-
An important read with some shortcomings Oct 27, 2007 (173 of 209 found this helpful)
Naomi Klein has written this book about the rise of what she calls "disaster capitalism": the global imposition/adoption of Chicago School (neoliberal) economics since the early 1970s. This is a particularly important book because, while many have written about the same topic, I have never seen it treated in a form that is both holistic (ie. a global history) and accessible (ie. largely free from the academic jargon of economics and social theory). The book does suffer from some problems however.
Klein's main thesis is problematic. She writes that the idea of economic shock therapy arose out of the same logic as Electric Convulsive Therapy (ECT). This idea is to create or exploit a destructive event in order to create regression, passivity, and a 'blank slate' on which to build a new order. In supporting this thesis, Klein uses all of Part I of her book to write about psychological torture and the CIA's mind control experiments. She attempts to develop a 'poetics of torture' that links the individual violence of ECT to the structural violence that occurs when neoliberalism is imposed as a governing strategy. Klein is no poet however, and the metaphor seems to die pretty early on in the book. She does thankfully offer a more implicit thesis that she invokes more regularly and supports more thoroughly: free markets did not develop through freedom, but through authoritarian or technocratic interventions.
Secondly, Klein treats capitalism as if it were only 35 years old. Her book however is thematically similar to the work of another woman who wrote on the same issues a century before: Rosa Luxemburg. By only going as far back as the rise of Keynsianism and developmentalism, Klein makes it seem as though neoliberalism is a radical historical exception. Yet it seems that, since the industrial revolution, it is Keynsianism that itself was the historical exception.
This book is mostly comprised of what are essentially case studies. Each case study could certainly be expanded into its own 600-page book, so simplification was necessary. I think that it is also necessary for the author to explicitly admit the complexity of any situation beyond just the power of market forces, which act strongly and ubiquitously but never alone. I think she does admit the shortcomings of her case studies for Israel/Palestine, South Africa, and Iraq (her best and most personally-involved ones), but not for the rest.
All in all, this book is worth a read and is a good introduction to one of the most powerful forces of our times. I just hope that it inspires people to read some other books that illuminate more of the complexities in regards to the theory and practice of neoliberalism in our communities, countries, and worlds. I particularly recommend David Harvey's A Brief History of Neoliberalism.
-
Shockingly Powerful Jul 14, 2008 (216 of 277 found this helpful)
The late Milton Friedman, the renowned economist, believed that democracy and a free-market economy went hand-in-hand, that the greatest threat to both was nationalization, government regulation, and social spending. He preached this philosophy to his disciples at the University of Chicago School of Economics, and they would go forth spreading the Gospel according to the Book of Milton.
There is also the International Monetary Fund, an agency founded after World War II to help struggling countries and their economies get back on their feet. Many of its managers and policy makers will be graduates of the Chicago School of Economics, and they will begin to impose the Friedman creed wherever possible.
There is only one thing wrong. No population seems to vote in the people who support their brand of economics. Its first success is when a socialist, democratically elected President of Chile, Salvador Allende, is overthrown and killed when the presidential palace is stormed by fascists. Augusto Pinochet comes into power and immediately places the "Chicago boys" in charge of the economy. With the death of price controls and lunch programs, Chileans find themselves spending one quarter of their monthly salaries just to buy bread. They will leave hours earlier for work than usual because they can no longer afford public transportation. Even Chile's social security program, once a model of efficiency is privatized, becoming virtually worthless overnight. Chilean children begin fainting in school from lack of food or milk and many stop attending altogether.
The story of Chile will be repeated in Argentina, Bolivia, China, Peru, Poland, South Africa, Sri Lanka, and Russia where the IMF will demand that borrowers meet Draconian conditions before they lend money. In each case these austerity measures will be made overnight, all at once. A shocked population will come to their senses if such radical changes are made over time. They will be able to organize, mobilize and challenge the implementation of such policies. It has to come all at once, right after elections, a coup, or a hurricane when the population will be too dazed and disorganized to respond. This will be the shock, or as author Naomi Klein calls it, shock doctrine. For those who are still lucid, there is the next step in the shock doctrine, terrorize, torture, or make them disappear.
In each case, in each country, prices on food and other common items will go through the roof, the number of destitute will increase exponentially, and democracy will be squashed. In China, the communist elite will impose these changes on the masses while ensuring that they will profit handsomely from the economic and social upheaval. President Clinton will cheer the economic shock doctrine instituted by Boris Yeltsin as he dissolves the Court and the Parliament, bringing the Russian army out to attack the latter, which killed more than 300 people and several deputies. A new class of super mega apparatchiks will emerge increasing the divide between the "have mores" and the "have nothings," and Russians will put up with a few KGB murders and disappearances for the promise of stability that Vladimir Putin will provide.
