The Shock Doctrine: The Rise of Disaster Capitalism

Extreme violence has a way of preventing us from seeing the interests it serves.

The parties with the most gain never show up on the battlefield.

The widespread abuse of prisoners is a virtually foolproof indication that politicians are trying to impose a system--whether political, religious or economic--that is rejected by large numbers of the people they are ruling. Just as ecologists define ecosystems by the presence of certain "indicator species" of plants and birds, torture is an indicator species of a regime that is engaged in a deeply anti-democratic project, even if that regime happens to have come to power through elections.

When it comes to paying contractors, the sky is the limit; when it comes to financing the basic functions of the state, the coffers are empty.

What we have been living for three decades is frontier capitalism, with the frontier constantly shifting location from crisis to crisis, moving on as soon as the law catches up.

The American Society of Civil Engineers said in 2007 that the U.S. had fallen so far behind in maintaining its public infrastructure -- roads, bridges, schools, dams -- that it would take more than a trillion and half dollars over five years to bring it back up to standard. Instead, these types of expenditures are being cut back. At the same time, public infrastructure around the world is facing unprecedented stress, with hurricanes, cyclones, floods and forest fires all increasing in frequency and intensity. It's easy to imagine a future in which growing numbers of cities have their frail and long-neglected infrastructures knocked out by disasters and then are left to rot, their core services never repaired or rehabilitated. The well-off, meanwhile, will withdraw into gated communities, their needs met by privatized providers.

protected businesses never, never become competitive ... Halliburton, Bechtel, Parsons, KPMG, RTI, Blackwater and all other U.S. corporations that were in Iraq to take advantage of the reconstruction were part of a vast protectionist racket whereby the U.S. government had created their markets with war, barred their competitors from even entering the race, then paid them to do the work, while guaranteeing them a profit to boot - all at taxpayer expense.

Regardless of the overall state of the economy, there is now a large enough elite made up of new multi-millionaires and billionaires for Wall Street to see the group as "superconsumers," able to carry consumer demand all on their own.

Like Russia's gangsterism and Bush's cronyism, contemporary Iraq is a creation of the fifty-year crusade to privatize the world. Rather than being disowned by its creators, it deserves to be seen as the purest incarnation yet of the ideology that gave it birth.

Authoritarian Communism is, and should be, forever tainted by those real-world laboratories. But what of the contemporary crusade to liberate world markets? The coups, wars and slaughters to instill and maintain pro-corporate regimes have never been treated as capitalist crimes but have instead been written off as the excess of overzealous dictators, as hot fronts in the Cold War, and now of the War on Terror. If the most committed opponents of the corporatist economic model are systematically eliminated, whether in Argentina in the seventies or in Iraq today, that suppression is explained as part of the dirty fight against Communism or terrorism - almost never as the fight for the advancement of pure capitalism.

During the Cold War, widespread alcoholism was always seen in the West as evidence that life under Communism was so dismal that Russians needed large quantities of vodka to get through the day. Under capitalism, however, Russians drinks more than twice as much alcohol as they used to - and they are reaching for harder painkillers as well.

The theory of economic shock therapy relies in part on the roleof expectations on feeding an inflationary process. Reining in inflation requires not only changing monetary policy but also changing the behavior of consumers, employers and workers. The role of a sudden, jarring policy shift is that it quickly alters expectations, signaling to the public that the rules of the game have changed dramatically - prices will not keep rising, nor will wages.

It (the Chinese move to embrace capitalism in 1989) is a mirror of the corporatist state first pioneered in Chile under Pinochet: a revolving door between corporate and political elites who combine their power to eliminate workers as an organized political force. The creation of today's market society was not the result of a sequence of spontaneous events but rather of state interference and violence.

in moments of crisis, people are willing to hand over a great deal of power to anyone who claims to have a magic cure—whether the crisis is a financial meltdown or, as the Bush administration would later show, a terrorist attack.

By the time the think-tank lifers arrived in Baghdad, the crucial roles in the reconstruction had already been outsourced to Halliburton and KPMG. THeir job as the public servants was simply to administer the petty cash, which in Iraq took the form of handling shrink-wrapped bricks of hundred-dollar bills to contractors. It was a graphic glimpse into the acceptable role of government in a corporatist state - to act as a conveyor belt for getting public money into private hands, a job for which ideological commitment is far more relevant than elaborate field experience.

The widespread abuse...is a virtually foolproof indication that politicians are trying to impose a system - whether political , religious or economic - that is rejected by large numbers of the people they are ruling...an indicator of a regime that is engaged in a deeply anti-democratic project, even if that regime happens to have come to power through elections.

The dirty secret of the neoliberal era is that these ideas were never defeated in a great battle of ideas, nor were they voted down in elections. They were shocked out of the way at key political junctures.

The Marshall Plan was the ultimate weapon deployed on this economic front. After the war, the German economy was in crisis, threatening to bring down the rest of Western Europe. Meanwhile, so many Germans were drawn to socialism that the U.S. government opted to split Germany into two parts rather than risk losing it all, either to collapse or to the left. In West Germany, the U.S. government used the Marshall Plan to build a capitalist system that was not meant to create fast and easy new markets for Ford and Sears but, rather, to be so successful on its own terms that Europe’s market economy would thrive and socialism would be drained of its appeal.

It was in 1982 that Milton Friedman wrote the highly influential passage that best summarizes the shock doctrine. " Only a crisis-actual or percieved-produces real change. When the crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.

...while the IMF certainly failed the people of Asia, it did not fail Wall Street - far from it. The hot money may have been spooked by the IMF's drastic measures, but the large investment houses and multinational firms were emboldened...These fun-seeking firms understood that as a result of the IMF's "adjustments," pretty much everything in Asia was now up for sale - and the more the market panicked, the more desperate Asian companies would be to sell, pushing their prices through the floor.

As a means of extracting information during interrogations, torture is notoriously unreliable, but as a means of terrorizing and controlling populations, nothing is quite as effective.

there is no humane way to rule people against their will.

We do not always respond to shocks with regression. Sometimes, in the face of crisis, we grow up—fast.

When Dick Cheney and Donald Rumsfeld conflate what is good for Lockheed, Halliburton, Carlyle and Gilead with what is good for the United States and indeed the world, it is a form of projection with uniquely dangerous consequences.

The recent spate of disasters has translated into such spectacular profits that many people around the world have come to the same conclusion: the rich and powerful must be deliberately causing the catastrophes so that they can exploit them.

No country offered more lucrative conditions than China: low taxes and tariffs, corruptible officials and, most of all, a plentiful low-wage workforce that, for many years, would be unwilling to risk demanding decent salaries or the most basic workplace protections for fear of the most violent reprisals.

This is what Keynes had meant when he warned of the dangers of economic chaos—you never know what combination of rage, racism and revolution will be unleashed.

The vast majority of the victims of the Southern Cone’s terror apparatus were not members of armed groups but non-violent activists working in factories, farms, shantytowns and universities. They were economists, artists, psychologists and left-wing party loyalists. They were killed not because of their weapons (which most did not have) but because of their beliefs.

I had just one goal—to stay alive until the next day … . But it wasn’t just to survive, but to survive as me. —Mario Villani,

Katrina was not unforeseeable. It was the result of a political structure that subcontracts its responsibility to private contractors and abdicates its responsibility altogether. —Harry Belafonte, American musician and civil rights activist, September 20052