Book Review:  The Shock Doctrine (Naomi Klein)

Reviewing Naomi Klein’s “The Shock Doctrine”

by Stephen Lendman

Naomi Klein is an award-winning Canadian journalist,
author, documentary filmmaker and activist. She writes
a regular column for The Nation magazine and London
Guardian that’s syndicated internationally by the New
York Times Syndicate that gives people worldwide
access to her work but not its own readers at home.

In 2004, she and her husband and co-producer Avi Lewis
released their first feature documentary - “The Take.”
It covered the explosion of activism in the wake of
Argentina’s 2001 economic crisis. People responded
with neighborhood assemblies, barter clubs, mass
movements of the unemployed and workers taking over
bankrupt companies and reopening them under their own

Klein is also the author of three books. Her first was
“No Logo - Taking Aim at the Brand Bullies” (2000)
that analyzes the destructive forces of globalization.
Next came “Fences and Windows - Dispatches from the
Front Lines of the Globalization Debate” (2002)
covering the global revolt against corporate power.

Her newest book just out is “The Shock Doctrine: The
Rise of Disaster Capitalism” that explodes the myth of
“free market” democracy. It shows how neoliberal
Washington Consensus fundamentalism dominates the
world with America its lead exponent exploiting
security threats, terror attacks, economic meltdowns,
competing ideologies, tectonic political or economic
shifts, and natural disasters to impose its will
everywhere. Wars are waged, social services cut, and
freedom sacrificed when people are too distracted,
cowed or bludgeoned to object. Klein describes a
worldwide process of social and economic engineering
she calls “disaster capitalism” with torture along for
the ride to reinforce the message - no “New World
Order” alternatives are tolerated.

“Free market” triumphalism is everywhere - from Canada
to Brazil, China to Bulgaria, Russia to South Africa,
Vietnam to Iraq. In all cases, the results are the
same. People are sacrificed for profits and Margaret
Thatcher’s dictum applies - “there is no alternative.”

“The Shock Doctrine” is a powerful tour de force, four
years of on-the-ground research in the making and well
worth the wait. In an age of corporatism partnered
with corrupted political elites, it’s must reading by
an author now firmly established as a major
intellectual figure on the left and champion of social
justice. Naomi Klein is all that and more. Even for
those familiar with her topics, the book is stunning,
revealing, unforgetable and essential to know. This
review will cover a healthy sample of what’s in store
for readers in the full equisitely written text. It’s
in seven parts with a concluding section. Each will be
discussed below starting with a brief introduction.

Introduction - Blank Is Beautiful: Three Decades of
Erasing and Remaking the World (into Hell)

New Orleans, post-Katrina, is a metaphor for an
American-style “New World Order” with unfettered
capitalism unleashed in its most savage form. Klein
quotes Republican congressman Richard Baker telling
lobbyists: “We finally cleaned up public housing in
New Orleans. We couldn’t do it but God did.” And New
Orleans developer Joseph Canizaro added: “I think we
have a clean sheet to start again (and take advantage
of) big opportunities.” Their scheme is erasing
communities and replacing them with upscale condos and
other high-profit projects on choice city real estate
at the expense of the poor mother nature forced out
and government won’t allow back.

Enter the “grand guru” of free-wheeling capitalism,
then age 93 and in failing health. This was
conservative/libertarian economist Milton Friedman’s
moment that he first articulated in his 1962 book
“Capitalism and Freedom.” His thesis: “only a crisis -
actual or perceived - produces real change. When a
crisis occurs, the actions that are taken depend on
the ideas that are lying around….our basic function
(is) to develop alternatives to existing policies
(ones Friedman rejects, and have them ready to roll
out when the) the impossible becomes politically
inevitable.” Klein calls crises “democracy-free
zones,” and Friedman’s thesis “the shock doctrine.”
For New Orleans it means “permanent reforms” like
destroying public housing and issuing vouchers for
privatized schools in lieu of rebuilding public ones
with government reconstruction funds.

For Friedman, government’s sole function is “to
protect our freedom both from (outside) enemies….and
from our fellow-citizens.” It’s to “preserve law and
order (as well as) enforce private contracts, (and)
foster competitive markets.” In his view, anything
else in public hands is socialism that for “free
market” fundamentalists like Friedman is blasphemy.

Until 1973, Friedman’s radical doctrine stayed in his
classroom, but all that changed on an earlier
September 11. Following General Augusto Pinochet’s
bloody ascent to power, he had a real life laboratory
as advisor to the new Chilean dictator. His
prescription came to be known as the “Chicago School”
revolution of rapid-fire economic transformation he
called “shock treatment,” now known as “shock
therapy.” It’s an economic version of “destroy(ing)
the village (and country) to save it” from the Vietnam
era and nearly as harsh.

Millions know its lessons, but Friedman’s not their
hero. It’s central tenets are structurally adjusted
mass-privatizations, government deregulation,
unrestricted free market access for foreign
corporations, and deep cuts in social spending with
repressive laws, harsh crackdowns and torture along
for the ride to reinforce the core tenet Reaganites
call “trickle down” and Brits call “Thatcherism.”

Its recipients call it hell, and Klein explains why -
in Chile, Argentina, Uruguay, Bolivia, Brazil, China,
Russia, the Falklands, Poland, South Africa, Sri
Lanka, New Orleans, Israel, and coming to a
neocon-occupied homeland neighborhood near you. It’s
“disaster capitalism” unleashed, and business is
booming. Klein cites insiders saying opportunities are
on a par with a thriving “emerging market….“the
deals are even better than the dot-com days, and the
‘the security bubble’ picked up the slack when those
earlier bubbles popped.”

Reaganomics adherents are today’s neoconservatives
with the “full force of the US military machine
(serving their unfettered) corporate agenda” of greed
writ large. Its holy policy trinity is: “elimination
of the public sphere, total liberation for
corporations and skeletal social spending (if any at
all).” But instead of lifting all boats as promised,
it’s mirror opposite. It creates a powerful ruling
corporatist class partnered with corrupted political
elites - “with hazy and ever-shifting lines between
the two groups.” Russia got billionaire “oligarchs,”
China “the princelings,” Chile “the piranhas,” and
America the Bush-Cheney “Pioneers.”

Everywhere, the scheme is the same: huge public wealth
transfers to private hands, exploding public debt most
often, “an ever-widening chasm between the dazzling
rich and disposable poor, and an aggressive
nationalism (like George Bush’s permanent “war on
terrorism” and the world) that justifies bottomless
spending on security.”  “Inside the bubble” is
paradise. Outside, however, is hell with “aggressive
surveillance, mass incarceration, shrinking civil
liberties,” a declining standard of living, and
repression and torture reinforcing the message to

Klein calls the harshness “a metaphor of the shock
doctrine’s underlying logic.” When applied, it induces
a state of “deep disorientation,” and shock to force
targets “to make concessions against their will.” The
“shock doctrine” works the same way on a mass scale,
and the 9/11 experience proved it. It exploded the
“familiar world” and created a period of
disorientation and regression the Bush administration
jumped on abroad and at home. As Klein put it:
“Suddenly we found ourselves living in a kind of Year
Zero (with) everything we knew of the world before
(now) dismissed as ‘pre-9/11’ thinking.” We became a
“blank slate, a clean sheet of paper,” and the
administration did what was impossible before. It’s
how the “shock doctrine” works: “the original disaster
(terror attack, war, hurricane, market meltdown) puts
the entire population into a state of collective
shock” enabling policy manipulators to move in for the
kill to remake the world in their image and get it
done before the shock wears off.

