RYviewpoint: Naomi Klein's "The Shock Doctrine"

Klein has assembled a pretty damning case against the direction that right wing ideologues have pushed society over the last 30+ years. This is an excellent review of the tragedy of economic control over the last 30 years. She documents how right wing ideologues have implemented ideas at the expense of popular control and socialist ideas all around the world. It is a story that well merits reading.

Here is her indictment of "disaster capitalism":

Since the fall of Communism, free markets and free people have been packaged as a single ideology that claims to be humanity's best and only defence against repeating a history filled with mass graves, killing fields and torture chambers. Yet in the Southern Cone [of South America], the first place where the contemporary religion of unfettered free markets escaped from the basement workshops of the University of Chicago and was applied in the real world, it did not bring democracy; it was predicated on the overthrow of democracy in country after country. And it did not bring peace but required the systematic murder of tens of thousands and the torture of between 100,000 and 150,000 people.

She is really down on Milton Friedman and his "Chicago school" of radical capitalism:

National salvation through the harnessing of greed was the closest thing Russia's Chicago Boys and their advisers had to a plan for what they were going to do after they finished destroying Russia's Instituions.

Nor were these catastrophic results unique to Russia; the entire thirty-year history of the Chicago School experiment 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 oligarch, 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 lawlessnes but precisely because of it.

And here is her statement on "disaster capitalism":

... the disaster economy sneaked up on us. In the eighties and nineties, new economies announced themselves with great pride and fanfare. The tech bubble in particular set a precedent for a new ownership class inspiring deafening levels of hype -- endless media lifestyle profiles of dashing young CEOs beside their private jets, their remote-controlled yachts, their idyllic Seattle mountain homes.

That kind of wealth is being generated by the disaster complex today, though we rarely hear about it. According to a 2006 study, "Since the 'War on Terror' began, the CEOs of the top 34 defense contractors have enjoyed average pay levels that are double the amounts they received during the four years leading up to 9/11." While these CEOs saw their compensation go up an average of 108 percent between 2001 and 2005, chief executives at other large American companies averaged only 6 percent over the same period. ...

Peter Swire, who served as the U.S. government's privacy counsellor during the Clinton administration, describes the convergence of fources behind the War on Terror bubble like this: "You have government on a holy mission to ramp up information gathering and you have an information technology industry desperate for new markets." In other words, you have corporatism: big business and big government combining their formidable powers to regulate and control the citizenry.

Here is her analysis of the Iraq war:

Our [anti-war] explanations for why the war [in Iraq] was waged rarely went beyond one-word answers: oil, Israel, Halliburton. Most of us chose to oppose the war as an act of folly by a president who mistook himself for a king, and his British sidekick who wanted to be on the winning side of history. There was little interst in the idea that was was a rational policy choice, that the architects of the invasion had unleashed ferocious violence because the could no crack open the closed economies of the Middle Esat by peaceful means, that the level of terror was proportional to what was at stake.

While I'm sympathetic to Klein's thesis and I enjoy the lively writing, some qualifications are necessary. I do not find Naomi Klein to be completely trustworthy. She is willing to overstate facts to try to make her point. I don't know enough details catch all the problems with the text but there are enough to make me somewhat suspicious. She is obviously very intelligent and very talented at writing, and the subject she takes on is worthy of the effort, but I feel she feels she needs to cut corners to "sell" her point of view. This isn't a condemnation of the book. It is well worth reading. But it is a caution that you need to read it with a critical eye and be ready to look for confirmation from other sources before accepting the story she gives you as the "whole truth".

