the klein doctrine: the rise of disaster polemics · ofiraq.shock-shock-shock.getit? hidden in...

The Klein DoctrineThe Rise of Disaster Polemics

by Johan Norberg

Johan Norberg is a senior fellow at the Cato Institute and the author of, among other books, In Defense of Global Capitalism.

No. 102

Naomi Klein’s The Shock Doctrine purports tobe an exposé of the ruthless nature of free-marketcapitalism and its chief recent exponent, MiltonFriedman.Klein argues that capitalismgoeshandin hand with dictatorship and brutality and thatdictators and other unscrupulous political fig-ures take advantage of “shocks”—catastrophesreal ormanufactured—to consolidate their powerand implement unpopularmarket reforms. Kleincites Chile under General Augusto Pinochet,Britain under Margaret Thatcher, China duringthe Tiananmen Square crisis, and the ongoingwar in Iraq as examples of this process.

Klein’s analysis is hopelessly flawed at virtual-ly every level. Friedman’s ownwords reveal him tobe an advocate of peace, democracy, and individ-ual rights. He argued that gradual economicreforms were often preferable to swift ones andthat the public should be fully informed about

them, the better to prepare themselves inadvance. Further, Friedman condemned thePinochet regime and opposed the war in Iraq.

Klein’s historical examples also fall apartunder scrutiny. For example, Klein alleges thatthe Tiananmen Square crackdownwas intendedto crush opposition to pro-market reforms,when in fact it caused liberalization to stall foryears. She also argues that Thatcher used theFalklands War as cover for her unpopular eco-nomic policies, when actually those economicpolicies and their results enjoyed strong publicsupport.

Klein’s broader empirical claims fare no bet-ter. Surveys of political and economic freedomreveal that the less politically free regimes tendto resist market liberalization, while those stateswith greater political freedom tend to pursueeconomic freedom as well.

May 14, 2008

Executive Summary

Cato Institute • 1000 Massachusetts Avenue, N.W. • Washington, D.C. 20001 • (202) 842-0200

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

Introduction

Since its publication last fall, Canadianauthor Naomi Klein’s book The ShockDoctrine:The Rise of Disaster Capitalism has alreadybecome a bible for young anti-capitalistactivists. Established reviewers have praised itas well. As philosopher John Gray explains inThe Guardian: “There are very few books thatreally help us understand the present. TheShock Doctrine is one of those books.”1 In theNew York Times, Nobel laureate Joseph Stiglitzwrites that it is “a rich description of the polit-ical machinations required to force unsavoryeconomic policies on resisting countries.”2

According to Amazon.com’s editors, it is oneof the 10 best nonfiction books of 2007.

Klein’s thesis is that economic liberalizationis unpopular and, therefore, can only win bydeceiving or coercing voters. In particular, free-market ideas rely on crises. In a time of a nat-ural disaster, war, or military coup, people aredisoriented and confused and fight for theirown immediate survival or wellbeing, settingthe stage for corporations, politicians, andeconomists to push through trade liberaliza-tion, privatization, and lower public spendingwithout facing any opposition. According toKlein, “neoliberal” economists welcomedHurricaneKatrina, the2004 Indonesian tsuna-mi, the IraqWar, and the South Americanmil-itary coups of the 1970s as opportunities toerase past policies and introduce radical free-market models. If wars and disasters aren’tenough to shock the citizens, neoliberals arepurportedly happy to see the opponents ofreform being attacked and tortured into sub-mission. The chief villain in Klein’s story isMilton Friedman, the Chicago economist whodid more than anyone in the 20th century topopularize free-market economics.

Tomakeher case,Klein exaggerates the free-market reformsthat takeplace in timesofcrisis,often by ignoring central events and rewritingchronologies. She uses loose metaphors andwild distortions to claim that freemarkets are aform of violence. She confuses libertarianismwith corporatism and neoconservatism and

blames Milton Friedman for encouragingreform by stealth. To do so, she engages in oneof themostmalevolent distortions of a thinkerthat has been done in a major work in recentyears. Klein tries to portray themild-manneredand freedom-loving Dr. Friedman as a cold-hearted, war-mongeringMr. Hyde.

