Raise the Hammer
Powerful elites leverage "shock" events to catch people off guard and then implement unpopular economic policies to their benefit and the detriment of local communities.
By Ted Mitchell
Published November 08, 2007
I picked up "The Shock Doctrine" not knowing what to expect, never having read Klein before.
This is the most enlightening book I have ever read. Enlightening, because it answers two questions that have plagued me for some time.
My first question is a simple observation. "What happened in the 1970s that started to make the world a nastier place?"
The second question arose on the morning of 9/11. "Why do they hate us?" seemed to me an unavoidable question for Americans to collectively ask themselves.
Without directly asking these questions, by the end of the book Klein does a very good job of answering both.
The premise of this book is that powerful, moneyed elites leverage "shock" events to catch people off guard, and then rapidly, forcefully and hopefully irreversibly implement unpopular economic policies to the benefit of free market capitalists and the detriment of local communities.
Shocks can be natural disasters, political unrest, or contrived events like regime change and war. The medicine prescribed is always the same regardless of the situation: rapid deployment of free market ideology at all costs.
Klein revisits the history of four decades of what she calls "disaster capitalism" in this 564 page tome. It becomes clear that she means both capitalizing on disaster and the disastrous consequences of unfettered capitalism.
Even serious news junkies have a lot to learn from Klein's perspective, as most of these facts never made it to the popular press while the issues were still hot. Even if some content is not news to readers, the package will result in an emotional barrage almost as relentless as the "shock and awe" process she describes.
The book is engaging, sometimes reading like a pot boiler albeit with a pit in the stomach feeling that simultaneously combines dread, rage and pity. Klein is no Chomsky though, references number only 68 pages and we are spared his slogging thoroughness.
Klein is not a particularly humorous author, except perhaps for repeatedly pointing out the programmed response of free-market ideologues: always the same regurgitated mantras in every situation!
It makes you wonder why there are so many high-profile right-wing think tanks, when there clearly isn't very much to learn.
Klein opens with the metaphor of electroshock therapy as performed by the brutal Canadian psychiatrist Ewen Cameron in the 1950s. The CIA discovers Cameron, funds his research, and incorporates these lessons into new dimensions of torture, soon to be used both actually and metaphorically in the laboratory of foreign economies.
This book has a demon: his name is Milton Friedman, and his ideology of utter laisse-faire capitalism, spread mainly via the Chicago School of Economics.
Klein reveals things you probably didn't know about the South American regimes of Argentina, Chile and Bolivia. For me, this was the most painful part of the book, and the least imbued with Klein's interpretations. Telling the story is enough, and it is gut-wrenching.
Klein moves on to how Thatcher used the Falklands war as a cover for forcing unpopular right-wing policies on Britain. This is followed by a more detailed look at how exploitative economic policies were forced on South America after the fall of military dictatorships with the help of the World Bank, IMF, and powerful multinational corporations.
The shock of the fall of Communism in Poland and Russia and South Africa's apartheid regime gave rise to even more bold behaviour of these incestuous players.
Klein discusses the Tiananmen Square massacre in an interesting light, painting a picture of how the old Communist guard slammed down hard on then emerging democratic voices such that the transition from party leader to oligarch capitalist is uninterrupted by petty things such as the will of the people. A similar story happens in Russia. One of these societies is supposedly free, but the masses in both are effectively in economic slavery.
Her next victims are the US Homeland Security complex and reconstruction contracts in Iraq and New Orleans post Katrina. The replacement of traditional military with private mercenaries is truly staggering in degree and pace of change.
The examples are graphic in contract nepotism, waste, conflict of interest and sometimes outright fraud. Perhaps her point is that all these things meld together, but here she wavers from putting Friedman in the crosshairs.
The story Klein tells of post-tsunami Sri Lanka is sad indeed, another example of governments suppressing the welfare of their own citizens, this time internally without serious pressure from the IMF and friends.
Klein's look at the Israel/Palestine/Lebanon problem from an economic viewpoint is very interesting. The easy targets of religious differences suddenly seem to lose their appeal when Klein's economic perspective is added.
Only the last chapter takes a more hopeful look at examples of mounting resistance to economic shock therapy, especially in South America. Be warned, as the reader has to endure a lot of bad news before getting this far.
I wish Klein would have given some explanatory economic background as to Friedman's and Keynesian ideologies (note however that Wikipedia has a lengthy criticism section on Keynes and none on Friedman). Similarly, she assumes a level of understanding about personalities and entities and their history that had me looking up quite a few things.
