Rough Notes on The Shock Doctrine: The Rise of Disaster Capitalism

Book Summary: The Shock Doctrine links decades of exploitation and devastation in the name of economic reform, from Chile's 9/11/1973 coup to Katrina. Because populations usually want high employment and social services, the "reforms" are implemented with manipulation and/or terror. In recent years more and more of the world is standing up against these crimes. Significance: The poverty caused by shock exploitation around the world is extreme. Violence and environmental damage are often quite devastating as well. The Shock Doctrine is one of the best resources for understanding massive abuses, such as the Iraq Occupation. Crimes against humanity are a tool, not a by-product of the profit crusade. (The "Why" of the exploitation is money.) Readability: The power of the events described, such as the Tiananmen Square Massacre, make the book hard to put down. Reminders connect key events and players. Occasionally the vocabulary is difficult, but most of the content is clear. Note that there are no summaries of the main points, so you will need to mark-up your copy of the book aggressively.

The Shock Doctrine: This is the use of confusion and fear to push through massive exploitation. Shock allows the most powerful to make economic changes with little resistance. State and corporate terror may keep people from speaking out, at least at first. Coups are one way in which to start the shock process, but natural disasters and financial crises are used as well. Sometimes a new government is created but in many cases an existing government or a rising political party suffices. A functioning democracy can limit the brutality and exploitation. The Exploitation Goals: Wealth and power are the high-level goals. Academics, especially from the Chicago School of Economics, may idealize a brutal, gladiator-style economy. In practice, it is the drive for wealth and power which dominates. Economic Reform, Advertised Version: "Reforms" are pushed in the name of freeing economies from crippling government constraints. The idea of freedom is important to scrutinize because it is advocated for investors and corporations but not for the general population. ("Freedom" actually has rather a bad history in propaganda.) Going along with this is a shift from the public to the private sector in the name of efficiency and competition. Economic growth and halting inflation are key claims of success. Economic Reform, Reality: The will of the people (democracy) is bypassed and there are often bloody purges. Poverty explodes, and the middle class shrinks. The people who gain wealth are international investors and often corrupt local government officials. Disappearing and torturing

citizens may be long-term tactics. Potential benefits of competition are lost because of massive corruption, monopolies, and economic depression. Shock Graph: This is a rough, hypothetical example and is not from the book. The purpose is to show how some community attributes might change over time.

Here an idealized democracy increased the quality of life for the general population while decreasing exploitation. The loss of exploitation profits increased the national and international exploitation drive by the elite. This was both to maximize exploitation and issue a global warning that real democracy would not be tolerated. After the exploitation drive became more powerful than democracy, there was a coup with purges of opposition politicians and labor leaders. The elite pushed through exploitation in the absence of democracy. Much of the profits came in the first round of plundering. The quality of life dived, with portions of the population falling into a living hell. (The film Darwin's Nightmare depicts how bad poverty can be.) A wide variety of scenarios appear in the book. Sometimes inflation weakens the quality of life and contributes to a coup. Sometimes the shocks are natural disasters. Sometimes a population recovers quickly and sometimes decades are required.

Shock Event Timeline: This is a rough event timeline: Shock Era Entities: The groups pushing and suffering shocks include:

Corporations: Corporations and their investors are key drivers of shock exploitation. Western governments: The US and many other Western governments actively push exploitation. The World Bank and IMF: These institutions use national debts to make nations subservient to international corporations. The University of Chicago Economics Department: This served, for a time, to legitimize extreme freedom for corporations. Shocked population: The general population suffers high unemployment and brutality. Unions: Because the unions oppose corporate power, it is the union organizers who are the targets for the worst abuse. Political opposition: They forced out of power unless they sell-out. Some may be tortured and killed.

Targets: If a population is completely powerless, the exploitation targets listed below may be pursued.

My Community Area Tag Exploitation Target Take public assets Cut social service spending Increase government contracts to corporations Increase surveillance and mercenary spending End local Ris k Priorit y Actio n

GOVERNMENT.ASSETS

GOVERNMENT.SOCIAL_SERVICE

GOVERNMENT.CONTRACT

SECURITY

GOVERNMENT.MARKET_REGULATION

business protections, price controls, and safeguards CORPORATE.UNION Destroy unions Destroy political opposition Buy local companies cheaply Take land from the poor Reduce taxes, especially for the wealthy Control the news End environment al protections Cut rights, enable abuses Prosecute the poor; permit fraud, torture, etc.

