The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein (Alfred A. Knopf Canada, $36.95)
Review by Toby Moorsom
Review by Toby Moorsom
This article appears in New Socialist 63, a special theme issue on Socialism For Our Times which will be available in early March.
“If money, according to Augier, comes into the world with a congenital blood-stain on one cheek, capital comes dripping from head to foot, from every pore, with blood and dirt.” Karl Marx, Capital, Vol. 1
The scope and tenacity of analysis in The Shock Doctrine clearly establishes Klein as a left intellectual to be taken seriously, especially given that it comes at a time when the left is in a near complete state of retreat. The book’s greatest strength is that it brings together a history of neoliberalism for a popular audience. Most importantly, it accurately reveals how neoliberal economics are part of a counter-revolutionary strategy against working-class victories of the post-war era. Nevertheless, its historical myopia and theoretical weaknesses are frustrating.
Market fundamentalism
Klein’s central argument is that the market fundamentalism, come to be known as neoliberalism, represents a new phase of capitalist accumulation defined by its close association with human disaster. This phase is not an unravelling of coincidences, but a product of planning, often involving the most grotesque criminal behaviour among an elite that is portrayed by its own corporate media as intelligent and heroic.
Klein’s central argument is that the market fundamentalism, come to be known as neoliberalism, represents a new phase of capitalist accumulation defined by its close association with human disaster. This phase is not an unravelling of coincidences, but a product of planning, often involving the most grotesque criminal behaviour among an elite that is portrayed by its own corporate media as intelligent and heroic.
Klein follows the parallel formation of research into electroshock “therapy” on psychiatric patients with a coordinated strategy of disciplining workers and populations around the world toward a new phase of growth based on the destruction of the Keynesian post-war compromise.
The results have produced a form of capitalism that traumatizes populations into submission through numerous forms of manufactured crisis, causing massive displacement and impoverishment. It also allows a wide-ranging extension of the market into the terrain of the capitalist state. In particular, it has seen the privatization of those parts of the state that both create and respond to crises. Thus, we see a cycle of profit based around a self-referential and increasingly consolidated group of rich and powerful figures that benefit from calamities and state terror.
The results have produced a form of capitalism that traumatizes populations into submission through numerous forms of manufactured crisis, causing massive displacement and impoverishment. It also allows a wide-ranging extension of the market into the terrain of the capitalist state. In particular, it has seen the privatization of those parts of the state that both create and respond to crises. Thus, we see a cycle of profit based around a self-referential and increasingly consolidated group of rich and powerful figures that benefit from calamities and state terror.
The myth
The Shock Doctrine is based on a myth that both people and whole societies that are uninterested in conforming to capitalist demands of self-interest can be healed by a combination of sensory overload, sensory deprivation, isolation and electrical shock. The desired outcome is a state of confusion in which memory is lost and a new personality can be imposed upon a blank slate.
The Shock Doctrine is based on a myth that both people and whole societies that are uninterested in conforming to capitalist demands of self-interest can be healed by a combination of sensory overload, sensory deprivation, isolation and electrical shock. The desired outcome is a state of confusion in which memory is lost and a new personality can be imposed upon a blank slate.
Not only are these the assumptions behind the CIA-funded research of former McGill professor Dr. Ewen Cameron, but they are also the assumptions behind the economic theory of Milton Friedman and the economics department at the University of Chicago. Klein reveals a vast crusade through which the Friedman-inspired ideology of neoliberalism rose to prominence as a “counter-revolutionary” backlash against post-war Keynesian economics and the rise in workers power associated with the worldwide anti-colonial, civil rights and socialist struggles of the 1960s.
Keynesian economics rest, in part, on the notion that governments can stimulate an economy in recession by investing in public works and preventing capital flight through trade barriers. It also asserts that workers need to gain some benefits from capitalism in order for them to provide markets for capitalist consumption. More importantly, by ensuring their interests are aligned with the system, they are less likely to swing toward socialism or fascism. (In practice, the beneficiaries of Keynesian economic policies tended to be white males, while women and people of colour continued to be excluded.)
Market distortions?
Friedman argued that these policies create distortions in the market, which, if left alone, would “naturally” allocate resources in an efficient manner. Thus, states need to remove themselves from the economic sphere and focus only on the political. Implicit in this theory is an obsessive, even fascist, desire for market purity attainable with accurate diagnosis and prescription.
Klein reveals a maniacal tendency for neoliberal ideologues to draw on medical analogies for describing the ailments of society. Thus they can be portrayed as objective technocrats that are absolved of any responsibility for the political processes associated with their prescriptions. The reality Klein depicts, however, is an economic model that not only imposes suffering on a massive scale and is therefore inherently violent, but also a model that requires authoritarian conditions for its implementation.