Dr. Friedman and Mr. Hyde

According to Klein, Milton Friedman wel-comed crisis as a way of making people dis-oriented and confused. With the public thuspreoccupied, the economy could be drastical-ly liberalized without any concern for thehuman costs. Klein’s Exhibit A against Fried-man is a quote from “one of his most influ-ential essays”:

Only a crisis—actual or perceived—pro-duces real change. When that crisisoccurs, the actions that are takendependon the ideas that are lying around. That,I believe, is our basic function: to developalternatives to existing policies, to keepthem alive and available until the politi-cally impossible becomes politicallyinevitable.3

This is “the shock doctrine,” according toKlein, the very source of inspiration for allthose reformers who apparently welcomeconflicts, disasters, and war. In the not verysubtle short film that accompanies the book,Klein shows this quote over images of pris-oners being tortured and given electricalshocks, to give the impression that this is thekind of crisis Friedman would welcome.4

But the quote is not from one of Fried-man’s most influential essays. It’s from thevery brief introduction to the 1982 edition ofCapitalism and Freedom (which was originallypublished in 1962).5 And it’s not about wel-coming disasters, it’s about pointing out therelatively uncontroversial fact that peoplechange their ways when it seems like the oldways fail—something Klein does not contra-dict. In fact, from the example that Friedman

2

Klein’s thesisis that economic

liberalizationis unpopular

and, therefore,can only win by

deceiving orcoercing voters.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

provided (that interest in free markets grew ascommunism failed in China and the SovietUnion, and the United States and UnitedKingdom suffered from stagflation), it is obvi-ous that Friedman was not advocating shocksand crises to force anyone to abandon the oldways that they cling to, but merely observingpeople themselves demanded changewhenoldsystems failed.But in the restof thebook,Kleinpretends that she has proved that Friedmanwas in favor of deliberately provoking crises.

Klein also provides supporting quotes tostrengthen this interpretation, and they aretaken out of context in the samemanner. Shepretends that Friedman’s concept of the“tyranny of the status quo” means the tyran-ny of voters, and that a crisis was needed forpoliticians to bypass the democratic process.6

For Friedman, the tyranny of the status quowas something entirely different—an iron tri-angle of politicians, bureaucrats, and specialinterest groups (businesses, for example) whoadvance their own welfare at the voters’expense.7

When Klein talks about Friedman’s sug-gestions to reduce inflation, she writes,“Friedman predicted that the speed, sudden-ness and scope of the economic shifts wouldprovoke psychological reactions in the publicthat ‘facilitate the adjustment.’”8

Klein gives the impression that Friedmanwas brutal and wanted to inflict pain to dis-orient people and push his reforms through.Theuse of thewords “psychological reactions”is also important, becauseKlein tries to associ-ate liberal reforms with psychological tortureand electrical shocks. But the quote in itsentirety shows that Friedman had somethingvery different in mind. He actually wrote thatif a government chooses to attack inflation inthis way: “I believe that it should be an-nounced publicly in great detail . . . . Themorefully the public is informed, the more will itsreactions facilitate the adjustment.”9

In other words, if the people are not igno-rant, and not disoriented, but fully informedof the reform steps, they would facilitate theadjustment by changing their behavior whenit comes to negotiations, saving, consuming,

and so on. Friedman’s view was the completeopposite of what Klein pretends it is.10

In the same manner, Klein conveys theimage of the “Chicago school” of economicsas a home for dogmatists and fundamental-ists, brainwashing their students and plottingtheir global power grab. The reality is that theChicago school became eminent not just forits quality but for its openness. All ideas werewelcome as long as you could argue well.Friedman himself listed “tolerance for diversi-ty” as one of the reasons for the ChicagoSchool’s success.11 After having talked toFriedman’s former colleagues and students,his biographer Lanny Ebenstein writes that heencouraged students to learn from otherapproaches than his own and he didn’t try toconvert themtohis positions.Hismethodwasthe rigorous testing of hypotheses with empir-ical data, and he was quick to admit mistakeswhen someone else found them in his work.12

Six Days in Chile

Klein cites the influence of Milton Fried-man’s economic views on Augusto Pinochet’smilitary dictatorship in Chile in the 1970s asevidence that free markets rely on tyranny andtorture. She writes that Friedman acted as“adviser to the Chilean dictator.”13 This iswrong. Friedman never worked as an adviserand never accepted a penny from the Chileanregime. He even turned down two honorarydegrees fromChilean universities that receivedgovernment funding because he thought itcould be interpreted as a support for theregime.