On Iraq, Katrina and Homeland Security, I wish she had been more precise at differentiating free-market capitalism from public funding of massive private corporations.
In my view, the latter are the worst of all worlds: big corporations with the inefficiency of big government and none of the competitive pressure of the marketplace's private money. It is a recipe for overspending and underperformance.
This departs from free-market cheerleaders like Friedman in my understanding. She never scores the current Bush administration (or should I say regime?) on adherence to Friedman.
Even extreme right wing ideologues like Ayn Rand believed that government should maintain the functions of policing. Bush has gone well beyond that, contracting out this critical role under the radar of public and media concern.
I'm sure that even Rand would be nauseated at the financial incompetence and nepotism of Bush's version of government. Klein would have a better argument if she was more precise on this point.
Many more reviews of this book can be found online. Some are so thoroughly descriptive that you hardly need to read the book.
Others appear to see the difference between a mixed free market with public institutions and utter laisse-faire capitalism in black and white: the former might as well be Stalinist communism.
There is nothing in this book to suggest such extremism. She generally lets the stories tell themselves, with only enough interpretation as is necessary for understanding. Customer reviews on Amazon.ca are entirely polarized, giving either one or five stars.
Klein answers this question only by presenting the bloody evidence. I will go further.
Friedman's ultra free market ideology is a simple economic theory. Ignore for a moment whether it can be verified by observation, and think about the simplicity. Now imagine all the complexity of running a country, attending to the disparate needs of millions of citizens through constantly changing world events.
There is an extreme mismatch with the types of problems these are. Think of building a house. To do it properly, you need a lot of different tools. Free market ideology is like having only a bag of hammers. You can get a lot done, but it makes a mess of the drywall, wires and plumbing.
I was inspired by this book to create the following graph:
Quality of Life vs. Economic Ideology
On the y axis, I have placed "quality of life" for the typical citizen, but several correlated descriptors could be used interchangeably: median income, lifespan, infant survival, etc.
There is one more descriptor to add: Freedom. This is the critical point, that excessive free market capitalism reduces freedom by virtue of economic slavery and neutered citizen power.
Only a mixture of state and free market systems allow the average citizen to maximize their quality of life. Excess state control does not allow enough personal wealth or freedom. Excess free market power leads to many falling through the cracks with no state apparatus to pick up the pieces and deal with the unpredictable complexities of reality.
Scandinavian countries are probably closest to the top. Canada is a little to the right, and the US has markedly fallen down that slope. This is the best answer I have yet seen to my first question, since Friedman's inspiration and the capitalist marketing machine started steering public opinion to the economic right in the 1970s, and the real consequences are now becoming clear.
Klein's perspective also makes the answer to "why do they hate us" very clear. The world hates America because of the way it has hijacked foreign democracies, exploiting foreign workers and natural resources. The package was always sold as a marriage, but in reality was more like rape.
Even if half of Klein's narratives proved to be false and the other half wildly exaggerated, there is enough substance here to indict unfettered free-market capitalism on charges of cultural, economic, and actual genocide.
If there is any justice, this should be the legacy of The Shock Doctrine: thoroughly and publicly put the Chicago school ideologies on trial by revisiting their place in recent world history. If a significant portion of the American public refuses to acknowledge this shame, I think the world is in dire straits.
No theory is so good that it does not spawn yet more questions, like: Why can't Americans even ask the question, why do they hate us? That question needs to be addressed before the US can start learning the truth about consequences.
By Genghis (anonymous) | Posted November 10, 2007 at 18:23:06
"Klein moves on to how Thatcher used the Falklands war as a cover for forcing unpopular right-wing policies on Britain. "
The usual Klein.
The Falklands War was started by Argentina invading the Falkland Islands.End of.
The Fact Thatcher dragged the British out of the welfare state war or not was going to cause riots( which it did) and move the left of left Labour to the right( or centre left) which it also did.
As far as Free market Cap v Communism, a balance is preffered as you have drawn.The problem is maintaining that balance.Who has to fight for the pie and who is given the pie?
The only countries that seem to have a real hate on for the US or the West are those Muslim countries or despotic regimes who are still economically stunted by centuries of Theocratic rule and former Communist states.Left behind in the rush to progress and relying on the Wests addiction to oil, yet cant generate the necessary Engineering skills among the people to build a refinery.Lazy nation thinking and arrogance.It is not the fault of the West that leaders are despotic.
