The Shock Doctrine
by Robert Philbin
[ bookreviews ]
"Today, global instability does not just benefit a small group of arms dealers; it generates huge profits for the high-tech-homeland-security sector, for heavy construction, for private health-care companies, for the oil and gas sectors - and, of course, for defense contractors.
"Reconstruction is now such a big business that investors greet each new disaster with the excitement of a hot new stock offering: $30 billion for Iraq reconstruction, $13 billion for tsunami reconstruction, $110 billion for New Orleans and the Gulf Coast.
"The scale of the revenues at stake was certainly enough to fuel an economic boom. Lockheed Martin, whose former vice president chaired the Committee for the Liberation of Iraq, which loudly agitated for the invasion, received $25 billion in U.S. government contracts in 2005 alone.
"Best understood as a 'disaster capitalism complex', it has much farther-reaching tentacles than the military industrial complex that Dwight Eisenhower warned against at the end of his presidency: this is global war fought on every level by private companies whose involvement is paid for with public money, with the unending mandate of protecting the United States homeland in perpetuity while eliminating all "evil" abroad." - Naomi Klein, The Shock Doctrine, 2007 [1]
Naomi Klein, emerging Joan of Arc of the progressive left, has produced an insightful study of the last half century of American capitalism, aptly titled, The Shock Doctrine: The Rise of Disaster Capitalism. As a result of her research, globalism, the American neocon movement, US foreign policy failures, the outsourcing of government functions to well-connected elites, the permanent diaspora of New Orleans poor - the totality of the post 9/11 era, in fact - begins to make sense. A new and coherent context takes shape as Klein connects six decades of accumulated history dots into an economic narrative which neatly complements the works of scholars like Professors Noam Chomsky and Jared Diamond.
While Chomsky and Diamond inform the process of "failed" and "collapsed" states, Ms Klein fashions an economic theory which describes how state and private sector collusion and cronyism contribute to failing and collapsing states. Klein explicates the violent suppression of popular democracies (through "shock and awe," and torture) since the 1950s to advance Milton Friedman's Chicago School "free market" theories, which benefit corporations and elites while wrecking havoc on the populations of central and Latin America, eastern Europe, South Africa, China, and Russia. In the final phase of her economic shock theory, Klein elucidates how opportunist "disaster capitalism" ultimately reduces government to a "hollow state," outsourced to the point of simply funneling disproportionately collected tax revenue directly to "crony corporations" and wealthy elites, while imposing detrimental and failed "free market" economics on otherwise resistant populations.
What makes The Shock Doctrine timely is the reality that many Americans can't gain perspective on the current political situation. We can't navigate our way to sound political judgments, election by election, if we don't understand the dynamics of our recent history and, given the state of America's media today, that's not easy.
We are at war across the Middle East for a reason, however, and that reason cannot simply be, "to defeat evildoers." A million Iraqis have been killed as the result of the US invasion to date, so where does evil begin, and where does it end? Ms Klein says the Iraq war is simply a new economy created by a neocon administration to outsource military and reconstruction activities to the profit of the administration's closest friends and supporters. Can this possibly be true?
The Shock Doctrine is an important read for several reasons, most particularly in my view, as an argument for a national "blended economic strategy" for the future. The need to blend state and "free" market mechanisms to address an array of public issues currently facing Americans is becoming obvious; and The Shock Doctrine helps shape an extended context to focus debate around these issues in the year or so before the next general election. Americans - really most people living in postmodern democracies - seek both the economic benefits of capitalism and some form of general social welfare, particularly in social niches where capitalism hasn't performed well, like public access to affordable health care, social security maintenance, low cost accessible and excellent public education, and national energy, resource, and environmental management.
