The Shock Doctrine

Book Review by Chris Nineham, October 2007

Naomi Klein talks about her new book with Chris Nineham and discusses some of the controversies it has raised.

The Shock Doctrine shows in chilling detail how the free market has been backed up with violence over the last 30 years. I suspect it has stirred up a debate already.

It would have been silly of me to spend four years writing a book the thesis of which is, "This is a war, this is a very real battle and there are very real casualties" and then think that the book would be greeted with applause and pats on the head.

There have been lots of misrepresentations. It has been called a polemic and a conspiracy theory, when the truth is it is based on extensive research and all of my claims come from admissions from the players themselves. I have nothing against polemic but this isn't one.

On the other hand, my activist friends have been excited to see how often the word "capitalism" has been appearing in the mainstream press. It's an ideology so dominant that it's invisible.

I did an interview for the BBC World Service and they brought on Otto Reich - a high-up official in the Bush administration who did terrible things in Latin America - and they introduced him as "pro-capitalist Otto Reich", which I'm sure is a first for him. So though it's too early to tell how this is all shaking down there are some interesting things happening.

There are three central arguments in your book. One is that the free market tends to create instability; two is that it thrives on instability and shock; and three, perhaps the most controversial argument, is that the high priests of neoliberalism sometimes orchestrate shock and instability.

There is a tremendous ease and comfort with crises among those high priests you're referring to. I don't actually think that they sit and plan crises, but they absolutely don't try to stop them. You can see that from the relaxed attitude about fixing the levees in New Orleans or the actions of the International Monetary Fund (IMF) during the Asian financial crisis.

The architects of the Iraq invasion did believe they would be greeted with flowers, but I also believe they knew there was the possibility they would not and that they were comfortable with both outcomes - which is to say that they rigged the war so that they couldn't lose.

Capitalism has a history of disaster and catastrophe of various kinds. What do you feel is new about the current period and the rise of disaster capitalism?

It is less about saying this is a new policy, more an alternative history of the rise of the dominant ideology of our time.

Neoliberalism is a particular evolution of capitalism and we happen to be living with a lie about how this ideology spread around the globe. And it's a very corrosive lie. The story goes that the Berlin Wall collapsed and everybody wanted their Reaganomics along with their Big Macs. The way in which the story has been told has cleansed the shocks, the violence and the crises from the story.

I wanted to put them back, partly to say to my allies on the left that we should not be apologetic about our alternatives. The flip side of the claim that neoliberalism swept the globe peacefully is the claim that socialism was defeated peacefully and democratically, and it wasn't. It was shocked out of the way and it was defeated by army tanks and think tanks.

You make a terrifying case about the amount of violence the state uses to protect the market. So it jarred on me a little that elsewhere in the book you call for another go at the Keynesian project, implying the state could be used to make the market more humane.

I'm a believer in mixed economies and I'm a democratic socialist. I do believe it is possible to have far less violent versions of systems which contain elements of the market within them.

Salvador Allende's project in Chile was a combination of cooperatives, markets and nationalised commanding heights. If we think that it has to be a totally absolutist project the left uses violence employing projects of its own.

If we look at what's happening in Latin America, the huge social movements are opening up some space and putting pressure on politicians like Evo Morales and Hugo Chavez. The alternatives which are emerging are very much like the alternatives which were attempted in the 1970s.

I interpret the history of violence you outline as a warning to those activists in Venezuela, Ecuador and elsewhere. There is some space at the moment but the powers that be are capable of moving to try and close down the space in a very brutal way.

Well they don't need my warning if they know their history. At the end of the book I talk about the ways in which these countries are trying to protect themselves from the kinds of shocks many were given in the 1970s.

That's everything from pulling students from the School of the Americas to Ecuador's president Rafael Correa's plans to shut down a huge military base to an incredible purge of the IMF.

If the US want to bomb one of these countries they can do it. But they have their own credibility to contend with. In these sort of backdoor ways that have been used in the past you can see very clear attempts by some of these left wing governments in Latin America to close the doors where there is the IMF and the debt shocks or the School of the Americas and the training of seditious militaries.

You argue that the growing disintegration of Iraq is not a product of mistakes by the US or centrifugal tendencies within Iraqi society itself, but a logical consequence of shock and awe and the free market.

I don't think the architects of the invasion of Iraq wanted the country to fall apart. Paul Bremer wrote dozens of statements about how opening Iraq up to the most unregulated form of trade ever attempted was going to be a magnet for free enterprise and the country would essentially rebuild itself. It was trickledown economics gone insane. That was the plan - these are not sophisticated thinkers.

