PDF Summary:The Shock Doctrine, by Naomi Klein
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The Shock Doctrine by Naomi Klein is a study of the history of economic shock therapy, which aims to quickly improve a country’s economy through rapid privatization, deregulation, and severe cuts in government spending. She also describes how it gave rise to the disaster capitalism complex: a privatized system of destruction and rebuilding that funnels billions of dollars into corporate pockets. The book discusses the incredible harm that economic shock therapy and disaster capitalism have caused to millions of people all over the world.
Klein is an award-winning author, filmmaker, and activist. She’s dedicated her life to studying the personal and environmental harms that result from wars and unchecked capitalism.
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Chile’s economic growth that the Times and the Post praised didn’t actually happen until the mid-80s, a decade after Pinochet tried Friedman’s economic shock therapy, and long after he’d radically changed course. The reality is that the Chicago School’s extreme free-market experiment was a disaster. Inflation skyrocketed, many people lost their jobs as the market flooded with cheap imports, and starvation quickly spread. The only ones benefiting from the shock therapy were foreign corporations and a few Chilean financiers who made a great deal of money on market speculation.
By 1982, Chile faced total economic collapse. Free-market capitalism had put all of Chile’s assets in the hands of speculators and financial institutions, who proceeded to run up a massive $14 billion debt. Inflation ran rampant while unemployment climbed to a crushing 30%.
In order to save his country, Pinochet had to do what Allende had done years before: Nationalize major industries and put a firm hand on the economy.
Despite the terrible results of this first experiment, Chile was the beginning—it was the Chicago School’s first major victory in the war to overthrow the New Deal and similar programs around the world. Although their policies didn’t improve life for the vast majority of Chileans, they did funnel wealth to the governmental and corporate elites. During the years of Pinochet’s shock treatment, 45% of Chileans fell into poverty, but the richest 10% of Chileans watched their incomes grow by an average of 83%.
The fast and free flow of money among the elites was like a drug for financial markets worldwide—rather than considering the awful cost of their experiment, or reassessing the free-market model, they immediately began looking for their next fix.
The Crisis Theory
The next major breakthrough for the Chicago School was the Crisis Theory: In simple terms, it meant leveraging a political or economic crisis to win public support, rather than pushing through the neoliberal agenda with brute force. Friedman noticed that people and governments are more receptive to dramatic economic policy changes after a crisis, which allowed an opening for his theories to be adopted.
The Crisis Theory was necessary because, although free-market economics spread quickly and brutally through South America, it had a harder time gaining traction in the US and Britain where democracy was more deeply entrenched, because people weren’t voting for politicians who tried to implement Friedman’s policies.
British prime minister Margaret Thatcher demonstrated how the Crisis Theory could advance Friedman’s policies during the Falklands War of 1982. It was an 11-week struggle between Britain and Argentina for control of the Falkland Islands which gave Britain an outside enemy. The people were swept away by a wave of nationalism and militarism, and they eagerly fell in line behind prime minister Margaret Thatcher. Her approval rating rocketed up from 25% to nearly 60%. Thatcher used her newfound popularity to impose neoliberal economic policies and government repression on a level that she’d told the Chicago School was impossible; for example, using police and government surveillance to squash a coal miners’ strike.
Debt Crises
Margaret Thatcher’s efforts in Britain proved that any sort of crisis could get the people to fall in line. Therefore, advocates of the free market reasoned, if internal crises could be leveraged as effectively as Thatcher leveraged the external crisis of the Falklands War, then they had a chance to fulfill their agenda after all.
Several influential economists noted in the mid-80s that hyperinflation was a type of crisis because it had many of the same effects as war: It created mass fear and confusion, displaced many people, and caused widespread loss of life. For the most orthodox of the Chicago School’s followers, this fact meant that hyperinflation wasn’t a problem to solve, but rather an opportunity to seize.
Ecological Crises
So far the crises that we’ve discussed have all been man-made. However, natural disasters are sometimes even more effective than wars or economic crashes.
The perfect example is December 26, 2004, when a devastating tsunami hit Sri Lanka and almost completely cleared the shoreline. Every hut and fishing boat was swept away in the storm, along with tourist cabanas and bungalows. Approximately 35,000 Sri Lankans died, and almost a million lost their homes—most of whom were small-boat fishers who relied on the sea to live.
