The Shock Doctrine

The Shock Doctrine: The Rise of Disaster Capitalism

Front cover of The Shock Doctrine: The Rise of Disaster Capitalism
Author	Naomi Klein
Country	Canada
Language	English
Subject	Economics
Publisher	Knopf Canada (first edition)
Publication date	2007
Media type	Print, e-book
Pages	672 (first edition)
ISBN	978-0676978001 (hardcover)
OCLC	74556458
Preceded by	Fences and Windows
Followed by	This Changes Everything

The Shock Doctrine: The Rise of Disaster Capitalism is a 2007 book by the Canadian author and social activist Naomi Klein. In the book, Klein argues that neoliberal free market policies (as advocated by the economist Milton Friedman) have risen to prominence in some developed countries because of a deliberate strategy of "shock therapy". This centers on the exploitation of national crises to push through controversial policies while citizens are too emotionally and physically distracted by disasters or upheavals to mount an effective resistance. The book suggests that some man-made events, such as the Iraq War, were undertaken with the intention of pushing through such unpopular policies in their wake. Some reviewers criticized the book for making what they described as incorrect claims, while others praised it as a compelling and important work.

The Shock Doctrine is the basis of a 2009 documentary by the same name directed by Michael Winterbottom.

Synopsis

The book has an introduction, a main body and a conclusion, divided into seven parts with a total of 21 chapters.

Part 1 begins with a chapter on psychiatric shock therapy and the covert experiments conducted by the psychiatrist Ewen Cameron in collusion with the Central Intelligence Agency. The second chapter introduces Milton Friedman and his Chicago school of economics, whom Klein describes as leading a laissez-faire capitalist movement committed to creating free markets that are even less regulated than those that existed before the Great Depression.

Part 2 discusses the use of "shock doctrine" to transform South American economies in the 1970s, focusing on the coup in Chile led by General Augusto Pinochet and influenced by a prominent group of Chilean economists that had been trained at the University of Chicago in the Economics department, funded by the CIA, and advised by Milton Friedman. Klein connects torture with economic shock therapy.

Part 3 covers attempts to apply the shock doctrine without the need for extreme violence against sections of the population. Klein says that Margaret Thatcher applied mild shock "therapy" facilitated by the Falklands War, while free market reform in Bolivia was possible due to a combination of pre-existing economic crises and the charisma of Jeffrey Sachs.

Part 4 reports on how Klein thinks the shock doctrine was applied in Poland, Russia, South Africa and to the tiger economies during the 1997 Asian financial crisis.

Part 5 introduces the "Disaster Capitalism Complex", where the author claims that companies have learnt to profit from disasters.

Part 6 discusses the use of "Shock and awe" in the 2003 invasion of Iraq and the subsequent occupation of Iraq, which Klein describes as the most comprehensive and full-scale implementation of the shock doctrine ever attempted.

Part 7 is about winners and losers of economic shock therapy – how small groups will often do very well by moving into luxurious gated communities while large sections of the population are left with decaying public infrastructure, declining incomes and increased unemployment.

Conclusion is about the backlash against the "shock doctrine" and economic institutions which, in Klein's view, encourage it - like the World Bank and IMF. South America and Lebanon post-2006 are shown in a positive light, where politicians are already rolling back free-market policies, with some mention of the increased campaigning by community-minded activists in South Africa and China.

Reactions

Favorable

Paul B. Farrell from the Dow Jones Business News stated "you must read what may be the most important book on economics in the 21st century". John Gray wrote in The Guardian, "There are very few books that really help us understand the present. The Shock Doctrine is one of those books." and described the book as "both timely and devastating". William S. Kowinski of the San Francisco Chronicle wrote, "Klein may well have revealed the master narrative of our time," and it was named one of the best books of 2007 by the Village Voice, Publishers Weekly, The Observer, and the Seattle Times. The Irish Times describes Klein’s arguments as "compelling" with Dr. Tom Clonan reporting that she "systematically and calmly demonstrates to the reader" the way in which neoconservative figures were intimately linked to seismic events that "resulted in the loss of millions of lives". The Independent called the book "a compelling account of the way big business and politics use global disasters for their own ends", while Stephen Amidon of the New York Observer calls it a "compelling study of the dark heart of contemporary capitalism."

