The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein is a very interesting book that talks about how the various countries of the world have relied on disasters in order to jump start their economies. Klein's thesis can be adequately surmised by her sentence in the book where she writes, “Some of the most infamous human rights violations of this era, which have tended to be viewed as sadistic acts carried out by antidemocratic regimes, were in fact either committed with the deliberate intent of terrorizing the public or actively harnessed to prepare the ground for the introduction of radical free-market 'reforms'” (Klein, 9). Even though many critics (e.g. Pal, 43)believe that Klein overdid it with her analogy about the shock therapy and the disaster-driven economies, she nevertheless presents a very interesting view of how the various economies of the world are progressing.
Klein explains her point of view by talking about how certain elements in various countries use things like war, terror attacks, and natural disasters as 'shock therapy' in favor of moving along their economies. Klein (pp. 25-26) writes, “I am writing about shock. About how countries are shocked--by wars, terror attacks, coups d'etat and natural disasters. And then how they are shocked again--by corporations and politicians who exploit the fear and disorientation of this first shock to push through economic shock therapy. And how people who dare to resist this shock politics are, if necessary, shocked for a third time--by police and prison interrogators.” Klein criticizes global capitalism and blames it for most of the problems that are ongoing in the world today. She talks about how events such as the overthrow of Salvador Allende, the collapse of communism, the destruction of New Orleans by Katrina, and the invasion of Iraq are seen by the capitalists as opportunistic events that work to get their economic ball in motion.
Even though many people have criticized Klein for taking such a negative take on the current world's most successful economic system of capitalism, one can find certain truths and reasons to her logic. It is no secret that many countries of the world have found themselves in economic stagnation and/or decline and have used things like war and disasters to recuperate from their economic slump. One of the most controversial of these have been the September 11 attacks. These attacks shocked and paralyzed not just the US but also the rest of the world. Yet, we find that many economies of the world, including that of the US and some in the Asian region, fared very well after these attacks. This was because the US began its War ad Terror, which gave it precedence to invade countries like Afghanistan and Iraq. At the same time, countries like Pakistan, who became US allies in this fight, received many grants and funding. This, coupled with the US economy being fueled by war, resulted in many economies being revived. It is this kind of a shock doctrine and incidences of disaster-capitalism that Klein presents in her book.
Another example of this kind of a 'shock therapy' can be found in the events following the disaster brought on in New Orleans by the hurricane Katrina. Katrina left thousands of people homeless and many people shifted from New Orleans to other areas. This caused a lot of money to be spent on housing and rebuilding of the city. However, many capitalists also saw this as an opportunity to make a lot of money, with real estate prices in the neighboring areas went up sharply and many people were able to make a lot of money. We can be sure that Hurricane Katrina was not just a local issue. Its reparations spread to the whole world in the view of nationalism. Nationalism is mostly presented as a radical shift in the consciousness by people globally when they encounter modernity, both technologically and culturally. This brings us to the ideas concerning globalization and how Katrina has not only adversely affected New Orleans, but also positive affected the world's economy. Globalization would in effect mean that a global culture is derived for all countries all over the world so that they can all work in a very viable and concrete economic environment. Many economists believe that investment is required for growth and economic growth provides the only sustainable way of improving living standards, and therefore an integration of cultures is the answer. However, it is not just the volume of investment that matters for growth - it is the productivity gains that result. Growth can contribute to increases in living standards in two ways. First, employment-led growth raises household income, the money earned can be used to educate children or increase skills. Second, companies are a main source of tax revenues for governments and growing economies generate more taxes revenues to invest in healthcare, education and social safety net including well-designed unemployment insurance and severance pay systems. Again similar to the case presented for business it is useful to view citizens is various roles to understand how they can benefit from globalization and to enhance their culture for better economic performance. And since, because of the disaster of Hurricane Katrina, the price of real estate rose all over the areas surrounding New Orleans, well as in most other states, we can safely assume that this was because of the shock doctrine that Klein asserts.
However, at the same time, we have to consider the pros of having such a capitalist structure in place in our world. We find that many free markets in the world that are following the notions of capitalism are doing really well and the people who are living there are living great lives, not just in the economic sense but also socially. Countries like Canada, France, and England are kind of welfare states that are operating on the principles of capitalism, yet they maintain extremely workable healthcare services for their citizens, where medical care is practically free; a benefit that such countries can derive from having a strong capitalist structure. Klein, however, claims that many of the countries sometimes use drastic measures in order to disrupt certain elements within their spheres or in other countries just so they are able to reap the benefits ensuing from these disasters. Klein talks about Chile and Milton Friedman, “Milton Friedman, the apostle of pure unfettered capitalism, sent many of his finest students to Chile for years to spread the message that markets must be allowed to work their pristine logic unhindered by government. They persuaded virtually nobody. Their parties were thumpingly defeated, and the democratic socialist Salvador Allende was elected instead. So the CIA backed an antidemocratic coup by the fascist general Augusto Pinochet--and Friedman swiftly stepped in to design 'the most extreme capitalist makeover ever attempted anywhere'” (Hari, 54).
Klein presents many such examples in her book and she is able to convince many of the readers about how the various countries of the world, including the US, have been employing such shocking methods in order to sustain their economies. After reading the book, we find that Klein writes about disaster capitalism, which is derived from her hatred for this notion. However, the most important aspect of this book is that Klein supports her theories with various facts and her depiction and analysis of the events are not based on mere speculation. This is what makes her book even more interesting and believable, even though the readers can find certain passages perhaps too fantastic to be true.
Hari, Johann. “The Price of Freedom,” New Statesman, 136, (5866): October 15, 2007
Klein, Naomi. The shock doctrine: the rise of disaster capitalism. New York: Macmillan, 2007.
Pal, Amitabh. “Our Favorite Books 2007,” The Progressive, 71, (12): 2007