Part 1 - Two Doctor Shocks - Torture and Chicago
School Fundamentalism

Following a crisis shock, another quickly follows. The
corporate piranhas exploit disorientation with
economic “shock therapy” along with “police, soldiers
and prison interrogators” with torture their method of
choice “to build a model country (by) erasing people
and then trying to remake them from scratch.”

Klein reviews the history of CIA’s interest in torture
as a way to control the human mind. It began with the
Montreal doctor they funded to perform “bizarre
experiments on his psychiatric patients (by) keeping
them asleep and in isolation for weeks, then
administering huge doses of electroshock (plus)
experimental (psychedelic LSD and hallucinogen PCP
angel dust) drug cocktails.”

The experiments were performed at McGill University’s
Allan Memorial Institute by Dr. Ewen Cameron even
though they clearly violated all standards of medical
ethics using human guinea pigs without their
permission with permanent damage their reward. Cameron
believed by blasting the human brain with an array of
shocks, he could “unmake and erase faulty minds, then
rebuild (on a blank slate) new personalities” cleansed
of their previous nature. It was voodoo science, and
it failed. His patients were his victims, but CIA
gained a wealth of knowledge it now employs with no
pangs of conscience or regard for ethics.

Klein traces CIA’s interest in mind manipulation to a
1951 trinational meeting of intelligence agencies and
academics in Montreal when concern was that Communists
could brainwash POWs to control them. That was when
the spy agency engaged Canadian researchers to learn
how, and one of them was Dr. Donald Hebb, director of
psychology at McGill, who was working on the problem.
Intelligence agencies were impressed enough with his
work to fund classified sensory-deprivation
experiments on volunteer McGill students.

They proved intensive isolation interferes with clear
thinking enough to make people more receptive to
suggestion. They were also “formidable interrogation
techniques” amounting to torture that Hebb knew
violated medical ethics. He later characterized
Cameron’s work as “criminally stupid,” but CIA got
what it wanted - a way to interrogate “resistant
sources” in a “new age of precise, refined torture,
not the gory, inexact” kind from the Spanish
Inquisition or what Nazis and other tyrants often
practiced. Cameron’s experiments with human guinea
pigs built on Hebb’s earlier work laying the
foundation for CIA’s “two-stage psychological torture
method” of sensory deprivation followed by sensory
overload. University of Wisconsin historian Alfred
McCoy in his book, “A Question of Torture” on CIA
interrogation, called it “the first real revolution in
the cruel science of pain in more than three

Pre-9/11, these techniques were freely used covertly
as any form of abuse or torture violates the Geneva,
UN and other statutes prohibiting these practices as
well as the US Army’s own Uniform Code of Military
Justice barring “cruelty” and “oppression” of
prisoners. No longer, as “On September 11, 2001, that
longtime insistence on plausible deniability went out
the window” as well as any claim this nation respects
the law and rights of free people everywhere. What
once was done sub rosa or by proxy is now condoned and
authorized at the highest levels of government on the
fraudulent claim of national security to hide the real
aim of social control.

Klein notes torture is still technically banned in the
US, but only when pain is the “equivalent in intensity
to (what accompanies) serious physical injury, such as
organ failure.” Simply put, anything goes, but it’s
not put that way. In Iraq, it was thought “shock and
awe” would be so stunning, Iraqis “would go into a
kind of suspended animation.” A second makeover
Chicago School fundamentalism shock could then be
imposed on a blank post-invasion slate, and bingo,
mission accomplished. Klein notes “there was no blank
slate, only rubble and shattered, angry people” who
were blasted with more shocks when they resisted. Like
Cameron and his experiments, “Iraq’s shock doctors can
destroy, but they can’t seem to rebuild,” and the same
is true wherever these shock doctors show up.

Milton Friedman and the Search for a Laissez-Faire

The epicenter of shock ideology is the University of
Chicago Economics Department. It came out of the 1950s
“in the thrall” (of a) man on a mission to
fundamentally revolutionize his profession,” and on
that score Milton Friedman succeeded mightily.
Friedman, now gone, believed, markets work efficiently
and best unfettered of rules, regulations, onerous
taxes, trade barriers, entrenched interests, and human
interference. Whereas Cameron believed electroshocks
could restore natural health, Friedman favored
economic shock as extreme and destructive to nations
as Cameron and CIA’s methods are to human minds.

Friedman taught this voodoo science and believed to
the end, all contrary evidence aside, it was perfect
and worked. Chicago School fundamentalism developed at
a post-war time in the 1950s when leftist ideas
supporting worker rights were gaining ground. Where
they “promised (workers) freedom from bosses, citizens
from dictatorship (and) countries from colonialism,”
Friedman promised “individual freedom” to choose that
appealed to owners of capital who embraced him and his

It stood in stark contrast to what became known as
“developmentalism” or “Third World nationalism” in the
post-war developing world. Economists in it favored an
“inward-oriented industrialization” strategy to break
the cycle of poverty and grow. Like Keynesians and
social democrats, they showed it worked in Latin
America’s Southern Cone with leaders like Juan Peron
“put(ting) their ideas into practice with a vengeance
(by) pouring public money into infrastructure
projects, (providing) local businesses generous
subsidies, and keeping out foreign imports
with….high tariffs.” It brought prosperity to the
South and “dark days” for Friedman, his acolytes, and
free-wheeling capitalists losing out to social

It sprung corporate America to action by funding a
legion of think tank and Chicago School foot soldiers
to change the message and fortunes of their
businesses. Friedman was their ideological leader
preaching public wealth should be in private hands,
rules and regulations out the window, accumulation of
profits unrestrained, and social welfare programs
curtailed or abolished. In short - deregulate,
privatize and get government out of the business of
everything besides providing security and enforcing
contracts. He also believed taxes were onerous and
once said he was “in favor of cutting (them) under any
circumstances and for any excuse, for any reason,
whenever it’s possible….”

He also said corporations should be exempt from
federal taxes claiming what they pay ends up in
consumer prices that, in fact, is pure nonsense as
every marketing MBA (like this writer) learns
straightaway. The fundamental law of pricing is to
charge what the market will bear, no more or less. In
other words, get all you can but no more than buyers
will pay. Soon enough they’d pay plenty in the
developing world.

In 1953, the US declared war against
“developmentalism” with CIA’s first ever coup against
Mohammed Mossadegh in Iran. Another followed the next
year in Guatemala, and in both instances
democratically elected leaders were ousted because
corporate interests opposed them. It was only the
beginning, and Friedman and his “Chicago Boys” soon
had a real time laboratory to prove their “capitalist
utopia” worked.

