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The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein
Vintage Canada 2008 (2007)
561 pages
Non-Fiction: Political Science; History; Current Affairs

There is a kind of history that gets overlooked, that doesn’t get taught in schools or universities aside from a fourth-year optional course that no one bothers to take. It’s a history that is fundamental to understanding our world, both past and present and where the hell we’re going. It’s a history that touches everyone, regardless of class, gender, race or age, but that slips out the back door before anyone thinks to call it to account, put it on trial and expose its heinous crimes. I’m talking about economic history, the history of economics, and the power economics plays in everything that happens in the world.

One of my biggest problems with the current trend in economic theory – what is called neo-liberal or neo-conservative economics, Chicago School economics, Reaganonomics, free-trade economics; whatever you want to call it – is that it’s missing something pretty damn big: the human element. They talk about this economic theory not only as if it were the only way to do things, or the best way, but as if it is autonomous of people – governments, business people, workers, farmers, the homeless. That because of this absence of a human element, it is Good, and Right, and acts in Our Best Interests.

Nothing could be further from the truth. It would be impossible for economics to behave independent of any human interference, or action, governmental or otherwise. Impossible, and undesirable. Those that benefit most are the same old villains: the greedy top 2% of the population, that holds more than 50% of “global household wealth”. Trickle-down economics is complete bullshit, and always was. What the real result is, though, is an economic theory that is wholly unaccountable for what it reaps.

There are many things I love about this book. Klein puts the human element back into Chicago School economics, detailing with exhaustive research the impact of the policies of this economic theory on the many peoples of the world it has been forced onto (forced is the right word; more on that later). Giving the “ordinary” people of the world a voice is incredibly important, and is like shining a light on the free market’s blood-stained hands.

It also exposes the real motivations behind the pretty speeches, the mercenary nature of this kind of economics, and the strings attached to the hands of the men (and few women) manipulating events and making the most money from it. Yes, it always comes down to money, for these people. What a predictable cliché they are! But dangerous too.

What began as a book on the invasion of Iraq and what Klein at first thought was a recent “fundamental change in the way the drive to ‘liberate’ markets was advancing around the world” (p.10) became, as she dug deeper, something much bigger. She realised that Chicago School economics, and its figurehead Milton Friedman, has been experimenting with many countries over the last three decades, and that the theory is even older.

The theory is one of “radical free-market ‘reforms'”, of using natural and man-made crises – shocks – to stun a population into a stupor while a government forces these “reforms” onto the country. This is one of the ironies of Chicago School economics, which Klein highlights: Friedman touted it as going hand-in-hand with democracy and freedom, when the exact opposite is true. The kind of economic reforms he advised leaders to put in place were the kind that instantly robbed people of jobs, freedom of speech and movement, even their lives. Their early experiments in South America – Chile, under Pinochet, and also Argentina, Bolivia, Uruguay, Brazil – involved by necessity a dictatorship, or corrupting or manipulating a democratically-elected, often socialist government, and using further “shocks” – torture, imprisonment, disappearances etc. – to stop the people from revolting.

Meanwhile, big international corporations would sweep in and buy up all the newly privatised industries, then dismantle them, fire everyone, and run off with the profits. Opening up a country for privatisation, in these cases, never benefits the country itself. This seems so glaringly obvious it’s amazing that so many dictators and other leaders bought into it. Sometimes they had no choice. Often held to ransom by the IMF and World Bank, or even by “aid” money in the aftermath of these crises, these shocks, they bowed down to pressure and did what they were told.

The Shock Doctrine traces the path of the use of Shock Therapy from humans to countries and their economies, from Chile to South Africa, from Russia to Sri Lanka, from America to Iraq. The need to create “clean slates” on which to build “model countries” and “model economies” was never more determinedly tried than in Iraq. Klein successfully shows how Washington’s drive to wipe the country of its history, to break it down and then slap this new economy onto it, had in turn helped create the violence, the fundamentalism that wasn’t there before – or not widely supported by its population.

