The Book is Called “The Shock
Doctrine” by Naomi Klein.
It 697 pages, she goes into great
detail on each shock event sequence.
This is a summary
The Shock Doctrine” by Naomi Klein
explores the concept of shock events as catalysts for political and economic
change. Klein argues that certain crises, whether natural disasters, wars, or
economic meltdowns, create opportunities for powerful elites to push through
radical policies that might be met with resistance in normal circumstances.
Milton Friedman is a prime
character, who was influenced by John Keynes, and Friedrich Hayek a “soul mate
and adversary”.
Here’s a summary of some key shock
events discussed in the book:
- Chilean Coup (1973):
Klein examines the U.S.-backed coup in Chile that ousted President
Salvador Allende. The ensuing military dictatorship, led by Augusto
Pinochet, provided an environment conducive to implementing free-market
economic policies under the guidance of economists trained at the
University of Chicago. The Chicago Boys played a pivotal role in Chile’s
economic transformation under General Augusto Pinochet. Trained at the University
of Chicago under Milton Friedman, these economists implemented radical
free-market policies, including privatization, deregulation, and
reductions in government spending. This transformation occurred in the
aftermath of the U.S.-backed coup that ousted President Salvador Allende. The results of the Chicago Boys
policies were horrific.
Suspension of Civil Liberties, Torture, Executions, Brutality by “security
forces”. Increasing gap between
rich and poor, Trade unions dismantled and union organizers tortured or
beat. Less public school funding,
putting the common man in worse shape.
- Argentina’s Military Junta (1976-1983): The book delves into the “Dirty War” in Argentina,
where the military junta used extreme violence and repression to suppress
dissent. Amidst the chaos, economic reforms were implemented following the
neoliberal model, with drastic consequences for the population.
Similar to the situation in Chile, the Chicago Boys influenced economic
policies during Argentina’s military dictatorship. The junta implemented
neoliberal economic reforms, following the guidance of economists with
ties to the Chicago School. Klein argues that these policies
disproportionately benefited the wealthy elite while causing significant
social and economic hardships for the general population.
- Post-Soviet Russia (1990s): Klein analyzes the economic shock therapy applied in
Russia after the collapse of the Soviet Union. The sudden shift from a
planned to a market economy resulted in widespread poverty and the rise of
oligarchs who exploited the privatization of state assets.
Gorbachev has started a peaceful and hopeful process of a democratic
revolution, but for the powers that be in order to push through a Chicago
School economic program, the democratic revolution had to be violently
interrupted and radically reversed. They used Yletsin, the President of
Russia, to successfully force Gorbachev’s resignation as the head of the
USSR, by dissolving the USSR. They literally called Yeltsins team “The
Chicago Boys” The first of 3 shocks — this one to the Russian Pysche.
The second Blitzkrieg shock came just a week later, when all price
controls were lifted although there were 225,000 State Owned companies.
Within a year, the average Russian lost so much because the money was
devalued, they had to cut their consumption by 40%.
The setup for the 3rd shock was Yeltsin dissolved the parliament and
cancelled the constitution. Predictably, this resulted in much fighting,
ending with Yeltsin’s army (he had doubled their wages), gunning down 100
citizens, blockading the parliament and eventually stormed it and burned
it to the ground.
The shock therapy applied in Russia after the collapse of the Soviet Union
reflects Chicago School principles. Economic reforms were influenced by
advisors with ties to the Chicago School, leading to rapid privatization,
liberalization, and marketization. The outcome was a concentration of
wealth among a few oligarchs and widespread poverty.
- South African Transition (1990s): The book discusses the transformation of South Africa
from apartheid to democracy. Klein argues that economic shock therapy was
applied, benefiting a small elite while leaving many black South Africans
economically marginalized.
While not explicitly mentioned in “The Shock Doctrine,” neoliberal
economic policies influenced by the Chicago School played a role in
post-apartheid South Africa. Economic reforms led to privatization and
market-oriented measures that, according to some critics, did not address
the systemic inequalities inherited from apartheid.