There is a reason the USA is a superpower.Complete unfeterred freedom of thought, expression, invention and capitalism.A nation of immigrants who put a man on the moon.
Why do Iran,Syria,North Korea, China,Libya, and a dozen other despotic countries hate us?
The list of offended itself should explain and dismiss why I could care less.
By Ted Mitchell (registered) | Posted November 10, 2007 at 21:03:19
Was that supposed to be "complete unfettered freedom FROM thought" in the US?
None of the "despotic regimes" are discussed in this book. If Genghis can bring himself to reading it, he might eat his words.
What is really stunning is that US capitalism is so threratened by the success of moderate socialism in weak (e.g south american) countries that it can't let them be if given the slightest chance to steamroller them.
Surely if the free market was the utopia it is billed to be it could compete on its own merit, without needing to eliminate the competition.
If you understand the mismatch in the types of problems between capitalist economic ideology (simple, few variable) and the reality of running a country (multivariable, interrelated = organized complexity) the failure of capitalism to better quality of life for the median citizen will be obvious. Just like building a house with only hammers.
By Capitalist (anonymous) | Posted November 21, 2007 at 12:25:48
Does anybody here find it ironic that Naomi Klein rails against capitalism yet she uses the capitalist system to become wealthy through the sales of her books?
I would have some respect for her if she gave all her possessions to the less fortunate, and moved to North Korea.
By blax (anonymous) | Posted November 21, 2007 at 14:40:36
Does anybody here find it ironic that Capitalist is attacking a straw man when he claims Naomi Klein rails against capitalism? She's against elites abusing their power and hijacking the power of the state for their own ends.
Also, no one ever got rich writing books on politics. I'm pretty sure Ms. Klein has done more for the poor than you have.
By highwater (registered) | Posted November 21, 2007 at 14:49:03
You should have been at her talk last night, Capitalist, then you would have heard her address that very subject.
If you knew anything about her work, you would know that she does not "rail against capitalism" when it is balanced with the public good through public institutions such as health care, education, social security, etc. What she opposes is Corporatism, the extreme form of capitalism promulgated by Milton Friedman, where state power centres on multi-national corporations and the government's role is reduced to policing the population victimized by Friedman's extreme economic measures. As you can imagine, this is a very unpopular form of government so it can't be imposed democratically and therefore relies on 'shocks' to the system such as economic crises, terrorist attacks, or natural disasters to foist itself on a frightened and disoriented populace. Friedman himself called this "shock treatment".
North Korea is a totalitarian state and is therefore anathema to the deep democracy that Klein calls for as an antidote to Corporatism.
I am currently reading the Shock Doctrine. I highly recommend that you do the same, then we could have a more informed discussion.
By the way, Klein used some of the 'wealth' (oh those wealthy authors!) created from the sale of No Logo to hire a team of researchers to help her with Shock Doctrine, which is why it is such an exhaustively researched, riveting read.
By Humanist (anonymous) | Posted November 25, 2007 at 19:51:16
Oh these modern age Marxist intellectuals. Railing against the corporate system...it is so much handier to rail against corporatism than to criticize capitalism (when the two are sybiotically related). This way Klein and her ilk make themselves more socially acceptable. The truth is the fairy tale worlds of Marx, Lenin, Guevara, Castro and Mao don't exist and never have. Even Hugo Chavez is using the power of the petro dollar to maintain his grip on totalitarian power.
Why doesn't Klein write about that and leave the best societies the world has ever produced alone...these societies? The U.S., Canada, Great Britain, modern Europe...what do they all have in common? Despite blips like Hitler and Bush and Thatcher and even Mike Harris who from one horrible extreme (Hitler) to a misguided idealogue (Harris/Bush), these societies have been able to correct themselves for the greater good? Are they perfect? No. Are they better than anything that history has had to offer as alternatives? Absolutely. Klein, thy name is ingrate!!!
By highwater (registered) | Posted November 26, 2007 at 12:59:20
Humanist, thy name is ingrate! It is precisely because of the Kleins of this world who won't let us forget, that we have been able to 'correct' ourselves for the greater good. I certainly hope capitalism and corporatism are not 'symbiotically related'. If they are, then so are corporatism and fascism, as one is simply the extreme form of the other. In any case, it is precisely the Thatcher/Harris/Bush form of 'capitalism' (ie. corporatism) that Klein rails against. You and she appear to be on the same side. If you had been at her talk, you also would have heard her criticize the authoritarian direction that Chavez has been going in lately, as well as the left's unfortunate tendencies to blindly defend the Chavezes of this world.
