The Shock Doctrine: The Rise of Disaster Capitalism

“Fervent believers in the redemptive powers of shock, the architects of the American-British invasion imagined that their use of force would be so stunning, so overwhelming, that Iraqis would go into a kind of suspended animation, much like the one described in the Kubark manual. In that window of opportunity, Iraq’s invaders would slip in another set of shocks—these ones economic—which would create a model free-market democracy on the blank slate that was post-invasion Iraq.

But there was no blank slate, only rubble and shattered, angry people—who, when they resisted, were blasted with more shocks, some of them based on those experiments performed on Gail Kastner all those years ago.”

In this passage, Klein lays out a central argument of the work. She argues that there is a literal and metaphorical connection between the electroshock torture used by the CIA and the shock therapy used by neoliberal economists. The literal connection is how US-UK forces intended to use violence to “shock” the Iraqi people into compliance during the invasion of Iraq. They then intended to economically “shock” them with neoliberal policies. If Iraqis resisted, they could then be tortured with literal electroshocks. This passage illustrates the dense, interconnected layers of the electroshock imagery and practice in the work.

“Friedman’s mission, like Cameron’s, rested on a dream of reaching back to a state of ‘natural’ health, when all was in balance, before human interferences created distorting patterns. Where Cameron dreamed of returning the human mind to that pristine state, Friedman dreamed of depatterning societies, of returning them to a state of pure capitalism, cleansed of all interruptions—government regulations, trade barriers and entrenched interests […] Cameron used electricity to inflict his shocks; Friedman’s tool of choice was policy—the shock treatment approach he urged on bold politicians for countries in distress.”

In this passage, Klein lays out how economist Milton Friedman envisioned the Exploitation of Crises for Economic Gain. She compares his vision with that of Dr. Cameron, who experimented with torture techniques like electroshock and sensory deprivation, arguing that they shared a common framework.

“The proposals in the final document bore a striking resemblance to those found in Milton Friedman’s Capitalism and Freedom: privatization, deregulation and cuts to social spending—the free-market trinity. Chile’s U.S.-trained economists had tried to introduce these ideas peacefully, within the confines of a democratic debate, but they had been overwhelmingly rejected. Now the Chicago Boys and their plans were back, in a climate distinctly more conducive to their radical vision. In this new era, no one besides a handful of men in uniform needed to agree with them.”

A key goal of The Shock Doctrine is the critique of Myths and Propaganda about Neoliberalism and Its Impacts. A claim of neoliberal proponents is that their free-market policies result in the spread of democracy. In this quote, Klein tacitly critiques this claim by noting that the Chicago Boys in Chile were better able to implement their policies outside of “the confines of a democratic debate.”

“Letelier rejected a frequently articulated notion that the junta had two separate, easily compartmentalized projects—one a bold experiment in economic transformation, the other an evil system of grisly torture and terror. There was only one project, the former ambassador insisted, in which terror was the central tool of the free-market transformation.”

In this quote, Klein summarizes the arguments made by former official of the Allende administration, Orlando Letelier, in his essay about the Pinochet regime published in The Nation in 1976. She mobilizes Letelier’s argument to support her claim that there is a connection between physical torture and economic torture in the form of neoliberal shock treatment. Citing Letelier, someone who had lived through and was oppressed and later killed by the Pinochet regime, gives her repetition of the same argument more legitimacy.

“Since the fall of Communism, free markets and free people have been packaged as a single ideology that claims to be humanity’s best and only defense against repeating a history filled with mass graves, killing fields and torture chambers. Yet in the Southern Cone […] it did not bring democracy; it was predicated on the overthrow of democracy in country after country. And it did not bring peace but required the systematic murder of tens of thousands and the torture of between 100,000 and 150,000 people.”

In this quote, Klein explicitly critiques the myth of the connection between the spread of peace, the spread of democracy, and the spread of free markets by arguing that the implementation of neoliberalism in Chile did not help people evade oppression and violence, but instead implemented both. She describes this process in vivid, rather than clinical, language like “systematic murder” to emphasize her strident point of view and the human toll. The numbers she provides are estimates and are not footnoted in the text, suggesting that they may not be entirely accurate.

“This intellectual firewall went up not only because Chicago School economists refused to acknowledge any connection between their policies and the use of terror. Contributing to the problem was the particular way that these acts of terror were framed as narrow ‘human rights abuses’ rather than as tools that served clear political and economic ends […] But by focusing purely on the crimes and not on the reasons behind them, the human rights movement also helped the Chicago School ideology to escape from its first bloody laboratory virtually unscathed.”

