stock here: The Book is Called “The Shock Doctrine” by Naomi Klein.
It 697 pages, she goes into great detail on each shock event sequence.
This is a summary
The Shock Doctrine” by Naomi Klein explores the concept of shock events as catalysts for political and economic change. Klein argues that certain crises, whether natural disasters, wars, or economic meltdowns, create opportunities for powerful elites to push through radical policies that might be met with resistance in normal circumstances.
Milton Friedman is a prime character, who was influenced by John Keynes
Here’s a summary of some key shock events discussed in the book:
- Chilean Coup (1973): Klein examines the U.S.-backed coup in Chile that ousted President Salvador Allende. The ensuing military dictatorship, led by Augusto Pinochet, provided an environment conducive to implementing free-market economic policies under the guidance of economists trained at the University of Chicago. The Chicago Boys played a pivotal role in Chile’s economic transformation under General Augusto Pinochet. Trained at the University of Chicago under Milton Friedman, these economists implemented radical free-market policies, including privatization, deregulation, and reductions in government spending. This transformation occurred in the aftermath of the U.S.-backed coup that ousted President Salvador Allende.
- Argentina’s Military Junta (1976-1983): The book delves into the “Dirty War” in Argentina, where the military junta used extreme violence and repression to suppress dissent. Amidst the chaos, economic reforms were implemented following the neoliberal model, with drastic consequences for the population.
Similar to the situation in Chile, the Chicago Boys influenced economic policies during Argentina’s military dictatorship. The junta implemented neoliberal economic reforms, following the guidance of economists with ties to the Chicago School. Klein argues that these policies disproportionately benefited the wealthy elite while causing significant social and economic hardships for the general population.
- Post-Soviet Russia (1990s): Klein analyzes the economic shock therapy applied in Russia after the collapse of the Soviet Union. The sudden shift from a planned to a market economy resulted in widespread poverty and the rise of oligarchs who exploited the privatization of state assets.
Gorbachev has started a peaceful and hopeful process of a democratic revolution, but for the powers that be in order to push through a Chicago School economic program, the democratic revolution had to be violently interrupted and radically reversed. They used Yletsin, the President of Russia, to successfully force Gorbachev’s resignation as the head of the USSR, by dissolving the USSR. They literally called Yeltsins team “The Chicago Boys” The first of 3 shocks — this one to the Russian Pysche. The second Blitzkrieg shock came just a week later, when all price controls were lifted although there were 225,000 State Owned companies. Within a year, the average Russian lost so much because the money was devalued, they had to cut their consumption by 40%. The setup for the 3rd shock was Yeltsin dissolved the parliament and cancelled the constitution. Predictably, this resulted in much fighting, ending with Yeltsin’s army (he had doubled their wages), gunning down 100 citizens, blockading the parliament and eventually stormed it and burning it to the ground.
The shock therapy applied in Russia after the collapse of the Soviet Union reflects Chicago School principles. Economic reforms were influenced by advisors with ties to the Chicago School, leading to rapid privatization, liberalization, and marketization. The outcome was a concentration of wealth among a few oligarchs and widespread poverty.
- South African Transition (1990s): The book discusses the transformation of South Africa from apartheid to democracy. Klein argues that economic shock therapy was applied, benefiting a small elite while leaving many black South Africans economically marginalized.
While not explicitly mentioned in “The Shock Doctrine,” neoliberal economic policies influenced by the Chicago School played a role in post-apartheid South Africa. Economic reforms led to privatization and market-oriented measures that, according to some critics, did not address the systemic inequalities inherited from apartheid.
- Asian Financial Crisis (1997-1998): Klein explores the impact of the financial crisis on countries like Indonesia, South Korea, and Thailand. The International Monetary Fund (IMF) interventions are referred to Chicago Style Tactics — during this period are criticized for promoting free-market policies at the expense of social welfare. One example is the IMF withheld money from Korea until All 4 presidential candidates all agreed they would follow all rules of the IMF. They “lost their autonomy” and it became known as the “National Humiliation Day”. After that, for Indonesia, the IMF “leaked” to the Washington Post, the prediction that all IMF money to Indonesia would be stopped, and that “rumor” crashed Indonesia’s currency by 25% in one day. This caused strongman Suharto to cave in and accept the guidance of the IMFs team, referred to as the Berkeley Mafia, see image above (credit to ChatGDP for the nice summary).
- Hurricane Katrina (2005): Klein examines the aftermath of Hurricane Katrina in the United States, particularly the privatization of public services in New Orleans. The disaster provided an opportunity for corporate interests to reshape the city’s infrastructure and services.
