Thread: The Shock Doctrine

This might be more appropriate in the history section. However since Klein seems very critical of Friedman and my question pertains to this I'll post here.

After reading some reviews on amazon.com it seemed many thought of Klein as a bit of an abuser of academics. Many suggested reading some of Friedman's books (I'm currently reading Capitalism and Freedom). I was wondering if this might be based on faulty facts found in Klein's book, a process used in economics (a process like systmatic naturalism used in other sciences), or just a bias on the part of the reviewer? I know you can't read people's minds, I am just asking for speculation based on your experience with economics and economists.

I recently read The Shock Doctrine and it certainly gave a perspective on free market economics that was new to me. As a history, I think it is probably factually fairly accurate, although no way could I vouch for that. (The bibliography looks extensive - what does that prove?)

The real thrust of the book is not so much that Friedmanite capitalism is fair or unfair, or works as advertised or doesn't work at all. The premise is that a state of sustained free market capitalism is only achievable if it is imposed by an authoritarian government, so the basic idea of freedom from government control is unrealistic to begin with.

The reason is that in any form of representative democracy people vote their self-interest and the middle class and the poor will always outnumber the so-called capitalist class so there will always be a social safety net and regulation of markets. This is anathema to the Friedmanites, but it is unavoidable in a democracy. Hence the free market that was Friedman's goal is made impossible by the very self-interest that he thought would create it. This paradox is Klein's thesis, amply supported by examples of dictatorships in Chile, Argentina and Russia failing to deliver the goods, and of the IMF and the World Bank dictating terms to desperate countries (such as post Cold War Poland and post-apartheid South Africa) when a home-grown dictator was not available.

Klein certainly has a left of center viewpoint, and I question her objectivity. It would be interesting to debate to what extent our current economic crisis is a demonstration of a fatal weakness of unregulated capitalism in a democracy. My own view has always been that capitalism is the essential engine that creates wealth but a pragmatic level of regulation and a social safety net are both necessary to keep that engine running smoothly.

It would be interesting to debate

Or then again, not.

"capitalism is the essential engine that creates wealth"

fine then, The plantation owner would probably "say something similar" about how slavery is an essential engine that creates wealth(for him).

The Feudal lord whose vast castle was built by laborers living in shacks, whose royal banquet was provided by starving farmers whose crop were stolen to feed the lord, his court, the henchmen that kept the repression going, as well as the clergy that made up excuses to justify the plundering(God anointed the King, toil and you shall be rewarded in the afterlife), he probably thought that Feudalism and fooling people with religion was a great engine of wealth too.

The people in Rome enjoying Bread and Circuses funded from the looting (litteral and indirect) of other regions of the empire might also have felt that Imperial domination of other countries was a good bargain that created wealth.

The US has been pillaging countries left and right for a century, oppressing local populations that lived in poverty while their natural ressources are being syphoned off to Wall Street (with a small cut to the local puppet-dictator). Read Smedley Butler's speech on intervention
"And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.

I suspected I was just part of a racket at the time. Now I am sure of it. Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service.

I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912 (where have I heard that name before?). I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.

During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents."

When the population opposes the pillaging and syphoning of their ressources by electing a governement that wants to nationalize ressources or utilities, the US Media makes up a story about how bad that government is (and the US public blindly believes it and asks for more) then the Marines are sent on the march(old fashioned way) or the CIA uses the terrorism/destabilisation/election-rigging/assasination/death-squad method and replaces the government with a dictator(Pinochet, Shah, etc).

So sure, Capitalism is an engine of wealth, like feudalism, slavery and imperial rule, and so on the only question is for whom? If you have been the unwilling and unknowing benefactor of other people's oppression, you might be rating the benefits of capitalism as being higher than those with the short end of the stick(people in Banana Repubic or whose families were killed for oil in Iraq).

Originally Posted by icewendigo

The plantation owner would probably share your feeling about how slavery is an essential engine that creates wealth(for him).

Please do not attribute "feelings" to me about subjects I haven't even discussed.