The Polish people, fed up with the broken promises of Solidarity who succumbed to IMF demands to relieve them of their crushing debt, will be thrown out of office in 1996 elections. Nelson Mandela will focus so much on achieving political control of South Africa he will neglect the real political power of controlling the economic engines that run the nation. He soon discovers that without economic power, he has no political muscle. He becomes a slave of economic apartheid. Shanty towns will get larger and people will become poorer. The population is disillusioned with their new-found "equality." The tsunami in Sri Lanka will allow the hoteliers to make a deal with the government, and place security guards around the beac
-
The New "New Economy" Sep 18, 2007 (312 of 402 found this helpful)
In THE SHOCK DOCTRINE, Naomi Klein brilliantly proposes a compelling counter-story to the prevailing fable of free market infallibility. Buttressed by painstaking and wide-ranging research, and an ability to see connections where others only see coincidence, Ms. Klein amply shows that profit-making is not the essence of democracy as Milton Friedman and his minions would have it. She shows instead that the machinery of the state and the requirements of "disaster capitalism" are now so tightly synchronized in their exploitation of disasters both man-made and natural as to be virtually one in the same.
Citing pertinent examples to prove her thesis that "disaster capitalism" is now rampant around the world - in Russia, in China, in Iraq to name just a few - she describes how in times of crisis, elites everywhere have learned that they can profit by implementing policies, e.g., "shock therapy" or "shock and awe," that would have been vigorously opposed in normal times. When these changes to Friedmanite free-market dicta are opposed, as they were in Chile, a third shock is implemented. This, according to Klein is a shock that is entirely man-made - the torture and murder of those who would stand in the way of the takeover of the public sector, or, as neo-liberal economists would have it, the bringing forth of a new birth of freedom.
During the "Reagan Revolution," Klein argues, the notion of the `Entrepreneur As Hero' was buffed to a high gloss though the influence of right-wing think tanks whose pronouncements were reported by a cowed and obedient media. A decade later in the dot.com era, entrepreneurs were burnished to blinding sheen when the media fed the world images of swashbuckling venture capitalists who were touted as bringing forth a new millennium through the Internet. Klein maintains that George W. Bush's "public offering" -- the War on Terror - covered slavishly and avidly by the media, has been wildly successful, lining the pockets of investors in the new Homeland Security sector as promises of taxpayer money everlastingly flowing into the coffers of the military-industrial-energy complex have been fulfilled. This is the new "new economy:" the looting of the public sector through the now tried-and-true methods of disaster capitalism.
THE SHOCK DOCTRINE reveals the many wounds that disaster capitalism has inflicted upon the body politic both here in the U.S. and throughout the world over the past 25 years. It is a breathtaking achievement. Highly recommended.
-
Using "disaster captialism" to change society and its negative impact Dec 11, 2007 (19 of 22 found this helpful)
**FYI** Please note to the best of my knowledge I am NOT related to Naomi Klein.**
If you wonder what happened to the middle class, why poverty is on the rise and what the economies in a democracracy, dictatorship and "communism" have in common, you'll find lots of food for thought in Naomi Klein's THE SHOCK DOCTRINE. Tracing the rise of the "Chicago Boys" laissez-faire economic beliefs, their impact on South America, China, Russia, Poland and South Africa and how it impacted their form of government, Klein makes a compelling argument for the flaws in Milton Friedman's economic "science".
Naomi Klein's book looks at the conflict between Milton Friedman's "laissez-faire" approach to business and government where business is largely unregulated running itself and government is little more than a bare bones system. Friedman believed that the economic theories he espoused would be perfect and that any problems with it would be due to outside forces interferring with his free market world. His approach was in complete contrast to Keynes who believed that the prime mission of politicians and economists was to prevent unemployment and avoid a depression or recession by regulating the market place. People like John Kenneth Galbraith heir to Keynes mantle believe that government was to keep our captalist system fair and prevent business from recreating disasters like the Great Depression and 1929 stock market crash. It is the conflict between these two economic philosphies that our world lives and flourishes.
