The Shock Doctrine: The Rise of Disaster Capitalism 1st Edition by Naomi Klein (PDF)

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The bestselling author of No Logo shows how the global “free market” has exploited crises and shock for three decades, from Chile to IraqIn her groundbreaking reporting, Naomi Klein introduced the term “disaster capitalism.” Whether covering Baghdad after the U.S. occupation, Sri Lanka in the wake of the tsunami, or New Orleans post-Katrina, she witnessed something remarkably similar. People still reeling from catastrophe were being hit again, this time with economic “shock treatment,” losing their land and homes to rapid-fire corporate makeovers.The Shock Doctrine retells the story of the most dominant ideology of our time, Milton Friedman’s free market economic revolution. In contrast to the popular myth of this movement’s peaceful global victory, Klein shows how it has exploited moments of shock and extreme violence in order to implement its economic policies in so many parts of the world from Latin America and Eastern Europe to South Africa, Russia, and Iraq.At the core of disaster capitalism is the use of cataclysmic events to advance radical privatization combined with the privatization of the disaster response itself. Klein argues that by capitalizing on crises, created by nature or war, the disaster capitalism complex now exists as a booming new economy, and is the violent culmination of a radical economic project that has been incubating for fifty years.

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⭐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 Shock Doctrine Book ReviewThe author strikes at the heart of market fundamentalists’ claim that freedom and democracy are the hallmarks of deregulated capitalism. Instead, she presents market fundamentalism as a far reaching ideology that has some surprising similarities to Twentieth Century communism. These include a strategy for world-wide dissemination, implementation by extensive coercive violence in much of the world, and marked indifference to suffering imposed undemocratically on the masses. But unlike communism, market fundamentalism is presented as a cynical war by the rich against the middle class and poor that inevitably leads to extreme concentration of riches in the hands of the few who can then capture government to perpetuate their dominance.The rise of the modern version of market fundamentalism began in the 1950s with Milton Friedman and others at the Chicago School of Economics. This was a counterrevolution to the successful Keynesian mixed economies of the time that relied on markets for growth but employed government regulation and taxation to counter market excesses, failures, and inequalities. The Chicago School regarded these government actions as distortions of the purity of markets according to their closed-loop thinking that relied on mathematical equations and models but very little real-world evidence.Friedman laid out the neoconservative economic agenda in 1962 in Capitalism and Freedom: First, governments must remove all rules and regulations standing in the way of the accumulation of profits. Second, they should sell off any assets they own that corporations could be running at a profit. And third, they should dramatically cut back funding of social programs. This became the well-known formula of deregulation, privatization, and cutbacks. The many specifics included low taxes for the rich, no worker protections like unions and minimum wage laws, no regulation of business, and elimination of government support for health care, pensions, and education.Implementation of this agenda in western democracies was difficult for the obvious reason that it required the majority to vote against its own interests to favor the rich. For equally obvious reasons, there was no shortage of plutocrats who provided overwhelming financial support for this agenda by extensive funding of lobbying, political campaigns, numerous think tanks, and media propaganda, particularly in the US. Consequently, gradual change was achieved, particularly beginning with Reagan and Thatcher, so that since the 1980s inequality has increased markedly in the US as nearly all economic gains from rising productivity have gone to the rich. Nevertheless, this transformation has been regarded as too slow, messy, and incomplete.In countries outside of the western democracies, many much swifter transformations to deregulated markets have been achieved by the strategy the author calls the shock doctrine, usually with disastrous consequences. In 1962, Friedman observed that “only a crisis—actual or perceived—produces real change.” He added that it was vital to keep his agenda alive and ready for rapid and irreversible implementation after political or natural disasters when populations were still too stunned to resist the “bitter medicine” that was to follow. He coined the phrase economic “shock treatment” for this painful tactic. The author reports three distinct phases of that shock treatment that follow in rapid succession: (1) the shock of the coup itself, (2) the shock of severe recessions with massive unemployment, falling wages, lost savings, and lost social insurance, and (3) the shock of imprisonment, torture (often featuring electric shock), and death for many tens of thousands who resisted.The mechanism to get Friedman’s agenda in place began with the Chile Project launched in 1956. This project brought 100 Chilean students to graduate school at the University of Chicago from 1957 to 1970. In 1965, the program was expanded to include students from across Latin America. As a result, hundreds of Chicago School economists along with some from other institutions were ready and waiting throughout Latin America and eventually throughout the world to administer shock treatment when opportunities arose. This program was greatly amplified by the International Monetary Fund (IMF) and World Bank in 1989 by adoption of the Washington Consensus for a similar market fundamentalist reform package for developing nations.From 1964 to 1985, numerous government crises, many of them after US-sponsored military coups, provided the opportunities for shock treatment throughout Latin America in Brazil, Chile, Argentina, Uruguay, and Bolivia, as well as in Indonesia. In 1989, the fall of the Soviet Union brought the opportunity for shock therapists to manage the sudden transition to market economies in Poland, other Soviet satellites, and finally Russia itself in 1991. Eventually other crises were exploited elsewhere, such as in South Africa during the change from apartheid, Thailand, South Korea, the Philippines, and Indonesia (again) after the 1997-1998 Asian financial crisis, war-torn Iraq immediately after the US invasion, Sri Lanka after the catastrophic 2004 Asian tsunami, and in New Orleans after Hurricane Katrina.The severe recessions that followed in many countries had drastic consequences for the general public. These included loss of fragile local industries and massive bankruptcy of farming after withdrawal of protection, rising unemployment up to 30% or more, falling wages by as much as 40%, increases by tens of millions for people living in poverty, and enhancement of this suffering from simultaneous withdrawal of social programs. Once the harsh impact of these policies became apparent, they became extremely unpopular and had to be implemented by force.Particularly in Latin America, military juntas engaged in book burning, closure of newspapers and magazines, occupation of universities, imposition of curfews, banning strikes and political meetings, raiding union halls, jailing community workers and union leaders, and deployment of tanks against demonstrators. The worst countries resorted to widespread torture and targeted extrajudicial killing, such as with the 300 torture camps and 30,000 “disappeared” individuals in Argentina. These brutal measures were always presented to international outsiders as part of the fight against communism. In reality, the majority of the people swept up were not terrorists, but rather those identified as posing the most serious barriers to the juntas’ economic programs. In 1976, 80% of Chile’s political prisoners were workers and peasants.Despite all of this, market fundamentalists claimed these outcomes as economic miracles, particularly for Chile. Unfortunately, the collaboration of Friedman and his Chicago boys with the brutal Pinochet dictatorship after the 1973 CIA-led coup was hardly an economic triumph, except for foreign companies and financiers. The first year of shock therapy resulted in a 15% contraction of the economy and increased unemployment from 3% to 20%. The economy crashed again in 1982 with exploding debt, recurrent hyperinflation, and unemployment of 30%. By 1988, when rapid growth returned, 45% of the population had fallen below the poverty line. Even in 2007, Chile remained one of the most unequal countries in the world, ranking 116 out of 123. All of this came about at the cost of 3,200 people disappeared or executed, 80,000 imprisoned, and 200,000 fleeing the country for political reasons.Shock therapy in Russia in 1991 was particularly catastrophic. Gorbachev reportedly sought to move the Soviet Union in the direction of the Nordic social democracies (whose combined growth and equality lead the developed world). However, Yeltsin wrested control of Russia and brought in Harvard economist Jeffrey Sachs to administer shock therapy for the transition from communism. What followed was the worst depression in modern history. In Russia, 80% of farms went bankrupt; 70,000 state factories closed; people living in poverty increased from 2 million to 74 million, suicide doubled, alcohol consumption doubled, violent crime quadrupled, life expectancy and population fell, and state property was turned over to corrupt oligarchs. When the people and parliament objected, Yeltsin illegally dissolved parliament, sent forces that killed 100 demonstrators, and attacked parliament with tanks and troops with 500 additional deaths. These events facilitated the rise of Vladimir Putin, the oligarchs, and the political climate we are stuck with today.In general, everywhere the Chicago School crusade has triumphed, it has created a permanent underclass of between 25% and 60% of the population. According to Grinspun, Keynesianism sought to mobilize support and share the burden through a negotiated process involving key stakeholders—government, employers, farmers, unions, and so on—when stabilization measures were implemented. In sharp contrast the market fundamentalist approach was to shift all the social cost onto the poor through shock therapy. Thus, in disseminating his ideology, Friedman can be seen as a Lenin-like figure who managed to create misery for large numbers of people throughout the world, purportedly for their own good.Although I liked the book, I do have some criticisms. The author does a reasonably persuasive job of reporting the ideology, pervasiveness, implementation, and consequences of shock therapy. However, in my view, she sometimes extends her discussion too far, such as to the 1989 Tiananmen Square massacre and to the killing of 500,000 to 1,000,000 Indonesians after the 1965 CIA-backed coup. In addition, serious problems before initiation of shock therapy, such as hyperinflation, are sometimes underemphasized. These diversions needlessly create opportunities for criticism from her ideological opponents to distract from the core of what she is reporting. I also disliked the way statistical fragments and examples are scattered throughout the text. I would have preferred a more chronologic account and even tables listing changes in GDP, unemployment, inequality, and so on. I found the index to be nearly worthless when trying to retrieve statistics for use in this review.

