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Name: The Shock Doctrine
Rating: 4.2 (71 reviews)
Author: Naomi Klein

Naomi Klein

Disaster capitalism's rise and what it means for you

4.2 (71 ratings)

19 mins

Brief summary

The Shock Doctrine by Naomi Klein exposes how disaster capitalism is used to push through unpopular free-market policies. It shows how elites exploit crises to advance their agendas, resulting in social and economic devastation for the majority.

Topics

Socialism & Capitalist Critique US Politics

Table of Contents

The Shock Doctrine
Summary of 9 key ideas

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Key idea 1 of 9

What’s in it for me? Understand how crises are used to brainwash economists.

Have you ever wondered why the media today seems so focused on natural disasters, conflicts and economic crises?

No doubt one of the reasons is that disaster headlines sell newspapers, but as you’ll see in The Shock Doctrine, the media aren’t the only ones benefiting from calamities. Crises like these are exploited by a rich minority for their own advantage.

In these blinks, you’ll discover

what economic interventions and electro shock therapy have in common;
how free-market economics turned Chile into one the world’s most unequal countries; and
how the Iraqi government was essentially robbed of 95 percent of its revenues.

In their interrogations, the CIA used psychological shock treatments designed to “recreate” the individual.

Throughout the history of psychology, scientists and academics have wondered how to best treat those suffering from psychological afflictions. By the mid-twentieth century, most treatment methods were focused on repairing psychological damage.

But Dr. Ewen Cameron decided to take a different approach: recreating the psychologically damaged individual through the process of shock therapy. With CIA funding to support his work, Cameron’s performed extensive experiments with electro shock treatment, where electric current is passed through a patient to induce seizures.

He noticed that his subjects followed a particular pattern: patients would first revert from a normal state to child-like behavior, until eventually completely regressing to permanent confusion and listlessness.

Cameron believed that at this point the individuals were “blank slates” on which new, healthy identities could be written.

The problem was that it didn't work. While Cameron was able to wear down their identities, he could not recreate them.

So, rather than changing his approach to get the desired results, Cameron opted to intensify his treatments. He began by using methods which were similar to torture: month-long sensory deprivation and isolation, intentional confusion, massive electric shocks and mega-doses of psychedelic drugs.

Meanwhile, the CIA recognized that Cameron's extreme shock therapy could also be used to other ends – for pacification and information extraction.

The extreme isolation (through sensory deprivation) and confusion (through intentionally distorting time by, for example, changing their meal schedules) inflicted upon Cameron’s subjects made it impossible for them to make any sense of their experiences. The direct result of this was a heightened impressionability and cooperation, of which CIA interrogators later made great use to extract information.

And by coupling this isolation with sensory overload – for example, with strobe lights or extremely loud music – they could further increase the cooperation of patients and, later, prisoners.

These observations were collected in a document called the Kubark Manual, which would serve as the protocol for what would later be termed “advanced interrogation techniques” – or, as some would call it, torture.

Free-market economists developed “economic shock therapy” to force through painful economic reforms in times of crisis.

The idea that a new order can rise from the ashes of a crumbled civilization is by no means new. What is new, however, is the practice of intentionally wrecking the economies of unwilling societies in order to completely restructure them.

Taking their inspiration from shock therapy, one powerful group of economists – led by Milton Friedman and his colleagues at the Chicago School of Economics – established and used economic shock therapy to enact painful reforms.

In practice, the reforms of economic shock therapy are often coupled with authoritarian state brutality.

It’s often simply not enough to economically shock an unwilling constituency into submission during the process of market reform. In order to squash the inevitable public rage towards the unemployment and insecurity that come with austerity and market liberalization, governments must take more drastic measures – like repressing democratic rights in order to push through unpopular economic reforms.

For example, the implementation of an interim government following the 2003 Iraq invasion was a well-executed repression of democratic rights.

Economic shock treatment tends to benefit the super wealthy and multinational corporations at everyone else’s expense.

With all major economic policy changes there are winners and losers. During the process of economic restructuring, the biggest losers by far are most of the citizens of countries which undergo economic shock therapy.

The immediate removal of price controls, the opening of national markets to privatization and the removal of trade restrictions have drastic effects for the average person. As an example, consider Pinochet’s Chile, which saw its unemployment rate hit 20 percent during the implementation of their first economic reforms – a national record. That figure jumped to 30 percent in 1982 following another round of economic reforms, with the economy on the whole shrinking by 15 percent.

Economic shock therapy requires the annihilation and silence of political and ideological dissidents.

Although economic shock treatment does not take aim at political dissidents, the general unpopularity of its reforms means that governments are motivated to crush any material or ideological opposition.

The removal of political dissidents prevents the obstruction of economic reform. During periods of unpopular reform, especially in those countries with a strong history of national protectionism and worker solidarity, reform regimes face many obstacles and threats.

In the 1970s, economic shock therapy resulted in poverty stricken, downtrodden and terrified populations.

To ensure that the public was sufficiently softened for the purposes of instituting reform, trade liberalization in the 1970s in countries such as Argentina was characterized by the twin terrors of economic shock therapy and immense brutality.

As you know, economic shock therapy was supposed to shock citizens out of their old way of thinking and get them to accept free-market reform.

In the 1980s, Western nations learned that denying aid to struggling countries forced those countries to open their markets.

Although the International Monetary Fund and other Western financial institutions claim to ensure the world’s financial stability, their actions regarding Asia and Eastern Europe in the 1980s tell a more sinister tale.

That is, instead of helping struggling nations, the Western financial institutions stood by while their economies collapsed.

By privatizing the military and reconstruction effort in Iraq, the United States made large corporations extremely wealthy.

The close relationship between big business and government is nothing new. However, the reconstruction of Iraq was an unprecedented opportunity for businesses who wanted access to government dollars.

Indeed, the Bush administration wanted to run government using the hollow shell model for corporate organization. In this model, there's a central organization that writes some of the checks and carries out “core competencies” while everything else is outsourced.

Final Summary

The key message in this book:

Policy decisions and revolution are not nearly as straightforward as they may seem. Whether they are the juntas in South America, the radical privatization in Southeast Asia, or the the restructuring of Iraq, major changes to government and economic policy are shaped not only by the demands of the people, but also the demands of corporations looking to find a way into new markets.

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What is The Shock Doctrine about?

The Shock Doctrine (2008) offers insights into the dark world of disaster capitalism, in which crises serve as an instrument to undo the trade regulations and national protections which prevent international megacorporations from totally exploiting poorer countries. Rooted in the findings of the CIA-sponsored "MKUltra" psychological torture experiments, economic shock treatment has left behind a legacy of blood and destruction since it first began to be taken seriously in the 1970s.

Who should read The Shock Doctrine?

Anyone interested in economics
Anyone interested in foreign policy
Anyone interested in history

About the Author

Naomi Klein is a bestselling author and political activist who has received the Warwick Prize for Writing and the National Business Book Award. In addition to writing the critically acclaimed nonfiction works The Shock Doctrine and No Logo, she also contributed to a number of film productions, such as The Take and The Corporation.

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Economics Politics

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