Tuesday, March 04, 2008

The Shock Doctrine - Review

I just finished reading Naomi Klein's latest book "The Shock Doctrine: The Rise of Disaster Capitalism". I enjoyed her previous book, No Logo, quite a bit so I was looking forward to this one.

The book starts out with an in depth recount of experiments conducted in the 1950s and 1960s, mostly at McGill University in Montreal, that studied a severe method of mental therapy on patients. This therapy involved braking down patients to their infantile level using methods such as intense periods of isolation followed by sensory overload, electroshock and hallucinogenic drugs. Once a patient had been "broken down" it was believed that doctors to "remake" the patients and cure all sorts of mental ailments. A lot of this research has been later used as the base for modern interrogation (torture?) employed by around the world. Klein also argues that basic principals of this research has been used on a much larger scale to inflict mass therapy on entire nations, braking them down to their basic level and wipe out any resistance in order to implement radical reforms that would otherwise be opposed by the majority of the population.

The book then spends a lot of time focusing it's critique on Milton Friedman and his so called "Chicago Boys", staunch free market economist who's main goal is remove any government interference in economics and let corporations run free. The first nations to implement Friedman's policies were Latin and South American nations, such as Chile under Pinochet, which had removed left leaning governments from office and been taken over by right wing dictatorships that brutally repressed it's people. In many of these countries Chicago trained economist came into powerful positions and privatized industries, raised prices, laid of public servants and generally screwed the poor.

Klein explains that Chicago boys learned that during times of instability they would be able to influence public policy (generally through institutions like the IMF) in order to advance their agenda of free market theory. Klein cites examples all over the world where disasters (man-mad or natural) have occurred and how states have been pressured into selling off their assets and opening up their economy to foreigners for plunder. Some of the examples include:
  • Poland right after the Solidarity movement won elections.
  • Russia after the fall of communism.
  • South East Asia after the tsunami of 2004
  • South Africa at the end of the apartheid
In all of these cases, Klein argues that Chicago trained and influence policy makers pushed through radical reforms that would never otherwise get passed in order to benefit big business.

I'm not sure that I agreed 100% with Klein's arguments, for sure there are numerous cases where corporations got sweetheart deals and it does seem like the IMF is more than happy to saddle struggling nations with a lot of debt and commitments but I don't think it's all that black and white. One example she talks about is Poland's shipyards closing shortly after communism fell, she seems to attribute this to western corporations raiding the factories and closing them maliciously, while the more likely cause is simply that communist era factories were generally a mess and in no way capable of staying open without the Soviet era subsidies they once had.

The section that is the most striking is about the Iraq war and the general outsourcing of the American government to private contractors. After 9/11 the "homeland security" industry grew from nowhere and all sorts of firms started selling services to the government. Most of these firms were run by former government officials who in some cases came back to the government at set policy that would often help their firms. The amount of ineptitude (or sheer corruption?) that occurred in the first months of the Iraq war were stunning. The people in charge were more concerned with getting Wal-Mart and Haliburton on the ground than they were saving Iraqi lives. Iraqis were excluded from working on reconstruction projects while contractors were guaranteed costs, plus profit. She also has a chapter on New Orleans and how corporations were given billions in reconstruction contracts (almost always no-bid) only to see the money get disappear with little to show for it even to this day.

There's more than enough in this book to get you riled up and upset about how some countries have been taken advantage by government and big business. But in general, Klein is a little too lefty for me. She doesn't offer much in terms of solutions, the book left me the impression that she believes that if only the entire world were run by Chavez and Morales and if corporations were all in the hands of governments we'd all be better off. Not sure I agree with that.

Overall the book was a decent read. Not as good as her previous one, a bit harder to get through and a little repetitive but overall worth reading if you enjoy this type of anti-corporate book.


Post a Comment

<< Home