This event, which was tragic for the fishers, was a golden opportunity for disaster capitalists. Once the rubble and bodies had been cleared away from the shoreline, they were left with pristine beaches all along the coast, ripe for development. Plus, the free-marketeers could use Sri Lanka’s time of need to make demands and gain concessions in exchange for aid. In short order, the country’s democracy was swept aside and replaced with a forum of ten wealthy Sri Lankan industrialists, who oversaw the “reconstruction.”
Iraq and the Disaster Capitalism Complex
In the early 1990s President George H.W. Bush’s Secretary of Defense, Dick Cheney, tried to bring the modern privatization craze to the US military. He decreased the number of active soldiers and increased the military’s reliance on private contractors like Halliburton. When Donald Rumsfeld joined President George W. Bush’s cabinet as Secretary of Defense in 2001, he continued Cheney’s work. He started laying off huge numbers of troops and personnel and hiring outside agencies like Halliburton and Blackwater to take up the slack in order to create a fully outsourced “hollow shell” government. Under this model, the government’s only role would be to hand out contracts to private companies, which would—supposedly—handle tasks more effectively and efficiently than a large government ever could. This was the birth of the modern disaster capitalism complex: a sprawling system whose only purpose was to funnel government money into corporate pockets.
The War on Terror
Bush and Rumsfeld got the chance to realize their dreams due to a national tragedy: the terrorist attacks of September 11, 2001. The attack provided a common enemy for the people to rally against, and a justification for anything the government did to fight back.
So began Bush’s infamous “War on Terror.” While it was supposedly an effort to defeat terrorism around the world, in practice, it was a smokescreen to build a privatized police state, both at home in the US and abroad in the Middle East. Large sections of the economy, ranging from disaster reconstruction to war and homeland security, were turned over to private contractors.
The Bush administration’s foreign agenda was even more extreme. The US attacked Iraq in response to 9/11 and subjected the people there to violent military shocks.
Then came the economic shock therapy. The Bush administration thought that they’d finally found their “clean slate” and planned to build their perfect free-market economy from the ground up.
However, they ran in trouble on two fronts. First, they were unable to create an effectively clean slate. The occupying forces met violent resistance at every turn. They responded to violence with further violence of their own, and the entire country spiraled into a war of attrition.
Second, they were unable to build a new, functioning economic system. The CPA—Coalition Provisional Authority, Iraq’s interim government—was so understaffed and had so few resources that it couldn’t even begin building the economy that the Bush administration dreamed of. For example, they had only three people assigned to privatizing state-owned factories; by contrast, East Germany had around 8,000 when it undertook the same task.
Ironically, this failure was due to the CPA’s devotion to Chicago School fundamentals. After all, minimizing government spending is a cornerstone of free-market capitalism, but in this case, it meant that they didn’t have the money or resources to do their jobs. Additionally, the CPA staffers’ hatred of all things governmental meant that what they were trying to do—build a new state from the ground up—went directly against their beliefs.
The Davos Dilemma
The ongoing shock treatments around the world culminated in a disturbing realization at the 2007 World Economic Forum.
For many years, people had believed that stability and peace were necessary for steady economic growth. The Forum, however, was puzzled by a global trend that seemed to buck this common knowledge. The world had been rocked by a near-constant series of shocks, beginning with the stock market crash of 2000 and the terrorist attacks on September 11, 2001. Despite that, the global economy was growing at an incredible rate.
The logical conclusion was that the economy no longer relies on stability—quite the opposite, in fact. Corporate profits all over the world are actually increasing in the face of sustained conflict and repeated disasters.
This conclusion correlates directly with the rise of the massive, multipurpose disaster capitalism complex of the 2000s, where massive contracts were granted to private firms in every industry from fuel to construction—and, of course, security and defense.
Conclusion: Recovering From Shock
As we’ve seen, free-market policies always result in a huge transfer of wealth and power from the lower economic classes to the upper ones. That transfer never happens peacefully, and in many cases, it doesn’t happen legally. That’s why free-market crusaders have to shock countries into submission: Their economic reforms can only go through when the people are too exhausted or stunned to fight back.
However, by its very nature, shock eventually wears off. For example, in 2001, Argentina—a former shock therapy laboratory—ousted a series of five presidents in three weeks, all while demanding freedom from the Chicago School’s policies.
Lebanon similarly rejected foreign aid—and the economic shock therapy attached to it—in 2006. Despite being deeply in debt and desperate for funds, Lebanese economists and some political leaders recognized that all of the profit would go to the disaster capitalism complex, while all of the hardship would fall upon their own people. General strikes and protests erupted all over the country in response to the proposed shock therapy, and the economy came to a screeching halt.
