The Shock Doctrine: The Rise of Disaster Capitalism

Naomi Klein brings us up to speed on how the economic agenda of the neo-cons came to be the mantra of American foreign policy and is now coming home to roost. I wanted to pour myself a stiff drink from the opening chapter where she describes what was really happening in New Orleans post Katrina. Her account of how the ideas of one man—Milton Friedman— in what was known as the Chicago School of economics (from the University of Chicago) was exported to South America, then Africa, then the Eastern block and Russia, South East Asia and finally to Iraq, is enraging, heart breaking and illuminating. She answered so many of my questions that she has forever galvanized my understanding of the last 35 years, just as Howard Zinn opened my eyes to the 200 years prior to that.

Much of what I knew already about the policies of the World Bank and the structural adjustment programs of the IMF was just the beginning of her tale. So much more was going on from the Ford Foundation sponsoring students from South America to study with Milton Friedman to the banks freezing all loans in order to force Allende's government to buckle to corporate takeovers of state factories to the support of strongman dictatorships by the US to Amnesty International erasing all mention of why people were being disappeared and tortured (so as not to offend corporate donors). Yes, why indeed? Why did we simply accept that South American dictators enjoyed such activities just for kicks? Turns out that all those tortured and disappeared were leaders in the socialist party. Capitalism is not the preferred economic system of a democratic people. All over the world the neo-cons were having to fight democratically elected socialist governments and the tactics they used resemble war and now is war in Iraq.

The underlying thesis of Ms. Klein's book is that the preferred strategy for forcing a country to embrace capitalism is to shock them with such severe economic hardships that the populace is too stunned to realize what is going on and when they do come too, they find out that their infrastructure has been sold dirt cheap to mult-national companies and that contracts have been made for so far into the future that the new governments are unable to stop the resulting rise in unemployment, 25% say, or the putting out of business of local businesses. Wal-Mart anyone?

I have long been looking for a way to explain the flawed thinking of free market ideology and now that I know it was just an extremist economic theory involving the desire for an unobtainable pure system, I can compare it to another extremist ideology. That of breeding the perfect race. It just isn't possible and to do so would be to hack off all the parts that offend the ideal. We know where that got us in the racial cleansing department. It is my sincere hope that one day the phrase "free market" will be as abhorrent as the word eugenics.

Meanwhile, having been mauled by such free market extremism, the victim's best bet is to play dead until the Grizzly bear moves on. In South America where the victim was left for dead, a new socialism is being born as countries are now banding together to make their own trade agreements and to keep prices stable. (Fluctating prices is how money is made on the free market by speculators/investors). And as long as profits are to be more easily made elsewhere, the beast will move on. That's how South East Asia was tripped up. The Asian Tiger countries took the advice of free market advocates to allow capital to move freely and, on rumor alone, it did move, leaving these countries with no money in the till. Then when they said well that didn't work let's restrict capital again, the IMF swooped in and said oh no, no, no you can't do that if you want to be part of free trade, you'll scare off investors, you must take money out of public services. Ms. Klein makes a correlation between the 20% rise in girls sold into the sex trade in Thailand and the implementation of IMF structural adjustments.

Meanwhile with all this destruction going on, in the new world of post 9/11 war, terrorism and global warming, a whole new market has evolved in security and reconstruction. And we thought the defense industry was bad. Now the stock market can cheer on death and destruction because its good for more than half of all businesses.

The world was caught by surprise by such unfettered greed because, before we always had the example of the Soviet Union and communism to tame the beast. With the fall of Russia, capitalism could roar on. This could have been a very depressing story, but Ms. Klein ends her tale by describing how people learned from this experience and are fighting back by decentralizing power, localizing it in essence, and making laws that their people will now know to make stick. May it be so.