The Shock Doctrine

The following essay is extracted from The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein (Henry Holt and Co., September 2007)

I met Jamar Perry in September 2005, at the big Red Cross shelter in Baton Rouge, Louisiana. Dinner was being doled out by grinning young Scientologists, and he was standing in line. I had just been busted for talking to evacuees without a media escort and was now doing my best to blend in, a white Canadian in a sea of African-American southerners. I dodged into the food line behind Perry and asked him to talk to me as if we were old friends, which he kindly did.

Born and raised in New Orleans, he’d been out of the flooded city for a week. He and his family had waited forever for the evacuation buses; when they didn’t arrive, they had walked out in the baking sun. Finally they ended up here, a sprawling convention centre now jammed with 2,000 cots and a mess of angry, exhausted people being patrolled by edgy National Guard soldiers just back from Iraq.

The news racing around the shelter that day was that the Republican Congressman Richard Baker had told a group of lobbyists, “We finally cleaned up public housing in New Orleans. We couldn’t do it, but God did.” Joseph Canizaro, one of New Orleans’ wealthiest developers, had just expressed a similar sentiment: “I think we have a clean sheet to start again. And with that clean sheet we have some very big opportunities.” All that week Baton Rouge had been crawling with corporate lobbyists helping to lock in those big opportunities: lower taxes, fewer regulations, cheaper workers and a “smaller, safer city” — which in practice meant plans to level the public housing projects. Hearing all the talk of “fresh starts” and “clean sheets”, you could almost forget the toxic stew of rubble, chemical outflows and human remains just a few miles down the highway.

Over at the shelter, Jamar could think of nothing else. “I really don’t see it as cleaning up the city. What I see is that a lot of people got killed uptown. People who shouldn’t have died.”

He was speaking quietly, but an older man in line in front of us overheard and whipped around. “What is wrong with these people in Baton Rouge? This isn’t an opportunity. It’s a goddamned tragedy. Are they blind?” A mother with two kids chimed in. “No, they’re not blind, they’re evil. They see just fine.”

One of those who saw opportunity in the floodwaters of New Orleans was the late Milton Friedman, grand guru of unfettered capitalism and credited with writing the rulebook for the contemporary, hyper-mobile global economy. Ninety-three years old and in failing health, “Uncle Miltie”, as he was known to his followers, found the strength to write an op-ed for the Wall Street Journal three months after the levees broke. “Most New Orleans schools are in ruins,” Friedman observed, “as are the homes of the children who have attended them. The children are now scattered all over the country. This is a tragedy. It is also an opportunity.”

Friedman’s radical idea was that instead of spending a portion of the billions of dollars in reconstruction money on rebuilding and improving New Orleans’ existing public school system, the government should provide families with vouchers, which they could spend at private institutions.

In sharp contrast to the glacial pace with which the levees were repaired and the electricity grid brought back online, the auctioning-off of New Orleans’ school system took place with military speed and precision. Within 19 months, with most of the city’s poor residents still in exile, New Orleans’ public school system had been almost completely replaced by privately run charter schools.

The Friedmanite American Enterprise Institute enthused that “Katrina accomplished in a day . . . what Louisiana school reformers couldn’t do after years of trying”. Public school teachers, meanwhile, were calling Friedman’s plan “an educational land grab”. 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.”

Privatizing the school system of a mid-size American city may seem a modest preoccupation for the man hailed as the most influential economist of the past half century. Yet his determination to exploit the crisis in New Orleans to advance a fundamentalist version of capitalism was also an oddly fitting farewell. For more than three 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.

In one of his most influential essays, Friedman articulated contemporary capitalism’s core tactical nostrum, what I have come to understand as “the shock doctrine”. He observed that “only a crisis — actual or perceived — produces real change”. When that crisis occurs, the actions taken depend on the ideas that are lying around. Some people stockpile canned goods and water in preparation for major disasters; Friedmanites stockpile free-market ideas. And once a crisis has struck, the University of Chicago professor was convinced that it was crucial to act swiftly, to impose rapid and irreversible change before the crisis-racked society slipped back into the “tyranny of the status quo.” A variation on Machiavelli’s advice that “injuries” should be inflicted “all at once”, this is one of Friedman’s most lasting legacies.

Friedman first learned how to exploit a shock or crisis in the mid-70s, when he advised the dictator General Augusto Pinochet. Not only were Chileans in a state of shock after Pinochet’s violent coup, but the country was also traumatized by hyperinflation. Friedman advised Pinochet to impose a rapid-fire transformation of the economy — tax cuts, free trade, privatized services, cuts to social spending and deregulation.