Salvador Allende’s Popular Unity government electoral
victory in 1970 was the opportunity. Three years later
he was out giving Friedman the chance he wanted. Klein
related the results in what she called “the first
Chicago School state” with others to follow. They’re
all the same with “an unstoppable hurricane of
mutually reinforcing destruction and reconstruction,
erasure and creation” following the crisis. Next is
unfettered economic shock therapy with torture and
disappearances awaiting resisters and anyone guilty of
bad thinking. Friedman’s brave new world was beginning
to roll. It’s devastation is everywhere including at

Part 2 - The First Test - The Bloody Birth of the

Counterrevolution began 34 years ago in Chile on
another September 11 that should have been
unimaginable and had to seem surreal. There were tanks
in the streets and fighter jets attacking government
buildings in a scene all too real and deadly. It
played out in Santiago and around Chile and was just
the beginning of a long nightmare. It brought General
Augusto Pinochet to power (with plenty of CIA help)
who called his action “a war,” not a coup, and to
reinforce his message he made it seem like one. Blood
in the streets, the presidential palace in flames, and
President Salvador Allende dead ended the most vibrant
democracy in the Americas. It was a cakewalk with “the
junta’s grand battle over by mid-afternoon.”

A state of siege was imposed followed by mass arrests,
killings and torture in a climate of fear that
enveloped the country. Allende supporters were
targeted in Chile’s “Caravan of Death.” Chileans paid
dearly, but the Chicago Boys had their moment of
triumph, and they were ready. Rolling off the press
was their detailed economic manual for the new
government called “The Brick.” It was a 500 page
Chicago School shock therapy wish list. It was “the
first Chicago School state,” its first “global
counterrevolution” victory, and “a genesis of terror”
in a brave new world for Chileans.

The economic playbook was right from Milton Friedman’s
“Capitalism and Freedom” that’s long on free market
triumphalism and void on its effects on real people.
It was pure Friedman featuring mass privatizations,
deregulation and deep social spending cuts flavored
generously with corporate-friendly tax cuts, trade
unionist crackdowns, savage repression for
non-believers, and an end to Chile’s social democratic
state Friedman condemned.

Pinochet bought it along with a team of Chicago School
alumni called “technos.” They embarked on a free
market binge with disastrous results. In the first
year, inflation hit 375%, thousands of Chileans lost
jobs, the country was flooded with cheap imports,
local businesses closed and hunger grew along with
public and small business discontent in this free
market “paradise.” In desperation, “it was time to
call in the big guns” with Milton Friedman coming to
Santiago to reinforce his message that for things to
improve they first had to get worse. It was classic
shock treatment and Chicago School baloney with
Friedman preaching patience and promising an “economic
miracle” if his prescription was followed.

Pinochet agreed, and slash and burn followed with
visions of paradise at the end of the rainbow. It was
pure untested fantasy, and the results showed it.
After one year of hardened shock therapy, Chile’s
economy contracted 15%, unemployment rocketed to 20%,
and contrary to Friedman’s rosy scenario it lasted for
years with no social safety net help for desperate

Klein notes Chile today is still cited as a model that
free market “Friedmanism” works in spite of the clear
evidence it doesn’t. Growth did resume a decade later,
but only after conditions worsened. It forced Pinochet
to reinstate Allende policies like renationalizing
privatized companies but not his social democratic
agenda. Chileans were left with the shambles. When the
economy stabilized and rapid growth resumed in the
late 80s, poverty was 45%, but the richest 10% saw
their incomes rise by 83%. Even today, Klein notes,
Chile remains one of the most unequal societies in the
world. It’s shock therapy miracle shifted “wealth to
the top and shock(ed) much of the middle class out of

It’s the way it works everywhere and a glimpse of the
future: “an urban bubble of frenetic speculation and
dubious accounting fueling superprofits and frantic
consumerism, ringed by ghostly factories and rotting
infrastructure of a development past; roughly half the
population (excluded); out-of-control corruption and
cronyism; (decimated) nationally owned small and
medium-sized businesses; (mass) transfer of (public)
wealth (and resources) to private hands (accompanied
by) a huge (shift) of private debts into public
hands.” Inside the Chilean bubble was paradise.
Outside was “The Great Depression.” Bubble-benefitters
reacted with “junkie logic: Where is the next fix?”

It was first across the border in other Latin American
Southern Cone countries where the “counterrevolution
spread (and) people vanish(ed).” Argentina, Brazil and
Uruguay were targeted with similar results as in Chile
under juntas replacing democrats. Chicago School
fundamentalism was on a roll, and woe to the
non-believers. Nations that were developmentalism
models became wastelands with decades of worker gains
lost almost overnight. Factories closed, wages fell,
unemployment soared, poverty grew severe, dissenters
disappeared, and ordinary people suffered to prove
what pin-stripped academics knew after Chile went
sour. Instead, it was on to the next target.

In them all, the slate was cleansed and terror
unleashed, unrestrained by national borders. Former
Allende economist and diplomat turned activist Marcos
Orlando Letelier became a victim in September, 1976.
While living in Washington, he condemned Chile’s
“economic freedom” for the privileged and paid with
his life. Pinochet’s DINA secret police killed him and
his American colleague, Ronni Moffit, by
remote-detonating a bomb planted under his driver’s
seat. An FBI investigation learned the assassins
entered the country under false passports with full
CIA knowledge and complicity.

The purging included cleansing wrong ideas and
thinkers like legendary left wing Chilean folk singer,
Victor Jara. He was seized and taken to Chile’s
notorious National (killing and torture) Stadium to be
reeducated. Soldiers broke his hands so he couldn’t
play the guitar. Then they shot him 44 times “to make
sure he couldn’t inspire from….the grave.” One
culture was being erased and replaced by another. As
in Nazi Germany, books were burned, newspapers and
magazines shuttered, universities occupied and strikes
and political meetings banned. Trade unionists were
specially targeted as threats to the new economic
order. It’s leaders were rounded up, movement members
viciously attacked, and “battalions” targeted workers
in factories. They were arrested, imprisoned,
tortured, and disappeared in a sweeping reign of
terror designed to crush opposition and

In Argentina, Ford Motor Company’s local subsidiary
was complicit. It helped soldiers and secret police
rid unionists from its factories and supplied vehicles
as well. Green Ford Falcon sedans became the feared
symbol of terror an Argentine playwright called
“death-mobiles.” Many thousands kidnapped and
disappeared rode off in these cars, never to return.

Farmers involved in land reform struggles also were
targeted along with anyone with “a vision of society
built on values other than pure profit.” It affected
community worker activists, many church-connected, who
wanted social services like health care, public
housing and education the state was erasing through
shock therapy and mass repression. Klein noted while
“policies attempted to excise collectivism from the
culture, inside….prisons (the practice was to)
excise it from the mind and spirit.” The sickness was
democratic socialism, the cure pain and suffering.
Wrong-thinkers were taught the hard way, and many paid
with their lives. Chicago School fundamentalism is
harsh medicine. Its grand guru, Milton Friedman, was
unrepentant. He called it “freedom” and took his
mathematical model miracle to the grave amidst a hail
of undeserved eulogies.

