BOOK REVIEW

Naomi Klein's
The Shock Doctrine: The Rise of Disaster Capitalism.
Picador, 2007

Reviewed by Charles W. Dahm, OP

If you have struggled to make sense of U.S. influence in the world, whether it is promoting democracy and development or fostering oppression and exploitation, this book is for you.

 The Shock Doctrine is a sweeping and insightful history of the last 50 years of much of the world’s political economy.  Naomi Klein, a Canadian journalist with considerable economic training, spent two years visiting and researching what happened to national economies rocked (shocked) by disaster.  Some disasters were natural (as New Orleans from Katrina, Sir Lanka from 2004 tsunami), economic (Indonesia with Suharto’s brutal coup of Sukarno in 1965, Bolivia’s radical reaction to1980s hyperinflation; Poland’s collapse from Solidarity’s revolution, Russia’s economic downfall after U.S.S.R.’s collapse and Boris Yelstin’s crony capitalism, Asian financial collapse in the late 1990s) or political (Chile from Pinochet’s 1973 ruthless coup; Brasil, Uruguay and Argentina’s military repression of democratically elected governments in the 1960s, South Africa’s ending of apartheid and accommodation with whites, China’s opening to corporate capitalism, Iraq’s destruction and “reconstruction” from a preemptive war).  All these disasters opened the door to free market policies that again ravaged (shocked) the countries’ economies, only to be followed or accompanied by a third shock, political oppression. 

This is a lot of history to cover, but Klein traces a common thread: the liberal (or neoconservative) model of free market economist, Milton Friedman and his School of Economics at the University of Chicago.  They recruited and trained students from around the world (with the support of the U.S. government and the Ford Foundation) in policies, strategies and tactics they later implemented as government officials in their homelands or as officers of international institutions, such as the World Bank and IMF. These people were brought in to rebuild after the disaster.  Promoting an unhampered free market as the solution to all economic ills, these economists and their corporate allies took advantage of, indeed searched for and, helped create, disasters that would allow them to build anew, from a clean slate, a new corporate capitalism. 

Klein makes the international developments of the last 50 years intelligible.  She repeatedly describes the intimate connection between brutal political repression (often orchestrated or guided by the CIA) and free market policies, the former cleaning the slate for the latter; they go hand-in-hand.  With the radical prescription of privatization (mostly benefiting U.S. and other multinational corporations), these efforts led to the suppression of democratic movements, greater economic hardship for the masses, and the enrichment of a small corporate elite.
Klein’s analysis does not identify a conspiracy behind it all, only a common ideology that has inspired the decisions of many world leaders.  She concludes on an optimistic note, however, because she sees current world leaders more aware of the negative consequences of an unbridled free market.  Even the World Bank and the IMF are recognizing their own demands in the 1980s and 1990s for economic structural adjustment led not to economic development but staggering debts and more unemployment and poverty. After a 50-year hiatus, Keynesian economics has returned to reign over Adam Smith and Milton Friedman.