Review of 'The Shock Doctrine'
The Shock Doctrine by Naomi Klein
The main thesis of Klein in “The Shock Doctrine” is that there is a concerted effort to impose a system of shock to a country when it is in crisis in order for big corporations through the auspices of the World Bank and IMF to capitalize via conditions attached to the emergency aid they provide (when governments have no choice but to accept). This idea comes from the economic philosophy of Milton Friedman of the Chicago School of Economics in the 1950s who believed that in order for society to thrive it must hearken back to a “natural” state with no economic encumbrances holding it back, to free the individual to make as much money as it can. These encumbrances include things like social support systems, and public institutions.
As far as global economics is concerned initially the idea was to try to convert existing governments over to these ideals however this proved to be unsuccessful. The initial experiments applying these doctrines in South America in the 1960s led to a specific strategy being developed that could be applied as required. With the initial experiments it was realised that in order to impose the dramatic changes required they must be delivered rapidly in a time of crisis when a country is in a state of shock and is, therefore, weakened. Klein reveals that this idea stems from the theory behind electroshock therapy: Keep shocking the subject to remove the disease, reverting the mind back to a blank state from which it can be reworked back to “normality” (of course this does not work and generally leaves the patient a drooling vegetable). Klein presents further evidence from practitioners of torture who know that you must weaken the will of your subject by applying shock after shock to overwhelm their systems at which point the victim is more susceptible to revealing what is required or acting in the way you desire.
To support the point, this book examines a number of economic crises where the shock doctrine has been applied or where the tenants of the doctrine were demonstrated including:
- In Indonesia (1965) following a coup and deadly repression the Chicgo Boys have their first test subject;
- In Chile (1973) following a coup the “Chilean Project” was put into effect;
- In Argentina (1976) where a junta led by Pinochet seized control of the government from Peron (who, while showing signs of dictatorship at least had a stable economy) applied the “Chicago Boys” doctrine to the country;
- In Bolivia (1985) where a deal made in the president's living room changed everything by applying the shock doctrine;
- In Poland (1989) following the election of the “Solidarity” party, debt was allowed to climb to incredible heights before the doctrine institutions stepped in…though they experience opposition they never had to face before;
- In China where the democracy protests in 1989 were, Klein reveals, more about protesting the speed at which market reform was being applied by the government and privatisation of national institutions (as per Friedman's policies) causing mass unemployment rather than being about the lack of democracy itself;
- After the fall of communism in Russia (1993) where the gradual democratic policies of Gorbechev were pushed aside in favour of the brutal actions of Yeltsin in imposing the doctrine;
- In Sri Lanka following the devastation of the tsunami in late 2004 left the population ripe for imposition of the doctrine;
- Following the Iraq war (2005) where the occupying forces were able to impose their economic will with literally no one able to oppose them.
The economic process applied to a country in a time of crisis is as follows:
- Suspend democracy (if it exists) - The changes are so dramatic and so brutal that you cannot have the general population voicing any dissent.
- Replace any national institutions with private corporations - To provide not only immediate cash to the government but also to allow big businesses to exploit the situation and reap hansom profits.
- Cut social spending - To put everyone on the “same level” spending on social safety nets and market protection policies should be removed to allow businesses to freely operate. Of course, this also has the unfortunate side effect of removing the support for the disadvantaged.
In many of the cases documented the regimes and governments that were put in place were far less democratic than what they replaced with the new economic policies dramatically increasing unemployment and the gap between the have and have-nots of the society. Klein admits the doctrine did indeed increase the wealth of the country but only for a limited few with the majority of people left far more worse off despite promises of it's practitioners that this would even out over time. In many of the cases documented here we are told the governments have dramatically improved their situation by reverting the policies imposed on them and returning to nationalized institutions (for example). The suggestion is that strict capitalism does not work but rather a combination of capitalism – with control structures – and socialistic features such as nationalised services (e.g. heath) appears to be the more successful.
The Chicago School frequently points out that their policies do not endorse nor condone the violence surrounding the imposition of their tenants but Klein is at pains to convince that the two cannot be separated: In order to impose the severe economic policies one must repress by whatever means necessary and resistance. Indeed, in the early cases of the policy being applied in South America the brutality was astonishing in its breadth. This book is not afraid to throw a light into areas we fear to look or into places we never thought of looking…
To put it simply: “The Shock Doctrine” is not exactly a ringing endorsement of globalisation but serves as a powerful warning of it's dangers often quite vividly with the frequent use of brutal violence and repression of the society it supposedly is there to serve. The book retells recent history in an entirely different light than what governments and popular media would have us believe, and is all the more shocking and incredible to take in. My personal beliefs are that things are never quite so simple but Klein makes a compelling case here in the 466 pages of the “Shock Doctrine” plus another 59 pages of references/footnotes. In addition to attacking the corporatist policies of the World Bank, IMF and other global economic institutions, the message presented here is that we cannot let capitalist forces controlling the economy unencumbered.
A bit of a tough, slow, read but revealing and insightful. Lots to take in…
Rating: “Nearly perfect, but not quite”
Review Date: 2020-06-20
Genre: Non-Fiction
Publisher: Penguin
Publication Date: 2007
ISBN: 9780141024530