The Shock Doctrine
Encyclopedia
The Shock Doctrine: The Rise of Disaster Capitalism is a 2007 book by Canadian author
Author
An author is broadly defined as "the person who originates or gives existence to anything" and that authorship determines responsibility for what is created. Narrowly defined, an author is the originator of any written work.-Legal significance:...

 Naomi Klein
Naomi Klein
Naomi Klein is a Canadian author and social activist known for her political analyses and criticism of corporate globalization.-Family:...

, and is the basis of a 2009 documentary by the same name.

The book argues that the free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...

 policies of Nobel Laureate Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...

 have risen to prominence in some countries because they were pushed through while the citizens were reacting to disasters or upheavals. It is implied that some man-made crises, such as the Falklands war
Falklands War
The Falklands War , also called the Falklands Conflict or Falklands Crisis, was fought in 1982 between Argentina and the United Kingdom over the disputed Falkland Islands and South Georgia and the South Sandwich Islands...

, may have been created with the intention of pushing through these unpopular reforms in their wake.

Synopsis

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

The introduction sketches the history of the last thirty years where economic shock doctrine has been applied throughout the world, from South America
South America
South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east...

 in the 1970s to New Orleans after Hurricane Katrina
Hurricane Katrina
Hurricane Katrina of the 2005 Atlantic hurricane season was a powerful Atlantic hurricane. It is the costliest natural disaster, as well as one of the five deadliest hurricanes, in the history of the United States. Among recorded Atlantic hurricanes, it was the sixth strongest overall...

. Klein introduces two of her main themes.
  1. That practitioners of the shock doctrine tend to seek a blank slate on which to create their ideal free market economies, which usually requires a violent destruction of the existing economic order.
  2. The similarities between economic shock doctrine and the original shock therapy
    Electroconvulsive therapy
    Electroconvulsive therapy , formerly known as electroshock, is a psychiatric treatment in which seizures are electrically induced in anesthetized patients for therapeutic effect. Its mode of action is unknown...

     – a psychiatric technique where electric shocks were applied to mentally ill patients.


Part 1 begins with a chapter on psychiatric shock therapy and the covert experiments conducted by the psychiatrist Ewen Cameron
Donald Ewen Cameron
Donald Ewen Cameron , commonly referred to as "D. Ewen Cameron" or "Ewen Cameron," was a twentieth-century Scottish-born psychiatrist who was involved in the United States Central Intelligence Agency's research on mind control and served as President of the Canadian, American and World Psychiatric...

 in collusion with the Central Intelligence Agency
Central Intelligence Agency
The Central Intelligence Agency is a civilian intelligence agency of the United States government. It is an executive agency and reports directly to the Director of National Intelligence, responsible for providing national security intelligence assessment to senior United States policymakers...

: how it was partially successful in distorting and regressing patients' original personality, but ineffectual in developing a better personality to replace it. Parallels with economic shock therapy are made, including a digression on how government agencies harnessed some of the lessons learned to create more effective torture
Torture
Torture is the act of inflicting severe pain as a means of punishment, revenge, forcing information or a confession, or simply as an act of cruelty. Throughout history, torture has often been used as a method of political re-education, interrogation, punishment, and coercion...

 techniques. Torture, according to Klein, has often been an essential tool for authorities who have implemented aggressive free market reforms – this assertion is stressed throughout the book. She suggests that for historical reasons the human rights
Human rights
Human rights are "commonly understood as inalienable fundamental rights to which a person is inherently entitled simply because she or he is a human being." Human rights are thus conceived as universal and egalitarian . These rights may exist as natural rights or as legal rights, in both national...

 movement has often portrayed torture without explaining its context, which has made it frequently appear as pointless sadism. The second chapter introduces Milton Friedman and his Chicago school of economics, who Klein describes as leading a movement committed to free markets even less regulated than before the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...

.

Part 2 discusses the use of shock doctrine to transform South American economies in the 1970s, focusing on the coup in Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...

 led by General Augusto Pinochet
Augusto Pinochet
Augusto José Ramón Pinochet Ugarte, more commonly known as Augusto Pinochet , was a Chilean army general and dictator who assumed power in a coup d'état on 11 September 1973...

. The apparent necessity for the unpopular policies associated with shock therapy to be supported by torture is explored.

Part 3 covers attempts to apply the shock doctrine without the need for extreme violence against sections of the population. The mild shock therapy of Margaret Thatcher
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...

 is explained as being made possible by the Falklands War
Falklands War
The Falklands War , also called the Falklands Conflict or Falklands Crisis, was fought in 1982 between Argentina and the United Kingdom over the disputed Falkland Islands and South Georgia and the South Sandwich Islands...