It was the most extreme capitalist makeover ever attempted anywhere, and it became known as a “Chicago School” revolution, as so many of Pinochet’s economists had studied under Friedman there. Friedman coined a phrase for this painful tactic: economic “shock treatment.” In the decades since, whenever governments have imposed sweeping free-market programs, the all-at-once shock treatment, or “shock therapy”, has been the method of choice.

I started researching the free market’s dependence on the power of shock four years ago, during the early days of the occupation of Iraq. I reported from Baghdad on Washington’s failed attempts to follow “shock and awe” with shock therapy – mass privatization, complete free trade, a 15% flat tax, a dramatically downsized government. Afterwards I traveled to Sri Lanka, several months after the devastating 2004 tsunami, and witnessed another version of the same maneuver: foreign investors and international lenders had teamed up to use the atmosphere of panic to hand the entire beautiful coastline over to entrepreneurs who quickly built large resorts, blocking hundreds of thousands of fishing people from rebuilding their villages. By the time Hurricane Katrina hit New Orleans, it was clear that this was now the preferred method of advancing corporate goals: using moments of collective trauma to engage in radical social and economic engineering.

Most people who survive a disaster want the opposite of a clean slate: they want to salvage whatever they can and begin repairing what was not destroyed. “When I rebuild the city I feel like I’m rebuilding myself,” said Cassandra Andrews, a resident of New Orleans’ heavily damaged Lower Ninth Ward, as she cleared away debris after the storm. But disaster capitalists have no interest in repairing what once was. In Iraq, Sri Lanka and New Orleans, the process deceptively called “reconstruction” began with finishing the job of the original disaster by erasing what was left of the public sphere.

When I began this research into the intersection between super-profits and mega-disasters, I thought I was witnessing a fundamental change in the way the drive to “liberate” markets was advancing around the world. Having been part of the movement against ballooning corporate power that made its global debut in Seattle in 1999, I was accustomed to seeing business-friendly policies imposed through arm-twisting at WTO summits, or as the conditions attached to loans from the IMF.

As I dug deeper into the history of how this market model had swept the globe, I discovered that the idea of exploiting crisis and disaster has been the modus operandi of Friedman’s movement from the very beginning – this fundamentalist form of capitalism has always needed disasters to advance. What was happening in Iraq and New Orleans was not a post-September 11 invention. Rather, these bold experiments in crisis exploitation were the culmination of three decades of strict adherence to the shock doctrine.

Seen through the lens of this doctrine, the past 35 years look very different. Some of the most infamous human rights violations of this era, which have tended to be viewed as sadistic acts carried out by anti-democratic regimes, were in fact either committed with the intent of terrorizing the public or actively harnessed to prepare the ground for radical free-market “reforms”. In China in 1989, it was the shock of the Tiananmen Square massacre and the arrests of tens of thousands that freed the Communist party to convert much of the country into a sprawling export zone, staffed with workers too terrified to demand their rights. The Falklands war in 1982 served a similar purpose for Margaret Thatcher: the disorder resulting from the war allowed her to crush the striking miners and to launch the first privatization frenzy in a western democracy.

The bottom line is that, for economic shock therapy to be applied without restraint, some sort of additional collective trauma has always been required. Friedman’s economic model is capable of being partially imposed under democracy — the US under Reagan being the best example — but for the vision to be implemented in its complete form, authoritarian or quasi-authoritarian conditions are required.

Until recently, these conditions did not exist in the US. What happened on September 11 2001 is that an ideology hatched in American universities and fortified in Washington institutions finally had its chance to come home. The Bush administration, packed with Friedman’s disciples, including his close friend Donald Rumsfeld, seized upon the fear generated to launch the “war on terror” and to ensure that it is an almost completely for-profit venture, a booming new industry that has breathed new life into the faltering US economy. Best understood as a “disaster capitalism complex,” it is a global war fought on every level by private companies whose involvement is paid for with public money, with the unending mandate of protecting the US homeland in perpetuity while eliminating all “evil” abroad.

In a few short years, the complex has already expanded its market reach from fighting terrorism to international peacekeeping, to municipal policing, to responding to increasingly frequent natural disasters. The ultimate goal for the corporations at the centre of the complex is to bring the model of for-profit government, which advances so rapidly in extraordinary circumstances, into the ordinary functioning of the state — in effect, to privatize the government.

In scale, the disaster capitalism complex is on a par with the “emerging market” and IT booms of the 90s. It is dominated by US firms, but is global, with British companies bringing their experience in security cameras, Israeli firms their expertise in building hi-tech fences and walls. Combined with soaring insurance industry profits as well as super profits for the oil industry, the disaster economy may well have saved the world market from the full-blown recession it was facing on the eve of 9/11.

In the torrent of words written in eulogy to Milton Friedman, the role of shocks and crises to advance his world view received barely a mention. Instead, the economist’s passing, in November 2006, provided an occasion for a retelling of the official story of how his brand of radical capitalism became government orthodoxy in almost every corner of the globe. It is a fairytale history, scrubbed clean of the violence so intimately entwined with this crusade.