But I think it was anticipated that there was always the possibility it would go wrong, and that the war and the reconstruction were so privatised there could be a different kind of boom which turned the war itself into the next frontier for super-profits. That is what happened.

Perhaps there is another dynamic at work. I believe the Iraq war has been a disaster for the US and the British establishment. Sometimes increased reliance on violence and terror can turn people against the system. The international anti-war movement, for example, was generated by outrage at shock and awe.

That's true. I'm not really in a position to comment on the anti-war movement in Britain. But one problem with the anti-war movement in North America was the fear of seeming unpatriotic after 9/11. It really distorted the honesty of the movement.

It used slogans and iconography which were designed in response to this fear. The economic analysis was dropped because it was seen as divisive. I wrote the book because we need to be drawing the connections between the violence and the economic system it serves, and even if it means that there are fewer people out for demonstrations it would be a more sustainable movement.

We don't want activism that is just a short blast and then followed by disillusionment.

I think we have to be very careful about that argument, and the impact of mass movements. It is right to make the connections, but we shouldn't make them a condition of activism.

There were very similar misgivings expressed during the Vietnam War, and that was a hugely successful movement. I think we have to say to people that we have made a difference already. The anti-war movements in Britain and the US are part of the reason why Bush is in deep trouble and why the British government is considering bringing the troops out of Iraq.

We never get credit for our victories. People say the anti-globalisation movement is in crisis, but I think the World Trade Organisation, the IMF and the World Bank are in crisis. The plans to create a free trade area of the Americas is in crisis. Those victories are never acknowledged as a result of mass action.

The result of those protests in Seattle was part of a global movement, and the fact that governments in the global south feel they can no longer sign these agreements and stay in office is a massive victory for people's power.

Your first book, No Logo, had a huge impact and helped set the agenda for the movement. Do you have similar aspirations for The Shock Doctrine?

My hope for the book is that it helps make all of us more shock resistant. In moments of crisis we look for the signs, we stay oriented, and part of the way we stay orientated involves being connected to history.

In some ways the left has been too willing to abandon its pre-9/11 thinking and allow the "war on terror" to change the way we talk and think. I think it's a different time. When I published No Logo there was a huge emerging movement and the book was swept up in that.

Now there are new concerns. I went to a fantastic meeting in New Orleans of tsunami survivors from India and Katrina survivors and there was a fabulous organiser from New Orleans called Saket Soni who helps to organise those workers corner by corner where the day labourers stand.

In this meeting Saket said they have disaster capitalism and we need disaster collectivism. So we are starting to see an emergence of a movement around these shocks and people are developing a theory around the right to reconstruct, the right to return, the right to have accountability for the money that's raised in these moments. Who knows what this will turn into?

Book of the week

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The end of the world as we know it

Naomi Klein's critique of neo-liberalism, The Shock Doctrine, is both timely and devastating, says John Gray

Saturday September 15, 2007
The Guardian

The Shock Doctrine: The Rise of Disaster Capitalism
by Naomi Klein
576pp, Allen Lane, £25

Over the past few decades, many of the ideas of the far left have found new homes on the right. Lenin believed that it was in conditions of catastrophic upheaval that humanity advances most rapidly, and the idea that economic progress can be achieved through the devastation of entire societies has been a key part of the neo-liberal cult of the free market. Soviet-style economies left an inheritance of human and ecological devastation, while neo-liberal policies have had results that are not radically dissimilar in many countries. Yet, while the Marxist faith in central planning is now confined to a few dingy sects, a quasi-religious belief in free markets continues to shape the policies of governments.

Many writers have pointed to the havoc and ruin that have accompanied the imposition of free markets across the world. Whether in Africa, Asia, Latin America or post-communist Europe, policies of wholesale privatisation and structural adjustment have led to declining economic activity and social dislocation on a massive scale. Anyone who has watched a country lurch from one crisis to another as the bureaucrats of the IMF impose cut after cut in pursuit of the holy grail of stabilisation will recognise the process Naomi Klein describes in her latest and most important book to date. Visiting Argentina not long before the economic collapse of 2002, I found the government struggling to implement an IMF diktat to roll back public spending at a time when the economy was already rapidly contracting. The result was predictable, and the country was plunged into a depression, with calamitous consequences in terms of poverty and social breakdown.