Friedman argued that these policies create distortions in the market, which, if left alone, would “naturally” allocate resources in an efficient manner. Thus, states need to remove themselves from the economic sphere and focus only on the political. Implicit in this theory is an obsessive, even fascist, desire for market purity attainable with accurate diagnosis and prescription.
Klein reveals a maniacal tendency for neoliberal ideologues to draw on medical analogies for describing the ailments of society. Thus they can be portrayed as objective technocrats that are absolved of any responsibility for the political processes associated with their prescriptions. The reality Klein depicts, however, is an economic model that not only imposes suffering on a massive scale and is therefore inherently violent, but also a model that requires authoritarian conditions for its implementation.
The forms of authoritarianism that have accompanied neoliberal experiments have changed over time, largely because Freidmanites have learned from each case of its application. Klein shows how the followers of the Chicago School were heavily funded by and closely aligned with a project stemming from within the CIA and the US military, designed to form a counter-revolution against socialist ideology in the countries of the southern cone of Latin America.
Funded by USAID and the Ford Foundation, Latin American students were brought to study in Chicago and then sent to establish US-funded economics departments in their own countries. However, their ideology met up against entire societies that were moving increasingly toward socialism.
Funded by USAID and the Ford Foundation, Latin American students were brought to study in Chicago and then sent to establish US-funded economics departments in their own countries. However, their ideology met up against entire societies that were moving increasingly toward socialism.
Imposition of the model
The first imposition of their model came to being in Chile in 1973 through the violent overthrow of Salvador Allende’s democratically elected socialist government, which was soon followed by a military junta in Argentina. The political repression that came with these dictatorships, however, was not aimed just at Marxists, but rather at all those who held any form of communal ideas. That is, at entire societies.
The first imposition of their model came to being in Chile in 1973 through the violent overthrow of Salvador Allende’s democratically elected socialist government, which was soon followed by a military junta in Argentina. The political repression that came with these dictatorships, however, was not aimed just at Marxists, but rather at all those who held any form of communal ideas. That is, at entire societies.
This provided the model that was then followed in countries all over the world and is currently behind the invasion in Iraq. Klein’s experiences in Iraq reveal a situation remarkably similar to Chile with political figures and community organizers interested in democracy rather than US decrees being tortured, murdered and “disappeared.”
At one point, Klein asserts, commerce benefited from apparent peace between nations (an argument made by Adam Smith while European colonial powers were pillaging Asia and the Americas). She notes that following the 9/11 attacks, the US stock market fell dramatically. Later attacks, however, were followed by growth. Israel is a particular example of a state that has benefited from this growth despite the lack of peace.
Klein notes that before the Oslo accords, Israeli businesses had wanted peace to maintain the functioning of their economy. The influx of a million refugees from the former Soviet Union (as a result of Chicago School economic policies there), however, reduced Israeli reliance on cheap Palestinian labour at the same time as businesses were investing heavily in the high-tech and security sectors that support a “disaster capitalism complex.” They were therefore increasingly able to seal off Palestine and manage it militarily while they continued to destroy neighbourhoods and build settlements on their remains.
The disaster capitalist industry Klein describes is ready to pounce on massive reconstruction contracts wherever they occur – and interestingly, to remarkably inefficient ends. Klein documents massive fraud, with little actual reconstruction. Instead, disasters become opportunities for social cleansing exercises.
“New corporatism”
Klein describes this phase of growth as a “new corporatism.” Corporatism, she suggests, was a practice of government, business and labour collaborating on a social contract, through which all would offer some concessions to maintain growth. New corporatism, however, refers to business interests wholly colonizing government, thereby using the state apparatus of repression against workers.
Klein describes this phase of growth as a “new corporatism.” Corporatism, she suggests, was a practice of government, business and labour collaborating on a social contract, through which all would offer some concessions to maintain growth. New corporatism, however, refers to business interests wholly colonizing government, thereby using the state apparatus of repression against workers.
While Klein provides convincing evidence of its existence, her analysis is limited in its capacity to explain how it is that neoliberal ideology is practiced in everyday life, and why workers themselves become involved in transforming their workplaces along neoliberal lines. Instead, the Shock Doctrine appears to be almost a conspiracy among elite men.
The Shock Doctrine also has historical limitations. What Klein describes is not something especially new to capitalism; rather, it is primarily the technologies and scope that have changed. It is really a continuation of the processes of what Marx described as primitive (or primary) accumulation. The word “primitive” was intended to describe the necessary pre-condition for capitalism to exist: the seizure of land and property held in common. It is only when people are dispossessed of land and all other means of producing for themselves that the selling of wage labour comes into being.