Apparently capitalism doesn't perform well in these basic social and cultural arenas because the private profit motive, necessary to pragmatically drive innovative capitalism, often directly conflicts with ethical and social benefits anticipated as public rights. At least since Adam Smith and John Stuart Mill, societies have demanded government control over ruthless profiteering by corporate entities and ruling elites as a "social contract," so when "corporatism" is obviously incompatible with human rights and social necessity, citizens naturally turn to the state to regulate profit-driven behavior and protect those presumed human and social rights. For example, how is it possible that unsafe, lead-painted toys gained access to US retail markets just in time for Christmas?
The manufacturers involved obviously have no concern for the welfare of the product's consumer, nor does the international distribution channel which delivers these products to the market, and ultimately to a child. There is no ethical or moral consideration to be raised in the marketplace, of course, until it's too late, an insurance claim arrives, and a public relations problem, for all concerned, ensues.
It is the role of government (through various regulatory agencies) to insure that only "safe" products, like toys, gain access to the US marketplace. When the public goes unprotected from market predators, it's a failure of government, not a weakness in the amoral, buyer-beware "free market." In fact, the market is working correctly because there is a profitable return on investment, not because some child is healthy. So while the US government fails its social obligation to secure its citizens safety, corporations continue to profit and Americans are exposed to dangerous products - all of which merely indicates the current government may indeed be moving toward "failed state" status. As Jared Diamond demonstrates in his book Collapse: How Societies Choose to Fail or Succeed, when governments fail to curb excesses in the elite private sector, the general populace suffers. But when government colludes with private sector excesses, and becomes the "private sector," democracies falter and societies collapse.
The Shock Doctrine argues that the reason the societies of Iraq and New Orleans have not been rebuilt, for example, isn't the result of incompetence or mismanagement as most of us might assume; but she says, "because the goal of the Bush administration is simply to destroy public and local institutions in favor of outside 'crony corporations.'"
Iraq became the prime example of the new "disaster paradigm" Klein argues: "the acceptable role of government in a corporatist state is to act as a conveyor belt for getting public money into private hands." The funneling of public funds to private corporations connected directly to the administration resulted in an unrestricted corporate feeding frenzy in Iraq, she argues, producing multiple subcontractors for each reconstruction job - each taking a profit - with the actual work of rebuilding shifted to cheap foreign labor with shoddy materials in dangerously insecure working environments. Costs skyrocket while projects never get built. There is nothing new about war profiteering: Americans just need to recognize it when we see it.
"Corruption during the occupation was not the result of poor management but of a policy decision." Klein says. "When it comes to governance, as well as economics, disaster capitalism doesn't work," except for the politically connected, creating what Klein calls, "disaster apartheid." The result has been years of extended war in Iraq with incredible human and economic waste, and nothing resembling "victory" or "success" in the war against "evildoers." In fact, the invasion of Iraq has increased extremism across the Middle East much to the benefit of terror groups like al-Qaeda, while alienating most of the world against Americans.
According to Ms Klein, a similar strategy developed in New Orleans after the shock of Katrina provided public outrage and unexpected business opportunities. "The Bush administration refused to allow emergency funds to pay public sector salaries," she writes, "but it quickly instituted all 32 privatization policies devised by the Heritage Foundation, which had supplied many of the Americans in charge of the Iraqi occupation. Several contractors with no-bid contracts in New Orleans were the same political contributors (some with financial ties to prominent officials) who received billions of federal dollars in Iraq."
In the wake of New Orleans, "disaster apartheid" becomes in my view the natural delineation between how the wealthy and the non-wealthy are able to cope with unanticipated disaster. The wealthy of New Orleans are not only rebuilding mansions around golf courses north of the city, but buying up homes and farms in rural Alabama so they have a nice quiet place to vacate when the next hurricane hits. Meanwhile, many of the relocated poor are now living in states of permanent mental depression, far from home, in poisonous government issued trailer shacks.