Klein argues that the rise of human rights activism and neoliberal economic policies are connected. She uses strident, fiery language to draw attention to the cruelty of authoritarian regimes in Latin America in the 1970s and implicates neoliberal economic advisors within that regime by describing the Southern Cone as the “bloody laboratory” of the “Chicago School ideology.”

“In direct contradiction of Friedman’s central claim, Haggard concluded that ‘good things—such as democracy and market-oriented economic policy—do not always go together.’ Indeed, in the early eighties, there was not a single case of a multiparty democracy going full-tilt free market […] For all these reasons, Friedman had spent a fair bit of time staring down an intellectual paradox: as the heir to Adam Smith’s mantle, he believed passionately that humans are governed by self-interest and that society works best when self-interest is allowed to govern almost all activities—except when it comes to a little activity called voting.”

In this quote, Klein critiques Milton Friedman’s neoliberalism for its apparent hypocrisy, because Friedman often advocated for undemocratic implementation of his policies. Klein is highly sardonic in this passage. For instance, she sarcastically writes, “except when it comes to a little activity called voting.” Klein thinks democracy and voting are very important and her use of “little” here is an example of antiphrasis, or the practice of stating the opposite of what is actually meant in such a way that it is obvious what the true meaning is.

“Sachs had gone to Bolivia quoting Keynes’s warning about economic collapse breeding fascism, but he had proceeded to prescribe measures so painful that quasi-fascist measures were required for their enforcement.”

Klein critiques economist Jeffrey Sachs’s policy recommendations in Bolivia and elsewhere in the 1980s and early 1990s. Sachs presents himself as a Keynesian, meaning that he promotes the beliefs of economist John Maynard Keynes that governments should intervene to stabilize the market so as to avoid fascism. However, in contrast with Sachs’s stated beliefs, Klein argues that his neoliberal policy prescriptions in Bolivia were so unpopular they resulted in “quasi-” fascism all the same.

“By the mid-eighties, several economists had observed that a true hyperinflation crisis simulates the effects of a military war—spreading fear and confusion, creating refugees and causing large loss of life. It was strikingly clear that in Bolivia, hyperinflation had played the same role as had Pinochet’s ‘war’ in Chile and the Falklands War for Margaret Thatcher—it had created the context for emergency measures […] For hard-core Chicago School ideologues like Williamson, that meant that hyperinflation was not a problem to be solved, as Sachs believed, but a golden opportunity to be seized.”

Klein’s description of how Chicago School thinking could be more easily implemented during times of crisis, such as in the cases of both Pinochet and Thatcher, reflects her wider argument about Exploitation of Crises for Economic Gain. Instead of regarding hyperinflation as a problem, economists like Sachs embrace it as a “golden opportunity” to further a neoliberal agenda.

“This is where Friedman’s crisis theory became self-reinforcing. The more the global economy followed his prescriptions, with floating interest rates, deregulated prices and export-oriented economies, the more crisis-prone the system became, producing more and more of precisely the type of meltdowns he had identified as the only circumstances under which governments would take more of his radical advice.

In this way, crisis is built into the Chicago School model.”

Throughout, Klein argues that the Exploitation of Crises for Economic Gain is “built into” neoliberal economics. She characterizes Milton Friedman’s ideas as “radical.” This is somewhat surprising because in the contemporary era, neoliberalism is a widespread and mainstream ideology. However, her use of “radical” here is intended to emphasize the “fundamentalism” at the heart of his set of beliefs. It is a form of fundamentalism because the only solution to a crisis created by neoliberal policies is further implementation of neoliberal policies—it is a totalizing system.

“Balcerowicz, the [Polish] finance minister, has since admitted that capitalizing on the emergency environment was a deliberate strategy—a way, like all shock tactics, to clear away the opposition. He explained that he was able to push through policies that were antithetical to the Solidarity vision in both content and form because Poland was in what he dubbed a period of ‘extraordinary politics.’ He described that condition as a short-lived window in which the rules of ‘normal politics’ (consultation, discussion, debate) do not apply—in other words, a democracy-free pocket within a democracy.”

