• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
Download
 
The Klein Doctrine
The Rise of Disaster Polemics
by Johan Norberg
 Johan Norberg is a senior fellow at the Cato Institute and the author of, among other books,
InDefenseofGlobalCapitalism
.
No. 102
Naomi Klein’s
The Shock Doctrine
purports tobeanexposéoftheruthlessnatureoffree-marketcapitalism and its chief recent exponent, MiltonFriedman.Kleinarguesthatcapitalismgoeshandin hand with dictatorship and brutality and thatdictators and other unscrupulous political fig-ures take advantage of “shocks”—catastrophesrealormanufactured—toconsolidatetheirpowerandimplementunpopularmarketreforms.Kleincites Chile under General Augusto Pinochet,Britain under Margaret Thatcher, China duringthe Tiananmen Square crisis, and the ongoingwarinIraqasexamplesofthisprocess.Klein’sanalysisishopelesslyflawedatvirtual-lyeverylevel.Friedman’sownwordsrevealhimtobe an advocate of peace, democracy, and individ-ual rights. He argued that gradual economicreforms were often preferable to swift ones andthat the public should be fully informed aboutthem, the better to prepare themselves inadvance. Further, Friedman condemned thePinochetregimeandopposedthewarinIraq.Klein’s historical examples also fall apartunder scrutiny. For example, Klein alleges thattheTiananmenSquarecrackdownwasintendedto crush opposition to pro-market reforms,when in fact it caused liberalization to stall foryears. She also argues that Thatcher used theFalklands War as cover for her unpopular eco-nomic policies, when actually those economicpolicies and their results enjoyed strong publicsupport.Klein’s broader empirical claims fare no bet-ter. Surveys of political and economic freedomreveal that the less politically free regimes tendtoresistmarketliberalization,whilethosestateswith greater political freedom tend to pursueeconomic freedom as well.
May 14, 2008
Executive Summary
Cato Institute•1000 Massachusetts Avenue, N.W.•Washington, D.C. 20001•(202) 842-0200
 
Introduction
Since its publication last fall, CanadianauthorNaomiKlein’sbook
TheShockDoctrine:The Rise of Disaster Capitalism
has already become a bible for young anti-capitalistactivists. Established reviewers have praised itas well. As philosopher John Gray explains in
The Guardian
: “There are very few books thatreally help us understand the present.
TheShock Doctrine
is one of those books.”
1
In the
 NewYorkTimes
, Nobel laureate Joseph Stiglitzwritesthatitis“arichdescriptionofthepolit-ical machinations required to force unsavory economic policies on resisting countries.”
2
 According to Amazon.com’s editors, it is oneofthe10bestnonfictionbooksof2007.Klein’sthesisisthateconomicliberalizationis unpopular and, therefore, can only win by deceivingorcoercingvoters.Inparticular,free-market ideas rely on crises. In a time of a nat-ural disaster, war, or military coup, people aredisoriented and confused and fight for theirown immediate survival or wellbeing, settingthe stage for corporations, politicians, andeconomists to push through trade liberaliza-tion, privatization, and lower public spendingwithout facing any opposition. According toKlein, “neoliberal” economists welcomedHurricaneKatrina,the2004Indonesiantsuna-mi,theIraqWar,andtheSouthAmericanmil-itary coups of the 1970s as opportunities toerase past policies and introduce radical free-market models. If wars and disasters aren’tenough to shock the citizens, neoliberals arepurportedly happy to see the opponents of reform being attacked and tortured into sub-mission. The chief villain in Klein’s story isMiltonFriedman,theChicagoeconomistwhodid more than anyone in the 20th century topopularizefree-marketeconomics.Tomakehercase,Kleinexaggeratesthefree-marketreformsthattakeplaceintimesofcrisis,often by ignoring central events and rewritingchronologies. She uses loose metaphors andwilddistortionstoclaimthatfreemarketsarea form of violence. She confuses libertarianismwith corporatism and neoconservatism andblames Milton Friedman for encouragingreformbystealth.Todoso,sheengagesinoneofthemostmalevolentdistortionsofathinkerthat has been done in a major work in recentyears.Kleintriestoportraythemild-manneredand freedom-loving Dr. Friedman as a cold-hearted,war-mongeringMr.Hyde.
Dr. Friedman and Mr. Hyde
 AccordingtoKlein,MiltonFriedmanwel-comed crisis as a way of making people dis-oriented and confused. With the public thuspreoccupied,theeconomycouldbedrastical-ly liberalized without any concern for thehumancosts.Klein’sExhibitAagainstFried-man is a quote from “one of his most influ-ential essays”:Only a crisis—actual or perceived—pro-duces real change. When that crisisoccurs,theactionsthataretakendependontheideasthatarelyingaround.That,Ibelieve,isourbasicfunction:todevelopalternatives to existing policies, to keepthem alive and available until the politi-cally impossible becomes politically inevitable.
3
This is “the shock doctrine,” according toKlein, the very source of inspiration for allthose reformers who apparently welcomeconflicts, disasters, and war. In the not very subtleshortfilmthataccompaniesthebook,Klein shows this quote over images of pris-oners being tortured and given electricalshocks,togivetheimpressionthatthisisthekind of crisis Friedman would welcome.
4
But the quote is not from one of Fried-man’s most influential essays. It’s from the very brief introduction to the 1982 edition of 
Capitalism and Freedom
(which was originally published in 1962).
5
 And it’s not about wel-coming disasters, it’s about pointing out therelatively uncontroversial fact that peoplechange their ways when it seems like the oldways fail—something Klein does not contra-dict. In fact, from the example that Friedman
2
Klein’s thesisis that economicliberalizationis unpopularand, therefore,can only win by deceiving orcoercing voters.
 