POLITICS.DEMOCRACY

CORPORATE.ACQUISITION

LAND.ACQUISITION

TAX

MEDIA GOVERNMENT.ENVIRONMENTAL_REGULATI ON

GOVERNMENT.HUMAN_RIGHTS

GOVERNMENT.ENFORCEMENT

A population's money goes to elites outside and within the region affected. The quality of life drops, and individuals become politically weak. The security sector grows to contain the "surplus population" and the violent resistance.

The tags are rough suggestions and not from the book. Tagging key activities is helpful for planning and monitoring. This is a practice on some large projects. The Shock Doctrine mostly describes media control and selective law enforcement indirectly. Shock Spin: These are some of the ways the Chicago School edicts are defended.

Wealth increased: Average individual holdings may increase because people at the top are becoming wealthier, but this ignores the great numbers of people pushed into poverty. Publicly owned wealth decreases as well. (This is as if New York City sold Central Park to government officials and then bragged that wealth had increased.) Inflation stopped: Though the extreme measures may have some numeric benefits, such as stabilizing inflation, the effects are brutal on most of the population. The limited benefits to the greater economy are usually slow to appear. In addition, claims of success ignore the lifeline of nationalized industry, often kept by many governments. Black market finances, such as from Bolivia's drug trade, are also ignored. Brutality did not happen: The abuses in the introduction and implementation of economic changes are omitted or denied. The locals were unfit: When an economic disaster cannot be hidden, the local culture is blamed. Russians are blamed for corruption, and Iraqis are blamed for sectarian violence.

The manipulation required to cause the exploitation is usually kept secret. The wealth grabbed by the elite pushing the changes is also not discussed. Defending Against Shock Exploitation: Many communities can reduce or resist exploitation.

Knowing what comes next: Understanding the tactics helps individuals and communities to think and retain their identity. Disclosing backroom deals: Some exploitation is stopped by publicity. Organizing: The greatest fear of the establishment is an organized population. (Attacks unfortunately focus on organizers.) Asserting rights: The right to keep property and rebuild one's own community are important for ending mental shock and exploitation. Prevention: Ideally communities would work with their elected officials BEFORE a well-known risk reaches a crisis. Giving copies of Naomi Klein's book to responsible government officials might be valuable with statements of anger at the exploitation might help. (The book does not emphasize this, but prevention is always worth considering.)

Additional Points:

Secrecy is a key weapon for abuse. The corporate media often supports manipulation and exploitation. Both major US political parties use the Shock Doctrine: Republican party actions are closest philosophically to the Chicago School, but many of the Democratic party officials at the national level support support the same policies.

Market pressure: Investors and business executives quickly punish nations who resist corporate control. Much of this is automatic. Obama: Naomi Klein's June 2008 essay Obama's Chicago Boys describes some Chicago School influences on Barack Obama.

Chapter Summary:
The following is a terse chapter-by-chapter summary of the book. Blank is Beautiful: Three Decades of Erasing and Remaking the World The introduction outlines the book and the concept of shock as a tool for abusive change.

Introduction

Part 1 Two Shock Doctors: Research and Development The Torture Lab: Ewen Cameron, the CIA and the Maniacal Quest to Erase and Remake the Human Mind A "criminally stupid" psychiatrist attempted to destroy people's minds with extreme forms of shock and then (superficially) rebuild personalities. The CIA backed the research and adopted some of its practices. The breaking down of an entity with the excuse of later rebuilding it is a theme in economic shock exploitation. The Other Doctor Shock: Milton Friedman and the Search for a LaissezFaire Laboratory Milton Friedman was a professor at the University of Chicago's Economics Department who advocated aggressive shifts to "pure capitalism." Mixed economies, with some government control and large government spending, were the enemies of economic freedom. John Maynard Keynes, an important person in helping to stabilize post-WW II economies, was the enemy. As many elite wanted to increase their wealth via corporate power, Friedman became a celebrated champion. US government and business people began supporting the teaching of Friedman's ideas in Latin America. Early CIA coups are discussed, as well as models for brutality. People pushing for a coup in Chile eventually chose Suharto's coup in Indonesia as a model, with brutality used preemptively.

Ch. 1 torture

Ch. 2 Chile preparation

Part 2 The First Test: Birth Pangs (The Southern Cone of South America) Ch. 3 Chile, Uruguay, Argentina coups States of Shock: The Bloody Birth of the Counterrevolution Pinochet helped lead Chile's coup on 9/11/1973 against Allende. "AntiCommunism" was the excuse. Pinochet implemented many of the Chicago School's requests, but not all. There was massive violence, and

poverty grew. The rich became richer. In 1982, however, Pinochet went back Allende's mixed economy model because of unacceptable financial problems. Uruguay took up the Chicago model in 1974. Argentina's military staged a coup in 1976 and also pushed through a partial implementation of the Chicago economic model. Poverty grew in Argentina as a result. The region's regimes began to kill less publicly to reduce international pressure. Ch. 4 coup effects Ch. 5 establishment denial Cleaning the Slate: Terror Does Its Work The regimes in the Southern Cone were especially brutal against those who threatened the emerging economic system. Corporations sometimes drove the terror as well. "Entirely Unrelated": How an Ideology Was Cleansed of Its Crimes Much of the human rights work in the Southern Cone focused on government abuses rather than economic exploitation. Corporations largely escaped connection with the brutality. The Chicago School of Economics received little blame as well.

