Magazine article People & Strategy

The Shock Doctrine: The Rise of Disaster Capitalism

Magazine article People & Strategy

The Shock Doctrine: The Rise of Disaster Capitalism

Article excerpt

The Shock Doctrine: The Rise of Disaster Capitalism

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Author: Naomi Klein

Publisher: Picador Metropolitans, 2007

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The Shock Doctrine: The Rise of Disaster Capitalism provides a detailed description of the origins and outcomes of neo-liberal economics and free market capitalism during the past 35 years. The major premise of the book is that unfettered capitalism, free markets, and globalization thrive on catastrophes that create a state of public disorientation or collective shock. Such occurrences, either natural or manmade, provide opportunities to promote privatization, government deregulation, deep cuts to social spending, dismantling of trade barriers, reduction of taxes, and rapid transformation of societies toward free market economies.

The author traces the origins of this economic approach to Milton Friedman and his free-market fundamentalism. Friedman argued that disasters provide opportunities for market advancement. Klein traces the application of Friedman economics, beginning with his graduates from the University of Chicago ("Chicago Boys") who sought to impose free-market capitalism in Latin America. This effort was facilitated through terror tactics and economic shock therapy in Chile under Pinochet and Argentina under Menem. In these cases, Friedman's students harnessed "the chaos and desperation of a hyperinflation crisis to pass privatization off as an integral part of the rescue mission" (p. 208). The author describes how other disasters, such as September 11, Katrina, the 2004 tsunami, and the Iraq war have provided shocks to affected populations and opportunities that have been exploited by governments and corporations to impose sweeping free market reforms and programs.

For example, Klein argues September 11 resulted in major collective trauma that was used and abused by the Bush administration (Friedman adherents) to suspend civil liberties and promote practices including privatization of government functions through outsourcing and creation of the $200 billion homeland security industry. …

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