Here's what I liked about the book:

Chapter 1 goes into more detail on the infamous "Sleep Room" at McGill where CIA-sponsored "psychic driving" experiments were undertaken. Her thesis was that this was the CIA testing torture techniques that would be used in the post 9/11 world.
Chapters 3 and 4 provides a good review of the horrors of the war on the Left carried out in Chile and Argentina.
Chapter 6 describes how Thatcher initially failed in her conservative "revolution" but was saved by the generals in Argentina when they invaded the Falklands. The surge in nationalism gave her the political clout to take on the miners and then impose her radical economics on Britain.
Chapter 7 describes how Jeffrey Sachs plotted to impose radical "shock therapy" on Bolivia and provides the details of the social disaster this brought that country. She also documents how this disaster is "sold" as a success by the right.
Chapter 9 describes how Jeffrey Sachs plotted to impose radical "shock therapy" on Poland and how this completely undermined the Soladarity movement.
Chapter 9 describes how Milton Friedman "consulted" with the Communist leadership in China to bring radical "shock therapy" to China. She points out that the fight in Tianamen Square was not between a conservative Communist hierarchy versus young new democrats. Instead she says it was a fight between a Communist Party that looked to Friedman's radical "free market" as a technique to enrich themselves at the expense of the large mass of China that resisted this radical economics.
Chapter 10 describes how the ANC sold out economic control to elites in a "trade" that gave political change but at the cost of control over the economy.
Chapeters 11 and 12 document how Russia was gutted by radical free market tactics that created the Russian mafia and huge profits for western investors.
Chapter 13 is the very sad story of how the IMF purposely delayed rescuing the Southeast Asian countries and piled on a lot of "structural reforms" which forced the sale of assets at knockdown prices to enrich investors as part of the free market shock treatment.
Chapters 14 and 15 look inside Bush's post 9/11 world and how the shock doctrine has looted the US.
Chapters 16 through 18 look at how the economic "shock and awe" has been executed on Iraq.

The book is a real eye-opener. I like the way it follows its theme around the world over the last 30 years. What she details is horrifying. There are lots of details that are behind the headlines and which have been forgotten with time. Klein is very good at taking this story and following it around the world and showing the connections.

But I am a bit concerned about the grand theme she has painted. It reads too much like a grand conspiracy theory. I don't doubt that fanatics wished for all the horrors she documents, but I do worry that the story isn't as interconnected and unified as she presents. Here are some of my specific complaints about exaggeration and overstatement:

pp 63-64: She claims that "developmental" economics made Argentina affluent under Juan Peron. My understanding is that in the first decade of the 20th century Argentina was a first world country. It was under Peron that the country slid down toward (but not quite into) third world status.
p 66: She call Eisenhower a "hard-core Republican". No. He wasn't even very political. He was a desperate attempt by the Republicans to win by courting a very popular WWII general. Both parties wanted him to run under his banner. In the end he favoured the Republicans, but not because he was an ideologue or had deep-seated "hard-core" conservative values.
pp 77-83: She tries to build a case that students of Milton Friedman, the Chicago Boys, directed the coup in Chile. The facts aren't as compelling as she would have us believe. Certainly they supported the overthrow, but a linkage between right wing military dictatorship and Friedman's economic theories is overstated.
p 186: "Here [Bolivia] was a country with a strong, militant labour movement and a powerful left tradition, site of Che Guevara's last stand." My understanding is that Guevara had little or no contact with Bolivian leftists and what contact he had led to his seizure and killing by CIA-led troops. Klein's reference to Guevara as if that were part of a heroic leftist tradition in Bolivia is quite odd.
p 262: She presents the idea of a central back that is independent of direct political control by the governing party is somehow an idea of "the Chicago School" is a distortion of history. There has been a long running debate of how independent a central bank should be of direct political control. This isn't an idea invented by Milton Friedman.
pp 299-300: She presents Clinton as an extension of Bush in a policy of letting Russia collapse rather than bring in aid. I accept that the US lagged, but I'm not wholly convinced that Clinton's administration was lockstep with the Reagan/Bush radical economics. I accept that bureaucrats were in place and acted during the Clinton administration, but I'm not convinced that there was a seamless conspiracy the continued from Reagan to Bush to Clinton to Bush.

Despite my complaints, this is an important book, well written, so it is well worth reading. Sure it has imperfections, but if you work around those, the book is full of interesting facts and viewpoints that need to be understood if we are ever to get out of the current miasma of fanatical right wing doctrinaires who control today's politics and economy.

... here are some videos which introduce you to Naomi Klein's "The Shock Doctrine":