But it's the continually revived shock of 9/11, and the fear of domestic terrorism that leads to Klein's larger example of "domestic economic shock therapy." Because of this ongoing Orwellian hustle, "everything from war fighting to disaster response becomes a for-profit venture." Which leads to the institutionalization of Klein's, "disaster capitalism complex - a full-fledged new economy in homeland security, privatized war and disaster reconstruction, tasked with nothing less than building and running a privatized security state, both at home and abroad." If she's correct, in this last year of the Bush administration, it appears an artificial economic paradigm now menaces the integrity of the US constitution, even as it expands US "energy resource wars" across the Middle East. And the scale of arrogance inculcated by some in public office is disturbing, as Klein writes:
"The fact that Vice President Cheney still maintains such a quantity of Halliburton shares [189,000 shares and 500,000 unvested options] means that throughout his term as vice president, he has collected millions every year in dividends from his stocks and has also been paid an annual deferred income by Halliburton of $211,000... When he leaves office in 2009 and is able to cash in his Halliburton holdings, Cheney will have the opportunity to profit extravagantly from the stunning improvement in Halliburton fortunes. The company's stock price rose from $10 before the war in Iraq to $41 three years later - a 300 per cent jump, thanks to a combination of soaring energy prices and Iraq contracts, both of which flow directly from Cheney's steering the country into war with Iraq." [p313]
This menace to the integrity of democracy emphasizes the importance of Klein's arguments in the current political climate. As she traces the self-perpetuating, anti-democratic economic engine which Dwight D Eisenhower first recognized as the "military-industrial complex" to what she now calls, the "disaster-capitalism complex," Klein connects the reader to the obvious:
"This isn't just some twisted invention of the Bush White House. Actually there is a history. Every time there has been a major leap forward for this fundamentalist version of capitalsm that really doesn't see a role for the state, the ground has been prepared by some kind of shock."
Klein also explores the influence of modern torture techniques, developed by the CIA, on her theories of traumatic social "shock" as prelude to imposed disaster capitalism, and then links these to Rumsfeld's "shock and awe" tactics, a line of argument least persuasive to my read.
There's nothing new about torture as a murderous tool of state suppression, nor is "shock and awe" new to warfare, which is finally always waged against civilians. Shock and awe is as old as the Trojan War, and as contemporary as the Nazi invasion of Poland or the bombings of Guernica, Hiroshima, and Nagasaki. Invading armies have been suppressing populations and partisan resistance movements by any means available for centuries, so piling a layer of torture psychology on disaster capitalism, doesn't advance the argument in my view.
Nor does it weaken Ms Klein's insight into correlations between vaguely defined wars, disaster capitalism, widespread corruption, the outsourcing of government functions, and the maintenance of wealthy American elites. We've seen all of this before in other wars, of course - the Hellenistic age, and late Rome, come to mind - but Ms Klein reinvigorates and integrates the more structural economic and political arguments of the last 50 years, which transmutes her theme into a postmodern, global century.
The rise of global information systems and nuclear proliferation over the same time period only make her arguments more pressing. The Shock Doctrine: The Rise of Disaster Capitalism, is an important book, dismally revealing, eminently readable, and essential to political discourse in contemporary America.
Notes
Notes
1 Naomi Klein on The Shock Doctrine:
"I examine three different kinds of shock: first, major cataclysmic events, like wars and terrorist attacks, that throw people into a state of total disorientation. This softens them up for the second shock, also known as shock therapy—the free-market economic policies pushed through all at once, as a sort of extreme country makeover. We saw it in Chile in the 1970s, Bolivia in the 1980s, Russia in the 1990s. The third form of shock is the literal shock of the torture chamber. I argue that torture is strongly linked to economic shock therapy, because it is when people reject free-market 'reforms' that states often turn to torturing individuals, and also to terrorizing whole societies. I became interested in how these three shocks reinforce each other when I was in Iraq covering the occupation. First came the 'shock and awe' attack. Then, under Paul Bremer, Iraq went from a country strangled by sanctions to just absolute Wild West capitalism. That was the second shock. But Iraqis didn’t respond the way it had been scripted. They started organizing and protesting and resisting. And when the resistance emerged, we saw the third shock, which is the body shock, the torture chamber."
Naomi Klein online: naomiklein.org/shock-doctrine [Back]
