Brave New World

by Chris Barsanti

27 November 2007

Naomi Klein convincingly argues in her crushingly pessimistic but magisterial work The Shock Doctrine that the future could well be a "cruel and ruthlessly divided" place where "money and race buy survival".

Believers in the shock doctrine are convinced that only a great rupture-a flood, a war, a terrorist attack-can generate the kind of vast, clean canvases they crave. It is in these malleable moments, when we are psychologically unmoored and physically uprooted, that these artists of the real plunge in their hands and begin their work of remaking the world.

When Milton Friedman died at the age of 94 in November 2006, he was eulogized far and wide as a towering, titanic (choose your size-enhancing superlative) figure in modern economics who may have advised the likes of Reagan and Thatcher, but who never really descended from the University of Chicago to put his thoughts into action. Although many writers afforded him as much weight in history as John Maynard Keynes, architect of much of the international postwar economic structure, they tended to overlook the extent to which Friedman proselytized his radical free-market theories, preferring to see him as the scholar, not the activist.

cover art

The Shock Doctrine

Naomi Klein

The Rise of Disaster Capitalism

(Henry Holt & Company)

Friedman’s adoring obituary in the Financial Times, for instance, downplayed the central role that “the master” (as the fawning writer couldn’t help but refer to him as) had in inspiring Margaret Thatcher in the ‘80s to go to war with unions and the civil service sector, and somehow forgot to mention Chile at all. Given that “the master’s” theories about the free market and privatization were a central component in the governing policies of the dictatorships which ravaged much of South America starting in the ‘70s, it’s an odd absence, and given what Naomi Klein says in her hand grenade of a book, The Shock Doctrine, a nearly criminal one.

The title of Klein’s book comes right from Friedman himself. General Augusto Pinochet’s bloody 1973 coup in Chile had left much of the citizenry in a state of shock; not only that, but the country was suffering from runaway inflation. Friedman advised the old butcher to “impose a rapid-fire transformation of the economy-tax cuts, free trade, privatized services, cuts to social spending and deregulation.” His prediction was that the sudden and extreme nature of this admittedly painful economic “shock treatment” was necessary to jolt the public into acceptance, and so “facilitate the adjustment.”

There was a glaring problem here, of course. For all the vaunted number crunching and far-seeing, big-picture thinking of Friedman and his Chicago-trained acolytes (later termed “the Chicago Boys”, many of them would spread his theories to receptive dictators across the continent) about how freeing up capital from government restraint would then improve the economy, there was little reason for them to think that “shock treatment” would help the transition at all. It was just the sort of logical leap that extremists make when they want to bring their perfect and imaginary world (whether it’s a free-market utopia or Taliban-like theocracy) into being.

Klein’s righteously furious text takes this theory of shock treatment at its word. Clearly a shock, whether physical or economic, creates a jolting reaction in the body it’s being applied to. Economists know this, psychologists know this, torturers know this. So Klein looks at what happened at Montreal’s McGill University in the ‘50s, where psychiatrist Dr. Ewen Cameron received large amounts of funding from the CIA, which was very interested in finding out how Cameron’s extensive use of electroshock therapy on patients could be adapted for their “special interrogation techniques.”

Cameron’s work did prove quite handy for these hardcore Cold Warriors, who later would use his extreme methods for breaking down mentally ill personalities (including not only shock treatments, but reality-distorting sensory deprivation and manipulation) as the basis for interrogation techniques codified in the infamous, long-secret Kubarak torture manual. The problem with Cameron’s ideas was not that they weren’t effective for torture or brainwashing (they worked quite well in that regard), but that they were essentially useless as therapy:

Cameron was sure that if he blasted away at the habits, patterns and memories of his patients, he would eventually arrive at that pristine blank slate. But no matter how doggedly he shocked, drugged and disoriented, he never got there. The opposite proved true: the more he blasted, the more shattered his patients became. Their minds weren’t “clean”; rather, they were a mess, their memories fractured, their trust betrayed.

So it is with believers in the shock doctrine. They shove Humpty Dumpty off the wall and assure him that everything will be fine at the bottom. But later, putting all those pieces back together again proves to be a little harder than imagined. Since its administrators are true fanatics, then, if the shock doesn’t have the desired result, it must be because they didn’t try hard enough: “It follows ineluctably that if something is wrong within a free-market economy—high inflation or soaring unemployment—it has to be because the market is not truly free.” So, go back and blast away again.

This was the method perfected by the corporatist dictatorships that waged war from the ‘60s on, throughout South America’s so-called “Southern Cone” (Chile, Argentina, Uruguay and parts of Brazil) against the remnants of postwar “developmentalism” in which populist governments nationalized important industries and redistributed wealth. This was anathema to multinational corporations who hated signing over even a shred of control to democratic governments, and who could use a powerful mix of Cold War anti-communism and the Chicago Boys’ seemingly unbiased and scientific intellectualism to get their way.

