Written by Edith Rasell, Justice and Witness Ministries Minister for Economic Justice
Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism
(New York: Metropolitan Books, Henry Holt and Company, 2007)
Naomi Klein has written an important book, a must-read for anyone seeking to understand the U.S. empire, corporate domination of people and the environment, poverty in the midst of abundance, and the worldwide rise in inequality with the rich getting much richer and the poor, poorer. The story, in general, is not a new one. Isaiah and Jeremiah would recognize it. But Klein clearly and compellingly details how, in the past 35 years, “free-market” capitalist economic policies, imposed through military force, covert CIA activity, financial institutions like the World Bank and International Monetary Fund, and the collusion of economic and political elites worldwide, have created a global system to enrich corporations and their shareholders. This has come at a great price.
Klein’s story is as timely as Hurricane Katrina and U.S.-occupied Iraq. But it begins in Chile in 1973. Popularly-elected President Salvador Allende was using a mix of capitalist and more socialist policies to transform Chile into a country more like Europe and North America than the third world. But the threat of a successful, alternative route of development was intolerable to the U.S. and multi-national capitalism. In 1973, six months after being re-elected, Allende was overthrown in a U.S.-backed coup. When members of Chile’s formerly expanding middle class peacefully protested against the economic shock therapy that was returning the country to one of mass impoverishment and a very few, very wealthy elites, the new leader Augusto Pinochet responded with a reign of terror. Not against an armed guerrilla movement – there was none – but against unarmed union leaders, community activists, economics professors, opposition politicians, and other citizens who marched and demonstrated. Thus began the disappearances, deaths, and imprisonment of peaceful dissidents that are common features of shock doctrine capitalism.
Chile was just the first of many countries where free-market policies were imposed. Despite claims that democratic freedoms and extreme free-market capitalism are two sides of the same coin, a claim most strongly promoted by University of Chicago economist Milton Freedman and repeated frequently by numerous leaders through the years including many U.S. presidents, Klein shows that, in fact, these policies in their purest, most extreme form have never been freely adopted. Rather, it takes a shock to distract people, numb them, and create the opening for the policies to be imposed: in New Orleans after Hurricane Katrina; in Iraq after the initial phase of the war; in Sri Lanka and Thailand after the tsunami; in Russia and Poland after the fall of communism; in S. Africa after apartheid ended; in S. Korea, Indonesia, Thailand, and the Philippines after the economic meltdown of 1997; and in numerous countries throughout the global South while in the midst of debt crises.
Neoliberalism is the word known and used around the world to name a prescribed set of extreme free-market policies. (It has nothing to do with political liberalism as we know it.) These policies include unregulated “free” trade and investment that allow goods and money to cross national borders with few concerns for workers or the environment, the shredding of any social safety net, deregulation, low taxes, a minimal role for government, and privatization, the selling of state-owned firms and utilities to corporations often in sweet-heart deals at fire-sale prices with little or no accountability.
If the neoliberal policies brought about a general improvement in living standards, albeit at some cost, the trade off might be deemed worthwhile. But they don’t. Klein shows that in country after country the impact has been worsening inequality with a few people becoming fabulously wealthy but most of the rest becoming more economically insecure and/or impoverished. Corruption, cronyism, and massive unemployment are other predictable outcomes.
Klein poignantly describes how individuals’ and corporations’ desires to become extremely wealthy trumped the wishes of the masses for minimal economic well-being. The history of Russia’s transition from socialism is one fascinating and shocking example. There are a number of twists in this story. Here’s one. In 1993 in the face of parliament’s opposition to his policies, then-President Boris Yeltsin fired on the parliament building until the elected representatives marched out with their hands up. Then he proceeded to dissolve Parliament and suspend the constitution. (The West continued to support him, nonetheless.) According to Newsweek, “The day after the Russian president dissolved Parliament, the word came down to the market reformers: start writing decrees.” Shock-doctrine capitalism could now move forward. Over the next few years, these “decrees” would send a third of the population into poverty and create seventeen billionaires while the country’s heritage of state-owned companies worth billions of dollars was sold for a fraction of its value.
The only false note in the book is Klein’s comparison of physical torture that softens up captives to say things they would otherwise not have said, and the “torture” and shock inflicted on countries that force populations to accept radically destructive economic policies that they would otherwise oppose. There are some eerie parallels. But Klein’s arguments and historical narrative stand solidly on their own merits and do not need this linkage.
People of faith and justice need to know how our neighbors are faring, how U.S. policies and actions are impacting other countries, and what the U.S. government is doing in our name. This information, especially regarding economic matters, is not routinely available on the nightly news or in the local paper. Shock Doctrine fills a huge void by laying out a pattern of horrifying economic and political domination that is innocuously named “neoliberalism.”
Do the world a favor. Read this book and then get active. The last chapter includes some inspiring stories of people around the world who are resisting. Let’s join them.