Mixed

The Nobel Laureate and former Chief Economist of the World Bank Joseph Stiglitz wrote a review of The Shock Doctrine for the New York Times calling the parallel between economic shock therapy and the psychological experiments conducted by Ewen Cameron "overdramatic and unconvincing" and claiming that "Klein is not an academic and cannot be judged as one. There are many places in her book where she oversimplifies." He also said "the case against these policies is even stronger than the one Klein makes" and that the book contains "a rich description of the political machinations required to force unsavory economic policies on resisting countries." Shashi Tharoor in the Washington Post says that The Shock Doctrine takes Klein's criticism of capitalism an important step further. He also said Klein "is too ready to see conspiracies where others might discern little more than the all-too-human pattern of chaos and confusion, good intentions and greed".

Unfavorable

In the London Review of Books, Stephen Holmes criticizes The Shock Doctrine as naïve, and opines that it conflates "'free market orthodoxy' with predatory corporate behaviour." John Willman of the Financial Times describes it as "a deeply flawed work that blends together disparate phenomena to create a beguiling – but ultimately dishonest– argument." Tom Redburn in the New York Times states that "what she is most blind to is the necessary role of entrepreneurial capitalism in overcoming the inherent tendency of any established social system to lapse into stagnation".

Jonathan Chait wrote in The New Republic that Klein "pays shockingly (but, given her premises, unsurprisingly) little attention to right-wing ideas. She recognizes that neoconservatism sits at the heart of the Iraq war project, but she does not seem to know what neoconservatism is; and she makes no effort to find out." Robert Cole from The Times said, "Klein derides the 'disaster capitalism complex' and the profits and privatisations that go with it but she does not supply a cogently argued critique of free market principles, and without this The Shock Doctrine descends into a muddle of stories that are often worrying, sometimes interesting, and occasionally bizarre."

Economist Tyler Cowen, who called Klein's rhetoric "ridiculous" and the book a "true economics disaster", says that the book contains "a series of fabricated claims, such as the suggestion that Margaret Thatcher created the Falkland Islands crisis to crush the unions and foist unfettered capitalism upon an unwilling British public."

Fred Kaplan said that Naomi Klein's depiction of the 1993 Russian constitutional crisis as a "clash between Chicago-style capitalists and honorable, fledgling democrats" is ludicrous.

Johan Norberg of the Cato Institute criticizes the book, saying that "Klein's analysis is hopelessly flawed at virtually every level". Norberg finds fault with specifics of the analysis, such as with the Chinese government crackdown on the Tiananmen Square protests of 1989. He argues that, rather than crushing opposition to pro-market reforms (as Klein would have it), the crackdown itself caused liberalization to stall for years. Klein responded on her website to both Norberg and Chait, stating both had misrepresented her positions. Klein wrote that Norberg had erected a straw man by claiming that her book is about one man, Friedman, but that it is in fact about a "multifaceted ideological trend". Norberg again responded that Klein "actually defends only one of her central claims that I criticized. Instead she gives the impression that I have just tried to find small mistakes here and there in her book." He went on to say that the numbers Klein supplied in her reply reveal the math in her central argument as "rubbish."

Awards

• Winner of the Warwick Prize for Writing (2008/9)

See also

• Chicago school of economics
• Criticism of capitalism
• Political economy
• Shock therapy (economics)

External links

• Official website
• Articles from theguardian.com
• The Shock Doctrine (2007 Short Documentary) at IMDb
• The Shock Doctrine (2009 Documentary Film) at IMDb

Reviews and interviews

• Awe, shocks! – review from Left Business Observer
• Positive commentary by Arianna Huffington
• News from Within Podcast: Naomi Klein's The Shock Doctrine in the Israeli Context., an audio interview with Naomi Klein.
• Dead Left by Jonathan Chait. A review by The New Republic
• After Words interview with Klein on The Shock Doctrine, September 19, 2007