Klein believes that neo-liberalism belongs among "the closed, fundamentalist doctrines that cannot co-exist with other belief-systems ... The world as it is must be erased to make way for their purist invention. Rooted in biblical fantasies of great floods and great fires, it is a logic that leads ineluctably towards violence." As Klein sees it, the social breakdowns that have accompanied neo-liberal economic policies are not the result of incompetence or mismanagement. They are integral to the free-market project, which can only advance against a background of disasters. At times, writing in a populist vein that echoes her first book No Logo, published seven years ago, Klein seems to suggest that these disasters are manufactured as part of a deliberate policy framed by corporations with hidden influence in government. Her more considered view, which is also more plausible, is that disaster is part of the normal functioning of the type of capitalism we have today: "An economic system that requires constant growth, while bucking almost all serious attempts at environmental regulation, generates a steady stream of disasters all on its own, whether military, ecological or financial. The appetite for easy, short-term profits offered by purely speculative investment has turned the stock, currency and real estate markets into crisis-creation machines, as the Asian financial crisis, the Mexican peso crisis and the dotcom collapse all demonstrate."

There are very few books that really help us understand the present. The Shock Doctrine is one of those books. Ranging across the world, Klein exposes the strikingly similar policies that enabled the imposition of free markets in countries as different as Pinochet's Chile, Yeltsin's Russia, China and post-Saddam Iraq. Part of the power of this book comes from the parallels she observes in seemingly unrelated developments. In a fascinating and alarming examination of the underside of recent history, she notes the affinities between the policies of shock therapy imposed in the course of neo-liberal market reform and the techniques of torture that have been routinely used by the US in the course of the "war on terror". Klein begins her first chapter with a moving account of a conversation she had with a victim of a covert programme of mind-control experiments, carried out in Canada in the 1950s, which used people suffering from minor psychiatric ailments to try out techniques of "de-patterning" that aimed to scramble and reshape their personalities.

Employing electroshock therapy, sensory deprivation and drug-induced comas, these experiments helped develop some of the "coercive interrogation techniques" that have been practised in Guantánamo Bay. Klein uses torture as a metaphor, and does not claim any cause-and-effect link between its re-emergence and the rise of neo-liberal shock therapy; but she does point to some disquieting similarities. Individuals and societies have been "de-patterned" with the aim of remaking them on a better, more rational model. In each case, the experiments have failed, while inflicting lasting and often irreparable damage on those who were subjected to them.

But has the free market experiment failed? As Klein sees it, free market shock therapy may actually have succeeded in achieving its true objectives. Post-invasion Iraq may be "a ghoulish dystopia where going to a simple business meeting could get you lynched, burned alive or beheaded". Even so, Klein points out, Halliburton is making handsome profits - it has built the green zone as a corporate city-state, and taken on many of the traditional functions of the armed forces in Iraq. An entire society has been destroyed, but the corporations that operate in the ruins are doing rather well. Klein's message, then, seems to be that - at least in its own, profit-centred terms - disaster capitalism works.

There can be no doubt that fortunes have been reaped from the Iraq war as they have been from other experiments in disaster capitalism. Yet I remain unconvinced that the corporations Klein berates throughout the book understand, let alone control, the anarchic global capitalism that has been allowed to develop over the past couple of decades - any more than the neo-liberal ideologues who helped create it foresaw where it would lead. Rightly, Klein insists that free market ideology must bear responsibility for the crimes committed on its behalf - just as Marxist ideology must be held to account for the crimes of communism. But she says remarkably little about the illusions by which neo-liberal ideologues were themselves blinded. Milton Friedman and his disciples believed a western-style free market would spring up spontaneously in post-communist Russia. They were left gawping when central planning was followed by the criminalised free-for-all of the 90s, and were unprepared for the rise of Putin's resource-based state capitalism. These ideologues were not the sinister, Dr Strangelove-like figures of the anti-capitalist imagination. They were comically deluded bien-pensants, who promoted their utopian schemes with messianic fervour and have been left stranded by history, as the radiant future they confidently predicted has failed to arrive.

The neo-liberal order is already facing intractable problems. The Iraq war may have allowed another experiment in shock therapy, but a failed state has been created as a result of which Gulf oil - which a former chair of the US joint chiefs of staff accurately described as "the jugular vein of global capitalism" - is less secure than before. Faced with defeat in Iraq, the Bush administration seems to be gearing up for an assault on Iran - a desperate move that would magnify the existing catastrophe many times over. At the same time financial crisis has reached into the American heartland as an implosion in speculation-driven credit markets has started to spread throughout the system. It is impossible to know how these crises will develop, but it is hard to resist the suspicion that disaster capitalism is now creating disasters larger than it can handle.

· John Gray's most recent book is Black Mass: Apocalyptic Religion and The Death of Utopia (Allen Lane)