Page 1 of
3 BOOK
REVIEW Power, passion and
neo-liberalism The Shock
Doctrine by Naomi
Klein
Reviewed by Walden Bello
This book is very impressive indeed. This
is, however, not immediately evident, a sense that
is confirmed by Joseph Stiglitz's review of the
book. Even before I read it, I was certain that
the Nobel laureate would highlight Klein's attempt
to make a connection between the electric shock
experiments performed by
the
notorious McGill University psychologist Ewen
Cameron who was on contract with the Central
Intelligence Agency and the economic shock
approach developed by Milton Friedman at the
University of Chicago.
And indeed, he
does, in the course of writing a typical New York
Times Book Review piece that dares not evince too
much enthusiasm for a book that comes from left
field lest it provoke the ever-alert watchdogs of
the right to question one's credentials. Stiglitz,
in fact, suggests that Klein's analysis might be
infected with conspiracy theory with his very
first sentence: "[T]here are no accidents in the
world as seen by Naomi Klein." Stiglitz does have
some positive things to say about the book, but he
neutralizes this by dropping the line
that Klein "is not an academic and must not be
judged as one". As for Klein's central concept of
"disaster capitalism", it is mentioned once but
otherwise ignored. It all adds up to damning with
faint praise.
The New York school of
publishing says that you win or lose your audience
in the first few pages, but whatever their reason
for bringing the Cameron experiments up front and
strongly implying a link between the genesis of
Cameron's shock treatment and the Chicago School
approach to economic policymaking, it is bad
judgment on the part of Klein and her editors.
What is transparently intended mainly as a
dramatic device risks achieving its opposite.
Conspiracy theory buffs will be elated but not the
critical, discerning audience the book is aimed
at.
Towering work Which is a
pity since The Shock Doctrine recovers to
emerge as a towering work, one that brilliantly
follows neo-liberalism's march from marginal
theology to universal policy. Klein combines the
journalist's eye for the arresting detail, the
analyst's ability to spot, surface and dissect
deeper trends, and a talent for telling a
spell-binding story, to prove once again that a
masterful journalist can often illuminate social
realities far better than the best-trained
economist or political scientist.
With her
ability to combine no-stone-left-unturned
investigative reporting with in-depth social
analysis, Klein is her generation's David
Halberstam, her Shock Doctrine and an
earlier book No Logo being on par with
The Best and the Brightest and War in a
Time of Peace. There is one difference,
though: Klein is unashamedly a woman of the left,
and this is where her analysis derives both its
power and its passion.
The Shock
Doctrine traces neo-liberalism's rise to
dominance to a program set up in the mid-1950s to
enable Chilean students to imbibe the radical
free-market doctrine being propagated by Milton
Friedman and his associates at the University of
Chicago. The U of C's economics department was
then an oasis of radical free-market thinking in a
world dominated by Keynesianism in the United
States and Europe and "developmentalism" or
desarrollismo in Latin America, with their
pragmatic compromises between the state and the
market, labor and management, trade and
development.
Los Chicago boys
The opportunity for neo-liberalism to come
in from the cold arrived in the early 1970s, when
General Augusto Pinochet overthrew the
revolutionary government of president Salvador
Allende in Chile and invited the "Chicago Boys"
that had been waiting in the wings for years to
manage the economy. With the population stunned by
the coup, the "Chicago Boys" went about the task
of swiftly dismantling the Keynesian and
developmentalist compromises that underpinned one
of Latin America's most advanced industrial
economies.
With a Year Zero mentality akin
to the Khmer Rouge in Cambodia, they forced
Chile's overnight transformation into the
free-market "paradise" prescribed by Friedman, a
believer in seeing crisis as an opportunity for
radical restructuring. It was, however, a paradise
that could be created only with massive repression
- and an even greater dose of repression was
necessary to radically liberalize neighboring
Argentina, where tens of thousands were murdered
and over a hundred thousand were tortured by a
murderous military regime that gave a free hand to
free-market radicals to restructure the economy.
Some of Klein's most original insights are
found in her chapters on Bolivia, Poland, China
and South Africa. Bolivia, under the tutelage of a
younger "Doctor Shock" - Harvard economist Jeffrey
Sachs - showed that neo-liberal measures could be
imposed by a democratically elected government if
it was willing to resort to emergency measures,
like arresting and isolating labor leaders.
Poland, also advised by Sachs, showed how
democratic transitions could actually be an
opportunity to deliver a system-transforming shock
that included eliminating price controls
overnight, slashing subsidies, and rapidly
privatizing state enterprises to a population that
was still dazed by the collapse of communism.
There was no democratic transition in
China, but Deng Xiaoping and his allies used the
Tiananmen Square massacre of 1989 and its
aftermath, when the population was confused and
paralyzed, to decisively advance and consolidate
the ambitious capitalist reform program they had
begun in the late 1970s. Neither in Poland nor in
China were people who were tired of communism
clamoring for the free market, Klein emphatically
points out; they were demanding greater popular,
democratic control over economic policy.
South Africa South Africa
provided yet another route to neo-liberalism. Here
there was an element of stealth, with white
business interests taking advantage of the African
National Congress' (ANC) overwhelming focus on the
politics of achieving black majority rule to
preserve their property rights and install a
conservative macroeconomic regime. But not
everything was that subtle: Big capital made clear
their intention to leave should socialist policies
be introduced, conveying the prospect of economic
destabilization.
In these circumstances,
the white elite found a valuable ally in chief ANC
negotiator and future South African President
Thabo Mbeki, who convinced Nelson Mandela that
what was needed to stabilize the new regime was
"something bold, something shocking that would
communicate, in the broad, dramatic strokes the
market understood, that the ANC was ready to
embrace the neo-liberal Washington Consensus".
British premier Margaret Thatcher and
president Ronald Reagan's contribution was to show
that neo-liberal programs antithetical to the
interests of the majority could be imposed in a
Western democracy if one was ruthless enough to
exploit certain situations. For Thatcher, the war
with Argentina over the Falklands in 1982 was a
heaven-sent opportunity to enlist jingoism in the
service of a radical program, one of her tactics
being to portray the labor unions as the "enemy
within".
Thatcher's tactics prefigured
those of George W Bush in the aftermath of
September 11, 2001, when he and his crew exploited
the hysterical state of the population to declare
a "war on terror" that was meant to kick-start a
new phase of the neo-liberal enterprise that Klein
labels "disaster capitalism". But before we go
into this, let us pause to assess Klein's analysis
so far.
Great but ... Klein's
account is superb, but it is not without its
flaws. For one, Klein has too rosy a view of the
Keynesian state that reigned in the United States
and Europe and the developmental state that
dominated the Southern Cone in the period from
late the 1940s to the mid-1970s. She writes that
owing to developmental regimes, "[T]he Southern
Cone began to look more like Europe and North
America than the rest of Latin America or other
parts of the Third World."
Again,
"Developmentalism was so staggeringly successful
for a time that the Southern Cone of Latin America
became a potent symbol for poor countries around
the world: here was proof that with smart,
practical policies, aggressively implemented, the
class divide between the First and the Third World
could actually be closed."
That certainly
was not what it felt like at the time. Indeed, if
the neo-liberals walked in from the wilderness, it
was because they were perceived as presenting an
alternative, albeit untested, to economic systems
in crisis. In the United States, the period of
rapid economic growth fueled partly by the
reconstruction of Japan and Europe gave way to a
state of stagnation cum inflation
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by dropping the line
that Klein "is not an academic and must not be
judged as one". As for Klein's central concept of
"disaster capitalism", it is mentioned once but
otherwise ignored. It all adds up to damning with
faint praise. 
