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Thursday, July 24th, 2008
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The Shock Doctrine: The Rise of Disaster Capitalism

by Naomi Klein

Dead Left

A review by Jonathan Chait

It seems like a very long time -- though in truth only a few years have passed -- since the most sinister force on the planet that the left could imagine was Nike. In 2001, Time proclaimed that the anti-globalization movement had become the "defining cause" of a new generation, and that the spokesperson for the cause was the Canadian writer and activist Naomi Klein. For puzzled outsiders grasping to understand why bands of youths had begun following the World Trade Organization wherever it went, brandishing oversize puppets and occasionally smashing up the local Starbucks, Klein was there to explain. She has always downplayed her place within the movement, but in fact her influence is as considerable as her press clippings proclaim. Her achievement, and it is no small feat, has been to revive economicism -- and more grandiosely, materialism -- as the central locus of left-wing politics.

From the time of Marx, and through the Depression, the left concerned itself primarily with economic inequality. The analysis of injustice in terms of class conflict and the forces of production was the canonical one. But the postwar boom -- the authors of the Port Huron Statement famously described themselves as "bred in at least modest comfort" -- turned the left's attention to foreign policy and national security in the Cold War, and to civil rights, and to feminism. By the 1980s, left-wing politics had withdrawn almost entirely into academia and other liberal enclaves, which it ruthlessly policed for any dissent from the verities of multiculturalist dogma and identity politics.

This evolution can be seen in Klein's own family. Her grandfather was a Marxist fired by Disney in 1941 for trying to organize animators. Her father fled the United States for Canada to avoid service in Vietnam, and joined Physicians for Social Responsibility. Her mother directed the anti-pornography film Not a Love Story. And Naomi Klein, like most campus leftists of the 1980s, directed her ideological energies toward the denouncing of variousisms within academia. (She later recalled, with admirable remorse, that she was known as "Miss P.C.")

By the 1990s, Klein had come to realize, like some other campus activists, that off-campus there could be found worse depredations than the canonization of Shakespeare and other dead white males. And the new enemy turned out to be an old one -- the original one, in fact: the corporations, and more generally capitalism. Klein set to work on her book No Logo, which appeared in 1999. That book wove together much of the new economic activism springing up in the precincts of academia into a withering anti-corporate manifesto. Her indictment had two main counts. The first was that many corporations profited from the cruel treatment of Third World labor. This observation was undeniable, and the publicizing of these evils has produced reforms of which activists can rightly be proud. The second charge was that corporations have encroached upon and monetized every aspect of modern life and culture. Klein wrote that she could envision a future "fascist state where we all salute the logo and have little opportunity for criticism because our newspapers, television stations, Internet servers, streets and retail spaces are all controlled by multinational corporate interests." This aspect of her argument needed a bit more thinking through.

The distinctive thing about Klein's style was that it was very Old Left. She had a classic Marxist-materialist analysis, arguing that economic conditions, rather than bigotry or ideology, are what shape the world. Her interest in culture and in actually existing life under capitalism was somewhat derivative of the Frankfurt School, though not as intellectually sophisticated. Yet she managed to make the old notions feel new, and to capture the ethos of what was being called "the New New Left." And her argument reflected the conviction of the new anti-globalization activists, the children of the "cultural left," that they themselves -- and not just workers in Nike factories abroad -- were the victims of international corporations.

The 1990s was, for all the obvious reasons, an intensely materialistic era, and Klein came along just in time to make its booms and excesses into fodder for some sort of revival of classical Marxist analysis, which had fallen into disrepair and even into disrepute after the collapse of communism. The publication of No Logo serendipitously coincided with the sudden rise of street protests, and the book became a surprise international best-seller. The dearth of leaders in the diffuse anti-globalization cause meant that Naomi Klein became the Tom Hayden of the movement. The Times of London deemed her "probably the most influential person under the age of 35 in the world." The National Post called her the "New Noam Chomsky," and the Guardian announced that "Naomi Klein might just be helping re-invent politics for a new generation."