At this point in her argument, it’s hard for Klein not to sound like a conspiracy theorist. One keeps expecting to turn the page and see a cartoon showing a number of shady-looking suits gathered in a smoky back room and greedily carving up the working class’s meager earnings. There are numerous instances where Klein’s denunciations of rapacious corporate bandits could have flown off into the rhetorical ether of the loony end of the blogosphere; but she’s too busy calculating the very human and very painful costs of what all these things do to people. It’s not in the end a dislike of capitalism that powers the anger and worry in The Shock Doctrine, but rather a fury at seeing ordinary citizens being used time and again as mere pawns in an economic chess game.

Back to Friedman, whom Klein turns to for his definition of freedom. He believed “political freedoms were incidental, even unnecessary, compared with the freedom of unrestricted commerce.” Given such a zero-sum attitude such as this, the followers of Friedman’s beliefs could justify nearly any kind of “shock” if it led in their minds to a freeing of precious money from the controlling hands of government.

Thusly, these “disaster capitalists”, as Klein effectively terms investors and companies that feed on this sort of thing, can look to places in shock after some catastrophe, whether natural (post-tsunami Sri Lanka, where companies and the government rushed to build resorts on suddenly empty beaches) or man-made (post-invasion Iraq, where Americans played free market reform games while the insurgents gathered) and see nothing but opportunity. And if a dictator or hurricane hasn’t already helped shake a overnment’s foundation, then the shocks can be administrated via helpful international lending bodies like the IMF.

The Shock Doctrine lays out with numbing regularity how it worked in the late 20th century for countries emerging from decades of repression. Nation after nation, from South Africa to Poland to the former Soviet Union and even China, were forced to make a simple choice: institute draconian free market reforms by the familiar program of selling off government-owned institutions, slashing social services, opening up to foreign companies, and all the rest; or go without desperately needed loans and other economic assistance.

And so Yeltin’s Russia, via prodding from Friedman-esque world-trotting economist Jeffrey Sachs, “was forced to choose between a Chicago School economic program and an authentic democratic revolution.” And so when the ANC came to power in South Africa, central banks and investors, fearful of the party’s liberal economic policies, stayed away in droves, further hobbling an already tenuous handover. The system’s a hard one to beat, according to Klein:

Once countries have opened themselves up to the global market’s temperamental moods, any departure from Chicago School orthodoxy is instantly punished by traders in New York and London who bet against the offending country’s currency, causing a deeper crisis and the need for more loans, with more conditions attached.

With free capital, the sky can seem the limit to Friedman’s followers. As hard as the shock tactics can seem (cushy welfare policies cut, price subsidies on basic goods eliminated, state industries shedding workers by the thousands), it should be all worth it if afterwards there are economic rewards for everybody. The only problem: it doesn’t work.

Just as the victims of Dr. Cameron’s shock treatments were never quite able to reconstitute their minds afterward, so, too, populations never seem to recover in the way that Friedman’s followers like to dream about. Klein puts it succinctly: “In every country where Chicago School policies have been applied over the past three decades, what has emerged is a powerful ruling alliance between a few very large corporations and a class of mostly wealthy politicians—with hazy and ever-shifting lines between the two groups.”

The ideologies may change, but the implements of the shock (“elimination of the public sphere, total liberation for corporations and skeletal social spending”) don’t ever seem to change, nor does the ever-yawning gulf in those countries between the wealthy few and the poor and powerless many. Klein argues in a crushingly pessimistic conclusion to this frightening but magisterial book that this could well be where the world is headed, with each new disaster providing “windows into a cruel and ruthlessly divided future in which money and race buy survival” and “public service is reduced to little more than a reconnaissance mission for future work in the disaster capitalism complex.”

Naomi Klein

Naomi Klein

It would be nice to think that Friedman and others like him were and are just the ivory tower deep thinkers of repute, that like Marx and Engels, they don’t deserve criticism for the evil done in their name. It’s hard to believe that, though, once Klein brings up the case of Orlando Letelier. In August 1976, Orlando Letelier (one-time Chilean diplomat, at that point working for an American progressive think tank) published an essay in The Nation, “The Chicago Boys in Chile”, which included a charge that Friedman personally shared responsibility for Pinochet’s crimes against humanity, that there was “an inner harmony” between the free market and unlimited terror.

A month later, as Letelier was driving to work in Washington, D.C., a bomb planted in his car by a member of Pinochet’s secret police exploded, killing Letelier and a colleague. Today there’s a memorial commemorating the location of the assassination, a physical testament to the “inner harmony” that threatens us all.

The Shock Doctrine


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