Part 3 Surviving Democracy: Bombs Made of Laws Saved by War: Thatcherism and Its Useful Enemies British Prime Minister Margaret Thatcher was too unpopular to advance corporate power until the Falklands War. After this, Thatcher dealt harshly with striking coal miners, spreading fear across unions. She also helped some renters to become owners of their units, increasing her political base. The general move was toward power for the rich. The lesson was that a war could allow a democracy to be manipulated into accepting policies that benefited the few. The New Doctor Shock: Economic Warfare Replaces Dictatorship The young US economist Jeffrey Sachs was part of the push to bring (some of the) Chicago School ideas to Bolivia's troubled economy in 1985. There were elections, but much manipulation and kidnapping followed. Some economic problems in Bolivia subsided, but life for the growing poor became worse. Some economic improvements probably came from a restarting of the large coca industry.

Ch. 6 The UK

Ch. 7 Bolivia

Crisis Works: The Packaging of Shock Therapy The IMF and World Bank began to push hard for Chicago School Ch. 8 practices. National debt forced many governments to agree to international demands for "privatization, deregulation/free trade, and debt exploitation drastic cuts to government spending." Eventually some people in the institutions admitted that nations lost financial stability.

Part 4 Lost in Transition: While We Wept, While We Trembled, While We Danced Slamming the Door on History: A Crisis in Poland, A Massacre in China In Poland, international pressure pushed Lech Walesa's Solidarity Party to follow Chicago school practices. This was done against the wishes of most party members. Back in the US, Francis Fukuyama described the end of economic choices in the world. In China, the Communist Party faced a growing desire for both democracy and an end to the extreme corruption growing under the new capitalist model. Deng Xiaoping, after years of increasing the capacity for internal repression, crushed demonstrators in Tiananmen Square and beyond. Labor leaders were, as usual, key targets. The economy moved closer to the Chicago School model after this. Unemployment shot up. Democracy Born in Chains: South Africa's Constricted Freedom The ANC had risen in power with a "Freedom Charter" declaring their goals of helping the general population. When the ANC became a true national political force its members hoped to greatly improve the quality of life for the majority of the population. Once negotiations began with the racist government, however, the ANC agreed to many financial obligations and government limitations. The formal agreements crippled the ANC's ability to make significant long-term improvements. Bonfire of a Young Democracy: Russia Chooses "The Pinochet Option" Though Russian legislators were portrayed as hard-line Stalinists opposing the liberal Yeltsin, it was in fact moderates defending social services against Yeltsin's extreme version of capitalism. Yeltsin used the military to end any hope of government for the people. The Capitalist Id: Russia and the New Era of the Boor Market Russia received no real help from the US or other nations because there was no profit motive to help the Russian economy survive. The quality of life worsened significantly. To push Canada to cut government services, many business institutions began fabricating a "debt wall" crisis. By the time the manipulations became public, the government had already reduced social services. The chapter also mentions how some general international manipulation became public. Let it Burn: The Looting of Asia and the "Fall of a Second Berlin Wall" Investor panic sparked economic problems in Thailand and then other countries in East Asia. Western governments did not help; the IMF did find this to be a great opportunity for "reform." In general poverty grew with the level of adoption of the Chicago School programs. By the time of the 1999 Seattle World Trade Organization Talks, however, widespread

Ch. 9 Poland, China

Ch. 10 South Africa

Ch. 11 Russia

Ch. 12 Russia, Canada

Ch. 13 Thailand, South Korea ...

opposition began to limit shock exploitation. Part 5 Shocking Times: The Rise of the Disaster Capitalism Complex Shock Therapy in the U.S.A.: The Homeland Security Bubble Corporations began taking large amounts of money from the US government, thanks to people existing in both the government and the business world at the same time. The 9/11 attacks in the US briefly raised the status of government employees. The W. Bush administration, however, increased the funding of the private security industry quickly, with little publicity. This helped to create a financial incentive to suspect and arrest people around the world without proof. A Corporatist State: Removing the Revolving Door, Putting in an Archway Many top government officials were key players in the business world as the W. Bush administration progressed.