And then came September 11. The Islamist attack on the World Trade Center may not have "changed everything," as so many Orwell-wannabes declared, but it, and the ensuing war with secular Iraq, certainly changed the orientation of the left. The locus of evil in the world, even more than during the Cold War, was once again American military power and its use beyond our borders. The new American adversaries were not corporations but individuals -- George W. Bush, Dick Cheney, Paul Wolfowitz. And they were motivated not by profit, but by ideology. This was not a problem that could be addressed by making the streets of Seattle run brown with Frappuccinos.

But Klein was intellectually unfazed. Rather than re-think the economicist premises of her recent radicalism, she set out to synthesize her old worldview with the post-9/11 world. "I felt it emotionally," she told The New York Times, "before I understood it factually." Doggedly connecting the dots, she discovered that the Iraq war was -- guess what? -- part of the same economic tissue that connected Nike and the World Trade Organization. Klein is nothing if not a totalistic thinker. Everything always adds up, and darkly. The left-wing labor economist Kim Phillips-Fein has written admiringly about Klein's role in seamlessly transforming the anti-globalization movement into the anti-imperialist movement:

In the wave of panicked reaction that followed the disaster, suddenly it seemed that the movement might disappear once more.... Almost alone among political journalists, Klein has devoted herself to writing about the war against Iraq as a political project driven by neoliberal ideology and economic interest -- a natural extension of the corporate dominance of the 1990s, instead of a radical break.

So Klein went through the transition from intellectual guru of the movement against Starbucks to intellectual guru of the movement against the Pentagon, and came away as influential as ever. She remains the darling of the left in the United States, where she writes for The Nation and The Huffington Post, and abroad, where she is even more popular. A poll of readers of Prospect and Foreign Policy in 2005 ranked her eleventh on a list of the hundred most influential public intellectuals in the world. And we can see the culmination of her intellectual synthesis in The Shock Doctrine: The Rise of Disaster Capitalism. The reception accorded this book has been staggering. It was a New York Times bestseller, a finalist for distinguished prizes, a favorite of "best book" lists in the newspapers. It has even been made into a short film. It has been reviewed favorably in The New York Times, and hyperbolically elsewhere. In These Times called it "The New Road to Serfdom" -- that is, the left-wing equivalent of the classic right-wing Hayekian tract. The San Francisco Chronicle said it "may have revealed the master narrative of our time." Not bad for a marginal dissenter.

The Shock Doctrine has a single, uncomplicated explanation for everything that ails us. It identifies the fundamental driving force of the last three decades to be the worldwide spread of free-market absolutism as it was formulated by Milton Friedman and the department of economics at the University of Chicago. The free marketers, Klein argues, understand full well that the public does not support their policies, which she summarizes as "the elimination of the public sphere, total liberation for corporations and skeletal social spending." And so they have decided that the free-market program can be implemented only when the public has been disoriented by wars, coups, natural disasters, and the like. The "shock doctrine" is the conservative plan to implement pro-corporate policies through the imposition and exploitation of mass trauma.

Klein cites a passage written by Friedman that "best summarizes the shock doctrine":

Only a crisis -- actual or perceived -- produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.
Much of the moral weight of Klein's indictment rests upon the morbid pleasure her subjects appear to take in the immiseration that permits their success. Klein observes that in the wake of Hurricane Katrina, Friedman described the ruin of the New Orleans school system thusly: "This is a tragedy. It is also an opportunity to radically reform the education system." On the very next page, she calls Friedman's plan "the treatment of disasters as exciting market opportunities." The reader is meant to recall Friedman's use of the word "opportunity," and forget his use of the word "tragedy." Reading Klein, you might almost conclude that Friedman devised the hurricane.

