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The Shock Doctrine: The Rise of Disaster Capitalism is based on the author’s research carried out for over four years. The book shows intensely how disaster capitalism did not start in September 2001. The author Naomi Klein traces its beginning to the early 60s. The author asserts that disaster capitalism began in the University of Chicago with Milton Freidman. This university gave the world the leading neo liberal and neoclassical economists.
The Shock Doctrine follows the use of these ideas through the modern history, showing in fascinating detail how well-known events have been premeditated, active stages for the shock doctrine, amongst them: the Falklands war, Pinochet’s coup, the Tiananmen Square Massacre, the Asian financial crises the collapse of the Soviet Union and Hurricane Mitch.
The Shock Doctrine: The Rise of Disaster Capitalism was published in 2007. It was authored by a Canadian Naomi Klein. It is a well acclaimed book amongst anti-capitalist activists as well as a good number of reputable reviewers. Amazon ranked it as one of the best top 10 books of 2007.
Klein bases her book on the thesis that economic liberalization is unwanted and can only get peoples support by misleading or bullying voters. She asserts that the free market ideas rely on crises to popularize them. When there is a war, natural disaster or even a coup, people are disoriented and seek their immediate well being. This presents an opportunity for politicians, economists and corporations to force in public spending, trade liberalization and privatization with no resistance.
Klein further asserts how neo liberal economists hailed the Indonesian Tsunami of 2004, the war in Iraq, Hurricane Katrina and the military coups in South America in the 70s. They used these unfortunate circumstances to get rid of past policies and force in their own radical free market policies. If the wars and disasters are not enough to give citizens a change of heart, the neo liberals use torture to bring their opponents on the board.
It is of Klein’s opinion that Milton Friedman, one of the most acclaimed economists of all time, is the principal villain. According to her, Milton Friedman was the chief supporter of free market economics in the 20th century. Milton did all he could popularize his free market view.
However, Klein somewhat overstates the free market alterations that take place in the time of crisis. She does this by restating chronologies and ignoring some key events. She claims that free market reforms are some form brutality. She blames Friedman for encouraging change. She portrays Milton Friedman as a callous Mr. Hyde.
Klein asserts that Friedman hailed crises as a means to make the society disoriented. In the time of crises, the community would be preoccupied with the matter at hand. This would make it remarkably easy to make drastic reforms with no opposition from the community. In her argument against Friedman, Klein sites a quote from one of Friedman’s essays where he claims that only an actual of supposed crises can bring about the necessary change. Milton claimed that when a crisis occurs then it is the basic function of economists to come up with alternatives to existing problems. According to Klein this forms the shock doctrine. It provides inspiration to the reformers who hail crises in the world. However, the quote by Milton Friedman is not in support of crisis in the world. His quote shows that people support change in their ways when their old ways do not seem to be working (Ebenstein 61). According to Klein, the concern for free market grew as the UK and the United States suffered from stagflation and the communist systems in China and the Soviet Union failed. Milton Freidman observed that during these periods of time (crises) people often demanded change since the old systems had failed them.
Klein emphasizes that Milton Friedman’s notion of the “tyranny of the status quo” means the oppression of the voters. She also asserts that for the politicians in any country to be able to bypass the democratic process, than the country in question has to be undergoing crises. However, Friedman is trying to show a link between interest groups, bureaucrats and politicians who seek their own enrichment at the expense of the common man (Friedman 7).
Klein continues by showing how Friedman wanted to reduce inflation. Here, she gives the reader the sense that Friedman wanted to inflict pain as to push through for his reforms. Klein associates liberal reforms with electric shocks and emotional torture. On the other hand, Milton Friedman once quoted that people are not ignorant and are rather well knowledgeable of the reform process (Ebenstein 67). If the leaders want to end inflation in any way, then they should announce it to the public to make the adjustment process easier.