First capitalist war
Arguably, the first capitalist war occurred when the English army cleared the Scottish highlands of feudal rule. In 1746, a modern army with breech-load rifles and cannons met up with Scottish clansmen armed with swords and bows and arrows. Following England’s decisive and rapid victory, the troops marched through the highlands raping and pillaging, sending thousands into forced migrations and imposing strict orders on those who remained. In particular, symbols of Scottish nationalism and clan pride, such as the tartan, were banned. As Karl Marx describes:
“From 1814 to 1820, these 15,000 inhabitants, about 3,000 families, were systematically hunted and rooted out. All their villages were destroyed and burnt, all their fields turned into pasturage. British soldiers enforced this eviction, and came to blows with the inhabitants. One old woman was burnt to death in the flames of the hut, which she refused to leave. Thus this fine lady appropriated 794,000 acres of land that had from time immemorial belonged to the clan. She assigned to the expelled inhabitants about 6,000 acres on the sea-shore—2 acres per family. The 6,000 acres had until this time lain waste, and brought in no income to their owners.”
Arguably, the first capitalist war occurred when the English army cleared the Scottish highlands of feudal rule. In 1746, a modern army with breech-load rifles and cannons met up with Scottish clansmen armed with swords and bows and arrows. Following England’s decisive and rapid victory, the troops marched through the highlands raping and pillaging, sending thousands into forced migrations and imposing strict orders on those who remained. In particular, symbols of Scottish nationalism and clan pride, such as the tartan, were banned. As Karl Marx describes:
“From 1814 to 1820, these 15,000 inhabitants, about 3,000 families, were systematically hunted and rooted out. All their villages were destroyed and burnt, all their fields turned into pasturage. British soldiers enforced this eviction, and came to blows with the inhabitants. One old woman was burnt to death in the flames of the hut, which she refused to leave. Thus this fine lady appropriated 794,000 acres of land that had from time immemorial belonged to the clan. She assigned to the expelled inhabitants about 6,000 acres on the sea-shore—2 acres per family. The 6,000 acres had until this time lain waste, and brought in no income to their owners.”
The usurpation of feudal property by the rising bourgeoisie went through what Marx describes as a “transformation into modern private property under circumstances of reckless terrorism . . . Thus were the agricultural people first forcibly expropriated from the soil, driven from their homes, turned into vagabonds, and then whipped, branded, tortured by laws grotesquely terrible, into the discipline necessary for the wage system.”
This expropriation, he suggests, takes place “in different countries, assumes different aspects, and runs through its various phases in different orders of succession, and at different periods.” Thus we see, for example, the Opium Wars as a means of conquering China. While there are differences in periods of primitive accumulation, he notes that they always rely on brute force and employ the power of the state “to hasten, hot-house fashion, the process of transformation.” (Rosa Luxemburg marvellously expanded upon this history in Accumulation of Capital).
This process induces shock, striking deeply at people’s sense of identity. Instead of working along clan and household groupings in close proximity to one’s settlement, with intimate knowledge of the environment, people are forced into cities at a rate faster than infrastructure and social support mechanisms can keep up with. They make contracts on a daily basis as individuals for wages and in doing so lose any form of collective power over processes of production. It strikes at all aspects of people’s cultural life in a manner similar to the attacks on Chileans in the 1970s or Muslims currently held in detention by the US.
Klein’s Keynesianism
This matters because it allows us to avoid Klein’s short-sighted Keynesianism. According to Klein, disaster capitalism is a perverted form of capitalism rather than something inherently tied to market-based societies. Thus, Klein thinks capitalism could otherwise be much kinder. So she suggests “it is equally possible to require corporations to pay decent wages, to respect the rights of workers to form unions, and for government to tax and redistribute wealth so that the sharp inequalities that mark the corporatist state are reduced.”
This matters because it allows us to avoid Klein’s short-sighted Keynesianism. According to Klein, disaster capitalism is a perverted form of capitalism rather than something inherently tied to market-based societies. Thus, Klein thinks capitalism could otherwise be much kinder. So she suggests “it is equally possible to require corporations to pay decent wages, to respect the rights of workers to form unions, and for government to tax and redistribute wealth so that the sharp inequalities that mark the corporatist state are reduced.”
Yet the Keynesian state was clearly not capable of maintaining such an order—or even creating it for that matter, as it was always something that existed amidst massive racial and gender inequalities. Capital has an insatiable need to grow and, in that process, it must continually destroy to build anew. What Klein describes as the “disaster capitalism complex” reveals the degree to which capitalism is willing to invade and impose its logic.
Historically speaking, it is more accurate to suggest, as Ellen Wood does, that Keynesianism was the anomaly and that what we are seeing now is a return to capitalism as it has always been. That it is horrendous is exactly why Engels, and later Rosa Luxemburg, suggested the choice would ultimately come down to one of Socialism or Barbarism.
Toby Moorsom is a graduate student in history at Queen’s University in Kingston – a university established by the victors and collaborators in the process of clearing the Scottish Highlands. He is grateful to Richard Banner and Harold Lavender for significant editorial assistance.
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