The Shock Doctrine Flashcards
The Shock Doctrine argues that neoliberal capitalism, the ideological love affair with free markets espoused by disciples of the late economist Milton Friedman, was so destructive of social bonds, and so beneficial to the 1% at the expense of the 99%, that a population would only countenance it when in a state of shock, following a crisis – a natural disaster, a terrorist attack, a war.
Milton Friedman, and American economist at the University of Chicago, was the grand guru for the movement for unfettered capitalism and the man credited with writing the rulebook for the contemporary, hypermobile global economy.
I call these orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities “disaster capitalism”.
For more than 3 decades, Friedman and his powerful followers had been perfecting this very strategy: waiting for a major crisis, then selling off pieces of the state to private players, while citizens were still reeling from the shock, then quickly making the “reforms” permanent.
He first learned how to exploit a large-scale shock or crisis in the mid-seventies, when he acted as adviser to the Chilean dictator, General Augusto Pinochet. Friedman advised Pinochet to impose a rapid-fire transformation of the economy - tax cuts, free trade, privatised services, cuts to social spending and deregulation.
Disaster capitalists see a blank slate or a clean sheet. They confuse rubble with renewal.
The new preferred method of advancing corporate goals has become using moments of collective trauma to engage in radical social and economic engineering.
The fundamantalist form of capitalism (exploiting crisis) has always needed disasters to advance.
In Argentina in the 70’s the junta’s “disappearance” of 30,000 people, most of them leftist activists, was integral to the imposition of the country’s Chicago school policies.
The bottom line is that while Friedman’s economic model is capable of being partially imposed under democracy, authoritarian condtions are required for the implementation of its true vision. This ideological crusade was born in the authoritarian regimes of South America.
Now wars and disaster responses are so fully privatised that they are themselves the new market.
In scale, the disaster capitalism complex is on a par with the “emerging market” and information technology booms of the nineties.
“Neoconservative” - a worldview that has harnessed the full force of the US military machine in the service of a corporate agenda.
In every country where Chicago School policies have been applied over the past 3 decades, what has emerged is a powerful ruling alliance between a few very large corporations and a class of mostly wealthy politicians.
Its main characteristics are huge transfers of public wealth to private hands, often accompanied by exploding debt, an ever-widening chasm between the dazzling rich and the disposable poor and an aggressive naitonalism that justifies bottomless spending on security.
This book is a challenge to the central and most cherished claim in the official story - that the triumph of deregulated capitalism has been born of freedom, that unfettered free markets go hand in hand with democracy.
If the most committed opponents of the corporatist economic model are systematically eliminated, whether in Argentina in the seventies or in Iraq today, that suppression is explained as part of the dirty fight against Communism or terrorism - almost never as the fight for the advancement of pure capitalism.
Pinochet had a knack for authoritarian rule but he knew next to nothing about economics.
What Chile pioneered under Pinochet was an evolution of corporatism: a mutually supporting alliance between a police state and large corporations, joining forces to wage all-out war on the 3rd power sector - the workers - thereby drastically increasing the alliance’s share of national wealth.
Argentina, Chile, Uruguay and Brazil were all run by US-backed military governments and were living laboratories of Chicago School economics.
According to Chile’s truth commission, established in May 1990, the secret police would dispose of some victims by dropping them into the ocean from helicopters after first cutting their stomach open with a knife to keep the bodies from floating.
In the run-up to Chile’s coup, the CIA bankrolled a massive propaganda campaign to paint Salvador Allende as a dictator in disguise, a Machiavellian schemer who had used constitutional democracy to gain power but was on the verge of imposing a Soviet-style police state from which the Chileans would never escape.
Since the fall of Communism, free markets and free people have been packaged as a single ideology that claims to be humanity’s best and only defense against repeating a history filled with mass graves, killing fields and torture chambers. Yet in the Southern Cone, the first place where the contemporary religion of unfettered free markets escaped from the basement workshops of the University of Chicago and was applied in the real world, it did not bring democracy - it was predicated on the overthrow of democracy in country after country.
The Tianemenan square massacre was the context from which China presided over its supercapitalist transformation.
A human impulse is to need stories. Narrative bias.
The idea of security is a myth but fear is still our enemy.
Studying history allows us to find patterns. It’s our roadmap. The way in which Spain dealt with the Madrid bombing and the manner in which the US dealt with 9/11 were completely polarised.