In his memoirs before he died, his “blatant
revisionism” on Chile was shameful and disturbing. He
falsely claimed Pinochet only asked for help in 1975
when, in fact, the Chicago Boys worked with the
military before the 1973 coup, and their policies were
implemented on Pinochet’s first day in power. Friedman
also claimed the junta’s repressive years didn’t undo
Chilean democracy. In his view, it opened up “more
room for individual initiative and for a private
sphere of life (offering a greater) chance of a return
to a democratic society.” It was classic convoluted
Chicago School thinking. It made him famous courtesy
of corporate triumphalism, generous funding and an
utter disdain for human rights and dignity.

Friedman also used his 1976 Nobel lecture to argue
economics was as scientifically accurate and objective
as other sciences. He failed to mention its dark side
- devastating poverty, unemployment, shuttered
factories and mass human misery and deaths in the
first nation adopting his ideology on its victimized
people. Now it’s everywhere and savagely enforced in
an age of corporate dominance, wars for profit and
neglect of human needs to fund them. That’s Friedman’s
real legacy from the barrel of a gun and called

Part 3 - Surviving Democracy

Chicago School dogma became known as Thatcherism in
Britain, but its prime minister wasn’t an early
adherent. Margaret Thatcher thought Chilean shock
therapy wasn’t possible in a democracy like the UK
because voters wouldn’t buy it. Three years into her
first term, her approval rating was lower than George
Bush’s. She was in danger of not being reelected and
didn’t dare risk imposing bitter economic medicine
that would sink her chances. That is, until destiny
intervened on April 2, 1982 when Argentina invaded the
British-held Falkland Islands off its coast that was
unimportant to either country except for the political
hay to gain from war.

Thatcher jumped at the chance to regain her footing
and “went into Churchillian battle mode,” even though
Argentina’s president, General Leopoldo Galtieri,
wasn’t Adolph Hitler. But defending the British empire
was almost as good, and it paid off. Thatcher’s
political future was at stake. She revived it, more
than doubled her approval rating and henceforth was
known as the “Iron Lady” that for her was high praise,
and she made the most of it.

She launched a “corporatist revolution” based on
Chicago School economics she thought impossible
earlier. She parlayed her new popularity to a victory
against striking coal miners in 1984 with tactics like
unleashing 8000 “truncheon-wielding” riot police in a
single confrontation. Before the strike ended,
thousands of workers were injured, but Thatcher stood
firm with a clear message to other unionists. Take
what you’re offered or get the same medicine.

She didn’t stop there, and what followed was a radical
economic agenda in a wave of state enterprise
privatizations including British Telecom, British Gas,
British Airways, British Steel and others in what
Klein called “the first mass privatization auction in
a Western democracy.” It proved Chicago School
fundamentalism didn’t need repressive dictatorships to
advance as long as “Iron Ladies” like Thatcher were
around to match the best of them, short of all out
tanks in the streets shock therapy, that is. Her
eleven and a half years in power proved it, and
Britain hasn’t been the same since with Labor as
committed now as the Tories.

Bolivia was soon targeted as well, but in 1985 was
part a democratic wave sweeping the world. It was an
election year with two familiar figures facing off for
the presidency - former dictator Hugo Banzar and
former elected president, Victor Paz Estenssoro. It
was close and Banzar thought he won so before final
returns were in he named 30 year old Harvard economist
Jeffrey Sachs to help develop an anti-inflation
economic plan for the country.

Sachs was part Keynsian but larger part Chicago School
adherent that made for a bad combination. He bought
its orthodoxy in softer form by supporting debt relief
and generous aid along with the shock therapy he
advised Banzar to adopt as the only solution to

As it turned out, Banzar lost and Paz won, and while
no socialist, he was no Chicago School adherent
either, or so voters thought. Four days into his term,
he charged his emergency economic team to radically
restructure the economy using shock therapy with a
twist. It was much harsher than Sachs proposed with
the entire state-centered structure Paz erected
decades earlier dismantled in the first 100 days
before the public could react. In its place, food
subsidies were ended, price controls lifted, wages
frozen, oil prices hiked 300%, deep government
spending cuts imposed, unrestricted imports allowed,
and state-owned companies downsized as a first step to
privatizing them. It cost hundreds of thousands of
full-time jobs, pensions and safety net protections.
Friedman continued to roll.

The results were predictable. The minimum wage never
regained its value, and two years later real wages
were down 40% and average per capita income dropped
from $845 in 1985 to $789 in 1987. As in other shock
therapy countries, a small elite got richer while the
great majority of Bolivians lost out with campesinos
faring worst. In 1987, they earned on average $140 a
year, or less than one-fifth the nation’s declining
average income.

Bolivian misery gave Sachs star status for the
country’s “Miracle.” It launched his new career and
brought him to Argentina, Peru, Brazil, Ecuador,
Venezuela and Russia later on plus a best-selling book
and three-part PBS “success story” series. The only
problem was it wasn’t true. President Paz had no
mandate for shock therapy, and many workers were
predictably furious at his betrayal. They went on
strike and Paz’s response made Margaret Thatcher’s
earlier action against striking coal miners seem tame
by comparison. Tanks rolled in the streets, and riot
police raided union halls, a university and factories.
Hundreds of arrests followed, including the top 200
union leaders, and oppositional politics was banned.
The siege lasted three months during the decisive
shock therapy period with more repression and Chicago
School medicine later.

It showed shock therapy needs harsh authoritarian rule
backing with Bolivia’s pin-stripped politicians,
economists and bureaucrats administering it, not
uniformed soldiers as in Chile. Paz’s democratic
victory was illusory like others when leaders renege
on promises and sacrifice them on the alter of Chicago
School orthodoxy.

Argentina was another “textbook case.” In the
post-Falklands War period, it was burdened with
billions in odious debt Washington insisted be
serviced and paid. It was far more onerous after the
(Paul) “Volker Shock” when the US Federal Reserve
Chairman hiked interest rates up to 21% in the
early-mid 1980s to fight inflation, so he said. It was
painful in the US and disastrous for developing
countries turning their debt burdens into crises. New
loans were needed to pay off old ones, and the debt
spiral was born afflicting nations then and still
today. That was the whole idea, or at least one of

Argentina, Brazil and other countries had another
option they didn’t take - defaulting on debt so great
it was unrepayable. As Klein put it: “Understandably
(new democracies were) unwilling to go to war with
Washington (and the international lending agencies it
controls so they) had little choice but to play by
Washington’s rules (and) in the early eighties (they)
got a great deal stricter….It was the dawn of the
era of ‘structural adjustment’ - otherwise known as
the dictatorship of debt.”

In the 1980s, Chicago School economists colonized the
IMF and World Bank to advance their corporatist
crusade. Economist John Williamson named it “the
Washington Consensus” that stuck ever since. It
consisted of core economic policies both institutions
consider essential for economic health according to
their orthodoxy. We know them well: all “state
enterprises ....privatized (and) barriers impeding
entry of foreign firms….abolished.” There was more
that together was classic Friedman dogma:
privatization, deregulation, unrestricted free trade
(never called fair), and deep cuts in government
spending except for security.