- Asian Financial Crisis (1997-1998): Klein explores the impact of the financial crisis on
countries like Indonesia, South Korea, and Thailand. The International
Monetary Fund (IMF) interventions are referred to Chicago Style Tactics —
during this period are criticized for promoting free-market policies at the
expense of social welfare. One example is the IMF withheld money from
Korea until All 4 presidential candidates all agreed they would follow all
rules of the IMF. They “lost their autonomy” and it became known as the
“National Humiliation Day”.
After that, for Indonesia, the IMF “leaked” to the Washington Post, the
prediction that all IMF money to Indonesia would be stopped, and that
“rumor” crashed Indonesia’s currency by 25% in one day. This caused
strongman Suharto to cave in and accept the guidance of the IMFs team,
referred to as the Berkeley Mafia, see image above (credit to ChatGDP for
the nice summary).
- Hurricane Katrina (2005): Klein examines the aftermath
of Hurricane Katrina in the United States, particularly the privatization
of public services in New Orleans. The disaster provided an opportunity
for corporate interests to reshape the city’s infrastructure and services. This disaster can be laid firmly at the
feet of the local and federal politicians and agencies, I will give the
Chicago Boys a “bye” on this one.
Some of the often horrific quality of service with accompanying
price gouging were : Debris Removal, Housing Trailers, Roads and Bridges,
Private Security, Medical, Educational including rebuilding schools, Tech
and Comms. And the blame goes far
beyond private contractors:
- FEMA repeatedly blocked the delivery of emergency
supplies ordered by the Methodist Hospital in New Orleans from its
out‐of‐state headquarters.
- FEMA turned away doctors volunteering their services at
emergency facilities. Methodist’s sister hospital, Chalmette, for example,
sent doctors to the emergency facility set up at New Orleans Airport to
offer their services, but they were turned away because their names were
not in a government database.
FEMAs faults
went way beyond those, the review reminded me of the Lahaina response, almost
looking intentional.
- Iraq War (2003):
The book discusses the Iraq War as an opportunity for private corporations
to profit through the reconstruction efforts. The war and subsequent
occupation created a space for implementing free-market policies in Iraq.
ChatGDP — - the economic policies implemented in Iraq were aligned
with neoliberalism, drawing on ideas that resonate with the Chicago
School. Some of the key individuals associated with these economic reforms
in Iraq include:
- Paul Bremer:
L. Paul Bremer was the head of the Coalition Provisional Authority (CPA)
in Iraq from May 2003 to June 2004. He played a crucial role in overseeing
the political and economic reconstruction of Iraq. Bremer implemented
significant economic reforms, including the removal of trade barriers,
privatization of state-owned enterprises, and the introduction of a new
currency.
- Thomas C. Foley:
Thomas C. Foley served as the Coalition Provisional Authority’s Director
of Private Sector Development in Iraq. He played a role in promoting
economic liberalization, including the privatization of state-owned
enterprises and the restructuring of Iraq’s economy along market-oriented
lines.
- Andrea Koppel:
Andrea Koppel served as the Director of Communications and Senior Advisor
to L. Paul Bremer in the Coalition Provisional Authority. While her role
was primarily in communications, the economic policies implemented during
her time were in line with neoliberal principles.
- Yonadam Kanna:
Yonadam Kanna, an Iraqi-American, served as the Minister of Industry and
Minerals in the Iraqi Interim Government. He played a role in advocating
for economic liberalization policies, including the privatization of
state-owned enterprises in the industry sector.
- While these individuals were not necessarily direct
representatives of the Chicago School, their roles and the economic
policies they advocated for in Iraq shared similarities with neoliberal
principles associated with the Chicago School of Economics. The policies
implemented included reducing state intervention, promoting privatization,
and adopting market-oriented reforms, which were hallmarks of the Chicago
School’s approach to economic policy.
