Shock Doctrine Review

“It is yet another Civilized Power, with its banner of the Prince of Peace in one hand and its loot-basket and its butcher-knife in the other.”–Mark Twain, 1901, speaking of U.S. imperial policies in Philippines

This is the most important recent book I’ve read.  The Shock Doctrine provides a powerful lens for understanding globalization & international events over the past few decades.  It ties up seemingly unrelated events from around the globe into a coherent narrative by explaining the main motivations, strategies, and actions of key financial & foreign policy elite.  Klein provides a deep context for understanding the spread of radical capitalism (and increasingly, disaster capitalism, as Klein calls it) and its real world consequences as promoted by the ideology of Milton Friedman and the Chicago School.

This school of thought is variously called neo-liberalism, the Chicago School, or the Washington Consensus (as a package of socio-economic policies for countries in the global south to implement). I once heard someone say neoliberals are just neocons who never quite left the Democratic Party.  Whatever you call it the main thesis is that economic growth is the highest good, is achieved by unfettered “free” markets and deregulation, and that as much of the economy should be in private sector as possible.

On this view, the role of government is to nurture market economies rather than schools, families, jobs, health care, and food for citizens. Gone are robust notions of the common good. Gone is the notion that democracy minimally means the will and voice of the people and protections of certain basic rights.  In fact, neo-liberal ideology has become so successful at marketing itself that many now equate democracy with unfettered free markets, the two somehow inseparable.  Politicians utter them in the same sentence and the populace has learned to imitate that meme. And as a twisted conclusion of this way of thinking, any government that attempts to protect the common good, to actually implement the will of the people, is labeled undemocratic.

This goes a long way to explain how popular, democratically elected presidents such as Evo Morales in Bolivia can be labeled as undemocratic or even a dictator in the United States’ media.  Morales is not falling in line with the Washington Consensus (in fact he ran on that platform) and he is not doing what is best for Multinational Corporations.  Worse, he said that Bolivian resources should be for the Bolivian people, the majority of whom are indigenous.  Two whammies.  This is utterly unacceptable to the corporatocracy & American foreign policy folks (often the same people in the ever-revolving door) and after reading John Perkins (below), I honestly fear for Morales’ government and his life.  It’s not paranoia, its history.

Many of the overriding themes described in the Shock Doctrine we already are familiar with–economic colonialism of the global south, corporate corruption, widening gap between rich and poor, the expansion of Military Industrial Complex–but the book gives so many details and examples from so many different contexts (Latin America, Asia, Russia, Middle East, and the United States) that one walks away with a profoundly enriched–if troubling–understanding.  John Perkins’ books (see below) make a good complement to the Shock Doctrine.

Klein’ starting point is the post-WWII context and university psychological shock treatment and torture experiments, which became funded by the CIA, then incorporated into their bag o’tricks.  Shock treatment is a parallel theme throughout the book: clear the mind, reduce it to a blank state through fear, shock, & awe, then enter new programming–that was the psychological theory.  Klein’s argument is that the Chicago School had a similar theory that they attempted first in Chile.  Clear the government’s stranglehold on the economy and write a new austere economic program to replace it–by whatever means necessary.

In the early 70’s the IMF/World Bank played an ever increasing extortionist role. The triple mantra of global financial colonialism is: deregulation, privatization, and end public sector spending on health, education, food & water price controls.  Developing countries are approached by “consultants” or economic advisers (see below: economic hit men) who convince the leaders to accept policies that will help them “reform” and “stabilize” their economy and enrich them at the same time.  Economic forecasts are inflated and manipulated and countries are provided with “aid” in the form of massive loans from World Bank, IMF, or regional banks like Asian Development Bank to fund massive infrastructure projects such as mega-dams.

Nations become deeply indebted (the whole point) and therefore are at the mercy of further exploitation.  In case after case indebted countries are forced to swallow the bitter pill of Structural Adjustment Programs (SAPs) dictated by World Bank/IMF.   And in case after case a national elite and corporations syphoned money from the country while the middle-class was gutted, supports for health, education, food were pulled away, and the gap between rich and poor stretched even wider.  In fact, much of the money never even enters the country but simply gets deposited in the bank accounts of the Bechtels, Marriotts, Halliburtons, Monsantos, etc. of the world, while handing the bill plus interest to the poor which are sacrificed.  The country’s elite managed to send their fair share to off-shore banking accounts, blatantly profiting from selling off their nation’s assets.  It is a massive socialization of the wealthy that makes Madoff’s pyramid scheme look like child’s play in comparison.

When the purveyors of this new form of economic feudalism cite successes they can point (sometimes) to stabilization of inflation, rise of GDP, flooding of new direct foreign investment (which can also flee right back out), and new projects.  They selectively fail to mention the poor getting poorer and sicker because what little food, fuel, and health support they had had to be eliminated to fulfill the SAPs.  They fail to mention that GDP is a deceptive measure of economic health (after all, when you get in a car crash, when there is a natural disaster, and when there is war, the GDP  rises). They also fail to mention the brutal displacements often caused by their projects (e.g. native people for mines and dams). Add to this the fact in almost every case the programs had to be either pushed through secretively and undemocratically or implemented by a willing group of authoritarian elites or a ruthless dictator who had to implement his own real form of shock therapy (suppression, torture, disappearances) to convince its citizens to accept the bitter pills.  Even Ford Motor Company colluded with the nation’s military government at one point to host a detention & torture room on its premises in Argentina.

At a certain point the political and financial elite found it could further its agenda and be viewed less critically via the electoral process–it could advance an authoritarian agenda and be applauded as democratic simply because elections had taken place.  Just run on one platform, and implement a contrary agenda.