In this quote, Klein provides a concrete example of the general principle described in Quote 10 and the ongoing “state of exception” upon which the implementation of neoliberal policies often relies. It is also an example of the “voodoo politics” described elsewhere in the text (See: Index of Terms). The Solidarity party campaigned on a leftwing economic platform, but key leadership within the party always intended, as admitted here, to abandon those campaign promises once in power.

“Today, the country stands as a living testament to what happens when economic reform is severed from political transformation. Politically, its people have the right to vote, civil liberties and majority rule. Yet economically, South Africa has surpassed Brazil as the most unequal society in the world.”

Throughout, Klein critiques the supposed connection between neoliberal politics and political liberty as part of the Myths and Propaganda About Neoliberalism and Its Impacts. The use of the word “severed” suggests that the decoupling of political and economic reform in South Africa was itself a form of violent shock. Brazil is used as an example of a country with high inequality, as historically it has had a relatively high Gini coefficient score, a measure of income inequality. However, the data on South African inequality is relatively incomplete and no footnote is provided for this claim, so it is unclear how Klein drew this conclusion about their comparison (see “Gini Index-Brazil, United States, South Africa.” World Bank Group).

“Communism may have collapsed without the firing of a single shot, but Chicago-style capitalism, it turned out, required a great deal of gunfire to defend itself: Yeltsin called in five thousand soldiers, dozens of tanks and armored personnel carriers, helicopters and elite shock troops armed with automatic machine guns—all to defend Russia’s new capitalist economy from the grave threat of democracy.”

This quote references the statement “we will take America without firing a single shot,” commonly attributed to Prime Minister of the Soviet Union Nikita Khrushchev [there is no evidence, however, he actually said this]. Here, Klein inverts that statement to apply it to the fall of the Soviet Union rather than the destruction of the United States. She uses irony in the form of antiphrasis, a statement that implies its opposite, and hyperbole when describing democracy as a “grave threat” that must be defended against.

“Sachs could not see the most glaring political reality confronting him in Russia: there was never going to be a Marshall Plan for Russia because there was only ever a Marshall Plan because of Russia. When Yeltsin abolished the Soviet Union, the ‘loaded gun’ that had forced the development of the original plan was disarmed. Without it, capitalism was suddenly free to lapse into its most savage form, not just in Russia but around the world. With the Soviet collapse, the free market now had a global monopoly, which meant all the ‘distortions’ that had been interfering with its perfect equilibrium were no longer required.”

In this quote, Klein argues that there was no Marshall Plan-style aid for post-Soviet Russia because the Marshall Plan for post-WWII Europe had had as one of its main motives the containment of communism. She therefore suggests that the collapse of the USSR left neoliberalism with no truly threatening ideology to contend with, giving neoliberals free rein to enact their shock doctrine reforms.

“Like a prison interrogator, the IMF used the extreme pain of the crisis to break the Asian Tigers’ will, to reduce the countries to total compliance. But the CIA’s interrogation manuals warn that this process can go too far—apply too much direct pain and, instead of regression and compliance, the interrogators face confidence and defiance. In Indonesia that line was crossed, a reminder that it is possible to take shock therapy too far, provoking a kind of blowback that was about to become very familiar, from Bolivia to Iraq.”

The use of the term “blowback” in this quote and throughout the text is somewhat confusing. Within the context of CIA operations, like the psychological techniques referenced as part of the analogy here, blowback typically means the unintended consequences of a covert operation. However, Klein here means “blowback” in the more general sense of “backlash,” invoking Resistance to Economic and Political Oppression in detailing how some severe reforms proved very unpopular indeed.

“It wasn’t that Rumsfeld wanted to save taxpayer dollars—he had just asked Congress for an 11 percent budget increase. But following the corporatist principles of the counterrevolution, in which Big Government joins forces with Big Business to redistribute funds upward, he wanted less spent on staff and far more public money transferred directly into the coffers of private companies. And with that, Rumsfeld launched his ‘war.’”

In this quote, Klein implicitly contests a myth of neoconservative politics. Often, neoconservatives argue that they want to shrink the size of government to reduce the deficit and “save taxpayer dollars.” However, as she notes, in 2001, the use of contractors resulted in more taxpayer spending rather than less.

“As proto-disaster capitalists, the architects of the War on Terror are part of a different breed of corporate-politicians from their predecessors, one for whom wars and other disasters are indeed ends in themselves.”

Klein notes in this quote the transformation of how “corporate-politicians” used the Exploitation of Crises for Economic Gain. Her use of the hyphenated “corporate-politicians” reflects her belief that politicians like Donald Rumsfeld and Dick Cheney could not be separated from their corporate identities and actions.