Recovering as a Community
However, even as people recover, they face daunting obstacles in reclaiming their countries. Perhaps the biggest problem of all is that they now have to rebuild entire communities from the rubble that economic shock therapy left behind, and they have to do it largely without foreign aid. Nonetheless, there’s cause for hope: communities all over the world are already doing it.
For example, Thailand was hit by a tsunami similar to the one that devastated Sri Lanka. However, unlike Sri Lanka, the Thai people rebuilt their own settlements and fishing communities, often within mere months.
In Thailand—and everywhere else that citizens have bucked the disaster capitalism complex by taking reconstruction into their own hands—people say that they’re not just healing their communities, but themselves as well.
That’s because shock is, in essence, a feeling of powerlessness; people feel like they’re being swept away by forces that they can’t hope to resist. Therefore, rebuilding their own communities is an expression of their personal power and a rejection of that helplessness.
The reconstruction efforts also wholly reject the endless quest for clean slates upon which to build model civilizations. These people aren’t starting from scratch but from the ruins of their old homes. They make do with whatever tools and materials they can salvage, and their only ideologies are community and practicality.
As we’re now seeing, communities can join together to support each other and rebuild, rather than waiting for external aid that comes with ulterior motives. These communities are coming back quickly, efficiently, and—most important of all—durably; the people won’t be taken in again by the false promises of economic shock therapy and disaster capitalism.
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PDF Summary Chapter 1: What Is Shock Therapy?
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The Search for the “Clean Slate”
Shock therapy is traditionally known as a treatment for mental disorders. It was pioneered in the 1940s and 1950s by Dr. Ewen Cameron. In his day, Dr. Cameron was a renowned psychiatrist—for a time, he was even the president of the World Psychiatric Association.
However, Dr. Cameron developed and practiced treatments that we would now consider torture. He frequently used electroconvulsive therapy (ECT): a treatment wherein electric shocks are administered to a patient’s brain, intentionally triggering a seizure. He also gave his patients massive doses of stimulants, depressants, or hallucinogens, and subjected them to isolation and sensory deprivation. In short, he tried to break their minds in any way he could.
Cameron’s ultimate goal was to regress his patients to infancy—what he termed a blank slate. He believed that, once their current thoughts and memories were wiped away, he could easily reprogram his patients with new, healthy thought patterns.
However, while Cameron was very successful at breaking his patients’ minds, he was completely unsuccessful at rebuilding them. He couldn’t get them to accept the new thought patterns...
PDF Summary Chapter 2: Milton Friedman’s Counter-Revolution
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According to the Chicago School of Economics, any problems that arise must be because the market isn’t really free, and the solution must be to remove all regulations and interference.
In short, Friedman’s version of capitalism was more like religious fundamentalism than science. Furthermore, like religious fundamentalists, his greatest enemies weren’t the fundamentalists of other “religions” like Marxism. Rather, he despised those who sought a mix of capitalism and government intervention, such as social democrats or Keynesians (described below).
Keynesian Economics
John Maynard Keynes was a hugely influential economist in the early 1900s. His ideas were so prominent that, even to this day, there’s a school of economic thought that bears his name.
Keynesian economics is based on increasing demand in the economy by increasing government spending and economic intervention, while at the same time cutting taxes. In simple terms, this school of thought suggests bolstering the economy by giving average people more spending money.
Keynesians favored capitalism in some aspects of the economy but demanded government-controlled education, government ownership...
PDF Summary Chapter 3: The First Shock Experiment
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While Pinochet handled the military matters, Chile’s Chicago-trained economists quickly published and distributed their 500-page economic bible, which came to be known simply as The Brick. Soon, copies of The Brick were on the desks of those military officers who would be running the new government.
The plan laid out in this lengthy book bore all the hallmarks of Milton Friedman’s teachings. It called for deregulation, privatization, and few-to-no social programs run by the government. The economists assured Pinochet that the market would naturally govern itself, and would find its proper balance shortly after he withdrew government interference.
These were exactly the same ideas that the Chicago School had tried to implement peacefully, only to be soundly rejected. However, this time, anyone who would have resisted was either dead, imprisoned, or terrified into submission. Pinochet’s government gladly adopted The Brick’s policies.
Their extreme free-market experiment was a disaster. Inflation skyrocketed, jobs were lost as the market was flooded with imports, and starvation quickly spread. Even Pinochet himself seemed concerned about how badly his people were...