Indebted developing countries learned shock doctrine
101 the hard way. Getting aid meant accepting
Washington Consensus rules - the whole package. So to
save their countries, they had to “sell (them) off.”
Klein calls Argentina the “model student” in the 1990s
under leaders like Carlos Menem. Appointing Domingo
Cavallo economy minister signaled he bought the
corporatist package. But as Klein points out:
“Argentina was not unique (and by 1999) Chicago School
alumni included more than twenty-five government
ministers and more than a dozen central bank
presidents from Israel to Costa Rica.”

Shock therapy was on a role that in Argentina turned
into a textbook case of therapeutically induced
disaster. What Time magazine in 1992 called “Menem’s
Miracle” became Menem’s Mirage when the economy
collapsed in 2001, and Argentina did the unthinkable
with Menem gone and a new president in power. It
defaulted on an $805 million debt to the World Bank.
It should have ended the neoliberal experiment, but
instead it spread. Economic crises fueled it, and when
old ones ebbed “even more cataclysmic ones appear(ed):
tsunamis, hurricanes, wars and terrorist attacks.
Disaster capitalism was taking shape” with shock
therapy its tool of choice.

Part 4 - Lost in Transition: Slamming the Door on

Before the Berlin Wall fell, Lech Walesa became a
labor hero in Poland and the West by defying the
Moscow-controlled government and getting away with it.
Solidarnosc (Solidarity) spread from its Gdansk roots
to the country’s mines, shipyards and factories and
within a year had 10 million members. They won the
right to bargain but wanted more. They aspired to take
over the state and institute their own alternative
economic and political program. It’s radical
centerpiece was to transform huge state-run companies
into worker-run cooperatives so Solidarity members
could be empowered in their own “socialized

Walesa objected, lost the debate, and he feared what
then happened. The Jaruzelski government declared
martial law, sent tanks to the streets and rounded up
thousands of Solidarity members. By the late 80s, the
crackdown subsided, the economy was in free fall,
workers again struck and Mikhail Gorbachev’s reformist
government was in power in Moscow. Solidarity was
legalized, a Citizens’ Committee Solidarity wing was
formed, its members stood in snap elections and won
effective control of the government capturing 260
parliamentary seats.

It should have been the best of times, but with the
economy in trouble, Poland needed aid including debt
relief. With Chicago School alumni running IMF, none
was offered except under Washington Consensus rules,
take it or leave it. Enter Jeffrey Sach, the shock
doc, with an even harsher plan than imposed on
Bolivia. It included an immediate end to price
controls, slashing subsidies, and privatizing mines,
shipyards and factories. It short, it ran directly
counter to Solidarity’s aim for worker-run industry.

Sachs promised Solidarity Poland could become like
France or Germany under his plan. By swallowing shock
therapy medicine first, taking the pain, the patient
would end up cured and healthy - if he was right.
After debate, the verdict was in and the treatment
bought with predictable results. Sachs promised
“momentary dislocations” but delivered a full-blown
depression. Industrial production plummeted 30% after
two years of “reforms.” Unemployment skyrocketed, and
in 1993 hit 25% in some areas. It’s still chronic
today with recent World Bank figures pegging it at
around 20%, the highest in the European Union. For
young people, it’s even worse with 40% of workers
under 24 unemployed.

Most alarming is the number of people in poverty. From
a 15% level in 1989, it rose to a startling 59% in
2003. Incredibly, the country, like Chile, is still
cited as a free market reform model. It’s pure myth,
angry Poles know it, but reports in the West ignore
them as they do shocked victims everywhere.

They didn’t ignore “the shock of Tiananmen Square,”
but didn’t report it accurately either. In the early
1980s, Deng Xiaoping was transforming his country
economically while keeping rigid political control
including iron-fisted repression when needed.
Democracy was nowhere in sight nor is it now. While
many of Deng’s reforms were successful and popular,
others in the late 80s weren’t, and it provoked deep
anger in the cities by people most affected. Price
controls were lifted, corruption and nepotism was
rampant, freedom minimal, job security eliminated,
unemployment soared, and deep inequalities grew
between “winners and losers in the new China.”

It came to a head with mass protests in 1989 in
Tiananmen Square that Western reports characterized as
a clash between old-guard Communist authoritarians and
idealistic students wanting western-style democracy.
It was pure propaganda. The protests were massive and
threatened the government, but democracy wasn’t the
issue. It was popular discontent from wrenching
economic change raising prices, lowering wages, and
causing “a crisis of layoffs and unemployment.”
Protesters weren’t against economic reform. They were
against the Chicago School version of it, but their
efforts were costly.

Deng declared martial law May 20, tanks rolled in the
square, indiscriminate shooting took place, and when
it ended thousands were dead, many more thousands
injured, and still more thousands hunted down,
arrested, jailed, some tortured, and hundreds likely
executed. Shock therapy rolled in China as in Chile -
through the barrel of a gun and raw state terror.
Following the crackdown, China opened to foreign
investment, joined the WTO, and turned the country
into the world’s largest low wage sweatshop for
Wal-Mart’s “Always Low Prices.”

For foreign investors and party apparatchiks, it was a
win-win arrangement with Klein citing a 2006 study
showing 90% of China’s billionaires to be Communist
Party officials. About 2900 “party scions” (called
“the princelings”) control $260 billion, and Klein
notes the “stark similarity between (China’s
authoritarian rule) and Chicago School capitalism - a
shared willingness to disappear opponents, blank the
slate of all resistance and begin anew” using shock
and fear to transform countries into free market
paradises for the privileged.

The Tragedy of South Africa’s “Democracy Born in

Klein quotes Nelson Mandela in January, 1990 (two
weeks before he was freed) in a note to his supporters
from prison saying: “The nationalisation of the mines,
banks and monopoly industries is the policy of the ANC
(and changing) our views….is inconceivable. Black
economic empowerment is a goal we fully support and
encourage, but in our situation state control of
certain sectors of the economy is unavoidable.” That
belief became ANC policy in 1955 in its Freedom
Charter. The liberation struggle wasn’t just about a
political system but an economic one as well. White
workers in mines earned 10 times more than blacks, and
large industrialists worked with the military to
enforce order and disappear dissenters.

Once apartheid ended, a new way was possible, and
Mandela seemed poised to lead it. The ANC had “a
unique opportunity to reject the free market orthodoxy
of the day” and choose a “third path between Communism
and capitalism.” ANC candidates swept the 1994
elections and Mandela became president at a time South
Africa surpassed Brazil as the most unequal society in
the world. Negotiations were held with the ruling
National Party, and a peaceful handover was achieved
but not without “prevent(ing) South Africa’s
apartheid-era rulers from wreaking havoc on their way
out the door.”

