The Shock Doctrine | Naomi Klein

Summary of: The Shock Doctrine: The Rise of Disaster Capitalism
By: Naomi Klein

Introduction

In ‘The Shock Doctrine: The Rise of Disaster Capitalism’, Naomi Klein examines the controversial ways governments and organizations exploit crises, whether natural or man-made, to push through divisive economic policies and seize control. Drawing on its roots in electroconvulsive therapy (ECT) and its application in political suppression, Klein traces the development of disaster capitalism through decades of global events and political decisions. The book explores the motivations of those behind these actions, as well as the repercussions on the affected populations and their consequences on a global scale.

Dr. Ewen Cameron’s Dark Experiments

Dr. Ewen Cameron, with CIA funding, conducted extensive experiments with electroshock treatment that involved torture methods such as sensory deprivation and mega-doses of psychedelic drugs. He believed that he could recreate a new, healthy identity when he observed his subjects becoming “blank slates.” However, his approach failed, and he only succeeded in breaking his patients’ identities, making them confused and listless. The CIA recognized the potential of Cameron’s shock therapy for information extraction and pacification, resulting in the Kubark Manual, which served as a protocol for later advanced interrogation techniques.

Creating Chaos for a New Order

A group of economists, led by Milton Friedman and the Chicago School of Economics, embraced the idea of economic shock therapy to achieve complete free-market capitalism. They believed in the maxim “the government that governs best governs least” and saw the free market as the catalyst for democracy, stability, and peace. However, they knew it would be difficult to get societies to enact free-market reforms. Therefore, they waited for opportunities such as economic crises to forcibly implement painful reforms to reshape economic policy. They also ran exchange programs between Latin American schools and the University of Chicago to convert more economists to their school of thought. Their actions were based on the belief that if enough liberalization policies were enacted swiftly and decisively, there would be no meaningful way to counteract them.

The Dark Side of Economic Reforms

Governments often repress democratic rights and use violence to impose economic reforms, but who really benefits?

When it comes to economic reforms, using economic shock therapy alone may not be enough to convince an unwilling public to comply. Therefore, governments may resort to more extreme measures, such as repressing democratic rights and using violence.

The book provides examples such as the interim government implemented in Iraq, which cancelled elections because emerging political powers were not willing to privatize their oil industry. Another instance is the ban on freedom of assembly and political dissent in South America’s Southern Cone, where state brutality extended into human rights violations.

Such violence was not just crude brutishness but planned terror, designed to force the population to comply. Up to 150,000 people were made to suffer in prisons specifically designed to break their will.

These examples show that economic shock therapy is often insufficient in itself to implement reforms, and many governments turn to state repression and violence to augment it. But who benefits from these reforms? The book challenges the notion that economic reforms benefit everyone and suggests that clear winners and losers exist.

Economic Shock Therapy: For the Few, at the Cost of the Many

Economic shock therapy policy measures implemented in an economy bring about winners and losers. But, generally, the biggest losers are the average citizens of the country. Pinochet’s Chile, for example, saw a record 30% unemployment rate and a 15% economy shrinkage after the implementation of Chicago School reforms. The long-lasting effects of these policies are prevalent, with Chile ranking as the eighth most unequal country in the world in 2006. On the contrary, multinational corporations benefit from these policies as they can purchase those firms damaged by hyperinflation and a broken economy. This policy hurts the rest of the population, helping the wealthy, and Iraq’s experience with privatizing their national oil industry is a suitable example. Since 95% of Iraq’s government revenues came from the national oil industry, privatizing it significantly impacted the country’s economy.

Silencing Opposition in the Name of Economic Reforms

Economic shock therapy is often accompanied by silencing of opposition, especially ideological dissidents, to prevent any obstruction in implementing unpopular reforms. Governments motivated to crush material or ideological opposition neutralize threats of full-fledged rebellions. Dissidents critical of regimes generate discord through the public scrutiny of the reforms, making them more dangerous. Using terror as a method to silence opposition can cause the ideological debate surrounding contested reforms to fall silent, giving reform regimes complete control over political discourse, thus framing dissidents as terrorists. With no possibility for political debate, both the reforms and despots imposing them have nothing to fear. In Chile, 80 percent of political prisoners subjected to Pinochet’s 1976 reforms were workers and peasants, while in Argentina, unionists, farmers advocating for land redistribution, and social service workers were abducted and tortured. Economic shock treatments do not directly target political dissidents but aim to prevent material or ideological obstruction to reforms.

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