Ch. 14 security

Ch. 15 US cronyism

Part 6 Iraq, Full Circle: Overshock Ch. 16 Iraq shock Erasing Iraq: In Search of a "Model" for the Middle East The US establishment's glee at employing the shock doctrine in Iraq was substantial at the start of the occupation. "Freedom" was meant for corporations. There was no respect for anything Iraqi. The bigger the shock of occupation, the better the results for the US planners. Ideological Blowback: A very Capitalist Disaster W. Bush's strategy was an "anti-Marshall Plan," causing mass unemployment. The local population lost government services and jobs. There was no accountability to the international companies making a profit. The CPA itself was too understaffed to function. The economic stress created much of the resistance. Many US corporations left the area, but did not return the money they wasted. Full Circle: From Blank Slate to Scorched Earth Bremer selectively stopped democracy when it threatened the exploitation planned by the US. US-backed brutality increased under "the Salvador option." This was in part because Rumsfeld had reduced the invasion forces below what career military officers recommended, and Iraq began to escape US control. Kidnapping became a way for local thugs and police to make money. Eventual attempts to employ the local population were too late.

Ch. 17 Iraq plunder

Ch. 18 Iraq hell

Part 7 The Movable Green Zone: Buffer Zones and Blast Walls Ch. 19 Asian Tsunami Blanking the Beach: "The Second Tsunami" This chapter describes exploitation of the 2004 Asian Tsunami. In Sri Lanka the tourism industry won, and the poor were driven from the

beaches and into shanty towns. Aid did not make it to the little person, and a civil war eventually restarted. The international elite's model for exploitation had been how Honduras responded to Hurricane Mitch. The poor of the Maldives also fared quite badly following the 2004 tsunami. Disaster Apartheid: A world of Green Zones and Red Zones This chapter describes how New Orleans suffered after Hurricane Katrina. The W. Bush administration cut the city's social services while giving corporations a wide array of large contracts. Like Iraq, the local population was largely bypassed for the rebuilding work. New Orleans became divided into rich "green zones" and poor "red zones." The chapter describes how hollow the US national government has become. At the local level some rich communities are even outsourcing government functions to corporations completely. Losing the Peace Incentive: Israel as Warning Recently peace has not boosted the world's economy the way disasters and terrorism have. This is termed the "Davos Dilemma." Israel has led the way in profiting from this area, with domestic peace seen as less valuable than long-term conflict. Immigrants from Russia have made Palestinians "surplus people," no longer needed for labor. The profits from Israel's security sector have been huge, and with large technology exports. Shock Wears Off: The Rise of People's Reconstruction The book concludes with how populations are refusing to accept radical market ideas and dictatorships, especially when such conditions would repeat previous horrors. Having some elite backers of shock exploitation charged and sometimes convicted of crimes is removing the "respectability" of the abuses as well. Some governments are scapegoating minorities as a way to handle economic and political pressure, however. The book ends with examples of people rebuilding their communities themselves.

Ch. 20 New Orleans

Ch. 21 Israel

Conclusion

Minor Notes
Scope: The current shock system is different than the models of exploitation and control used before. Key characteristics of The Shock Doctrine include:

The "Economic freedoms" pushed by the Chicago University School of Economics. An emphasis on business power. Extreme short-term plundering.

The backing of the IMF and World Bank. Crushed or anemic democracy.

A target government need not be controlled directly by the US government. Financial agreements, especially when driven by debt pressure, often turn a government toward business and away from the needs of its population. The US does not generally raise its flag over areas exploited with shock, though US military bases are put in some areas. National resources are more important than expanding the national borders. Naomi Klein is a fairly young Canadian, which probably makes the Vietnam War rather distant to her. US authors sympathetic to the downtrodden usually focus on US-backed coups and open wars. Instead, Klein describes the rise of exploitation through business. Coups and wars are often part of this modern nightmare, but not essential. Financial institutions, big business, and academia drive much of the exploitation. George Lakoff's Writings: In publications such as Moral Politics Lakoff describes the emotional packaging of economic "freedom." The Strict Father Model is the one pushed with economic shock. (Lakoff focuses on how emotion and idealism drives politics in the US.) Future Exploitation Targets: These some potential targets for future shock exploitation. The list is only partially from the book.

West Coast earthquake prone areas Iran: The oil wealth and lack of Western business control makes the country a target, among other reasons. Venezuela: Oil wealth and social spending are important here, also.

Michael Moore: Michael Moore's next film, scheduled for 2009, will tentatively include a partial history of US establishment backed abuses around the world. Potentially many of the events in The Shock Doctrine could be covered.