraordinarily entertaining and thought-provoking left-leaning book is full of detail in describing the battleground between Keynesian and (gaining) Friedman economic theories since the 1970s. The latter believes that the capitalist engine drives economies whereas the socialist safety net costs them. It has exploited opportunities presented by natural or man-made disasters (for example, 9/11, counterrevolutions and military coups, debt, hyperinflation, Katrina and New Orleans, the 1993 invasion of Iraq and its aftermath, the collapse of the Soviet Union, the US air traffic controllers’ strike, tsunamis, etc. - and perhaps even a few deliberately created crises) in order apply shock and awe to get things done its way. The solution has been to apply accelerated elitist non-democratic driven shock therapy of laissez-faire economics, unfettered free markets, dramatic reductions in government expenditure and creation of hollow governments, high levels of subcontracting of responsibilities to large corporations, and the selling off of state assets at giveaway prices. In such cases, government decision making and strategy has become increasingly influenced by the profit motive of vested interests (most notably the rapidly growing defence and security industries). The result has been dramatic plutonomy, a widening of the gap between rich and poor and the creation of a massive underclass, all while stock markets have continued to rise, as well as such phenomena as gentrification and gated communities for the privileged. Countries have moved away from mixed, socially levelling economies towards trickle-down economics, corporate dominance and the pressures of globalisation on employment and wages. Such solutions can be contrasted with the post WW2 Marshall Plan which restrained rampant capitalism in taking into consideration social movements and restricting the ability of foreign corporations to pillage susceptible economies in order to get ‘a piece of the action’. The author points out many cases of what can be interpreted as criminal behaviour, either through negligence or incompetence, conflicts of interest, the evasion of public scrutiny, allowing corporate interests over-influencing government strategy (notably in relation to military conflicts), not to mention the abundance use of revolving doors between government posts and private industry. The bad names and words in this trend include the ‘neoliberal’ Chicago School of Economics, (where Milton Friedman and many acolyte protagonists originated from), and individuals such as Bremer, Bush, Cheney, Pinochet, Reagan, Rumsfeld, Sachs, and Thatcher. This book was published in 2007, i.e. before the financial crisis, Snowden, Syria, the Arab Spring, the Greek crisis, the growth of ISIS, and the restraint practiced by Barack Obama, so it pays to gloss over the last chapter, as well as any promise that might have been then seemingly offered by characters such as Chavez, Kirchner, and Putin. Parkinson’s Law illustrates the dangers of big government, ivory towers and the absence of competition, and too much democracy can result in sclerosis, so presumably there does exist a just middle way, but certainly not the one described in this book.

大惨事につけ込んで実施される過激な市場原理主義改革（Shock Doctrine）、「惨事便乗型資本主義（Disaster Capitalism）」として分析解説されています。 Believers in the shock doctrine are convinced that only a great rupture ' a flood, a war, terrorist attack ' can generate the kind of vast, clean canvases they crave. It is in these malleable moments, when we are psychologically unmoored and physically unrooted, that these artists of the real plunge in their hands and begin their work of remarking the world. フリードンの唱える市場至上主義の信奉者達は、洪水、戦争、テロ攻撃等の破壊状況のみが、希望する白紙のキャンバスを拵えてくれると確信している。 被災者達が心理的に自分を見失い、肉体的にも根なし草状態になっている時こそ絶好の機会と捉えて、彼らの望む世界を構築すべく活動策謀を始めるのだ。 国際公約でのTPP参画で、東日本大震災の復旧、原発安全廃炉・放射線の処理工事に、住民要望を無視したこの惨事便乗型資本主義が適用されてしまう懸念が拭いきれません。

C'est l’œuvre maîtresse de madame Klein. Remarquable et brutale prise de conscience de la réalité dans laquelle nous vivons car, bien que les théories de Friedmann soient censées n'être applicables que dans les régimes autoritaires, elles le sont de plus en plus dans nos démocraties. De quoi se questionner.