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Subtitled The Rise of Disaster Capitalism, Naomi Klein’s latest assault on free market economics and its ills, begins by stating its objective as one which seeks to challenge the claim that the triumph of unfettered markets goes hand in hand with democracy and freedom. Moreover, it will aim, Klein tells us, to demonstrate that the implementation of such a fundamentalist form of capitalism has been routinely accompanied “by the most brutal forms of coercion inflicted on the collective body politic as well as on countless individual bodies”. In other words, that “the history of the contemporary free market was written in shocks.”
For the last fifty years, Klein argues, the chief proponents of the free market have set the economies of the developed world – in particular that of the United States – on the road to that which she refers to as “disaster capitalism”, a doctrine which sees catastrophes, shocks and crises, not as impediments to the expansion of markets, but rather, as unique economic opportunities to be seized and capitalised upon. But though adopting such principles may have realised record profits for those companies, corporations and people of power that were the architects of their instigation, it is exactly this doctrine, Klein suggests, that has resulted in some of the most heinous examples of economically-minded repression and terror this side of the mid-twentieth century, from the suffering of Chile at the hands of General Pinochet to the failed reconstruction plan for the decimated Iraq.
For the origins of her “Shock Doctrine”, Klein goes back to 1950s Chicago and the city’s School of Economics under the tutelage of economist Milton Friedman. It was here that the radical liberalism that would later be trialled in South America and subsequently exported to developing economies around the world emerged and developed in the shadow of FDR’s New Deal and the Keynesian economics that underlay it. Whereas Keynes had advocated government intervention in economic policy in order to allay the excesses and adverse effects that a wholly unregulated market is liable to provoke, however, Friedman and his “Chicago Boys” were busy cultivating their own antithetical principles, all the while waiting for the opportunity to put them into practice.
At the same time, the psychiatrist Dr Ewen Cameron, working at the Allan Memorial Institute of McGill University in Montreal, was busy investigating the effects that so-called “de-patterning” had on his unfortunate patients. Through the use of electroshock therapy, sensory deprivation and drug-induced comas, Cameron sought to distort and regress the original personalities and behavioural patterns of his patients in order that they could be rebuilt upon the blank slate that remained according to the will of the psychiatrist. But though these experiments may have been successful in destroying the minds of his patients, Cameron was never able to build those minds back up again and it is thus that the parallels between these experiments and the Chicago School’s attempts to impose its economic model around the world are drawn. As such, though wars, terror attacks, coups d’état and natural disasters may work towards – or be engineered to achieve – the blank slate upon which unfettered markets can be constructed, without adequate concern for that which previously existed or that which will replace it, the fallout from such slash and burn tactics, at least for those that have to suffer them, is often far less commendable than the alleged economic miracle imposed upon them.
Klein’s book narrates the Chicago School’s attempted imposition of their radical free market principles in the so-called “southern cone” of Latin America, beginning in Chile in 1973 with Pinochet’s overthrowing of the socialist president Salvador Allende, before broadening its scope to include Argentina, Uruguay and Brazil.
Shocked into confusion and impotency in the wake of the campaigns of terror that ritually accompanied such overhauls, the populations of these southern cone countries were unable to resist when a second wave of shocks in the form of the radical restructuring of their economies was undertaken. Their resistance to the eradication of unions, the removal of minimum wage barriers, the loss of jobs to outsourced workers and other such trademarks of the free market revolution, had been usurped by the compliant disorientation that the Chicago Boy’s required in order to instigate their policies.
The initial success of these policies – as far as those that profited from them were concerned – was proof to the Chicago School of its superiority over the old, interventionist order. Unfettered private enterprise was the future and the rest of the world’s developing economies were ripe for plundering. As such, Sri Lanka, Bolivia, Poland, Russia and South Africa were all treated to a similar shock therapy model as that which Latin America had endured, in the process of which, many of their state-owned enterprises were sold off to Western multinationals for a fraction of their true worth.
It is this scorched earth economic policy that Klein argues has led to the recent Iraq debacle, the systemic failures that accompanied Hurricane Katrina and the misguided attempts at reconstruction in those countries affected by the 2004 Asian tsunami. Where the tsunami gave the Sri Lankan government the chance to force the resident fishermen from their beachfront homes in order that the land could be sold to make way for long-coveted hotel development projects, the catastrophe wreaked by Hurricane Katrina allowed much of the city’s education system and public housing to be privatised and replaced by charter schools and prime real-estate opportunities.
Moreover, after the shock and awe that marked the invasion of Iraq and the initial military campaign, the chief objective of the Bush administration was to clear the way for the country to be made into a Middle Eastern exemplar of a free-market haven for Western corporations. But as we have since witnessed, the lack of concern for the adequate reconstruction of the public infrastructure of the country allowed a vacuum to develop which sectarian violence and extremist militias were only too obliged to fill.
The Shock Doctrine is a work that is at times a devastating attack on the arrogance, greed and misguided logic of the neo-liberal ideology that has guided the expansion of capitalism throughout the world over the past half century. And, though it is too simplistic to blame a single man or set of principles as being the direct cause of a given event, it is reasonable to attempt to trace an empirical history of the foundations of that event in order to try and better understand the various motives and special interests that underlie it. It is only by way of such understanding that any present excesses being perpetrated in the name of a given notion can begin to be resisted.
It has been said that Klein fails to set out an alternative to the rampant neo-liberalism she berates. But I’m not sure that such prescription is a journalist’s job. Rather, a journalist’s job is to uncover and report the facts, not just for the sake of their reporting, but so that we may recognise instances of excess and set about doing what we can to lessen their detrimental effects and prevent their repeat in the future. The Shock Doctrine can thus be seen as a work of resistance whose aim is to engender that resistance further. In this regard, The Shock Doctrine surely takes significant steps towards achieving that aim.