By Humanist (anonymous) | Posted November 26, 2007 at 13:21:06
Well, if I had known about it I would have. The doctor's review and leftist penchant don't do her justice then.
I have just bought her book, but although we might agree with some issues, I doubt I'll be able to stomach the leftist exaggerations she is bound to espouse.
You have got to admit that the political left is a waste of time. From the Rae government, the near left, to the Cuban fiasco, the rear (as in rump) left, to the Russian debacle, the far (as in far out of touch) left, we have nothing but poor examples to show for these experimentations.
Locally we have leftist reps in the city, the province and the federal parliament. What have they done other than to rail at everything and tilt at all kinds of windmills. Only the center and the benevolent right get things done. If I'm wrong, please show me.
By highwater (registered) | Posted November 26, 2007 at 14:45:43
I'm still working my way through the Shock Doctrine so I really only know what I've read so far and from hearing her speak the other night (and from reading No Logo). I doubt you'll agree with everything she says, but I tink you'll enjoy it. I suppose it all the depends on how you interpret the sliding scale of Left and Right. You criticize the Rae government and Cuba and Russia. Alot can be said about the Rae government, but I wouldn't lump them in with the authoritarian regimes you mention. I would add the Scandinavian countries to your list of 'best societies', and I suspect Klein would too. They consistently score at the top of the UN Human Development Index. Would you classify their social democratic policies as "a waste of time"?
Also, I'd love to know how you define "benevolent right". If you are speaking of classic Red Toryism, then I'm with you on that. But if you mean Harper/Bush compassionate conservatism, then yikes! Klein is anti-authoritarian whether left or right. She doesn't advocate the far left policies of the regimes you named, instead advocates balancing capitalism with the greater good, and urges memory and DEEP democracy (imagine what Harper would be doing if he had a majority) to keep us immune from demagoguery in times of crisis.
By Humanist (anonymous) | Posted November 26, 2007 at 15:27:59
Of course I mean the center/center right. I would need to inform myself more about the Scandinavian systems and governments. I have visited ever so briefly Sweden and Denmark. The streets were clean, there seemed to be law and order; the people were smiling and happy.
So on the surface all seemed ok. They did assassinate one of their prime ministers, however, and Holland does have this relaxed moral standard about drugs and sex. I'm not sure I agree with that. Harper is scary. He is a cold man, all you have to do is look at his eyes. He seems not to have a soul. When I saw him on Rick Mercer, even though he was trying to spoof himself, it didn't work.
Layton? A lightweight opportunist. Remember in Toronto he abused his privileges and he and wifey lived in subsidized houses when they weren't supposed to. This is when he and she were councillors.
Government should be for the greater good. Trudeau defined it well. Joe Clark even practised it well. The far right scares me and the far left leaves me cold and puzzled.
I believe in the power of individuals to change the world and appreciate intellectuals like Klein. But prefer pragmatists as well.
I have read some of your posts. You seem informed and educated but are hard on those with whom you disagree. That is what this blog is all about "hammer and sickle?"
By highwater (registered) | Posted November 26, 2007 at 15:47:15
I think you and I are pretty much on the same page.
If I seem hard on people, I am truly sorry. I'll have to watch that a little more carefully in the future. That's the problem with the internet. No one can see the twinkle in my eye and the big dumb grin on my face while I'm arguing.
Cheers.
By mhughes (anonymous) | Posted December 02, 2007 at 08:46:23
If you did not get to hear Klein, "the Other Side" on 93.3 fm is airing her presentation on Tuesday December 4th at noon.
Sometimes we need to listen more than once to absorb the information...
By Friedrich (anonymous) | Posted December 06, 2007 at 22:05:43
Klein's confusion of the current US economic system with the Free Market is symptomatic of the general economic illiteracy among the semi-literate elite. The US politically hampered economy is little more than a new installment of the Fascist principle that profits are privatized, while losses are socialized. Giving billions of free money to well-connected companies is not free market economics but piracy. Friedman makes a convenient scape goat for the economically illiterate who confuse Friedman's questionable moral judgement with his sound ideas about economics.
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