Many leaders were more than happy to comply with the foreign corporate agenda, such as Chile’s General Augusto Pinochet.  Wealthy nationals, leading military men, several U.S. corporations (ITT, Pepsi-Cola, etc.) and the CIA (via Nixon’s order) helped put Pinochet into power after destabilizing, then overthrowing, democratically-elected Socialist president Salvador Allende’s regime.  Allende (whose daughter is the well-known Bay Area author Isabelle Allende) began investing in schools, health clinics, food supports, child assistance, housing, & wage increases, and nationalized the central bank and some large industries–all of which are no-nos for the United States’ policy makers & the financial elite. A combination of external market fluctuations, rising inflation and deficits, falling exports, and economic sabotage (CIA funneled in millions of dollars)  led to the perfect storm to oust Allende and install a military junta.

Soon thereafter Chile became one of the first “testing grounds” for a radical capitalist agenda, a Chicago School playground.  But it became a ground of terror for its citizens, especially if you happen to be poor, a teacher, a journalist, indigenous, or a labor leader–or if you happen to think that Chile should use its resources to help its own people.  Pinochet inaugurated the DINA, a national secret police, who were trained & funded by the CIA, who targeted opponents of the dictatorship.  They were responsible for 1000’s of disappearances, murders, and tortures (current President Michelle Batchelet & her mother & father were among those tortured).  Even within the first couple months they hunted down students, professors, union leaders, journalists, and political opposition and assassinated them, then covered up their crimes by faking an accident or writing false reports.  Bodies were thrown down mine shafts, buried in the countryside, and dropped off of helicopters tied to heavy rails and thrown into the sea. The DINA then turned their sights internationally and began targeting victims in Argentina, Italy, and even the United States. The most famous was murdering Letelier (former Chilean foreign minister) & his American co-worker Ronni Moffit in a car-bombing in downtown Washington, D.C. in 1976 (when George H.W. Bush was CIA director, who tried to cover it up with a false story, then continued funding DINA).  This is how far they will go to keep resources in the private hands of the wealthy.  One of those involved in that car bombing and many others was Michael Vernon Towley, a CIA & DINA operative originally from Waterloo, IA (my home state)–he is now freely roaming in the United States under the Federal Protection Program.

You heard that right, American tax-payers are funding the protection of an indicted terrorist, who was previously funded by tax-payers via CIA laundering to kill innocent people.

Fortunately, justice has begun the catch up with many of the perpetrators just in the past few years.  For more on this,  see the film, “The Judge & The General”, telling the story of the courageous Judge Juan Guzman who investigated the crimes of Pinochet, ultimately indicting him at the age of 91 for kidnapping and murder–though he died before being tried.  He and others were also found in the past few years to have amassed a sizable wealth over the years, relocating millions of dollars in U.S. banks accounts, which also helped him launder money.  Even as we speak there are on going cases bringing members of his military regime

As Latin American writer Eduardo Galeano put it: “The theories of Milton Friedman gave him the Nobel Prize; they gave Chile General Pinochet.”

Klein goes on to describe other cases–Poland, Russia (which chose the Pinochet option), China, South Africa, & Iraq.  She then describes how increasingly the corporatocracy didn’t have to wait until Structural Adjustment Programs were implemented through the World Bank, but rather seized on any and every opportunity of natural or other disaster to come in, impose their program, and suck the money out–whether it is Katrina, the 2004 Tsunami, or terror attacks.  In fact all of these are a boon to a whole new sector of homeland security, private mercenaries, and tech sectors who stand to profit every time the terror alert goes up.  She describes a new “Disaster Apartheid” that we saw after Katrina,  increasingly manifested as “Green Zones” (aka Iraq) amidst poverty-stricken and bleeding “red zones”–but now portable anywhere.

Her penultimate chapter is especially troubling, tackling the Israel-Palestinian conflict.  In addition to the historical disincentive towards peace that U.S. weapons manufacturers & aid have provided there and in Africa, there are new incentives for keeping the conflict going because hi-tech homeland security firms make a lot of profit off of it.

The one topic I was surprised Klein left out was the privatization of voting machines (Diebold, ES &S, etc.) in this country and its very real threat to any pretensions of democracy.  The only other thing missing from the book was a rope to hang myself because by the end of the book I was utterly floored by the enormity of the problem.

However, her final chapter gives some bit of relief.  In a sense it is a thoroughly horrifying book, and the power of these entrenched institutions and cold-hearted ideologies scared the @%$! out of me, but if there is a silver-lining to the silver bullet it is that the shock wears off eventually, people organize, democracy rises, people challenge power & dogma, voices are heard and the balance of powers begins to sway–as we are seeing across Latin America, for example. The situation is not only not inevitable, it is reversible, which gives one hope.  And the fact that someone like John Perkins, who has been in the belly of the beast, is optimistic, is reassuring.

Unfortunately, most Americans (estadoudinenses, that is) are fairly oblivious to the types of agendas and crimes detailed by Klein (and Perkins), even if they have a gut feeling that corporations & megabanks have too much power.  This book will help remedy that hole–we should share this book widely and put it in the classrooms. Rachel Maddow called it the only book she recommends as an actual mandatory must-read.

The first step is for citizens to learn this reality.  Then realize we are in a very real battle being waged, from the Iraqi “reconstruction” profiteers and Bolivian water privatizers to New Orleans and Atlanta.  The next step is to translate this awareness of battle into organized action.

See Naomi Klein on YoutTube present some of her views from the Shock Doctrine.

One response to “Shock Doctrine Review

  1. Pingback: Top Reads of 2009 « Pull The Root, Plant the Seed·

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