Negotiations took place on two parallel tracks -
political and economic. Mandela and his chief
negotiator, Cyril Ramaphosa, “won on almost every
count” politically. But along side it, economic
negotiations were held with the country’s current
president, Thabo Mbeki, in charge with the outcome in
the end far different. With ANC leaders preoccupied
with controlling Parliament, the former white
supremacist government and industrialists were
determined to safeguard their wealth, and they
succeeded by assuring Washington Consensus policies
would be instituted when political power changed

ANC economists and lawyers were outfoxed or outgunned
by the opposition, IMF, World Bank, GATT and power of
big capital against inexperienced politicians and
technocrats who ended up losers. Black officials
controlled the government, but discovered the real
power was elsewhere. As Klein put it: “The bottom line
was that South Africa was free but simultaneously
captured.” The leadership mistakenly thought once
firmly in power they could undo earlier made
transition compromises.

They couldn’t or didn’t for the same reasons other
developing countries accept free market rules. Adopt
them or be punished by the market as Mandela learned
when he was freed. The South African stock market
collapsed in panic, and the country’s currency (the
rand) dropped by 10%. He acknowledged the problem
later on saying it’s “impossible for countries….to
decide economic policy without regard to the likely
response of these markets.” It’s too bad he didn’t
know how Hugo Chavez managed after 1999 (oil aside).
He achieved what Mandela reneged on, and Venezuela’s
economy is booming. Had he and ANC officials stood
their ground early on, South Africa (with its mineral
riches) might have done the same thing - had a growth
economy in a socially democratic state and a model for
its neighbors.

They didn’t, black South Africans lost out, Mandela’s
legacy is tainted, and a key factor was current
president Thabo Mbeki. He spent spent years studying
in exile in England during the apartheid years during
which time “he was breathing in the fumes of
Thatcherism.” He became the ANC’s free market tutor,
believed in market fundamentalism, and its
prescription was “growth and more growth.” It meant
neoliberal shock therapy with the full Friedman
package Mbeki supported. He later professed: “Just
call me a Thatcherite,” and Mandela told journalist
John Pilger the same thing in retirement saying:
“ can call it Thatcherite but, for this
country, privatization is the fundamental policy.”

After over a decade of that agenda (1994 - 06), Klein
highlighted the toll showing conditions today much
worse than under apartheid, and ANC’s leadership

—the number of people living on less than $1 a day
doubled from two to four million;

—the unemployment rate more than doubled to 48% from
1991 - 2002;

—only 5000 of 35 million black South Africans earn
over $60,000 a year;

—the ANC government build 1.8 million homes while
two million South Africans lost theirs;

—nearly one million South Africans were evicted from
farms in the first decade of democracy; as a result,
the shack dweller population grew by 50%, and in 2006,
25% of South Africans lived in them with no running
water or electricity. And there’s more:

—the HIV/AIDS infection rate is about 20%, and the
Mbeki government shamefully denied the severity of the
crisis and did little to alleviate it; it’s been a
major reason why average life expectancy in the
country declined by 13 years since 1990;

—40% of schools have no electricity;

—25% of people have no access to clean water and
most who do can’t afford the cost; and

—60% of people have inadequate sanitation, and 40%
no telephones.

“Freedom” for these people and all black South
Africans came at a high price, and no efforts are
being made to ameliorate it. Political empowerment was
traded for economic apartheid under Chicago School
fundamentalist rules. Klein observed: “Never before
had a government-in-waiting been so seduced by the
international community.” If China, Vietnam and even
Russia saw “the neoliberal light,” Mandela was told,
how could South Africa resist it. The ANC leadership
might have (and Mandela had the credentials to lead
them) had they examined the wreckage around the world
in Friedman-seduced countries. Instead, they took the
easy way out and surrendered.

Russia Chooses “the Pinochet Option”

The man who ignited political and social change in
Russia wasn’t around long enough to lead it. Mikhail
Gorbachev became head of the Soviet Union’s Communist
Party in March, 1985, believing the economy stalled
and needed change. His solution became glasnost
(liberalizing opening up) and perestroika
(reconstruction), and Soviet Russia would never be the
same again. By the early 1990s the press was freed,
the constitutional court was independent, and
elections were held for Russia’s parliament, local
councils, president and vice-president. In addition,
Gorbachev favored a Scandinavian-style social
democracy combining free market capitalism with strong
social safety net protections. He hoped to build “a
socialist beacon for all mankind.” He never got the

While still in office at the 1991 G7 meeting in
London, his fellow heads of state delivered a free
market message Chicago School-style. Later, the IMF,
World Bank and other international lending agencies
reinforced it - Soviet-era debts must be honored and
aid depended on adopting strict shock therapy rules.
The Soviet Union soon dissolved, Gorbachev was out,
Boris Yeltsin became Russia’s president, and Chicago
School fundamentalism was adopted as needed “reform.”
Klein calls what happened next “one of the greatest
crimes committed against a democracy (in peacetime) in
modern history.”

Yeltsin assembled a team of Chicago School ideologues
to remake the economy. Jeffrey Sachs showed up, too,
with other US-funded transition experts to help write
privatization decrees, launch a New York-style stock
exchange, and craft a total radical economic makeover
for a country long used to central planning. Only one
thing stood in the way - democracy, and a parliament
able to vote down what Yeltsin’s team designed. A
clash of wills drew closer in the spring of 1993 when
parliament’s budget diverged from IMF demands for
strict austerity. Yeltsin reacted with the “Pinochet
option.” He issued decree 1400 dissolving parliament
and abolishing the constitution. Two days later,
parliament voted 636 - 2 to impeach him, and battle
lines were drawn.

Yeltsin sent troops to surround parliament and cut off
power, heat and phone lines. The army backed him and
he pressed on. He then proceeded to dissolve all city
and regional councils in the country. Then, on October
4, 1993, he ordered the army to storm the parliament,
set it ablaze and “defend Russia’s new capitalist
economy from the grave threat of democracy.” The
assault took about 500 lives, wounded nearly 1000
others with the enthusiastic support from the West in
headlines like the Washington Post proclaiming
“Victory Seen for Democracy” in Russia. Some

Yeltsin now had unchecked dictatorial power, the West
had its man in Moscow, and shock therapy had an open
field to inflict wreckage on Russia’s people who
didn’t know what him them as it unfolded. A
corporatist state replaced a communist one, and its
apparatchiks were winners along with a handful of
western mutual fund managers who made “dizzying
returns investing in newly privatized Russian
companies.” In addition, “a clique of nouveaux
billionaires” (17 in all called “the oligarchs”) were
empowered to strip mine the country of its wealth and
ship profits offshore at the rate of $2 billion a

As a result, Yeltsin’s popularity plunged so he did
what all desperate leaders do to hold power with the
next election to worry about. He began a war in 1994
in the breakaway Chechen republic killing 100,000
civilians by the late 90s. Elections were held in
1996, and Yeltsin won by overcoming his low approval
ratings with huge oligarch-funding and near-total
control of television coverage. He then quietly handed
power to Vladimir Putin on December 31, 1999 without
an election but with the stipulation he was exempt
from criminal prosecution. His legacy was devastating
with Klein noting “never have so many lost so much in
so short a time.” When Russia’s 1998 financial crisis

—80% of Russia’s farmers were bankrupt;

—around 70,000 states factories had closed;

—an “epidemic” of unemployment raged;

—before shock therapy in 1989, two million Russians
lived in poverty on less than $4 a day; by the
mid-90s, the World Bank estimated 74 million were
impoverished and by 1996 conditions for 25% (almost 37
million) Russians were “desperate” and the country’s
underclass remained permanent;

—Russians drink twice as much now as before;
painkilling and hard drug use increased 900%, and
HIV/AIDS threatens to become epidemic with a 20-fold
jump in infections since 1995; suicides are also
rising, and violent crime increased more than
fourfold; and

—Russia’s population is declining by 700,000 a year
with capitalism having already having killed off 10%
of it as one more example of free market-inflicted
disaster. That’s the brave new world disease spreading
everywhere with another scorched-earth stop below.
Friedman called it “freedom.”