It is time for this to change. Since the collapse of the Soviet Union, there has been a powerful reckoning with the crimes committed in the name of communism. But what of the crusade to liberate world markets?

I am not arguing that all forms of market systems require large-scale violence. It is eminently possible to have a market-based economy that demands no such brutality or ideological purity. A free market in consumer products can coexist with free public health care, with public schools, with a large segment of the economy — such as a national oil company — held in state hands. It’s equally possible to require corporations to pay decent wages, to respect the right of workers to form unions, and for governments to tax and redistribute wealth so that the sharp inequalities that mark the corporatist state are reduced. Markets need not be fundamentalist.

John Maynard Keynes proposed just that kind of mixed, regulated economy after the Great Depression. It was that system of compromises, checks and balances that Friedman’s counter-revolution was launched to dismantle in country after country. Seen in that light, Chicago School capitalism has something in common with other fundamentalist ideologies: the signature desire for unattainable purity.

This desire for godlike powers of creation is precisely why free-market ideologues are so drawn to crises and disasters. Non-apocalyptic reality is simply not hospitable to their ambitions. For 35 years, what has animated Friedman’s counter-revolution is an attraction to a kind of freedom available only in times of cataclysmic change — when people, with their stubborn habits and insistent demands, are blasted out of the way — moments when democracy seems a practical impossibility. Believers in the shock doctrine are convinced that only a great rupture — a flood, a war, a terrorist attack — can generate the kind of vast, clean canvases they crave. It is in these malleable moments, when we are psychologically unmoored and physically uprooted, that these artists of the real plunge in their hands and begin their work of remaking the world.

Torture: The Other Shock Treatment

From Chile to China to Iraq, torture has been a silent partner in the global free-market crusade. Chile’s coup featured three distinct forms of shock, a recipe that would re-emerge three decades later in Iraq. The shock of the coup prepared the ground for economic shock therapy; the shock of the torture chamber terrorized anyone thinking of standing in the way of the economic shocks.

But torture is more than a tool used to enforce unwanted policies on rebellious peoples; it is also a metaphor of the shock doctrine’s underlying logic. Torture, or in CIA parlance, “coercive interrogation,” is a set of techniques developed by scientists and designed to put prisoners into a state of deep disorientation.

Declassified CIA manuals explain how to break “resistant sources”: create violent ruptures between prisoners and their ability to make sense of the world around them. First, the senses are starved (with hoods, earplugs, shackles), then the body is bombarded with overwhelming stimulation (strobe lights, blaring music, beatings). The goal of this “softening-up” stage is to provoke a kind of hurricane in the mind, and it is in that state of shock that most prisoners give their interrogators whatever they want.

The shock doctrine mimics this process precisely. The original disaster — the coup, the terrorist attack, the market meltdown – puts the entire population into a state of collective shock. The falling bombs, the bursts of terror, the pounding winds serve to soften up whole societies. Like the terrorized prisoner who gives up the names of comrades and renounces his faith, shocked societies often give up things they would otherwise fiercely protect.

Naomi Klein's latest book is The Shock Doctrine: The Rise of Disaster Capitalism (Henry Holt, 2007). She is the author of the international bestseller No Logo (Picador, 2000) and Fences and Windows (Picador, 2002), and is an award-winning journalist and syndicated columnist. In 2004, her reporting from Iraq for Harper’s Magazine won the James Aronson Award for Social Justice Journalism. Visit her website (, where this essay first appeared. Read other articles by Naomi, or visit Naomi's website.

10 comments on this article so far ...

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  1. gerald spezio said on September 19th, 2007 at 8:55am #

    Naomi Klein’s “Shock Doctrine” is a magnificent and scholarly scientific general theory. She makes every well reasoned attempt to explain what is happening to our very lives. She asks and answers the question; who is doing what to whom. She is specific and precise.

    It is as sound an explanation as human intelligence informed by science can make it.
    We won’t find any better. For scientists it is in a class with evolution by natural selection.

    Most people have never known what was happening to them.
    Naomi Klein is trying her very best to tell us.

  2. Sunil Sharma said on September 19th, 2007 at 9:05am #

    I agree with you Gerald. Klein is a brilliant writer and activist. The Shock Doctrine is one of the most important books to have appeared in recent years, and is essential reading for anyone wanting to get a more realistic grasp of the political terrain we face.

  3. Lloyd Rowsey said on September 19th, 2007 at 12:47pm #

    Absolutely first rate. Yes. Bravo Naomi Klein. We are all Kleinists now.