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Learn more about our summaries →PDF Summary Chapters 4-5: Violence and the Free Market
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Letelier published a highly controversial article detailing all of the above points. Less than a month later, on September 21, 1976, he was assassinated with a car bomb. The assassin, as the FBI would discover, was a high-ranking member of Pinochet’s secret police who’d gotten into the US with a fake passport and the CIA’s approval.
Enforcing Purity
The Chicago School’s economic theories were based on ideals like natural order and balance, and a belief that the system itself—rather than the government—needed to have absolute control. Chicago economists believed that the market had to be absolutely free of what they called distortions, such as social programs and government regulations.
This emphasis on purity naturally meant that a regime trying to implement these theories couldn’t tolerate the existence of competing ideologies, like developmentalism. Anything that threatened to cause “distortions” in the market had to be wiped out by any means necessary.
This meant that the juntas needed to crush not just an opposing ideology, but the dominant ideology of the Southern Cone. They did so with scientific precision and religious fervor, using a combination of...
PDF Summary Chapters 6-8: The Crisis Theory
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- Resistance in Britain: In 1981, the economist Friedrich Hayek—who taught at the Chicago School, where he was held up on something of a pedestal—took a trip to Chile to see what the Chicago-trained economists had created. He was so impressed with the free flow of money there that he wrote to his friend Margaret Thatcher, then-prime minister of Britain, and urged her to transform Britain’s economy in a similar way.
Thatcher, however, insisted that such an economic shock program wouldn’t be possible in Britain. Trying to implement free-market policies would practically guarantee that Thatcher (who was already losing popularity) would be soundly defeated in the next election.
Thatcher Brings the Free Market to Britain
Things looked grim for the Chicago School economists’ dreams of a global free market until a seemingly insignificant military conflict changed the course of economics.
The 1982 Falklands War—or the Malvinas War if you’re in Argentina—was an 11-week struggle between Britain and Argentina for control of the Falkland Islands. While the conflict was trivial from a military standpoint, from a political standpoint it was exactly what Thatcher needed to...
PDF Summary Chapter 9: The Struggle for Self-Determination
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Solidarity turned to the IMF for help, which by this point was firmly controlled by Chicago School economists. Those economists didn’t see a country that had struck a heavy blow against the communist regime that the US so hated—they only saw another place reeling from debt and inflation, caught in the throes of a sudden regime change. In other words, another perfect target for shock therapy.
Meanwhile, the US government congratulated Solidarity on its decisive victory against the Communist party, but still insisted that the Polish people would still have to pay the debts they had inherited from their former oppressors. The US only donated a pittance in aid—$119 million, when the country needed billions.
Sachs Arrives in Poland
While Poland was being denied aid on all fronts, Jeffrey Sachs began working as an advisor for Solidarity. After what he’d done in Bolivia—which the rest of the world only knew about through carefully sanitized reports—Poland saw him as nothing short of a messiah.
Sachs’s plan was standard Chicago School neoliberalism: Getting rid of price controls, cutting subsidies, privatizing the state-owned mines, factories, and shipyards, and...
PDF Summary Chapter 10: South Africa’s Struggle
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In the 1980s a new generation of freedom fighters picked up the Charter. This younger generation was fearless, militant, and ready to do whatever it took to topple the white supremacist state. They marched and protested relentlessly, refusing to back down even when met with tear gas and bullets.
Nelson Mandela’s Chance
One key player in this struggle was Nelson Mandela. He was a South African revolutionary who was imprisoned in 1962 on charges of treason. He spent 27 years in prison, but never backed down from his beliefs or gave up hope that the country could be free. He was, in many ways, both the face and the heart of the ANC.
In 1990, Mandela wrote a simple two-sentence letter to his supporters outside the prison stating that the ANC was still committed to nationalizing banks, mines, and monopoly industries for the good of the people, and that it always would be. Officially, it was a policy statement from the ANC. However, in reality, it was reassurance that he was still fighting after almost three decades in prison.
On February 11, 1990, just two weeks after sending that letter, Nelson Mandela walked free. People all over South Africa celebrated his release,...
PDF Summary Chapter 11: Russia’s Three Shocks
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Gorbachev was unwilling to go to those extremes, but Boris Yeltsin—one of his political opponents—had no such reservations. Three painful shocks followed that fateful G7 summit: one political, one economic, and one psychological.