The Looting of Asia

In the summer of 1997, economic crisis hit Asia from
no apparent cause beyond rumors the Thai bhat was in
trouble, and Thailand didn’t have enough dollars to
back it. Hot money in became an electronic stampede
out with “Asian Contagion” unleashed and heading for
Indonesia, South Korea and other so-called Asian Tiger
countries that were fast-growth miracles until they
crashed together with the plight of one affecting the
others. It then got worse and spread to Latin America
and Russia with US markets also affected briefly in
1997 and then again with a severe jolt in the summer
of 1998.

The 1997 Asian panic was crippling with $600 billion
in stock market wealth taking decades to build wiped
out in a year. Klein notes “a classic fear cycle”
ignited the crisis that might have been contained by
the same type “quick, decisive loan” rescue package
offered Mexico in 1994 in their so-called Tequila
Crisis. It would have been a strong signal to markets
the US Treasury and international lending agencies
wouldn’t let the Asian Tigers fail. No help came, and
the message instead was: “Don’t help Asia.” Why?
Because “Asia’s catastrophe was an opportunity (for
predatory western corporations and vulture investors)
in disguise.”

Asian Tigers grew by protecting their markets and
barring foreign companies from ownership of land or
national firms. They also restricted imports from the
West and Japan and instead built up their own domestic
markets. Western predators wanted unfettered entry to
the region with the right to scoop up the best Asian
companies but needed a way to do it. Now they had it
from an event Klein calls “the fall of a second Berlin
Wall,” as important to western capital as the first

Enter the IMF with crisis-struck Asian countries too
sick to resist it. They needed help, and the lending
agency had plenty to offer on similar terms as to
previous crisis recipients. With economies in trouble
and empty treasuries, the Tigers got no choice. First,
they had to remove all “trade and investment
protectionism and activist state intervention that
were the key ingredients of the Asian miracle.” IMF
also demanded big spending cuts, “flexible” workforces
(meaning mass layoffs and constrained wages and
benefits), privatized basic services, and the rest of
the package they demand for loans.

The regional toll was devastating with the
International Labor Organization estimating 24 million
lost jobs along with “what was so remarkable about the
region’s ‘miracle’ in the first place: its large and
growing middle class.” In addition, 20 million people
fell into the “planned misery” of poverty, reversing
an earlier trend reducing it. Women and children
suffered most with families selling daughters to human
sex traffickers to survive as child prostitution had a
new growth market.

So did Wall Street as IMF structural adjustments put
“pretty much everything in Asia….up for sale” in the
affected countries. The more markets panicked, the
lower asking prices became, and the more pressured
hurting companies were to sell out for what they could
get or face bankruptcy. It was a bonanza for buyers,
and major deals went through in a great fire sale at
bargain prices. Asia became hugely transformed with
hundreds of local brands replaced by western
transnational ones. The New York Times called it “the
world’s biggest going-out-of-business sale.” It also
became an early glimpse of post-9/11 disaster
capitalism - a way for corporate predators to exploit
crises in what’s become common practice in the age of
“terror” creating opportunities galore and big profits
for well-connected firms.

Klein notes the Asian crisis never ended as
desparation took root after 24 million people lost
jobs in two years. No nation handles that, and the
fallout can be unpredictable. It led to a rise in
religious extremism in Indonesia and Thailand and “the
explosive growth in the child sex trade.” Unemployment
is still high and layoffs continue with new foreign
owners demanding higher profits with jobs disappearing
to provide them.

Eventually things settle down but never to where they
once were. Throwing people overboard, displacing small
farmers and business owners and crushing unions means
those affected stay that way. “They end up in slums,
now home to one billion people (and rising); they end
up in brothels or in cargo ship containers. They are
the disinherited (or what) German poet Rainer Maria
Rilke (called) ‘ones to whom neither the past nor the
future belongs.’ ” They’re the human wreckage left
behind by countries swallowing Chicago School economic
medicine. Its promised miracle is people-poison but
not for vulture investors thriving on it. Disaster
capitalism is on a roll, and its growth market
potential is unlimited and guaranteed to continue
unless mass public outrage stops it as one day it

Part 5 - The Rise of the Disaster Capitalism Complex -

Shock Therapy in the USA

Richard Nixon knew before the rest of us that Donald
Rumsfeld is “a ruthless little bastard.” He also has a
knack for making enemies even inside the Pentagon he
ran as Defense Secretary. He planned to “reinvent
warfare for the twenty-first century (making it) more
psychological than physical, more spectacle than
struggle, and far more profitable” than ever before.
Talk aside, he wanted to revolutionize the military by
running it like the corporate world, and that meant
using methods like outsourcing and branding. His idea
was for fewer full-time troops, more as-needed ones
from the Reserves and National Guard, and a lot of
backup help from private contractors like Blackwater
USA for security and Halliburton for a range of
functions unrelated to soldiering. He wanted less
staff and more tax dollars diverted to private
companies. The Pentagon brass wasn’t pleased, but
Rumsfeld was boss and Dick Cheney backed him.

Klein calls them both “proto-disaster capitalists” who
practice “the central tenet of the Bush regime (that)
the job of government is not to govern but to
subcontract.” The privatization mania was kick-started
in the Reagan era, but Bill Clinton bought it as well.
Now the feeling is anything government can do, private
business can do better so let them. That means fire
departments, prisons, public schools, public health,
data management, border control and even parts of the
military. As Klein explained: “crisis-exploiting
methods….honed over the previous three decades would
be used to (privatize) the infrastructure of disaster
creation and….response. Friedman’s crisis theory was
going postmodern (to create a) privatized police
state” by auctioning it off.

“Then came 9/11, and the idea of hollowing out
government seemed opposite of what a frightened public
wanted - a strong central government to protect them.
Bush promised it in speeches, but “his inner circle
had no intention of converting to Keynesianism.”
September 11 security failures only reinforced their
belief that private firms could handle the challenge
better than government, and that meant transferring
hundreds of billions of public dollars to corporate
pockets. The Bush administration exploited shock and
fear “to push through its radical vision of a hollow
government in which everything from war fighting to
disaster response was a for-profit venture.”