  4. Deadbeat said on September 19th, 2007 at 1:20pm #

    I wouldn’t necessarily equate Ms. Klein work to as “theoretical”. It always confound me that that leftist writers today must append Capitalism with some sort of prefix as if to imply some different type of Capitalism. This is how Capitalism works and we should just face that fact.

    What Ms. Klein has done is stripped the facade off of “economics” to high light the inner working of Political Economy. In the end that is what it’s really about — POWER.

  5. gerald spezio said on September 19th, 2007 at 1:41pm #

    Deadbeat, to qualify my use of theory, may I suggest that the theory is what informs the inquiry and the searching. Without theory, there is no science in the modern sense.

    Simply stated; “You can’t count every grain of sand on the beach.”

    Brainy Klein is doing genuine social science. She is proposing a “nomothetic” process that would answer similar questions under recurring natural and social conditions – general causes and general effects.

    Much of what passes as academic social science is somebody’s personal sorcery filled with all manner of witchcraft and mentalistic terminology.

  6. Michael Rappaport said on September 19th, 2007 at 3:32pm #

    This is a brilliant article, but those who talk about capitalistic orthodoxy are missing the point. What this is about, and what it almost always has been about throughout history, is oligarchy.

    The “haves” want to continue that way and to become the “have mores,” doling out as little of their wealth as they must to keep the masses satiated.

  7. Daniel said on September 19th, 2007 at 11:18pm #

    The World Utopian Movement has some answers for our conflicted world. Capitalism is a curse as is nationalism and religion.

    We need a better way. Check out Seeking Utopia for a new direction.

  8. Mulga Mumblebrain said on September 20th, 2007 at 4:40am #

    The essence of Capitalism is hatred of the Other. As they say, ‘If you want a friend on Wall Street, buy yourself a dog!’. The Other may be other human beings, the natural world or posterity and those ghastly unborn generations who will be living when I am returned to clay. Capitalism is inevitably and inexorably destructive, as everything must be turned into money. It is a system that selects the worst for success, the unscrupulous and the unprincipled who will stoop to activities others abjure as wicked, or a waste of precious, limited, time. As with the adage that bad money drives out good, under Capitalism bad people drive out good people. When the choice is whether to have or to be, the Capitalist always chooses avarice and accumulation, as he or she is attempting to feed an insatiable inner emptiness, a bottomless black hole where their soul has imploded. We see the evidence of our Capitalist ordained fate every day. Climate Change, habitat destruction, desertification, acidification of the oceans, toxic pollution, grotesque inequality, war and murder in pursuit of loot. By not succeeding in replacing Capitalism we go to our doom, brainwashed and self-satisfied, ignorant, fearful and deluded, like an army of Panglossian lemmings throwing ourselves into space, in the manic belief that an ‘Invisible Hand’ will reach out and catch us before we fall into the abyss.

  9. josephD said on October 13th, 2007 at 9:44am #

    What jumps out at me from Klein’s analysis is the concensus among the power brokers that enables coordinated action on the ground in response to disasters. Capital is locked and loaded and ready to roll, armed with Uncle Miltie’s “shock doctrine”, prepared to engage in pre-meditated acts of social engineering.

    From another angle, Numinous Naomi Klein is indulging a “conspiracy theory”. Opportunities don’t just fall out of the blue for the canny investor, they are anticipated beforehand. Is it a stretch to suppose that a group of rich people have had their eye on NO for many years, keenly aware of the high probability of an “act of god” that would provide them with their clean slate?

    Is it a stretch to suppose that this same group has been able to influence policy over the years to prevent the allocation of funds necessary for the remediation of levees? Not a big stretch, not for the canny investor who has the patience of a vulture waiting for its lunch to stop moving.

    It is a stretch to suppose that this group engaged in a little “black op” and employed a crew to actually bomb the levees at critical points, even though at the time residents did report hearing explosions?

    Now that’s a stretch, let’s not go there. Responsible commentators do not offend the logic of ethical behavior with groundless speculation based on mere anecdotal evidence, the testimony of traumatized victims. God can engage in acts of horrific destruction, but humans, particularly the lofty owners of capital who, as we know, protect and nurture the masses in their charge, do not play God. Do they?

    One shudders to think that they would. We must guard against this kind of anti-social thinking and do our part to discipline irresponsible commentators who would say, for example, that in order to justify imperial aggression, ortganized capital sponsored the destruction of the WTC through a fake act of terror.

    That is just too preposterous. Sweet Naomi never intended to imply such a thing. With a wink and a Mona Lisa smile, pretty Naomi reassures us that she is no delusional conspiracy theorist.

    This sort of thinking is repugnant. In their wisdom, the former Soviet leaders recognized it for what it is, a species of mental illness aptly called “sluggish schizophrenia”.

    Clearly, our Numinous Naomi is in the best of mental health.

  10. Lloyd Rowsey said on October 14th, 2007 at 6:10am #