“The fact that it was hard to find people in Baghdad who were interested in talking about economics was not surprising. The architects of this invasion were firm believers in the shock doctrine —they knew that while Iraqis were consumed with daily emergencies, the country could be auctioned off discreetly and the results announced as a done deal […] After the crusade had conquered Latin America, Africa, Eastern Europe and Asia, the Arab world called out as its final frontier.”

The use of the expression “final frontier” in this quote suggests that there is a (neo-)colonial aspect to the American invasion of Iraq. The frontier is an important metaphorical image in colonial discourse, as colonists constantly seek new territories to settle and exploit. Elsewhere, Klein argues that “colonial-era terms were entirely appropriate” (241) for describing the implementation of neoliberal economics in countries, as was done in Iraq.

“After the toppling of Saddam Hussein, Iraq badly needed and deserved to be repaired and reunited, a process that could only have been led by Iraqis. Instead, at precisely that precarious moment, the country was transformed into a cutthroat capitalist laboratory—a system that pitted individuals and communities against each other, that eliminated hundreds of thousands of jobs and livelihoods and that replaced the quest for justice with rampant impunity for foreign occupiers […] The ‘fiasco’ of Iraq is one created by a careful and faithful application of unrestrained Chicago School ideology.”

In this quote, Klein argues against both the mainstream American leftwing and rightwing beliefs about why “nation-building” in Iraq failed. The mainstream left argued that it was a result of “incompetence and cronyism” in the Bush administration, while the right blamed the failures on Iraqi society. Klein contests both of these visions, insisting instead that what was happening in Iraq was a “fiasco” created by neoliberal economics, which thrived in crisis situations.

“Three decades earlier, the neoliberal crusade had begun with tactics like these—with so-called subversives and alleged terrorists grabbed from their homes, blindfolded and hooded, taken to dark cells where they faced beatings and worse. Now, to defend the hope of a model free market in Iraq, the project had come full circle.”

In this quote, Klein connects the CIA-informed torture methods used by the Pinochet regime in Chile with the torture methods used by US troops and military contractors on War on Terror detainees in places like Abu Ghraib prison. In this way, she makes a connection between these tactics and their role in neoliberalism.

“The creation of the task force represented a new kind of corporate coup d’état, one achieved through the force of a natural disaster. As in so many other countries, in Sri Lanka, Chicago School policies had been blocked by the normal rules of democracy; the 2004 elections proved that. But with the country’s citizens pulling together to meet a national emergency, and politicians desperate to unlock aid money, the express wishes of voters could be summarily brushed aside and replaced with direct unelected rule by industry—a first for disaster capitalism.”

Klein uses emphatic language to imply that the implementation of neoliberal policies was accomplished outside the normal democratic process in Sri Lanka. She describes the “wishes of the voters” as being “summarily brushed aside.” The use of “summarily” suggests that this was an easy process to accomplish in the aftermath of natural disaster.

“The fact that exactly the same errors as those made in Iraq were instantly repeated in New Orleans should put to rest the claim that Iraq’s occupation was merely a string of mishaps and mistakes marked by incompetence and lack of oversight. When the same mistakes are repeated over and over again, it’s time to consider the possibility that they are not mistakes at all.”

In this quote, which is actually a parenthetical aside, Klein argues that the outcomes in Iraq and New Orleans were not unintended but rather the result of neoliberal ideology and its applications. Typically, these policy decisions are considered separately and critiqued on their own terms. By drawing them together chronologically and ideologically, Klein is making a more universal claim about the common beliefs that underpin them.

“The recent spate of disasters has translated into such spectacular profits that many people around the world have come to the same conclusion: the rich and powerful must be deliberately causing the catastrophes so they can deliberately exploit them […] The truth is at once less sinister and more dangerous. An economic system that requires constant growth, while bucking almost all serious attempts at environmental regulation, generates a steady stream of disasters all on its own, whether military, ecological or financial.”

Klein argues that the crises that both engender and result from neoliberalism are not best understood as conspiracy theories, but rather as endemic to the ideology itself. Her argument against “conspiracy theorists” presages her investigation of Naomi Wolf’s conspiracy theories in Doppelganger (2023). It also makes Klein’s discussion of MKUltra in Chapter 1 appear more reliable because she substantiates it, unlike those who pursue baseless conspiracy theories like those she critiques in this passage.