⭐Not sensationalist. Not speculative. Level-headed. Extensively documented.I checked online for criticism of this work and it was quite telling to see that; 1) there is not many negative reviews, 2) those that exist tend to be either very non-specific and defamatory OR pick up on a single issue they disagree with – let’s face it, in a book of this size covering so much ground, would it be humanly possible to not make a single mistake? So although I am not in a position to know if Naomi or her critiques are correct on those few specific points, it doesn’t really detract (imo) from 95% of the book content and message.Overall the message is very sobering but I literally do feel this book has changed the way I see and hear the news . I am also struggling to know what to do with the burden of sobering new (for me) knowledge.

⭐Yes a deeply depressing book… but a 5 star review. But some things are like that. If you’re the type who prefers blissful ignorance then avoid this book.

⭐My 2nd copy – lent the first one, never seen it since! What Naomi Klein is writing about is happening right now, here in the UK. You’ll read it with growing understanding, and growing anger at the blatant manipulation which is polarising global wealth. “Famine or feast, the rich win either way’ is Klein’s message, but as with her other books she points to solutions and alternatives.Can’t rate this too highly as a watertight argument against disaster capitalism and the misery it is wreaking on the planet, its flora and fauna – including us.

⭐I got this on a recommendation from a friend. I love non fiction but this is not my usual genre of reading. I wanted to broaden my knowledge on capitalism and how governments take control over a people amidst the CV 2020 pandemic.I read the first 100 pages but then gave up. It is a little too political for me and too be honest too long!! 500 pages is a considerable amount to sit through unless a book is really exceptional!There wasn’t neccissarily anything wrong with the book, perhaps it is just not my area of interest, it just didn’t hold me enough to continue. If you’re into politics the is a very persuasive read and well written. Hence the4 star rating.

⭐I do not expect ever to read a better book on economics and politics. It is VERY important! The style is clear and lucid, masterly. It highlights the defects of capitalism, especially the defects of those promolgating it: The US, the Chicago Boys and the many dictators, quasi dictators and politicians taken in by them in thousands of cases, all referenced, assembled impeccably and the weight of evidence astronomic. The thesis seems to be that many countries of the world have changed their economic arrangements, suddenly, to provide a laissez faire form of capitalism all of it based on the Chicago Boys: Milton Friedman, Hayek, Harburger et al. This being the perceived ideal form. Friedman even got a Nobel for it. In every case there was abject failure. Overnight all the firms owned by the nations were sold off, invariably to US companies or locals at a thousandth of the actual value (in the case of Russia). All the normal services having fallen apart because of the shock application of this new politics, there were complaints and even riots. These were stopped by the people involved being ‘disappeared’: loaded into a plane, flown over a wide river and thrown out: food forcrocodiles. In one such country the deficit before the shock was 3 billion. Twenty years later it was 103 billion: 5 billion a year, most of it going into the pockets of fat cats, some of them economists favouring the change and big companies like Ford. What seems is clear is that laissez faire capitalism is not only theoretically defunct but

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