- Iraq War (2003): The book discusses the Iraq War as an opportunity for private corporations to profit through the reconstruction efforts. The war and subsequent occupation created a space for implementing free-market policies in Iraq. ChatGDP —
- the economic policies implemented in Iraq were aligned with neoliberalism, drawing on ideas that resonate with the Chicago School. Some of the key individuals associated with these economic reforms in Iraq include:
- Paul Bremer: L. Paul Bremer was the head of the Coalition Provisional Authority (CPA) in Iraq from May 2003 to June 2004. He played a crucial role in overseeing the political and economic reconstruction of Iraq. Bremer implemented significant economic reforms, including the removal of trade barriers, privatization of state-owned enterprises, and the introduction of a new currency.
- Thomas C. Foley: Thomas C. Foley served as the Coalition Provisional Authority’s Director of Private Sector Development in Iraq. He played a role in promoting economic liberalization, including the privatization of state-owned enterprises and the restructuring of Iraq’s economy along market-oriented lines.
- Andrea Koppel: Andrea Koppel served as the Director of Communications and Senior Advisor to L. Paul Bremer in the Coalition Provisional Authority. While her role was primarily in communications, the economic policies implemented during her time were in line with neoliberal principles.
- Yonadam Kanna: Yonadam Kanna, an Iraqi-American, served as the Minister of Industry and Minerals in the Iraqi Interim Government. He played a role in advocating for economic liberalization policies, including the privatization of state-owned enterprises in the industry sector.
- While these individuals were not necessarily direct representatives of the Chicago School, their roles and the economic policies they advocated for in Iraq shared similarities with neoliberal principles associated with the Chicago School of Economics. The policies implemented included reducing state intervention, promoting privatization, and adopting market-oriented reforms, which were hallmarks of the Chicago School’s approach to economic policy.
In “The Shock Doctrine,” Klein argues that elites often exploit moments of crisis to advance their economic and political agendas, taking advantage of the disorientation and vulnerability of affected populations. The book suggests a pattern of using shock events to push through policies that may not be accepted in more stable times.
stock here: Klein does imply from the USA is currently being shocked, perhaps for the great reset. I asked ChatGDP to summarize these Shocks. Something that would have taken me 30 minutes or more….is done below in seconds. Thanks ChatGDP!
Here is an analysis that considers elements from Klein’s book as well as broader observations:
1. Economic Disruption and Inequality:
- Klein’s Perspective: In “The Shock Doctrine,” Klein argues that shocks, such as economic crises or disasters, can be exploited by powerful interests to push through neoliberal economic policies that benefit the elite. She suggests that during times of crisis, attention is diverted, allowing for the implementation of policies that might face resistance in normal circumstances.
- COVID-19 Context: The COVID-19 pandemic indeed led to economic disruption, with small businesses being disproportionately affected by lockdowns. The closure of non-essential businesses and restrictions on movement created economic hardships, contributing to a concentration of economic power in larger corporations, which often have the resources to weather such shocks.
2. Big Business Profits:
- Klein’s Perspective: Klein discusses how corporations, especially those with close ties to governments, can benefit from crises. The concept of “disaster capitalism” suggests that certain entities thrive amid chaos by securing lucrative contracts or exploiting policy changes.
- COVID-19 Context: Large corporations, particularly those in the technology, pharmaceutical, and e-commerce sectors, experienced significant gains during the pandemic. The acceleration of trends like remote work, e-commerce, and digital services further consolidated the power of tech giants, raising concerns about their influence.
3. Government Overreach:
- Klein’s Perspective: Klein highlights instances where governments use crises to expand their powers, often at the expense of civil liberties. She argues that emergencies provide cover for the implementation of measures that would otherwise face public resistance.
- COVID-19 Context: Governments worldwide implemented emergency measures to contain the spread of the virus, including lockdowns, surveillance, and restrictions on movement. Concerns have been raised about the potential erosion of civil liberties and the extension of emergency powers beyond the immediate crisis.
4. Fear and Control:
- Klein’s Perspective: Klein discusses how fear can be a tool to manipulate public opinion and facilitate the acceptance of drastic policy changes. In times of crisis, the urgency to address perceived threats may lead to a greater acceptance of government intervention.
- COVID-19 Context: The fear of a global health crisis prompted unprecedented government actions. The urgency to control the spread of the virus contributed to public acceptance of measures that, in normal circumstances, might have faced more resistance.