Klein repeatedly implies that there is something immoral about using crises to advance the right-wing agenda without explaining why this is so. After all, Friedman wanted to overhaul the New Orleans public education system because he believed, rightly or wrongly, that vouchers would work better. If you thought your house was horribly designed, and a tornado flattened it, would you rebuild it exactly as before?

The notion that crises create fertile terrain for political change, far from being a ghoulish doctrine unique to free-market radicals, is a banal and ideologically universal fact. (Indeed, it began its dubious modern career in the orbit of Marxism, where it was known as "sharpening the contradictions.") Entrenched interests and public opinion tend to run against sweeping reform, good or bad, during times of peace and prosperity. Liberals could not have enacted the New Deal without the Great Depression. Communist revolutions have generally come about in the wake of wars. The liberal economist Victor R. Fuchs once wrote that "national health insurance will probably come to the United States in the wake of a major change in the political climate, the kind of change that often accompanies a war, a depression, or large-scale civil unrest."

Fuchs did not mean that the public would never accept universal health insurance unless they had been brutalized into doing so. Nor was his observation evidence that he longed for disaster to befall the United States. Most American liberals today would admit that the sorry state of the American economy, foreign policy, and political life has created a golden opportunity for progressive reform. There is nothing odious about this. Yet Klein takes analogous observations from conservatives as proof that the right "prays for crisis the way drought-stricken farmers pray for rain."

Klein locates the beginnings of the shock doctrine in Chile, where in 1973 a military coup led by Pinochet displaced a democratically elected socialist government, and implemented economic policies urged upon him by Friedman and other Chicago School free-marketers. Chile offers the closest example of a case study that fits Klein's thesis. But even here the facts do not fit quite as tightly as she would like. Through most of her narrative, Klein depicts Pinochet as a pure puppet of Friedman. "For the first year and a half," she writes, "Pinochet faithfully followed the Chicago rules." But a half-dozen pages later, while explaining away the impressive economic growth that followed under Pinochet, she writes that "it's clear that Chile never was the laboratory of 'pure' free markets that its cheerleaders claimed." More generally, she seems incapable of understanding that authoritarianism of the sort represented by Pinochet may be as moved by a lust for power as by a lust for profits. They are not the same phenomenon.

From that starting point, Klein proceeds to interpret most of the events of the last thirty years as repetitions of the same inexorable pattern: elites forcing laissez-faire policies upon unwilling citizens. Her interpretive method is an extremely crude sort of Marxist economicism. The Tiananmen Square uprising, in Klein's telling, was not a pro-democracy movement so much as an explosion of opposition to privatization, and Beijing crushed the movement not in the service of autocracy but in the service of neoliberalism. "It wasn't Communism [Deng] was protecting with his crackdown," she writes, "but capitalism."

Klein's model leaves little room for the non-economic varieties of conflict, such as ethnic or sectarian strife. "Some of the most infamous human rights violations of this era," she observes, "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 freemarket 'reforms.'" One example Klein cites in her list is the U.S. intervention in Kosovo. But the human rights violation that she deplores was not the ethnic cleansing of Albanians, it was the American response. And what motivated the American attempt to stop the mass atrocity? Capitalism, of course: "The NATO attack on Belgrade in 1999 created the conditions for rapid privatizations in the former Yugoslavia -- a goal that predated the war." (Klein assures her readers that economics was not the "sole motivator" for the war, but her analysis makes no room for any such complication.)

