The Shock Doctrine: The Rise of Disaster Capitalism

The Shock Doctrine is a sustained critique of neoliberal ideology and the myths its proponents propagate about the benefits of the ideology. This guide will use the term neoliberalism, although, as author Naomi Klein points out, this ideology is referred to by a variety of terms, including neoconservatism, market fundamentalism, Chicago School economics, and corporatism. Liberalism here does not refer to left-wing or center-left political beliefs. Economic liberalism is the belief that markets should be structured so that the exchange of goods and services faces few or no barriers like taxes, tariffs, quotas, centralized management, currency controls, and so on. Classical liberal economic policy holds that the government should intervene when necessary to stabilize the market. 

Neoliberals, by contrast, believe that the government should be as small as possible. They argue the government should be mostly limited to creating markets, ensuring contracts, and providing security services. Neoliberals advocate for nationalized, or publicly owned, assets or services to be privatized, or sold off or managed by private corporations. The key theorist of neoliberal policy is Milton Friedman, whose work and policy proposals are cited throughout The Shock Doctrine (for more on neoliberal economic policy, see A Brief History of Neoliberalism by David Harvey).

During the rise of neoliberalism in the context of the Cold War, an influential narrative about the value of this ideology and set of policies was put forward by proponents and eventually adopted into the mainstream discourse. The narrative goes something like this: Under a Communist or socialist economic system, people do not have true freedom because they are unable to fully engage in the free market. In contrast, people living in neoliberal economies are able to buy or sell a wide variety of goods and services, at prices set by the “invisible hand” of the free market, and are therefore free. Further, as argued by economist Friedrich Hayek, neoliberal, decentralized markets put pressure on dictatorships, which thrive in a centralized economy, and therefore lead to democracy.

Thomas Friedman (no relation to Milton), Francis Fukuyama, and other prominent neoliberal writers also believe the expansion of neoliberal economic systems creates peace and prevents war. In neoliberal economies, countries are obligated to trade with one another because they have to specialize in providing specific goods and services to compete. These theorists argue that countries that have intertwined trade will not go to war with one another because it would threaten their trade relationships. Although some people become very wealthy under neoliberal systems, wealth is reinvested in the economy, causing living conditions for everyone to improve (“the rising tide lifts all boats”). Proponents thus claim that politicians and economists who promote neoliberalism are not motivated by greed, but a sincere desire to improve living conditions, strengthen democracy, prevent war, and ensure individual freedoms.

In The Shock Doctrine, Naomi Klein argues against every facet of this mainstream narrative about neoliberalism as described above. Both explicitly and implicitly, she contests the mainstream presentation of, and claims about, neoliberalism, its purpose, its effects, and its implementation. In each of her case studies, for instance, she notes that the poverty and economic inequality levels in countries that adopt neoliberal policies rapidly increase, contrary to neoliberal proponents’ claims that free market fundamentalism leads to prosperity. Published in 2007, the book describes the history of neoliberal policies around the world and connects that history to what were the then-ongoing crises of the United States’ occupation of Iraq, and the aftermath of Hurricane Katrina in New Orleans.