provided (that interest in free markets grew ascommunism failed in China and the SovietUnion, and the United States and UnitedKingdomsufferedfromstagflation),itisobvi-ous that Friedman was not advocating shocksand crises to force anyone to abandon the oldways that they cling to, but merely observingpeoplethemselvesdemandedchangewhenoldsystemsfailed.Butintherestofthebook,Kleinpretends that she has proved that Friedmanwasinfavorofdeliberatelyprovokingcrises.Klein also provides supporting quotes tostrengthen this interpretation, and they aretakenoutofcontextinthesamemanner.Shepretends that Friedman’s concept of the“tyranny of the status quo” means the tyran-ny of voters, and that a crisis was needed forpoliticianstobypassthedemocraticprocess.
6
For Friedman, the tyranny of the status quowassomethingentirelydifferent—anirontri-angle of politicians, bureaucrats, and specialinterestgroups(businesses,forexample)whoadvance their own welfare at the voters’expense.
7
When Klein talks about Friedman’s sug-gestions to reduce inflation, she writes,“Friedman predicted that the speed, sudden-ness and scope of the economic shifts wouldprovokepsychologicalreactionsinthepublicthat ‘facilitate the adjustment.’”
8
Klein gives the impression that Friedmanwas brutal and wanted to inflict pain to dis-orient people and push his reforms through.Theuseofthewords“psychologicalreactions”isalsoimportant,becauseKleintriestoassoci-ate liberal reforms with psychological tortureand electrical shocks. But the quote in itsentirety shows that Friedman had something very different in mind. He actually wrote thatifagovernmentchoosestoattackinflationinthis way: “I believe that it should be an-nouncedpubliclyingreatdetail....Themorefully the public is informed, the more will itsreactions
 facilitate the adjustment 
.”
9
In other words, if the people are
not 
igno-rant, and
not 
disoriented, but fully informedof the reform steps, they would facilitate theadjustment bychangingtheirbehaviorwhenit comes to negotiations, saving, consuming,andsoon.Friedman’sviewwasthecompleteopposite of what Klein pretends it is.
10
In the same manner, Klein conveys theimage of the “Chicago school” of economicsas a home for dogmatists and fundamental-ists, brainwashing their students and plottingtheirglobalpowergrab. Therealityis that theChicago school became eminent not just forits quality but for its openness. All ideas werewelcome as long as you could argue well.Friedmanhimselflisted“tolerancefordiversi-ty” as one of the reasons for the ChicagoSchool’s success.
11
 After having talked toFriedman’s former colleagues and students,hisbiographerLannyEbensteinwritesthatheencouraged students to learn from otherapproaches than his own and he didn’t try toconvertthemtohispositions.Hismethodwastherigoroustestingofhypotheseswithempir-ical data, and he was quick to admit mistakeswhensomeoneelsefoundtheminhiswork.
12
Six Days in Chile
Klein cites the influence of Milton Fried-man’s economic views on Augusto Pinochet’smilitary dictatorship in Chile in the 1970s asevidencethatfreemarketsrelyontyrannyandtorture. She writes that Friedman acted as“adviser to the Chilean dictator.”
13
This iswrong. Friedman never worked as an adviserand never accepted a penny from the Chileanregime. He even turned down two honorary degreesfromChileanuniversitiesthatreceivedgovernment funding because he thought itcould be interpreted as a support for theregime.However, he was in Chile for six days inMarch 1975 to give public lectures, invited by a private foundation. When he was there healso met once with Pinochet for around 45minutes,andwrotehimoneletterafterwards,arguing for a plan to end hyperinflation andliberalize the economy. That was the samekind of advice Friedman gave to communistdictatorships like the Soviet Union, China,and Yugoslavia, yet nobody would claim hewasacommunist.
3
Friedman neverworked as anadviser toPinochet andnever accepted apenny from theChilean regime.
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...