Almost nothing can confound Klein's cookie cutter. You might have thought that, say, the Israeli-Palestinian conflict is rooted in non-monetary things such as land, religion, security, and ideology. But it is not, as the doctrinaire Klein confidently explains. Israel made a peace deal with the Palestinians in 1993 because "Israeli corporations were tired of being held back by war," and thought that if Israel made peace, it would "be perfectly positioned to be the Middle East's free-trade hub." But then what changed? The answer is the Israeli economy: "the flipping of Israel's export economy from one based on traditional goods and high technology to one disproportionately dependent on selling expertise and devices related to counterterrorism." Klein takes an unusual view of the causal relationship. Rather than terrorism instigating the rise of Israel's counterterrorism sector, Klein sees the relationship working in reverse: "the rapid expansion of the high-tech security economy created a powerful appetite inside Israel's wealthy and most powerful sectors for abandoning peace in favor of fighting a continual, and continuously expanding, War on Terror." So Israel decided to provoke bomb blasts in its buses and pizzerias largely -- again, she dutifully concedes that it was not the sole factor -- because building blast walls and bomb detectors became more profitable than living in peace.

The heart of Klein's book is her analysis of the Iraq war, which she regards as the state-of-the-art application, the definitive demonstration, of the shock doctrine. In Klein's telling, the war is merely a forcible expansion of economic globalization. "The architects of the invasion," she instructs, "had unleashed ferocious violence because they could not crack open the closed economies of the Middle East by peaceful means." Why, then, did Bush settle on Iraq, as opposed to some other closed Middle Eastern economy? Klein argues that other targets were indeed considered, but Bush chose Iraq owing to its "good central location for military bases," the American military's familiarity with the terrain from the Gulf war, and the fact that "Saddam's use of chemical weapons on his own people made him easy to hate."

Saddam's record of aggression of years of defying U.N. weapons inspectors does not make the list. "Saddam did not pose a threat to U.S. security," she writes, "but he did pose a threat to U.S. energy companies, since he had recently signed contracts with a Russian oil giant and was in negotiations with France's Total." Of course, Russia and France received contracts because they were working to undermine the sanctions regime and containment of Iraq. Why didn't Bush do the smart capitalist thing and simply make a deal with Saddam to drop the sanctions and cut American oil companies in on Iraq's oil reserves? Klein does not say.

It seems a little ridiculous to have to point out that Iraq is not exactly a new outpost of unfettered capitalism, with McDonald's and Exxon stations beckoning customers on every corner. The American master plan to transform Iraq into an "Arabic Singapore" has not worked out too well. But in full defiance of everything that we know about post-war Iraq, Klein proceeds to argue that what might superficially appear to be a total failure is, in fact, the successful culmination of the war's purposes. After the invasion, she explains, local democracy and inter-sectarian peace sprang out around the land. "Freedom," she remarks, "was becoming a reality." And from the perspective of the Bush administration, this was a problem. A truly democratic Iraq would never accept the laissez-faire economy that Washington wanted, and which was the entire purpose of the war. "So," Klein deduces, "Washington abandoned its democratic promises and instead ordered increases in the shock level."

Most critics of the war believe the notion of exporting democracy to a hostile Arab country was doomed in its conception. Some war supporters counter that the occupation could have succeeded, but bungling and incompetence caused it to fail. Klein is staking out a third, esoteric, highly original position. She says that the occupation could have succeeded, but the Bush administration did not want it to succeed. She is explicit about this:

Had the Bush administration kept its promise to hand over power quickly to an elected Iraqi government, there is every chance that the resistance would have remained small and containable, rather than becoming a countrywide rebellion. But keeping that promise would have meant sacrificing the economic agenda behind the war, something that was never going to happen.

Never? Ten pages later Klein concedes that, starting in December 2006, the Pentagon pulled a "dramatic about-face" and decided to re-open Iraq's state factories. Her cheerful insouciance in the face of such inconvenient facts points to an odd, slightly endearing quality of hers: she is conscientious enough to provide readers with facts that blow her thesis to smithereens, yet at the same time she is deluded enough not to notice the rubble of her thinking on the floor. So Klein makes a big deal about the comic but stillborn efforts by some Republican ideologues to transform Iraq into a flat-tax paradise, but she also notes that very little privatization actually took place in Iraq, and indeed that the Coalition Provisional Authority (CPA) had just three staffers devoted to privatizing Iraqi state industries. You would think this latter fact would undermine her belief that privatizing Iraq's economy was the central goal of the war. Alas, no. She thinks it just goes to show that "the CPA itself was too privatized to privatize Iraq."