, while free-market reform in Bolivia
Bolivia
Bolivia officially known as Plurinational State of Bolivia , is a landlocked country in central South America. It is the poorest country in South America...

 was possible due to a combination of pre-existing economic crises and the charisma of Jeffrey Sachs
Jeffrey Sachs
Jeffrey David Sachs is an American economist and Director of The Earth Institute at Columbia University. One of the youngest economics professors in the history of Harvard University, Sachs became known for his role as an adviser to Eastern European and developing country governments in the...

.

Part 4 reports on how the shock doctrine was applied in Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...

, Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...

, South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...

 and to the tiger economies during the 1997 Asian financial crisis.

Part 5 introduces the Disaster Capitalism Complex where the author describes how companies have learnt to profit from disasters. She talks about how the same personnel move easily from security-related posts in US government agencies to lucrative positions in corporations.

Part 6 discusses the occupation of Iraq, which Klein describes as the most comprehensive and full-scale implementation of the shock doctrine ever attempted.

Part 7 is about the winners and losers of economic shock therapy, how narrow 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
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...

.

Conclusion is about the backlash against the shock doctrine and economic institutions that propagate it like the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

 and IMF
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

. South America and Lebanon
Lebanon
Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...

 post-2006 are examined as sources of positive news, 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
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

.

Praise

Paul B. Farrell from the Dow Jones Business News
Dow Jones & Company
Dow Jones & Company is an American publishing and financial information firm.The company was founded in 1882 by three reporters: Charles Dow, Edward Jones, and Charles Bergstresser. Like The New York Times and the Washington Post, the company was in recent years publicly traded but privately...

 stated "you must read what may be the most important book on economics in the 21st century". John Gray wrote in The Guardian
The Guardian
The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...

, "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
San Francisco Chronicle
thumb|right|upright|The Chronicle Building following the [[1906 San Francisco earthquake|1906 earthquake]] and fireThe San Francisco Chronicle is a newspaper serving primarily the San Francisco Bay Area of the U.S. state of California, but distributed throughout Northern and Central California,...

 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
Publishers Weekly
Publishers Weekly, aka PW, is an American weekly trade news magazine targeted at publishers, librarians, booksellers and literary agents...

, The Observer
The Observer
The Observer is a British newspaper, published on Sundays. In the same place on the political spectrum as its daily sister paper The Guardian, which acquired it in 1993, it takes a liberal or social democratic line on most issues. It is the world's oldest Sunday newspaper.-Origins:The first issue,...

, and the Seattle Times.
The Irish Times
The Irish Times
The Irish Times is an Irish daily broadsheet newspaper launched on 29 March 1859. The editor is Kevin O'Sullivan who succeeded Geraldine Kennedy in 2011; the deputy editor is Paul O'Neill. The Irish Times is considered to be Ireland's newspaper of record, and is published every day except Sundays...

 describes Klein’s arguments as "compelling" with Dr. Tom Clonan reporting that she "systematically and calmly demonstrates to the reader" the way in which neocons were intimately linked to seismic events that "resulted in the loss of millions of lives". Near the end of the review Dr. Clonan’s offers a précis for Klein’s central argument—that the neoconservative project is not about "implanting of democracy" but a repressive prescription for the maximising of global profit for a small elite. "Neocons see the ideal ratio of super-rich to permanent-poor as consistent with an uber-class of business oligarch
Business oligarch
Business oligarch is a near-synonym of the term "business magnate", borrowed by the English speaking and western media from post-Soviet parlance to describe the huge, fast-acquired wealth of some businessmen of the former Soviet republics during the privatization in Russia and other post-Soviet...

s and their political cronies from the top 20%". The remaining 80% of the world’s population, the "disposable poor", would subsist in "planned misery" unable to afford adequate housing, privatised education or healthcare.
The Independent
The Independent
The Independent is a British national morning newspaper published in London by Independent Print Limited, owned by Alexander Lebedev since 2010. It is nicknamed the Indy, while the Sunday edition, The Independent on Sunday, is the Sindy. Launched in 1986, it is one of the youngest UK national daily...

 called the book "a compelling account of the way big business and politics use global disasters for their own ends", while Stephen Amidon
Stephen Amidon
Stephen Amidon is an American author and film critic. He grew up on the East Coast of the United States of America, including a spell in Columbia, Maryland, which served as the inspiration for his fourth novel The New City. Amidon moved to London, UK, in 1987, where he was given his first job as a...

 of the New York Observer
New York Observer
The New York Observer is a weekly newspaper first published in New York City on September 22, 1987, by Arthur L. Carter, a very successful former investment banker with publishing interests. The Observer focuses on the city's culture, real estate, the media, politics and the entertainment and...

 calls it a "compelling study of the dark heart of contemporary capitalism."

