The Shock Doctrine

"Naomi Klein’s argument is that capitalism actually requires shocks to the economic systems. Economic management, she argues, is not about stabilising the economic system, but actually undermining it so that it can be ‘rescued’ by capitalist interests. It is the fact that she can apply her theory to such a wide range of areas that I admire, her weaving together of apparently disparate phenomena – this is what I try to do with the buzzing and confusing world of modern biotechnology, which I present as united by the process of the commodification of the human body. Get the weekly Five Books newsletter It’s probably a bit predictable to choose her analysis of the Iraq war, but that is very telling. Klein argues that the war wasn’t caused just by what many critics saw as Bush’s monomania or Blair’s toadying. Nor was it merely a matter of ‘one-word answers’ like ‘oil’ or ‘Israel’. Instead, she sees the war as being about the deliberate destruction of the Iraqi economy and infrastructure so that Western firms could move in to win lucrative contracts and penetrate the closed economies of the Middle East. It was an entirely rational doctrine, she argues, the ‘shock doctrine’: just an evil one."

"The Shock Doctrine explains some of the mechanisms by which patrimonial capital acquires power and enhances its wealth. It’s a brilliant piece of work, and one of those rare books that changes the way you perceive the world. By showing how neoliberals, in particular, use disasters to create opportunities to extend their programme in ways that would never be accepted in ordinary circumstances because they are profoundly undemocratic and exclusive, she was able to explain a series of phenomena that we see operating all over the world. She is able to fill in some of the gaps in Piketty’s account. Piketty demonstrates quite rightly that there is an organic momentum in patrimonial capital, in that once you’ve got money you can increase that money through what is laughably called ‘investment’. As Andrew Sayer points out in Why We Can’t Afford the Rich , ‘investment’ means two completely different things. It means investing in creating new products, ideas and things that did not exist before, and it also means putting money into things that already exist in order to multiply that money. These are opposed meanings. The second one should be called ‘speculation’. But it disguises itself under the term ‘investment’ in order to justify the simple harvesting of rent and interest payments. “This is a brilliant piece of work, and one of those rare books that changes the way you perceive the world.” Klein shows that the organic momentum of patrimonial capitalism is greatly enhanced by being extended through the doctrine of capitalising on crises, which is what neoliberal advisors, governments and corporations have been doing from Iraq to New Orleans. They move in and hit any place that has suffered from catastrophic disruption as hard as they can with a whole series of new policies that people are in no state to resist. These policies basically involve transferring public or generally shared wealth into the hands of a private elite. We saw something very similar in the UK following the financial crash—a financial crash caused by the neoliberal policy of the deregulation of the banks—which was used to enhance neoliberal policy. While we were reeling, George Osborne and others moved in and said right, we’re having that. Basically, through austerity, they transferred a great deal of public wealth and public sector assets into the hands of their chums in the city and in corporations. Yes. Milton Friedman and the Chicago school are just one component of a global movement that began in 1947 with the formation of the Mont Pelerin Society. This was set up by Friedrich Hayek and others following the success of his book The Road to Serfdom , which really laid out the territory for neoliberal philosophy. It created ‘a kind of neoliberal international’ (as Daniel Stedman Jones called it in his book Masters of the Universe ) composed of academics, journalists, think-tanks, and a whole series of independent thinkers around the world who gradually worked this up into a series of strategies and tactics—of which the shock doctrine was one. Very patiently, they waited for Keynesian economics to get into trouble, which it did in the 1970s. They were able to move in and say that they had got the solutions: a completely different way of doing economics and a new way of organising society. This was then picked up by Thatcher and Reagan, and then by Clinton and by Blair, and became hegemonic. What we’re lacking now is a new narrative that acknowledges that neoliberalism has failed, but offers a new story to replace it. We can’t go back to Keynesianism. It ran into all sorts of problems in the 1970s which have not gone away. When people say they’re Keynesians today, they’re just talking about a very small fraction of the Keynesian program: they’re talking about stimulus spending and interest-rate manipulation. But there is a lot more to it than that: capital controls, foreign exchange controls and the International Clearing Union, and a whole series of all other issues that were essential for his program to be carried out. But it’s very hard to see how they could be brought in today. We can certainly recruit elements of Keynesianism but we can’t use the whole package. We need a new political narrative."

"I have been trying to get various different documentaries made. One was about my parents who were political exiles from Argentina. They had been in prison in the 1970s. But I couldn’t get any money to fund it. Then I met a man who had been an interrogator at Abu Ghraib and he wanted to go back to Iraq and apologise to some of the people he had interrogated, and I couldn’t get any money for that either! Then Michael Winterbottom, (who I had co-directed The Road to Guantanamo with) approached me out of the blue to say that he had been approached by Naomi Klein and the producers. And they had asked him to make a film about her book The Shock Doctrine and he wanted to collaborate with me again. I was in the middle of working on a TV programme. But I grabbed hold of a copy of the book and read it over the course of a few nights. I really loved it, and what was so fantastic for me was that all my attempts to look at the subject had all been very subjective and ground-level views, telling a story through my parent’s eyes, etc. But what Naomi does with her book is to try and describe how big events like Iraq happen; why do Guantanamo and Abu Ghraib exist? It starts off with the theory that moments of crisis have been utilised by the right wing in the US and other countries to manipulate people into following their agenda. And that leads all the way up to the economic crisis that we have at the moment."