So Klein attributes the failure to privatize Iraq to the CPA's incompetence, but she deems every other apparent failure to be a deliberate plan to foster chaos. To make this case, Klein runs through every one of the administration's post-war mistakes and explains why it was no mistake at all. Paul Bremer, the director of reconstruction and humanitarian assistance, decided to purge Baathists from the Iraqi government not because they were Baathists but because they were government employees. De-Baathification, Klein writes, "had little to do with anti-Saddamism and everything to do with free-market fervor." She further insists that the widespread episodes of looting in early 2003 "cannot be dismissed as mere oversights," but were part of the American plan to dismantle the Iraqi state.

With the pseudo-clarity of a conspiracy theorist, Klein dismisses out of hand the possibility of incompetence. There were memos warning the Army of looting, she ominously notes -- scanting the possibility that bureaucratic lethargy, rather than conscious intent, prevented the memos' warnings from being acted upon at ground level. That widespread bungling and mismanagement also followed Hurricane Katrina strikes Klein as proof of intentionality. "The fact that exactly the same errors as those made in Iraq were instantly repeated in New Orleans," she remarks, "should put to rest the claim that Iraq's occupation was merely a string of mishaps and mistakes marked by incompetence and lack of oversight."

Like every conspiracy theory, Klein's account of the fate of the world finally lacks internal logic. She points to one instance of American soldiers dismembering Iraqi passenger planes, inflicting "$100 million worth of damage to Iraq's national airline -- which was one of the first assets to be put on the auction block in an early and contentious partial privatization." If the point of the war was to hand control of Iraq's state assets to American corporations, wouldn't American troops be protecting those assets instead of destroying them?

But her most explosive charge is that Bush and his cabal are not merely the puppets of war profiteers, but war profiteers themselves. "Key Bush officials have maintained their interests in the disaster capitalism complex," thereby "allowing them to simultaneously profit from the disasters they help unleash." Klein provides two examples of such conflicts of interest. The first is that Donald Rumsfeld maintained his stock in Gilead Sciences, which holds the patent for Tamiflu, even while serving as defense secretary. Get it? Rumsfeld would stand to profit from a flu pandemic. But surely you don't have to be an admirer of Rumsfeld to doubt that he would engineer an outbreak of a deadly virus in order to fatten his stock portfolio. (Indeed, one suspects that even if Rumsfeld tried to pull off such a dastardly scheme, he would probably wind up creating a cure for the flu by mistake and render Tamiflu worthless.)

The other piece of data that Klein cites to support her charge that Bush administration officials profit from the disasters that they cause is Vice President Cheney's holdings in Halliburton. "When he leaves office in 2009 and is able to cash in his Halliburton holdings," she charges, "Cheney will have the opportunity to profit extravagantly from the stunning improvement in Halliburton's fortunes." This is a spectacular accusation -- that the driving force behind the Iraq war stands to gain millions of dollars from it. You might wonder why John Kerry did not make this an issue in 2004, or why liberal pundits have not crusaded against Cheney's blatant self-dealing. The answer, of course, is that it is completely untrue. Cheney has signed a legally binding agreement to donate to charity any increase in his Halliburton stock. (Honest -- you can look this up on factcheck.org.) Lord knows Rumsfeld and Cheney have committed enough actual misdeeds not to need indicting with imaginary ones.

Klein's strength as a writer is her interest in the ground level of things. Free-trade advocates rely heavily on abstract theory, lecturing us on comparative advantage and the relative virtues of Portuguese wine versus English wool; but Klein, no armchair radical, jets off to wretched places in the Third World and paints a picture of the reality of free trade in chilling detail. That picture ought to give pause to the most committed free-trader, even if she is hardly the only one to have noted these consequences. Yet when it comes to the right-wingers who constitute her book's main subject, Klein's reportorial spirit is nowhere to be found.

