Thursday, January 27, 2011

"The Shock Doctrine": Klein Debunks Friedman

The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein. 701 pp. Picador. $16.00 (paperback)

Naomi Klein's "No Logo" and "Fences and Windows," previously reviewed here, are essential to understanding anti-globalization protests. In "The Shock Doctrine," Klein considers the influence of free market theorist Milton Friedman, whom she accuses of pursuing "shock" economics or "disaster capitalism." Klein makes an analogy between the the application of shock on individuals and countries. She describes the CIA-backed studies of Dr. Ewan Cameron at McGill University's Allan Memorial Institute in the 1950s. Cameron believed that the way to cure supposedly disturbed individuals was to shock them to the point that their personality was wiped away, enabling one to influence this blank slate. What was done on an individual basis, Klein contends, has also been done to nations: "Where Cameron dreamed of returning the human mind to that pristine state, Friedman dreamed of...returning [societies] to a state of pure capitalism cleansed of all interrruptions–government regulations, trade barriers and entrenched interests."

Klein cites numerous examples in which coups d'etat, revolutions, environmental disasters or terrorist attacks result in a confused, insecure population. These are the optimal times to apply Friedman's recommendations. Among these changes are such ordinarily unpopular "reforms" as privatization, deregulation, cuts to social spending and union busting. Included among the examples in which Friedman's theories were applied to societies undergoing rapid change, often accompanied by brutal repression, are Chile under Pinochet; Russia under Yeltsin; Indonesia under Suharto; and Iraq under economic laws that primarily benefited U.S. contractors such as Halliburton, Bechtel and Parsons. Even countries moving toward freedom, such as South Africa and Poland, were hemmed in by loans from the World Bank and the International Monetary Fund, institutions that demanded Friedman-style reforms.

The effects of shock, according to Klein, can wear off, as seen in countries, especially Latin American, that come to demand more control over their own resources, resist dealing with the World Bank and IMF, and move away from laissez-faire policies. In "The Shock Doctrine," Klein has once again uncovered the reality behind contemporary conservative economic doctrine and practice on a global scale.

Short film by Naomi Klein and Alfonso Cuaron on "The Shock Doctrine":

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