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

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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

monopolies. The purpose is to show how some community attributes might change over time. there was a coup with purges of opposition politicians and labor leaders. Here an idealized democracy increased the quality of life for the general population while decreasing exploitation. and economic depression. Sometimes inflation weakens the quality of life and contributes to a coup. hypothetical example and is not from the book. (The film Darwin's Nightmare depicts how bad poverty can be.) A wide variety of scenarios appear in the book. The quality of life dived. with portions of the population falling into a living hell. Potential benefits of competition are lost because of massive corruption. The loss of exploitation profits increased the national and international exploitation drive by the elite.citizens may be long-term tactics. . Sometimes a population recovers quickly and sometimes decades are required. Shock Graph: This is a rough. Sometimes the shocks are natural disasters. This was both to maximize exploitation and issue a global warning that real democracy would not be tolerated. The elite pushed through exploitation in the absence of democracy. Much of the profits came in the first round of plundering. After the exploitation drive became more powerful than democracy.

for a time.CONTRACT SECURITY GOVERNMENT. Political opposition: They forced out of power unless they sell-out.MARKET_REGULATION . it is the union organizers who are the targets for the worst abuse. The University of Chicago Economics Department: This served.ASSETS GOVERNMENT.SOCIAL_SERVICE GOVERNMENT. to legitimize extreme freedom for corporations. The World Bank and IMF: These institutions use national debts to make nations subservient to international corporations. Shocked population: The general population suffers high unemployment and brutality. Some may be tortured and killed.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. the exploitation targets listed below may be pursued. Targets: If a population is completely powerless. Unions: Because the unions oppose corporate power. 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. Western governments: The US and many other Western governments actively push exploitation.

ENVIRONMENTAL_REGULATI ON GOVERNMENT. enable abuses Prosecute the poor. torture. and safeguards CORPORATE.ACQUISITION LAND. etc. The quality of life drops. permit fraud.DEMOCRACY CORPORATE.business protections.HUMAN_RIGHTS GOVERNMENT. especially for the wealthy Control the news End environment al protections Cut rights. The security sector grows to contain the "surplus population" and the violent resistance. and individuals become politically weak.ENFORCEMENT A population's money goes to elites outside and within the region affected.ACQUISITION TAX MEDIA GOVERNMENT. price controls. . POLITICS.UNION Destroy unions Destroy political opposition Buy local companies cheaply Take land from the poor Reduce taxes.

This is a practice on some large projects.The tags are rough suggestions and not from the book. Black market finances. 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. the local culture is blamed. . Publicly owned wealth decreases as well. Defending Against Shock Exploitation: Many communities can reduce or resist exploitation. The corporate media often supports manipulation and exploitation. (This is as if New York City sold Central Park to government officials and then bragged that wealth had increased. The manipulation required to cause the exploitation is usually kept secret.) Asserting rights: The right to keep property and rebuild one's own community are important for ending mental shock and exploitation.) Inflation stopped: Though the extreme measures may have some numeric benefits. the effects are brutal on most of the population. Brutality did not happen: The abuses in the introduction and implementation of economic changes are omitted or denied. Organizing: The greatest fear of the establishment is an organized population. (The book does not emphasize this. Shock Spin: These are some of the ways the Chicago School edicts are defended. (Attacks unfortunately focus on organizers. and Iraqis are blamed for sectarian violence. The locals were unfit: When an economic disaster cannot be hidden. are also ignored. often kept by many governments. but this ignores the great numbers of people pushed into poverty. Disclosing backroom deals: Some exploitation is stopped by publicity. Russians are blamed for corruption. The Shock Doctrine mostly describes media control and selective law enforcement indirectly. Giving copies of Naomi Klein's book to responsible government officials might be valuable with statements of anger at the exploitation might help.      Knowing what comes next: Understanding the tactics helps individuals and communities to think and retain their identity. The wealth grabbed by the elite pushing the changes is also not discussed.     Wealth increased: Average individual holdings may increase because people at the top are becoming wealthier.) Additional Points:    Secrecy is a key weapon for abuse. claims of success ignore the lifeline of nationalized industry. The limited benefits to the greater economy are usually slow to appear. such as stabilizing inflation. but prevention is always worth considering. Prevention: Ideally communities would work with their elected officials BEFORE a well-known risk reaches a crisis. Tagging key activities is helpful for planning and monitoring. such as from Bolivia's drug trade. In addition.