Klein's relentless materialism is not the only thing driving her to see conservatives merely as corporate puppets. She pays shockingly (but, given her premises, unsurprisingly) little attention to right-wing ideas. She recognizes that neoconservatism sits at the heart of the Iraq war project, but she does not seem to know what neoconservatism is; and she makes no effort to find out. Her ignorance of the American right is on bright display in one breathtaking sentence:

Only since the mid-nineties has the intellectual movement, led by the right-wing think-tanks with which [Milton] Friedman had long associations -- Heritage Foundation, Cato Institute and the American Enterprise Institute -- called itself "neoconservative," a worldview that has harnessed the full force of the U.S. military machine in the service of a corporate agenda.

Where to begin? First, neoconservative ideology dates not from the 1990s but from the 1960s, and the label came into widespread use in the 1970s. Second, while neoconservatism is highly congenial to corporate interests, it is distinctly less so than other forms of conservatism. The original neocons, unlike traditional conservatives, did not reject the New Deal. They favor what they now call "national greatness" over small government. And their foreign policy often collides head-on with corporate interests: neoconservatives favor saber-rattling in places such as China or the Middle East, where American corporations frown on political risk, and favor open relations and increased trade. Moreover, the Heritage Foundation has always had an uneasy relationship with neoconservatism. (Russell Kirk delivered a famous speech at the Heritage Foundation in which he declared that "not seldom has it seemed as if some eminent neoconservatives mistook Tel Aviv for the capital of the United States.") And the Cato Institute is not neoconservative at all. It was virulently opposed to the Iraq war in particular, and it opposes interventionism in foreign policy in general.

Finally, there is the central role that Klein imputes to her villain Friedman, both in this one glorious passage and throughout her book. In her telling, he is the intellectual guru of the shock doctrine, whose minions have carried out his corporatist agenda from Santiago to Baghdad. Klein calls the neocon movement "Friedmanite to the core," and identifies the Iraq war as a "careful and faithful application of unrestrained Chicago School ideology" over which Friedman presided. What she does not mention -- not once, not anywhere, in her book -- is that Friedman argued against the Iraq war from the beginning, calling it an act of "aggression."

It ought to be morbidly embarrassing for a writer to discover that the central character of her narrative turns out to oppose what she identifies as the apotheosis of his own movement. And Klein's mistake exposes the deeper flaw of her thesis. Friedman opposed the war because he was a libertarian, and libertarian conservatism is not the same thing as neoconservatism. Nor are the interests of corporations always, or even usually, served by war.

What makes Klein's thesis so odd, and so awful, is that in fact there is an unlimited supply of raw material, an abundant basis in reality, for the sorts of arguments that she wants to make. The last two decades certainly have seen the global spread of absolutist free-market ideology. Many of the newest adherents of this creed are dictators who have learned that they can harness the riches of capitalism without permitting the freedoms once thought to flow automatically from it. In the United States, the power of labor unions has withered, and prosperity has increasingly come to be defined as gross domestic product or the rise of the stock market, with the actual living standards of the great mass of the population an afterthought. Corporations, which can relocate nearly anywhere around the world, have used their flexibility as a cudgel against workers, who do not enjoy the privileges of mobility. Domestic policy has aggressively sharpened income inequalities, and corporations have enjoyed unfettered influence to a degree not seen in a hundred years. And the president did start a war without paying the slightest bit of attention to the country that he would be left occupying or how its people would react.

All these things are true. And all these things are enormous outrages and significant problems. It's just that they are not the same outrage or the same problem. And Naomi Klein's relentless lumping together of all her ideological adversaries in the service of a monocausal theory of the world ultimately renders her analysis perfect nonsense.

Jonathan Chait is a senior editor at The New Republic.


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