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December 2007

Volume 20, Number 12
Activism

Workers Centers
Colin Asher


Block Battle
Michael Gould-Wartofsky


Organizing Domestics
Ari Paul


Commentary

Downwinders
Lisa Mullenneaux


Winter Soldier Campaign
Iraq veterans against the war -- Ivaw


Eighty and Still Protesting
James Lamb


Nut House Econ
Edward Herman


Behind Burma's Repression
Marc Pilisuk


Gayspeak/Christianspeak
Michael Bronski


Nukes Are Back
Harvey Wasserman


Culture

Burns’s War
Ron Linville


Getting Off
Eleanor j. Bader


2 Book Reviews
Vijay Prashad


Shock Doctrine
Joshua Sperber


Features

Year 501
Noam Chomsky


Corporate Democrats
Paul Street


Corporate SCHIP
Kip Sullivan


Healthcare Reform
Roger Bybee


Auto Industry
Jack Rasmus


U.S. & Eygpt
Sara Abbas


India SEZs
Sriram Ananthanarayanan


Zaps

ZAPS
Z Staff


NOTE: Z Magazine subscribers and sustainers have access to all Z Magazine articles here and in the archive. The latest Z Magazine articles available to everyone are listed in the Free Articles box at the top of the table of contents, and are starred in the list below. Questions? e-mail Z Magazine Online.

Book Review - The Shock Doctrine By Naomi Klein

The Rise of Disaster Capitalism

By Joshua Sperber
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December 2007
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New York, Metropolitan, 2007, pp. 576

 

As with much scholarly political writing, Naomi Klein's The Shock Doctrine: The Rise of Disaster Capitalism is characterized by a deep schism divorcing its material from its analysis. The content of The Shock Doctrine is outstanding, as Klein conducts a broad, rigorous, and richly informed survey of capitalism's creation and exploitation of disaster areas around the globe. From the CIA-backed overthrow of Allende to the ultimate imposition of neo-liberalism throughout the Southern Cone, Bolivia, Poland, Russia, China, South Africa, and Iraq, Klein describes how U.S.-led neo-liberal capitalism—inspired by Milton Friedman and his Chicago School disciples—rolled back social and economic advances via torture, death squads, and IMF-led "debt punishment."  

 

The story is not new, as Alexander Cockburn notes in his review on Counterpunch. However, the book makes fascinating reading due to Klein's adept historicization of contemporary crises, such as the 2004 Asian Tsunami, Hurricane Katrina, and the 2003 war on Iraq. Her survey is equally enhanced by her ability to bring together an enormous amount of material within a cohesive analytical framework written in engaging and generally understated prose. Unfortunately, the weakness of this framework betrays the importance of her material.  

The Shock Doctrine explicates contemporary capitalist ravages through the idea of shock therapy. In this interpretation, the important factor is that the imposition of neo-liberalism such as the IMF's notorious Structural Adjustment Programs— whereby high-interest loans to capital-starved countries are predicated on mandatory privatization and repeal of regulations and social welfare, as well as requiring restructuring toward single export economies, though Klein does not discuss this latter element—can best be understood as resulting and benefiting from events comparable to the trauma of administered shock. Deprived of its moorings following a crisis such as Pinochet's coup or the collapse of the USSR, public confusion is exploited in order to implement regressive economic policy that in other cases would spark popular outcry. Based partly on Ewen Cameron's 1950s sensory deprivation/overload shock experiments at McGill University—where a calibrated system of shocks was administered to "erase" memory as a precondition for psychiatric "healing"—the state application seeks to erase obstacles to profit, including the historical memory of whole societies. 

As Cockburn argues, this thesis is limited, as it cannot account for the relatively peaceful implementation of neo-liberalism into the Indian economy or, for that matter, can it account for Bill Clinton's crisis-free attacks on the welfare state during the 1990s. Torture further constitutes a contrived metaphor, Cockburn continues, since one need only pay attention to the history of recurring primitive accumulation or the enclosure acts to see that capitalism has always been a system of destruction and recreation—a system of crisis. 

Moreover, Klein's conception of a fundamental transformation in the economics of warfare following 9/11 is overstated. Previously, she writes, "The primary economic role of wars...was as a means to open new markets that had been sealed off and to generate postwar peacetime booms. Now wars and disaster responses are so fully privatized that they are themselves the new market." Yet this ignores, as she does throughout, that it was the Second World War's mass state spending for the nascent military industrial complex—and not the New Deal—that enabled the U.S. to emerge from the Depression. This military spending was so vital that the cessation of the war produced a great deal of concern over the effects of returning to a pre-Lend Lease economy. Thus, the permanent militarized economy and the Cold War were born. 