The First Shock: The Soviet Union Dissolves
Boris Yeltsin, who by 1991 had abandoned the Communist party and run as an independent, was the current president of Russia. However, his power was overshadowed by Gorbachev, who was president of the entire Soviet Union. Thus, in order to realize his dream of becoming the Russian Pinochet, Yeltsin needed to increase his own power and get Gorbachev out of the way.
His opportunity came in August of 1991, when the deposed Communist party unsuccessfully tried to depose him. A group of party members drove tanks up to the Russian parliament building and threatened to attack the democratically-elected parliament. Yeltsin, along with a large group of Russians determined to protect their new democracy, faced down the tanks from the steps of the Parliament building. Eventually, the tanks turned and drove away without harming anyone.
The event was a huge boost to Yeltsin’s popularity, and he leveraged...
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PDF Summary Chapter 12: Sachs’s Successor
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Secondly, while Sachs saw the end of the Cold War and the Soviet Union’s collapse as another opportunity for shock therapy, many others saw it as a rousing victory for capitalism and democracy. They still viewed Russia as an enemy—even though the conflict was officially over—so they had no interest in helping.
Capitalism’s Global Monopoly
In one sense, simple free-market ideology had held back aid to Russia. Basically, with the Soviet Union gone, capitalism had a monopoly on the world.
While the Soviet Union had been a world superpower, people could—at least theoretically—decide whether they supported capitalism or communism. During times of economic hardship, such as after World War II in Europe or during the Great Depression in America, socialism and communism always grew in popularity; having a government that promised to take care of people’s needs started sounding better than the ruthless individualism of pure capitalism.
Therefore, governments and economists had needed to soften capitalism and make it more appealing. They did this through government-sponsored jobs, social programs to make sure that people could afford to eat, and foreign aid to help...
PDF Summary Chapter 13: Shock Therapy in Asia
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Mutual fund brokers had previously presented the Asian countries as a single investment package. As a result, the crisis quickly spread beyond Thailand to Indonesia, the Philippines, Malaysia, and South Korea. Those countries had to empty their reserve banks just to sustain their currencies, which caused the unfounded rumor to become a reality: Now they really were going broke.
Decades’ worth of wealth disappeared from Asian stock markets in a single year. Naturally, as the economic situation in Asia worsened, investors were less willing to put money into those countries. Asian nations were caught in a cycle of fear that could only be stopped by a sudden, large influx of money.
However, the message from the financial establishment was clear: do not help Asia. Milton Friedman himself appeared on CNN to insist that the market be allowed to correct itself, as per Chicago School orthodoxy.
In November 1997, at the Asia Pacific Economic Cooperation Summit, US president Bill Clinton made their position clear: The US Treasury wouldn’t be stepping in. The IMF was similarly reluctant—when it finally did respond, it wasn’t with a simple loan, but a list of now-familiar...
PDF Summary Chapters 14-15: The Washington Consensus at Home
... Then, in 1995, Halliburton brought Cheney on as its new CEO. Thanks to that vague contract they’d created together when he was Secretary of Defense, Cheney and Halliburton could expand the definition of “logistical support” until the company was effectively in charge of an entire overseas military operation.
Under Cheney’s leadership, Halliburton almost doubled the amount of money it received from the US government—from $1.2 billion to $2.3 billion—in just five years. Cheney himself was richly rewarded for his work, too. Before taking office as Bush Jr’s vice president, he estimated his net worth at somewhere between $18 million and $82 million, with as much as $30 million of that coming from his Halliburton stock options.
Privatizing Domestic Affairs
With the Cold War over, defense contractors like Lockheed Martin—which relied on government weapons contracts for income—needed a new strategy. Their new approach was to get involved in work that was traditionally handled by civil servants: everything from sorting mail to monitoring air traffic. Their efforts got a boost in the 2000s, after George W. Bush took office—Bush was absolutely in favor of private contractors...
PDF Summary Chapters 16-17: Iraq: the Culmination of Neoliberalism
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- Establishing democracy after the fact—which is to say, using post hoc elections to lock in the changes
Bush sold the project to Americans with a simple promise that they were bringing freedom to a troubled area. Many mistook this for a promise of free and fair democracy. However, the real objective was the corporate freedom established in so many other countries: the freedom for private companies to harvest as much wealth and as many resources as possible.
