Thursday, September 13, 2007

The Shock Doctrine: The Rise of Disaster Capitalism

(Maaf, buku ini dijelaskan dalam bahasa Inggris ya).

The Shock Doctrine: The Rise of Disaster Capitalism

By Naomi Klein

This new book looks incredible. It describes how economist Milton Friedman produced a new way of increasing capitalism globally, using profit and the free market to alter society for the benefit of capitalism, by using “shock therapy”. Friedman’s dream is that profit and the market should be the only underlying forces that control our lives.

Author Naomi Klein in her new book “The Shock Doctrine” presents information that many of our current global situations are caused by the use of “shock’ to force the public to accept a capitalist agenda which will definitely make the rich even richer, but may not do much for the very poor. Wars, coups, natural disasters can all be used to make sudden capitalist reforms before the public has time to understand what is being done to them. In other words, immediately after a violent public shock (such as September 11) the government in that country will suddenly introduce new policies which flavor capitalism, profit and the free market. These same policies would not be accepted by the people under ordinary conditions. So the “shock doctrine” gives the government the perfect opportunity to make unpopular changes that benefit the free market and capitalism and the people are unable to do anything to stop it.


(from the website)

In THE SHOCK DOCTRINE, Naomi Klein explodes the myth that the global free market triumphed democratically. Exposing the thinking, the money trail and the puppet strings behind the world-changing crises and wars of the last four decades, The Shock Doctrine is the gripping story of how America’s “free market” policies have come to dominate the world-- through the exploitation of disaster-shocked people and countries.

At the most chaotic juncture in Iraq’s civil war, a new law is unveiled that would allow Shell and BP to claim the country’s vast oil reserves…. Immediately following September 11, the Bush Administration quietly out-sources the running of the “War on Terror” to Halliburton and Blackwater…. After a tsunami wipes out the coasts of Southeast Asia, the pristine beaches are auctioned off to tourist resorts.... New Orleans’s residents, scattered from Hurricane Katrina, discover that their public housing, hospitals and schools will never be reopened…. These events are examples of “the shock doctrine”: using the public’s disorientation following massive collective shocks – wars, terrorist attacks, or natural disasters -- to achieve control by imposing economic shock therapy. Sometimes, when the first two shocks don’t succeed in wiping out resistance, a third shock is employed: the electrode in the prison cell or the Taser gun on the streets.

Based on breakthrough historical research and four years of on-the-ground reporting in disaster zones, The Shock Doctrine vividly shows how disaster capitalism – the rapid-fire corporate reengineering of societies still reeling from shock – did not begin with September 11, 2001. The book traces its origins back fifty years, to the University of Chicago under Milton Friedman, which produced many of the leading neo-conservative and neo-liberal thinkers whose influence is still profound in Washington today. New, surprising connections are drawn between economic policy, “shock and awe” warfare and covert CIA-funded experiments in electroshock and sensory deprivation in the 1950s, research that helped write the torture manuals used today in Guantanamo Bay.

The Shock Doctrine follows the application of these ideas though our contemporary history, showing in riveting detail how well-known events of the recent past have been deliberate, active theatres for the shock doctrine, among them: Pinochet’s coup in Chile in 1973, the Falklands War in 1982, the Tiananmen Square Massacre in 1989, the collapse of the Soviet Union in 1991, the Asian Financial crisis in 1997 and Hurricane Mitch in 1998.

Below are some basic facts from the short film that was made to promote the book.

Fast Facts, Shocks and their Aftermath from the Shock Doctrine Short Film

Chile, 1973

  • 50,000 tortured
  • 80,000 imprisoned
  • Public spending cut by 50%
  • Incomes for the rich up 83%
  • 45% of population in poverty

Wars – Falklands War, 1982

  • 910 people die
  • Thatcher's popularity doubles
  • She privatizes gas, steel, airlines, telephones
  • She declares war on unions
  • Thousands are injured
  • Unemployment triples
  • Number of poor increases by 100%


  • China 1989 – hundreds killed
  • Thousands jailed and tortured
  • China becomes sweatshop to the world
  • China embraces "free market" capitalism
  • Factory wages: $1/day

Russia, 1993

  • Yeltsin attacks parliament
  • Hundreds killed
  • Parliament burned
  • Opposition arrested
  • 72 million impoverished
  • 17 new billionaires created

Terrorist Attacks – New York, 2001

  • Attacks launch "War on Terror." It is privatized.
  • US spy agencies outsource 70% of their budgets
  • Pentagon increases budget for contractors by $137 billion/year
  • Department of Homeland Security spends $130 billion on private contractors

Invasions – Iraq, 2003

  • The most privatized war in modern history
  • US decrees 200 state companies will be privatized
  • Hundreds of thousands killed
  • 4 million displaced

Natural Disasters – Sri Lanka, 2004

  • 35,000 dead
  • Coastline handed over to hotels and industry
  • Nearly 1 million displaced
  • Fishing people forbidden to rebuild homes by the sea

The Shock Doctrine
By Naomi Klein

The short film (made to promote the book) is available online here:

As well as an excerpt from the book.

One excerpt from the book:

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 traumatised by hyperinflation. Friedman advised Pinochet to impose a rapid-fire transformation of the economy - tax cuts, free trade, privatised 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.

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