Finally, Klein's description of "collective regression" following the 9/11 attacks is a simplification. While 9/11 did produce a reactionary backlash, it simultaneously created fissures in the dominant national ideology, creating openings marked by uncharacteristically critical analyses in the corporate media while normally marginalized writers like Noam Chomsky reached the New York Times bestseller list. 

Whereas The Shock Doctrine provides an excellent description of contemporary capitalism, it largely fails to explain it. Klein's erroneous conception of capitalism has her focusing on individual actors instead of larger transformations affecting the postwar economy. Her focus on Friedman, John Williamson, Jeffrey Sachs, and other economists, described as the self-serving ideologues they undoubtedly are, attributes the triumph of neo-liberalism to little more than the force of will of certain individuals—an incongruously conservative theory of historical transformation by an apparent radical. Klein's description of lifelong leftists who embraced Chicago School economics, such as Argentina's Carlos Menem and Bolivia's Victor Paz Estenssoro, indicates a primacy of economics rather than politics. The acceptance of neo-liberalism by other nominally liberal politicians like Clinton, Blair, and Schroeder further suggests that more was at work in the advent of neo-liberalism than the mere determination of individual ideologues. 

Unbelievably, Klein omits any discussion of the 1973-4 global recession that triggered a fundamental transformation in the world economy. Described by Eric Hobsbawm as marking the end of the golden age of capitalism that had ruled since 1945, it was the 1973 recession that created the conditions for the resuscitation of laissez faire, hitherto discredited for its failure to respond to the Great Depression. It was not that laissez faire was now viewed as a panacea (save by some ideologues), but its longstanding demands to cut regulation and social spending—i.e., taxation (a crucial point Klein ignores)— achieved a new use value with the decline in profit. The post-1973 global climate was characterized by enhanced competition, dwindling markets, productive gluts, growing environmental ruination, and, as Immanuel Wallerstein describes in The Decline of American Power, the exhaustion of the historic surplus of rural labor, accelerating the long-term increase in taxes and wages. With strained outward growth, capitalism began to cannibalize itself. Less a response to good or bad politics than economic imperatives, neo-liberalism reduced taxation and provided new areas for investment. 

This basic but oft ignored reality is what makes Klein's advocacy of Keynesian economics so disconcerting. This stance has no grasp of the unmanageable long-term costs that required its abandonment in the first place (Klein attributes its decline to political decision making following the end of the Cold War, which would seem to conflict with her description of early 1980s Thatcher- ism), while it dismisses the fact that, again, Keynesianism had little role in bailing capitalism out of the Great Depression. On a tactical level, advocating for Keynesian reform is also problematic. Klein accurately notes that the New Deal was intended to buy off increasingly radicalized workers and prevent the growing threat of revolution. By demanding Keynesianism and not revolution she has forfeited the bargaining leverage that allowed workers to win Keynes- ianism in the first place. More significantly, even if a return to Keynesianism were plausible it should be asked whether it is desirable. 

Klein does not appear to recognize the fundamental and inevitable destructiveness of not just laissez-faire, but capitalism per se. Her quote of Ghandi decrying "the root of all evil—human greed" is a fallacy that obscures that capitalism's motor is perpetual expansion in general and economic survival within competition in particular; capitalism exploits, but hardly requires greed. Similarly, her description of Keynesian welfare as "generous" dismisses the point that under capitalism surplus value extracted from wage labor is the source of profit. Giving a pittance back should hardly be something to be congratulated.  

Klein's defense of so-called mixed economies is buttressed by her dismissal of the state capitalism of the former USSR, which she incorrectly labels "state Communism" or "authoritarian Communism." Klein's failure to utilize Marx has her missing the fact that the USSR's transfer of private property to state hands and the resulting continuation of alienated labor characterized the Soviet system as something far more similar to U.S. capitalism than anything Marx supported. Her inability to critique alienated labor and private property— whether in corporate or national hands—results in vague assertions that "Markets need not be fundamentalist." This combination of belief in the positive potential of not only markets but the state, along with criticism of the logical manifestations of those institutions—a contradiction also found in works like Greg Grandin's Empire's Workshop, Mahmood Mamdani's Good Muslim, Bad Muslim, and David Harvey's The New Imperialism—is reflective of textbook liberal ideology: things can get better within the current system. They cannot. The physical environment alone and, therefore, the survival of the species, desperately requires the destruction of capitalism and its governing apparatus. Klein's impressive collection of data demonstrates the relentless rapa- ciousness of the status quo while promising more of the same. 

Z 

Joshua Sperber is a freelance writer living in New York. 

 

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