"AntiCommunism" was the excuse. with some government control and large government spending. As many elite wanted to increase their wealth via corporate power. was the enemy. 3 Chile.  Market pressure: Investors and business executives quickly punish nations who resist corporate control. Uruguay. Friedman became a celebrated champion. were the enemies of economic freedom. Ch. US government and business people began supporting the teaching of Friedman's ideas in Latin America. 2 Chile preparation Part 2 The First Test: Birth Pangs (The Southern Cone of South America) Ch. Pinochet implemented many of the Chicago School's requests. 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 breaking down of an entity with the excuse of later rebuilding it is a theme in economic shock exploitation. There was massive violence." Mixed economies. The CIA backed the research and adopted some of its practices. with brutality used preemptively. and . as well as models for brutality. Much of this is automatic. but not all. Argentina coups States of Shock: The Bloody Birth of the Counterrevolution Pinochet helped lead Chile's coup on 9/11/1973 against Allende. an important person in helping to stabilize post-WW II economies. Early CIA coups are discussed. 1 torture Ch. 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. 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. Introduction Part 1 Two Shock Doctors: Research and Development The Torture Lab: Ewen Cameron. John Maynard Keynes. 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. People pushing for a coup in Chile eventually chose Suharto's coup in Indonesia as a model.

but life for the growing poor became worse. 6 The UK Ch. Ch. The Chicago School of Economics received little blame as well. increasing her political base. The general move was toward power for the rich. however.poverty grew. Pinochet went back Allende's mixed economy model because of unacceptable financial problems. spreading fear across unions." Eventually some people in the institutions admitted that nations lost financial stability. deregulation/free trade. The rich became richer. The region's regimes began to kill less publicly to reduce international pressure. but much manipulation and kidnapping followed. Some economic problems in Bolivia subsided. Some economic improvements probably came from a restarting of the large coca industry. and debt exploitation drastic cuts to government spending. The lesson was that a war could allow a democracy to be manipulated into accepting policies that benefited the few. Corporations sometimes drove the terror as well. . Corporations largely escaped connection with the brutality. In 1982. 8 practices. She also helped some renters to become owners of their units. Poverty grew in Argentina as a result. 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. Uruguay took up the Chicago model in 1974. Ch. "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. Thatcher dealt harshly with striking coal miners. 7 Bolivia Crisis Works: The Packaging of Shock Therapy The IMF and World Bank began to push hard for Chicago School 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. Argentina's military staged a coup in 1976 and also pushed through a partial implementation of the Chicago economic model. After this. National debt forced many governments to agree to international demands for "privatization. 4 coup effects Ch. 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. There were elections.

the Communist Party faced a growing desire for both democracy and an end to the extreme corruption growing under the new capitalist model. Western governments did not help. While We Trembled. The chapter also mentions how some general international manipulation became public. 11 Russia Ch. widespread Ch. This was done against the wishes of most party members. the IMF did find this to be a great opportunity for "reform. it was in fact moderates defending social services against Yeltsin's extreme version of capitalism. 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. 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. crushed demonstrators in Tiananmen Square and beyond. To push Canada to cut government services.. By the time of the 1999 Seattle World Trade Organization Talks. Francis Fukuyama described the end of economic choices in the world. Once negotiations began with the racist government. South Korea . Yeltsin used the military to end any hope of government for the people. 12 Russia. Deng Xiaoping..Part 4 Lost in Transition: While We Wept. 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." In general poverty grew with the level of adoption of the Chicago School programs. China Ch. 13 Thailand. the government had already reduced social services. In China. 9 Poland. however. many business institutions began fabricating a "debt wall" crisis. While We Danced Slamming the Door on History: A Crisis in Poland. key targets. 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. By the time the manipulations became public. . however. The economy moved closer to the Chicago School model after this. international pressure pushed Lech Walesa's Solidarity Party to follow Chicago school practices. Unemployment shot up. The quality of life worsened significantly. Labor leaders were. Canada Ch. the ANC agreed to many financial obligations and government limitations. A Massacre in China In Poland. as usual. Bonfire of a Young Democracy: Russia Chooses "The Pinochet Option" Though Russian legislators were portrayed as hard-line Stalinists opposing the liberal Yeltsin. The formal agreements crippled the ANC's ability to make significant long-term improvements. after years of increasing the capacity for internal repression. Back in the US. 10 South Africa Ch.

