Saturday, April 05, 2008

The Shock Doctrine

I have a new favorite book. After months of letting it languish on my list of books to read (it was published last September), I finally got around to reading Naomi Klein's masterful synthesis of the last several decades of global history, The Shock Doctrine: The Rise of Disaster Capitalism. If I could get everyone to read just one book to understand the origins of our times and our present-day problems, this might be the one. It is not, as I had initially assumed, merely a book about how greedy companies swoop in to take advantage of natural disasters and wars to rake in the contracts (as they have done after Hurricane Katrina and in Iraq, two of the central case studies in the book). Instead, it is a much more wide-ranging book, taking the reader on a grand tour of economic misery, human rights abuses, and elite opportunism since the 1970s: from the horrors of Pinochet's Chile (and much of the rest of Latin America) to the failed economic promise of post-Apartheid South Africa, and from the suppression of democracy and elite looting of national assets in post-Soviet Russia to the Asian economic meltdown of the 1990s.

The common thread linking all of these disparate cases is the application of the now-familiar economic "shock" strategies of the Chicago School and Washington Consensus--privatization, deregulation, and emasculation of social spending--in conjunction with the suppression of democracy and human rights. She relies on a rich metaphor (in some cases, actually a direct connection) comparing the use of "shock" therapy on individual mental patients and political prisoners to the economic "shock" of imposing these strategies on stunned citizenries. Although Klein is a journalist, not an academic scholar, her work is a tour de force of systematic and rigorous argument, with extensive documentation (and interview data) and many of the most damning statements quoted directly out of the mouths of the proponents of Chicago-style economic shock therapy themselves. It is also extremely engaging and well-written. Although some of the cases she sketches were somewhat familiar to many of us already (such as the horrors of Latin America's "dirty wars" and the inside dealing of lucrative contracts in Iraq), nevertheless I was riveted from the moment I started reading the book to the end.

Much of the book is profoundly depressing, showing how American leaders of both political parties (including Bill Clinton), enabled economic advisors who advocated "shock" therapy to centrally influence policy decisions. The book comes down really hard on many academic experts, such as the Russian/Soviet studies scholars who simultaneously advised 1990s Russian leaders cracking down on democratic dissent while profiting themselves from investments. But by far the harshest critique is reserved for the "free-market" economists of the Chicago School of economics, who serve as the knowledge and idea brokers and keep turning up everywhere in the book. Tracing Chicago School ideas back especially to the School's much-admired leader Milton Friedman, (and implicitly to Hayek's Road to Serfdom and other libertarian wellsprings), I think her criticism of this group is convincing, and it is one those of us in the "logocracy" need to take to heart.

In the very last (brief) chapter, though, she turns to a surprisingly optimistic note, suggesting that ordinary people around the world are wising up to the horrors of "shock therapy" and offering more resistance. To my mind, reading her book and taking its lessons to heart offer a wonderful opportunity for those of us who may not be suffering the worst consequences of these ideas to educate ourselves and prepare to resist these ideas from within the belly of the beast (i.e. the world of reasonably well-off and well-educated Americans).

Clearly I am not the only one impressed by Klein's book. Her website already displays more than 25 foreign language and international versions of the book. It also provides links to several interesting reviews. My favorite was one from the San Francisco Chronicle, by William S. Kowinski. Aptly calling Klein's book "the master narrative of our time," Kowinski predicts that Shock Doctrine "could turn out to be among the most important books of the decade." Several other reviews have clever, evokcative titles--such as "Doing Well by Doing Ill" (Shashi Tharoor, WaPo), "The New Road to Serfdom" (Christopher Hayes, In These Times), and "Bleakonomics" (Joseph Stieglitz, NYT)--that reveal just how much Klein's book aims to overturn the conventional economic thinking of the last third of the twentieth century based on Friedman, Hayek, and company. This is the book to recommend to that dear friend of yours who is in danger of being seduced by economic libertarian thinking upon reading (Milton) Friedman's Capitalism and Freedom, Hayek's Road to Serfdom, or anything by (Thomas) Friedman or Ayn Rand. It offers a stunning and historically grounded rebuttal to anyone who thinks that unfettered capitalism automatically leads to democratic freedom.

Of course, some will (rightly) say that Klein's "shock doctrine" pattern cannot explain everything in recent history. There will always be a few exceptions that don't fit the larger pattern. But what is most amazing about this book is how it links together so many disparate elements of recent global history into one coherent and convincing narrative. The "shock doctrine" may not explain everything, but it sure explains a lot. And it is an essential signpost in comprehending how we got into our present-day mess, so that we can work on building a better world.