Mass disorientation post-9/11 provided the
opportunity, and the “war on terror” became a “bold
evolution of shock therapy….built to be private from
the start” to capitalize on it. It came in two stages.
First, policing, surveillance, detention and
war-making powers of the executive were dramatically
increased though nothing in the Constitution permits
it. Then, the whole package, including occupation and
“reconstruction,” was outsourced to well-connected
private firms that responded with generous campaign
funds to keep the mutually reinforcing daisy chain
humming. Using the ploy of fighting “terrorism,” the
homeland disaster capitalism complex emerged as a
full-blown new economy and what Klein calls “a virtual
fourth branch of government.”

The Bush administration’s idea of government, with
security as one function, wasn’t to provide it but to
buy it at cost-plus market prices with lots of
latitude for the plus. Just as the internet launched
the dot-com bubble, from 9/11 emerged the disaster
capitalism one, and it was off to the races “in an ad
hoc….chaotic fashion.”

Fighting “terrorism” is big business, and one of the
first opportunities was the market for surveillance
cameras with 30 million of them installed in the US,
billions of hours of footage, analytic software to
scan it, digital image enhancement to help it, and
information management and data mining technology to
handle all data government collects on everyone and
everything. September 11 unlocked the potential, a
huge new growth market was created, and protection
from terror became more important than big brother
watching. In six short years, an industry that barely
existed is now much larger than Hollywood or the music
business, and its potential looks limitless.

Klein calls it “an unprecedented convergence of
unchecked police powers and unchecked capitalism, a
merger of the shopping mall and the secret prison” in
a frightening brave new world most people barely
understand or know exists. It generates enormous
wealth that creates a powerful incentive for its
winners to sell fear for more of it and partnering
with government makes it easy, especially the kind in
power now.

Capitalism Becomes Corporatism in a Corporatist State

Proto-disaster capitalism defines the Bush
administration as crises, wars and other disasters
“conflate with what’s good for Lockheed, Halliburton,
Carlyle and (Rumsfeld’s old company) Gilead” Sciences.
Cataclysm is a growth business that in the current
climate involved “some of the seediest and most
blatant corruption scandals in recent history,”
war-profiteering in the hundreds of billions, and a
“whirling revolving door between government and
business” taken to a new level. The limitless homeland
security and war-profiteering markets are so alluring,
hundreds of administration officials can’t wait to
cash in like earlier ones did. Klein names some noted
ones like Richard Pearle, James Baker, Henry
Kissinger, Paul Bremer, George Shultz, John Ashcroft,
Tom Ridge, Rudi Giuliani, Richard Clarke, James
Woolsey, Joe Allbaugh, and Michael Brown who wrote an
infamous memo to a fellow FEMA staffer asking: “Can I
quit now?”

That’s the whole idea in a get rich quick environment
- get an impressive government title, stay in office
long enough in a department handing out big contracts,
collect insider information with market value, then
quit and cash in. Klein calls public service now
“little more than a reconnaissance mission for future
work in the disaster capitalism complex.” She also
quotes Danielle Brian, executive director of the
Project on Government Oversight (a nonprofit watchdog
group) saying: “It’s impossible to tell where the
government ends and Lockeed begins.” She also believes
that corporatist economic goals and right to limitless
profit seeking lie at the heart of the most committed
neocons who talk a good game but value great wealth
their top priority. They partnered permanent war and
homeland security with the disaster capitalism complex
to get it, and it’s hard indeed telling where one ends
and the other begins. But it’s centerpiece project is
Iraq, and its headquarters is in Baghdad’s heavily
fortified Green Zone.

Part 6 - Iraq, Full Circle - Overshock - Erasing A

Perhaps no country provides a greater untapped
opportunity for unfettered capitalism than Iraq. It
represents the planet’s last remaining low-hanging oil
resources fruit with potentially more of it than Saudi
Arabia according to some oil analysts. It’s also
strategically located in the heart of the oil-rich
Middle East (with two-thirds of proved reserves) Klein
calls the “crusade’s….final frontier.” Iraq’s
potential alone is so enormous it made war the way to
crack open its market potential because peaceful
methods hadn’t worked. Its conquest would then serve
as “a different model in the heart of the Arab-Muslim
world” that could become a catalyst to opening the
whole region.

The potential is a giant free-trade zone, the illusion
of newly created democracies, and the freedom for
unfettered capitalism “to feed off freshly privatized
states.” Klein explained this as “the model theory,”
Iraq as the model, with the idea not being
nation-building but nation-creating. But what of the
nation already there that’s known as the “cradle of
civilization.” It would have to be erased, and Chicago
School fundamentalism would create a new one in its
place in its own image with a blank slate to work

Bush administration war planners considered the full
array of possible shocks and went with them all -
blitzkrieg “shock and awe,” elaborate PsyOps, use of
fear as a weapon, repressive occupation, mass
detention and torture, and “the fastest and most
sweeping political and economic shock therapy program
attempted anywhere….From the start, the invasion was
(Washington’s message) to the world….in the language
of fireballs, deafening explosions and city-shattering
quakes.” It said dare challenge US authority, and
you’re next. Shock and awe planners designed its
strategy to deter “the public will of the adversary to
resist (to render) the adversary completely impotent”
from the effects of sensory deprivation and overload
inducing disorientation and regression.

In March, 2003, Baghdad got it on a massive scale. The
ministry of communication and four telephone exchanges
was blitzed and set ablaze cutting off millions of
phones and preventing people from learning if their
family and friends were alive. Television and radio
transmitters were also destroyed along with the
electrical grid plunging the city into “an awful,
endless night.” Residents were trapped in their homes
unable to speak or hear each other or see outside at
night. “LIke a prisoner destined for a CIA black site,
the entire city was shackled and hooded. Next it was

Unchecked looting did the most to erase the “country
that was….Gone are 80% of the museum’s 170,000
priceless objects….the national library is a
blackened ruin….the Ministry of Religious
Affairs….was left a burned-out shell (and the)
national heritage was lost.” Paul Bremer’s senior
economic advisor, Peter McPherson, wasn’t bothered. It
made his job of radically downsizing the state and
selling it off easier. Cleaning the slate and erasing
the nation was proceeding fast. It “all unfolded in a
matter of weeks.” Baghdad was “open for business,” and
the fire sale for its assets began with US firms
having first dibs on everything, except oil, and that
would come later as it has now but is stalled.

While he was there, Paul Bremer was Washington’s man
in Baghdad charged with readying the launch of Iraq,
Inc. He saw to it laws were passed smoothing the way
for Chicago School shock therapy. Two hundred firms
were to be privatized immediately to get “inefficient
state enterprises into private (predatory) hands….”
New economic laws followed that comprised a “wish
list….foreign investors and donor agencies dream
of,” according to The Economist. The corporate tax was
cut from 45% to a flat 15%; another allowed foreign
companies to own 100% of Iraqi assets and take all
profits out of the country; all restrictions on
imports were removed; and investors could sign deals
and leases lasting 40 years so no future government