Mixed

Nobel
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel , is an award for outstanding contributions to the field of economics, generally regarded as one of the...

 Laureate and former Chief Economist
World Bank Chief Economist
The World Bank Chief Economist provides intellectual leadership and direction to the Bank’s overall development strategy and economic research agenda, at global, regional and country levels...

 of the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

, 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." Nonetheless he claims that, "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
Shashi Tharoor
Shashi Tharoor is an Indian politician and a Member of Parliament from the Thiruvananthapuram constituency in Kerala...

 in the Washington Post says that The Shock Doctrine takes Klein's criticism of capitalism an important step further, but also says that 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".

Criticism

In the London Review of Books
London Review of Books
The London Review of Books is a fortnightly British magazine of literary and intellectual essays.-History:The LRB was founded in 1979, during the year-long lock-out at The Times, by publisher A...

, Stephen Holmes criticized its perceived naïveté and for conflating "'free market orthodoxy' with predatory corporate behaviour." John Willman of Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....

 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
Jonathan Chait
Jonathan Chait is a writer for New York magazine. He was previously a senior editor at The New Republic and a former assistant editor of The American Prospect. He also writes a periodic column in the Los Angeles Times.- Personal life :...

 wrote in The New Republic
The New Republic
The magazine has also published two articles concerning income inequality, largely criticizing conservative economists for their attempts to deny the existence or negative effect increasing income inequality is having on the United States...

 that Klein "pays shockingly (but, given her premises, unsurprisingly) little attention to right-wing ideas. She recognizes that neoconservatism
Neoconservatism
Neoconservatism in the United States is a branch of American conservatism. Since 2001, neoconservatism has been associated with democracy promotion, that is with assisting movements for democracy, in some cases by economic sanctions or military action....

 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
The Times
The Times is a British daily national newspaper, first published in London in 1785 under the title The Daily Universal Register . The Times and its sister paper The Sunday Times are published by Times Newspapers Limited, a subsidiary since 1981 of News International...

 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
Tyler Cowen
Tyler Cowen is an American economist, academic, and writer. He occupies the Holbert C. Harris Chair of economics as a professor at George Mason University and is co-author, with Alex Tabarrok, of the popular economics blog Marginal Revolution...

, 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
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...

 created the Falkland Islands crisis
1982 invasion of the Falkland Islands
On 2 April 1982, Argentine forces mounted amphibious landings of the Falkland Islands . The invasion involved an initial defence force organised by the Falkland Islands' Governor Sir Rex Hunt giving command to Major Mike Norman of the Royal Marines, the landing of Lieutenant-Commander Guillermo...

 to crush the unions and foist unfettered capitalism upon an unwilling British public." Fred Kaplan
Fred Kaplan
Fred Kaplan is a journalist and contributor to Slate magazine. His "War Stories" column covers international relations and US foreign policy.-Career:...

 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
Johan Norberg
Johan Norberg is a Swedish author and historian, devoted to promoting economic globalization and liberal positions. He is arguably most known as the author of In Defense of Global Capitalism...

 of the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...

 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 of the Tiananmen Square protests of 1989
Tiananmen Square protests of 1989
The Tiananmen Square protests of 1989, also known as the June Fourth Incident in Chinese , were a series of demonstrations in and near Tiananmen Square in Beijing in the People's Republic of China beginning on 15 April 1989...

, which he claims did not crush opposition to pro-market reforms, but in fact caused liberalization to stall for years. Klein responded on her website to both Norberg and Chait claiming both had misrepresented her positions. Klein claimed Norberg had erected a straw man
Straw man
A straw man is a component of an argument and is an informal fallacy based on misrepresentation of an opponent's position, twisting his words or by means of [false] assumptions...

 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."

See also

  • Chicago school of economics
  • Criticism of capitalism
  • Political economy
    Political economy
    Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

  • Shock therapy (economics)
    Shock therapy (economics)
    In economics, shock therapy refers to the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country, usually also including large scale privatization of previously public owned assets....


External links


Reviews & Interviews

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