The Shock Doctrine: The Rise of Disaster Capitalism

In 2006, Milton Friedman died. His legacy is one of heightened global economic inequality and violent, sometimes illegal, impositions of Chicago School policies. However, many of the world leaders who embraced Friedman’s policies were facing legal challenges in 2006. 

Furthermore, populations in democratic countries were increasingly rejecting further imposition of neoliberal policies. For instance, left-wing politicians like Hugo Chávez, Daniel Ortega, Lula da Silva, and others won leadership contests throughout Latin America. In some instances, this rejection took the form of right-wing reactionary populism, as in the election of ultraconservative Lech Kaczynski in Poland, who blamed the poor economic situation there on “gays, Jews, feminists, foreigners, Communists” (449). Klein notes that Chicago School ideologues see socialism as its greatest threat, which is why they publicly call it Communism and “deliberately blu[r] the clear differences between the worldviews” (451).

In the 2000s, leftwing leaders in Latin America began to roll back the neoliberal policies that were so damaging to their economies. They reduced their vulnerability to shocks in the global prices for commodities by forming the Bolivian Alternative for the Americas (ALBA), a fair trade zone where countries provide goods and services to each other at intra-negotiated prices (rather than at the global price point). Latin American governments have resolved to no longer send soldiers to train at the School of the Americas in Georgia, where they were taught vicious tactics. Ecuador refused to renew the lease for a US military base. Many are resisting or rejecting loans from the IMF. Klein expresses hope that the IMF and World Bank “are at risk of extinction” (457).

Klein argues that the shock doctrine has become less effective because people have learned to expect the “shock”—it is not as disorienting when it is predictable. She notes that this is why “the erasure of memory” (463) is so critical to torture. For instance, when the Lebanese government attempted to impose shock therapy following the 2006 Israel-Lebanon War, the Lebanese people conducted a sit-in in protest of the policies. Meanwhile, Hezbollah organized rebuilding efforts where the government did not by providing direct cash transfers and jobs to people.

Klein was inspired by the efforts of Thai villagers who did not wait for government support, but instead rebuilt their villages themselves following the tsunami in 2004. They were visited by New Orleans community organizers after Katrina, who took the lesson to heart and, instead of waiting for government assistance to rebuild their homes, began to do it themselves. Klein describes this process as building “resilience—for when the next shock hits” (466).