After the invasion, when Saddam was dethroned, the Iraqi people were indeed filled with new hope. They almost immediately began putting together their own local elections, democratically – for the first time in a long time – electing their own representatives. The man in charge of the country at the time, Paul Bremer, who was hurriedly writing new laws to open the country up to private investment from America, quickly put an end to these demonstrations of people’s democracy. Hypocrites all.

The book does end with some hopeful signs of recovery. South America, a place that has always had a highly politicised population, has come out of its collective shock and is slowly rebuilding, putting their countries back together again, picking up what was so bloodily interrupted all those years ago but this time with shock absorbers in place so that it cannot happen again. I have always highly admired the various people of South America, who – if they had not suffered what they did – would now be one of the most prosperous places in the world. By turning their backs on globalisation and free-market ideology, on disaster capitalism and all the muck that comes with it, they are once again on the path to something quite beautiful: a more ideal third way, a more harmonious structure that is as far from totalitarian communism (think China and the USSR, North Korea and Romania) as it is from disaster capitalism. They are the ones to watch.

The Shock Doctine is not an easy book to read – the prose is inherently readable and approachable, but the subject matter is intense, often depressing, incredibly sad and disheartening at times, and fills you with rage. It has answered many of the questions that have puzzled me for so long, that no one else has bothered to properly explain – like why did Israel suddenly attack Lebanon, and why are they being such bastards with the Palestinians? What the hell happened to South Africa when Apartheid was supposed to end? Why is Iraq such a mess? and many more.

Because the economic theory “began” in America, and was so readily absorbed in that country, a lot of the book focuses on that country and certain people from it – but it is also a victim of its own policies, and I learnt a great deal about the hollow government Bush Jr. and Rumsfeld created, which contracted out (at the cost of billions and billions of taxpayer dollars) so much of its responsibilities that when Hurricane Katrina hit New Orleans, it could do nothing. It had no money, no resources, no manpower, no skills. Tragic.

Klein doesn’t go into why America, the institution, is so ripe a place for this kind of economic theory, but I believe the book goes well with Ronald Wright’s What is America? I would have liked to hear more of what impact other countries, like the UK, had in Iraq, but they got barely a mention. According to the point of the chapter, though, they weren’t important.

I’ve seen elements of this economic theory play out in my own home country, without the use of shock treatment: John Howard implemented all sorts of disastrous and unpopular policies, from cutting funding to Austudy (now Youth Allowance), universities and public schools (my old primary school couldn’t even afford a librarian and had to lock up its library for most of the week); he privatised Telecom (many Australians bought shares – it’s ironic, because before privatisation they already owned it) and put through a new Minimum Wage law for 15 – 18 year olds, so that MacDonalds could fire its adult workers and hire cheap teenagers for the same job; as well as a law that enabled companies to fire employees and rehire them on contracts, meaning they had no job security (no unions either), no benefits or holiday or sick pay, and were essentially paid less. So sometimes it does happen without shock therapy – and Klein points this out too, though the cases are more rare and the policies are tamed down by the people – but Howard also had a dangerous majority and happily labelled anyone who disagreed with him (including the thousands of protesters) as hooligans and “un-Australian” – his biggest insult.

The Shock Doctrine is important, profound, educational and eye-opening. I would say that you might need to be in the right frame of mind for it – if you whole-heartedly disagree with the importance of government regulations and services, with nationalised education, health care and industry, if you think that free-market economics is inherently “good” for the middle class and poor people, that America is doing a “good” thing in Iraq, if Friedman is your idol and you have stocks in Halliburton or Lockheed Martin or CH2M Hill, you are not going to like this book. Regardless of where you stand, it is confronting.

But if you’ve ever felt the slightest unease over certain reforms and policies, if the word “progress” and “growth” don’t necessarily equate “good” and “inherently right” in your gut, and if you care about the people no matter their country or skin colour, who have slipped further and further into poverty – this is the book for you. You might never look at the world the same way again, and that’s a good thing. You might never blindly believe what you hear, and that too is a great thing. You might pause a moment to think “what’s really going on here that CNN is smugly glossing over?” and that is a fantastic thing.

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