Bush administration. Bush's strategy was an "anti-Marshall Plan. The bigger the shock of occupation. 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. The 9/11 attacks in the US briefly raised the status of government employees. In Sri Lanka the tourism industry won. 14 security Ch. Ch. US-backed brutality increased under "the Salvador option. 19 Asian Tsunami Blanking the Beach: "The Second Tsunami" This chapter describes exploitation of the 2004 Asian Tsunami.opposition began to limit shock exploitation. The CPA itself was too understaffed to function. "Freedom" was meant for corporations. The local population lost government services and jobs. Full Circle: From Blank Slate to Scorched Earth Bremer selectively stopped democracy when it threatened the exploitation planned by the US. with little publicity." This was in part because Rumsfeld had reduced the invasion forces below what career military officers recommended. however. Ch. and Iraq began to escape US control. This helped to create a financial incentive to suspect and arrest people around the world without proof.S.: The Homeland Security Bubble Corporations began taking large amounts of money from the US government. but did not return the money they wasted. 18 Iraq hell Part 7 The Movable Green Zone: Buffer Zones and Blast Walls Ch. There was no respect for anything Iraqi. thanks to people existing in both the government and the business world at the same time. and the poor were driven from the . Eventual attempts to employ the local population were too late. Part 5 Shocking Times: The Rise of the Disaster Capitalism Complex Shock Therapy in the U.A. 17 Iraq plunder Ch. The W. The economic stress created much of the resistance." causing mass unemployment. increased the funding of the private security industry quickly. the better the results for the US planners. 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. Kidnapping became a way for local thugs and police to make money. There was no accountability to the international companies making a profit. Ideological Blowback: A very Capitalist Disaster W. 15 US cronyism Part 6 Iraq. Bush administration progressed. Many US corporations left the area.

beaches and into shanty towns." no longer needed for labor. The poor of the Maldives also fared quite badly following the 2004 tsunami. Shock Wears Off: The Rise of People's Reconstruction The book concludes with how populations are refusing to accept radical market ideas and dictatorships. . The W. Having some elite backers of shock exploitation charged and sometimes convicted of crimes is removing the "respectability" of the abuses as well. Like Iraq. Key characteristics of The Shock Doctrine include:    The "Economic freedoms" pushed by the Chicago University School of Economics. At the local level some rich communities are even outsourcing government functions to corporations completely. An emphasis on business power. This is termed the "Davos Dilemma. Immigrants from Russia have made Palestinians "surplus people. however. The international elite's model for exploitation had been how Honduras responded to Hurricane Mitch. and a civil war eventually restarted. and with large technology exports. Losing the Peace Incentive: Israel as Warning Recently peace has not boosted the world's economy the way disasters and terrorism have. The book ends with examples of people rebuilding their communities themselves." Israel has led the way in profiting from this area. The profits from Israel's security sector have been huge. with domestic peace seen as less valuable than long-term conflict. Some governments are scapegoating minorities as a way to handle economic and political pressure. Ch. Disaster Apartheid: A world of Green Zones and Red Zones This chapter describes how New Orleans suffered after Hurricane Katrina. 20 New Orleans Ch. the local population was largely bypassed for the rebuilding work. Aid did not make it to the little person. Extreme short-term plundering." The chapter describes how hollow the US national government has become. 21 Israel Conclusion Minor Notes Scope: The current shock system is different than the models of exploitation and control used before. New Orleans became divided into rich "green zones" and poor "red zones. Bush administration cut the city's social services while giving corporations a wide array of large contracts. especially when such conditions would repeat previous horrors.

The list is only partially from the book. often turn a government toward business and away from the needs of its population. George Lakoff's Writings: In publications such as Moral Politics Lakoff describes the emotional packaging of economic "freedom. Financial institutions. US authors sympathetic to the downtrodden usually focus on US-backed coups and open wars.  The backing of the IMF and World Bank. Financial agreements. and academia drive much of the exploitation. National resources are more important than expanding the national borders. which probably makes the Vietnam War rather distant to her.    West Coast earthquake prone areas Iran: The oil wealth and lack of Western business control makes the country a target. will tentatively include a partial history of US establishment backed abuses around the world. Crushed or anemic democracy. among other reasons. A target government need not be controlled directly by the US government. Michael Moore: Michael Moore's next film. Instead." The Strict Father Model is the one pushed with economic shock. Coups and wars are often part of this modern nightmare. The US does not generally raise its flag over areas exploited with shock. though US military bases are put in some areas. but not essential. (Lakoff focuses on how emotion and idealism drives politics in the US. scheduled for 2009.) Future Exploitation Targets: These some potential targets for future shock exploitation. . especially when driven by debt pressure. big business. Klein describes the rise of exploitation through business. Potentially many of the events in The Shock Doctrine could be covered. Naomi Klein is a fairly young Canadian. also. Venezuela: Oil wealth and social spending are important here.