By Norberg, Johan
Reason , Vol. 40, No. 5
The Shock Doctrine: The Rise of Disaster Capitalism, by Naomi Klein, New York: Metropolitan Books, 576 pages, $28
IN THE FUTURE, if you tell a student or a journalist that you favor free markets and limited government, there is a risk that they will ask you why you support dictatorships, torture, and corporate welfare. The reason for the confusion will be Naomi Klein's book The Shock Doctrine: The Rise of Disaster Capitalism.
In a very short time, the book has become a 21st-century bible for anti-capitalists. It has also drawn praise from mainstream reviewers: "There are very few books that really help us understand the present," gushed The Guardian. "The Shock Doctrine is one of those books" Writing in The New York Times, the Nobel-winning economist Joseph Stiglitz called it "a rich description of the political machinations required to force unsavory economic policies on resisting countries."
Klein's basic argument is that economic liberalization is so unpopular that it can only win through deception or coercion. In particular, it relies on crises. During a natural disaster, a war, or a military coup, people are disoriented, confused, and preoccupied with their own immediate survival, allowing regimes to liberalize trade, to privatize, and to reduce public spending with little opposition. According to Klein, "neoliberal" economists have welcomed Hurricane Katrina, the Southeast Asian tsunami, the Iraq war, and the South American military coups of the 1970s as opportunities to introduce radical free market policies. The chief villain in her story is Milton Friedman, the economist who did more than anyone in the 20th century to popularize free market ideas.
To make her case, Klein exaggerates the market reforms in question, often ignoring central events and rewriting chronologies. She confuses libertarianism with the quite different concepts of corporatism and neoconservatism. And she subjects Milton Friedman to one of the most malevolent distortions of a thinker's ideas in recent history.
Exhibit A against Friedman is a quote from what Klein calls "one of his most influential essays": "Only a crisis--actual or perceived--produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable." This, says Klein, is "the shock doctrine" In a not-very-subtle short film based on the book, the quote appears over images of prisoners being tortured.
The quote is not, in fact, from one of Friedman's most influential essays; it's from a very brief introduction to a reprint of his book Capitalism and Freedom. And it is not a rationale for welcoming disasters; it's about the uncontroversial fact that people change their minds when the old ways seem to fail. Friedman provides a telling example, which Klein neglects to quote: Young Americans joined him in opposing the military draft after the Vietnam War forced them to risk their lives on another continent.
She also distorts other Friedman quotes to support her case. She pretends that Friedman's concept of "the tyranny of the status quo" refers the tyranny of voters, and that he believed crises were needed to bypass the democratic process. But for Friedman, the tyranny was something entirely different: an iron triangle of politicians, bureaucrats, and special-interest groups (businesses, for example) that deceive voters.
Discussing Friedman's proposal to reduce inflation through sweeping market reforms, Klein writes, "Friedman predicted that the speed, suddenness and scope of the economic shifts would provoke psychological reactions in the public that 'facilitate the adjustment.'" This gives the impression that Friedman wanted to disorient people through pain in order to push through his reforms. …