From Military Shock to Economic Shock
The invasion and occupation of Iraq marked a brutal return to the earliest strategies of the free-market vendetta—using shock and awe to wipe out any resistance to fundamentalist capitalism. However, the War on Terror went even farther and faster than any previous efforts. It was as though strategists and economic experts reviewed the available shock tactics and decided to just use them all.
The operation began with sudden, overwhelming military force. In the weeks between March 20 and May 2, the US military bombarded Iraq with over 30,000 bombs—for context, that was 2/3 of the bombs ever made up to that point.
It was massive overkill from a military perspective, but...
PDF Summary Chapter 18: Junta Tactics in Iraq
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Bremer’s next problem was the fact that local elections were cropping up in cities and towns all over Iraq. He ordered that all such elections stop; local leaders were to be chosen by the occupying forces, not by the Iraqi people. In those places where elections had already happened, the newly elected councils were disbanded.
Renewed Violence in Iraq
Many people stationed in Iraq during these months say that there’s a clear link between Bremer’s efforts to suppress democracy and the increase in Iraqi resistance. For example, shortly after Bremer appointed his Governing Council, terrorists attacked both the Jordanian mission and the UN’s local headquarters in Baghdad.
It seems likely that even Bremer himself knew that his policies would spark violence. In 2001, long before he took charge of operations in Iraq, Bremer warned US firms that they were at increased risk of terrorist attacks due to rising unemployment and income inequality—results of the same free-market system that had made them rich.
Even so, Iraqis were still expecting the US to organize national elections and peacefully hand over power once to whoever won the majority vote. However, in late 2003, Bremer...
PDF Summary Chapter 19: Ecological Shocks
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- Open the fishing business to large industrial corporations, rather than allow it to be handled by individuals in small boats
- Accept hefty loans from the World Bank and IMF—in this case, so that Sri Lanka could quickly update its infrastructure
The shock therapy plan, which was called Regaining Sri Lanka, was finalized in early 2003 and the World Bank gave its stamp of approval. However, many Sri Lankans—particularly the impoverished fishers displaced by the fighting—resisted this plan for economic shock therapy.
For one thing, they’d just come out of a prolonged civil war, fighting for ideals like “homeland” and “territory.” Now that the fighting had finally paused, the plan called for them to give up what meager properties they had and allow corporate interests to build there. Naturally, the people had no interest in doing so.
For another, this was 2003, and the world’s love affair with global free-market capitalism had taken a severe hit after the Asian economic crisis. Many Sri Lankans predicted that, for most citizens, the sacrifices wouldn’t be worth the economic gains.
Sri Lankans soundly rejected the plan by USAID and the World Bank. First, a wave of...
PDF Summary Chapters 20-21: Discrimination After a Disaster
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A Test of Faith for the Free Market
When Katrina hit, the whole world got to see the sharp divide between the patients of Ochsner Hospital and Charity Hospital. Those who had the means simply left town, went to hotels, and started making arrangements with their insurance companies. Meanwhile, the poorest residents of New Orleans were left behind to drown.
It was a shocking revelation for many people. Even those who understood the inequalities that people faced in day-to-day life had thought that major disasters would be exceptions to the rules of capitalism—that the state would step up and help those who’d been hit the hardest. The response to Katrina proved that that was not the case.
FEMA had previously paid private contractors $1 million to make comprehensive plans for just such a storm. However, when the time came for the government to put those plans into effect, the coffers were suddenly empty. The response to Katrina was so weak that aid struggled to even reach the New Orleans Superdome—where some 23,000 people were stranded with no food or water, and where media from all over the world had already been for days.
As in Iraq, the US government proved to be...
PDF Summary Conclusion: Recovering as Communities
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Although Lebanon’s prime minister did accept the funds, and the terms that came with them, the citizens were much less cooperative. General strikes and protests erupted all over the country and brought the economy to a screeching halt.
The upheavals around the world are existential threats to free-market ideology. Remember, one of the Chicago School’s central claims is that free-market capitalism and democracy are inseparable elements of freedom; but now, politicians from the US to Venezuela are starting to win elections by opposing neoliberal economics.
Even in the US—where the Bush administration cemented “free enterprise” into the National Security Strategy and backed it up with the threat of the world’s largest military—people are rejecting Chicago School orthodoxy. A 2006 poll by the New York Times and CBS found that 64% of Americans believe that the country should have universal healthcare, and were willing to pay a bit more in taxes to reach that goal.
Rebuilding Communities
Unfortunately, those people shaking off the effects of shock now face two major problems. The first is that, although people are starting to buck the disaster capitalism complex and...