Some of the Big Corporations
involved in Iraq were Halliburton and BlackRock who are accused of the
below: It should be clear that in every
big contract, a certain percent can be kicked back to the politicians via multiple
shell companies, making loans that never get paid back, selling them property a
far below market value, and over paying for things like art (think Hunter Biden),
or non trackable money, like gold bars.
Halliburton
War mongering Dick Cheney as VP had
just left Halliburton as CEO! Halliburton
received numerous no bid large contracts.
Overcharging and charging for services that were never delivered. Poor quality and poor logistics.
BlackRock
Profits are tied to magnitude and
continuation of war and conflict. Investing
directly in US defense contractors.
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In “The Shock Doctrine,” Klein
argues that elites often exploit moments of crisis to advance their economic
and political agendas, taking advantage of the disorientation and vulnerability
of affected populations. The book suggests a pattern of using shock events to
push through policies that may not be accepted in more stable times.
stock here: Klein does imply from
the USA is currently being shocked, perhaps for the great reset. I asked
ChatGDP to summarize these Shocks. Something that would have taken me 30 minutes
or more….is done below in seconds. Thanks ChatGDP!
Here is an analysis that considers
elements from Klein’s book as well as
broader observations about how the USA is being abused in the current round of shocks being applied to America,
particularly the average working person and small business. With the powers that be knowing that they
never get kickbacks from small business and small business will fight back
against overreach, while large corporations will kowtow to Government policies
as long as it is clear that their acquiescence will result in future profits. Attacks on the food supply, attacks via
forest fires and economic losses and stresses on insurance companies from other
fire losses. Attack on the railway
systems, including attack on conservative areas by train accidents and then
lack of proper clean up and evacuations and no set procedure for application
for grants to cover lost income and other costs. One of the shocks is the existence of a “system”
to apply for aid, but with the average person unable to deal with the paperwork
and also hobbled by the loss or inaccessibility of documents they need for the
aid process. It’s a gaslighting on the
public to have them think aid is available, but it is practically not obtainable.
1. Economic Disruption and
Inequality:
- Klein’s Perspective:
In “The Shock Doctrine,” Klein argues that shocks, such as economic crises
or disasters, can be exploited by powerful interests to push through
neoliberal economic policies that benefit the elite. She suggests that
during times of crisis, attention is diverted, allowing for the
implementation of policies that might face resistance in normal
circumstances.
- COVID-19 Context:
The COVID-19 pandemic indeed led to economic disruption, with small
businesses being disproportionately affected by lockdowns. The closure of
non-essential businesses and restrictions on movement created economic
hardships, contributing to a concentration of economic power in larger
corporations, which often have the resources to weather such shocks.
2. Big Business Profits:
- Klein’s Perspective:
Klein discusses how corporations, especially those with close ties to
governments, can benefit from crises. The concept of “disaster capitalism”
suggests that certain entities thrive amid chaos by securing lucrative
contracts or exploiting policy changes.
- COVID-19 Context:
Large corporations, particularly those in the technology, pharmaceutical,
and e-commerce sectors, experienced significant gains during the pandemic.
The acceleration of trends like remote work, e-commerce, and digital
services further consolidated the power of tech giants, raising concerns
about their influence.
3. Government Overreach:
- Klein’s Perspective:
Klein highlights instances where governments use crises to expand their
powers, often at the expense of civil liberties. She argues that
emergencies provide cover for the implementation of measures that would
otherwise face public resistance.
- COVID-19 Context:
Governments worldwide implemented emergency measures to contain the spread
of the virus, including lockdowns, surveillance, and restrictions on
movement. Concerns have been raised about the potential erosion of civil
liberties and the extension of emergency powers beyond the immediate
crisis.
4. Fear and Control:
- Klein’s Perspective:
Klein discusses how fear can be a tool to manipulate public opinion and
facilitate the acceptance of drastic policy changes. In times of crisis,
the urgency to address perceived threats may lead to a greater acceptance
of government intervention.
- COVID-19 Context:
The fear of a global health crisis prompted unprecedented government
actions. The urgency to control the spread of the virus contributed to
public acceptance of measures that, in normal circumstances, might have
faced more resistance.