Klein shows the Chicago School of Economics as one full of fundamentalists and extremists. She claims that, in this school, they brainwash the students and have a plan to grab power globally. Milton Friedman was a lecturer in the Chicago School of Economics.
Klein mentions that Milton Freidman majorly influenced Augusto Pinochet’s economic views. He was the military dictator in Chile in the 70s. Milton acted as Augusto’s economic advisor. Milton did, in fact, visit Chile for six days and even gave public lectures at a local university. Friedman once wrote a letter to the Chilean President suggesting to him a plan on how on end the hyperinflation that had plagued the country. His plan involved liberalizing the economy. Klein asserts that Milton Friedman did not in any way care about the social costs of the reforms used to end hyperinflation. However, she fails to mention that the reforms suggested by Milton would in any way lower that the current rate of temporary unemployment. The book continues to talk about the Chilean coup of 1973. According to Klein, the coup was executed so that the Chilean liberal economists could carry out change in the economy. By this, she claimed that the supporters of neoliberalism were sadists and would do anything including cause the death of innocent people so as to support their cause.
She continues to say that Liberalization started the day the Junta took office (Klein 78). In the next few chapters, Klein describes how Milton was Augusto Pinochet’s advisor and how Milton supported the dictator.
However, the author seems to have a change of heart later, and she states that Milton did not support the totalitarian policies of the Chilean military dictator. The writer states that when Freidman talks of freedom he means that political freedoms were subsidiary and not necessary as compared to freedom of unlimited commerce.
Klein continues to make Milton the villain of her work. She claims that he was I favor of an aggressive American foreign policy. This led up to the war on Iraq so that Chicago style reforms could be put to work there. She continues to say that the Bush administration split up the Iraqi army. This is because they were neo liberals who were not in support of the public sector. She, however, does not state what Friedman’s view was on the war. Klein also blames Chicago style economics and Milton for the way the International Monetary Fund treated the Asian Financial Crises. She continues to blame him for the way the government Sri Lanka took away people’s land so as to put up extravagant hotels after the tsunami.
Klein is right when she asserts that it is easy for governments to liberalize their economies in times of crises. There is a link between economic liberalization and dictatorship and violence. A good example of dictators who have liberalized in times of hardship is such as China and Chile. She compares electric shock as a way to torture and shock therapy in economics to show that they both obliterate the past and pave way for a new beginning (Klein 127). She also mentions a CIA project where psychiatrist, Ewen Cameron, used electric shocks to alter the way people thought.
In the book, Klein does not offer any statistical proof to her readers, which make her, work less reliable. She offers no proof to show how free markets are unpopular. She also does mention how speedily liberalizing economies such as Estonia, Iceland. Ireland, the US or Australia where reforms were given massive support through elections. She, however, puts her focus on countries with dictatorial governments or those undergoing crises.
In the next chapter, Klein tries to show how Margaret Thatcher also tried to use violence and shock to bring reforms. In Klein’s opinion, Thatcher only won the election in 1983 because of the help she got from the Falklands War. She, however, does not mention that another reason why Thatcher’s popularity was adept at that time was due to the rapidly growing British economy. The book proceeds to link Thatcher to violence by showing how she closed down the coal mines even after the workers strikes in 1984. This strikes led to the police using violence on the workers. She blames the violence and people injured on Thatcher by stating that it was Thatcher who send the police to attack the workers.
The core of Klein’s book is that free market reforms are preferred by the worlds’ most atrocious dictators. She further claims that contemporary capitalism started in the Southern area of Latin America. She calls the governments in Argentina and Chile “Chicago School Juntas”. In an Argentian prison, a number of prisoners were tortured and asked to choose between their own tortures of torture of their fellow inmates. According to Klein, this made the inmates start thinking like individualists which supported the free market regime. This was because there were Chicago School of Economics advisors in both of these countries. Klein applauds countries like Sweden for maintaining democratic socialism. To support her way of thinking, Klein shows how a shopping mall in Buenos Aires was literally built where a torture centre once stood. She asserts that his is Chicago style economics in full play.