Klein suggests that "disaster capitalism", i.e., introducing radical changes in terms of economic and government policy when a country is in shock (taking advantage of the fact that massed resistence is unlikely to that change), is allowing the rise of unchecked multi-national corporations that take advantage of and damage our society in the process. She suggests that Friedman's beliefs that the market will manage itself and that free market capitalism undermined the Soviet Union is a idealized and naive belief. The impact for good and bad is that business functions like a plant with too much sunlight and water overgrowing and strangling out everything else in the economic ecosystem and, as a result, causing the system to become unbalanced with human suffering and economic disaster as the result if it is unchecked. She traces a parallel path between the rise of Friedman's economic philosphy and the rise of human rights violations, rise and fall of various governments throughout the world and the opportunism of the business world to exploit it.
She ties all of this together looking at the economic policies and beliefs that are reshaping American society--for good and bad--into a different society where the gap between the wealthy and the poor continues to expand and one where the free market society is being radically retooled. The result is a society where the rich grow richer and the poor grow poorer with the pressured middle class continuing to see their position continually eroding. This book will probably divide those along the more extreme political lines but has the ring of truth nevertheless.
Klein crafts a fascinating book. Although some of her observations might be a bit of a stretch and her arguments occasionally flawed, she provides compelling evidence to support her thesis and connects the dots of events that might otherwise appear to be unrelated. Whether or not you agree with Klein or are outraged by her evidence, you'll find plenty of food for thought in her book.
-
Incredible Insights! Sep 22, 2007 (70 of 90 found this helpful)
Klein's book is a solid and invaluable study of "economic shock therapy" (sudden privatization removal of all trade barriers, accompanied by drastic reductions in taxes and social spending) over the past three decades. She concludes that economic shock therapy (originally formulated by economist Milton Friedman) cannot be implemented without a preceding crisis (eg. hyperinflation (eg. Chile, Bolivia), weather disasters (eg. Katrina or the 2004 tsunami in South Asia), war (eg. 9/11, Iraq War II), or major political upset (eg. the Soviet Union after Gorbachev's resignation), and requires suppression of dissent to succeed. The "really bad news" is that each example cited by Klein quickly led to massive economic worsening for the general populace. Worse yet, is Friedman's statement that "our (true free-market enthusiasts) basic function is to develop alternatives to existing policies, and to keep them alive and available until the politically impossible becomes politically inevitable." Worst of all, is a suspicion that the current administration is committed to bringing about such crises if they don't naturally occur.
Friedman first learned to exploit large-scale crisis in the mid-70s while acting as advisor to Chile's General Pinochet following his violent 1074 coup. Tax cuts, free trade, privatized services, cuts in social spending, deregulation, voucher-funded private schools quickly followed. Torture cells and mass murders stifled dissent. Unemployment went from 3 to 20% (ultimately 30% in 1982), and thousands of business foundered. Eventually Pinochet was forced to rescind much of what had been done, and Chile began recovering - mainly thanks to its government copper mines that had not been privatized. A lasting result, however, that in 2007, Chileans had the 8th most unequal income distribution.
Russia's Yeltsin wasted no time after Gorbachev's 10/91 resignation, and in his first week announced lifting price controls (70% opposed), free trade policies, and the beginning of rapid privatization of the nation's 225,000 state-owned companies. Parliament agreed to give Yeltsin free rein for a year. At the end of that period the economy had fallen 40%, and rising opposition prompted Yeltsin to disband Parliament and back up his decrees with military rule and arrests. A small group of oligarchs managed to use government monies deposited in their just-created banks to buy vast national assets at fire-sale prices - eg. 51% of one oil company went for $130 million, only to be valued two years later at $2.8 billion. (Only Russians were allowed ownership.) These oligarchs then supported Yeltsin with large donations and heavy media coverage - 800X that of his rivals. Despite winning the election, Yeltsin's approval rating fell to 6%, and by '98, over 80% of Russian farms were bankrupt, those living in poverty rose from 2 million to 74 million in 8 years, the population declined 10%, etc.
Undeterred, reformers' next stop was Iraq. This time, U.S. firms would be the first in line for the anticipated easy billions. Bremer spent most of his first four months almost exclusively on economic matters - privatizing everything in sight (except oil - was warned that to do so would create enormous resistance), lowering the corporate tax rate from 45 to 15%, allowing foreign companies to own 100% of Iraqi assets and take out 100% of the profits, and cementing deals with 40-year leases and contracts. Meanwhile, de-Baathification removed skilled people from their posts, weakened the voice of secular Iraqis, and fed the resistance - already red hot from Bremer's having dismissed the entire 400,000 man Iraqi army. Unemployment, already high, rose even more. Then, it was on to rewrite the Iraq constitution to cement these changes - this succeeded at first, but opposition led to a second rewriting where these changes were lost.
Only 15,000 Iraqis were hired for reconstruction projects