Klein continues to pursue her cause and shows how publicly funded schools decreased from 123 to 4 schools after hurricane Katrina in New Orleans (Klein 400). Klein also cites economist John Williamson who says that state enterprises should be all privatized (Williamson 7). By this, she shows that the Washington Consensus which consists of the World Bank, the International Monetary Fund and the United States government are all radicals and part of the Chicago movement.
Klein also uses China to show a country in which the government has adopted Friedman’s views. She claims that the Tiananmen massacre involved protesters who were opposed to the free market views which their leaders were trying to impose on them. She asserts that the communist party attacked the students so as to redeem its free market agenda which the students were against. Tiananmen opened a way for liberal reforms with no rebellion from the society. Klein then compares China and Poland to show how the use of torture in china led to unqualified economic success. In Poland, however, where no violence was used, the effects of economic crises were more ambiguous. However, a report by Fenby on the Tiananmen Massacre shows that the students and intellectuals had gathered to mourn the death of Hu Yaobang, the former secretary general. He was one of Chinas supreme reformers. The students also wanted reforms especially free speech in the country. The protest grew as people joined in including those who wanted reforms.
On the Iraqi war, Klein claims that the terrorist’s attacks on the US gave the Bush administration a way forward to implement Friedman’s ideas (Klein 492). This was by profiting his associates in the security and defense sectors with exceptional sums of money and new contracts. Klein forgets to explain what these Friedman ideas are so as to provide a better understanding to the reader.
There were plenty of American companies in Iraq to take advantage of the restoration taking place there. According to Klein the US government had prevented competitors from participating in this market thereby benefiting only the US.
According to Klein if the government of any country gives private corporations subsidies, contracts, privileges and protection, then they must be Freidman followers to the core. However, on inspection of the work done by Friedman, he at one time pointed out that capitalists and corporations may conspire against the government to get protection, privileges and even subsidies. Businesses do not, in fact, support free market but once every while they seek government intervention for their own selfish needs. He called it “the suicidal impulse of the business community”.
Klein, however, praises dictators such as Hugo Chavez, Mahmoud Ahmedinejad and Vladamir Putin for implementing economic nationalism (Klein 557). She is in support of dictators so long as they do not lower trade barriers and taxes.
Klein also blames Boris Yeltsin, Russia’s President, for bringing an end to democracy in the country. He did this by paying no attention to the anti-Yeltsin majority in the country’s parliament. He dissolved the parliament so as to pave the way for shock therapy in the country and implement free market ideas.
In her conclusion, she examines the counterattack of shock principle and economic organizations that proliferate it like the World Bank and IMF. She also praises countries like Lebanon and South America which are removing free market policies.
In her book Klein forgets to mention how the world has become more democratic with free market economies. The world has somewhat undergone a democratic revolution with the liberalization of economies. The number of electoral democracies has also increased significantly from 79 in 1990 to 121 in 2007. Klein does not also give data or statistics in her book to prove her findings.
However, The Shock Doctrine: The Rise of Disaster Capitalism does have much to offer. Freidman and other Chicago style economists assumed too much. They assumed perfect economies based on perfect competition, perfect information and even perfect risk.
Klein is not an economist and cannot be judged as one. This may be the reason why her book lacks empirical data, which would make it convincing. However, her book caused a lot of ripples in the world of economics and is worth taking a look at.
The Shock Doctrine is the unflattering Truth Commission the influential leaders have wanted to keep locked away safely. Naomi Klein has unlocked the padlock of secrecy and exposed the cruel contents within. She masterfully brings to light the dark roots of the staple of today's seamless bloody warfare: economic terror, torture, international conquest and disaster profiteering. Klein traces the doctrine of shock, functional across the world from Africa, Latin America, the Arab World and the Soviet Union.