However, he was in Chile for six days inMarch 1975 to give public lectures, invited bya private foundation. When he was there healso met once with Pinochet for around 45minutes, and wrote him one letter afterwards,arguing for a plan to end hyperinflation andliberalize the economy. That was the samekind of advice Friedman gave to communistdictatorships like the Soviet Union, China,and Yugoslavia, yet nobody would claim hewas a communist.

3

Friedman neverworked as anadviser toPinochet andnever accepted apenny from theChilean regime.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

According to Klein, Friedman did not careabout the social cost of ending hyperinfla-tion—again, that is untrue. She never men-tions that he suggested reforms that wouldlower the temporary unemployment or thatone of his recommendations was to create arelief program for Chileans who sufferedunemployment and distress.14

Klein writes that the Chilean coup in 1973was aneoliberal coup, executed so thatChileanliberal economists (“the Chicago Boys”) couldreform the economy. She has to do that to givethe impression that neoliberals have blood ontheir hands, because the most violent periodwas shortly after the coup. To do that she hasto invent a new chronology and claim that theliberalization began on the first day the juntatook power.15 This creates a big problem forher. If liberalization began on day one, then itis impossible for her to claim that Friedman’svisitwasof sucha tremendous importanceandstarted the real transformation, because thatvisit didn’t take place until late March 1975.Yet she tries to have her cake and eat it too.

The reality was that military officials werein charge of the economy at first. They wereoften corporatist and paternalist and opposedthe Chicago Boys’ ideas about radical reforms.For example, the air force blocked pro-marketreforms in social policy until 1979.16 It wasn’tuntil thisway of governing the economy led torunaway inflation at the time of Friedman’svisit that Pinochet threw his weight behindliberalization and gave civilians ministerialpositions. Their success in the fight againstinflation impressedPinochet, so theywere giv-en a larger role.17 Klein could have used thereal chronology to blame Friedman for goingto adictatorship that tortured its opponents—the traditional criticism—but that is notenough for her. To find support for her thesisthat economic liberalism needs violence, shehas to make it look like torture and violencewere part of Friedman’s plan.

Several chapters after she has given thereader the impression that Friedman support-ed Pinochet and was an adviser to him, Kleinadmits with a brief quote that Friedman didnot support the authoritarian policies of

Pinochet.18 That is a rather weak descriptionof his disagreement with a regime he called“terrible” and “despicable.”19

Klein claims that Friedman’s definition offreedom meant that “political freedoms wereincidental, even unnecessary, compared withthe freedom of unrestricted commerce.”20

That was not Friedman’s view. He thoughtthat they really are related, and that it wouldbe easy for dictators to rule impoverishedpeo-ple fighting for their survival, whereas richerpeople in a growing economy would begin todemand political rights. As late as in his lastinterview, Milton Friedman warned that hewasmuchmore pessimistic aboutChina thanIndia, because of China’s authoritarian polit-ical system. According to him,China “is head-ing for a clash, because economic freedomand political collectivism are not compati-ble.”21 From Friedman’s perspective, one ofthe main reasons to try to get both commu-nists and military regimes to accept liberaleconomic policies was that it would increasethe chance that they would become democra-tic. As he wrote in 1975:

I approve of none of these authoritari-an regimes—neither the Communistregimes of Russia and Yugoslavia northe military juntas of Chile and Brazil.. . . I do not regard visiting any of themas an endorsement. . . . I do not regardgiving advice on economic policy asimmoral if the conditions seem to meto be such that economic improve-ment would contribute both to thewell-being of the ordinary people andto the chance of movement toward apolitically free society.22

Friedman’s hopes that economic liberal-ization would lead to political liberalizationmight not always have been realized (eventhough they were in Chile’s case), but it is nothonest to pretend that he didn’t have thesehopes—that he didn’t care about democracy.When Friedman came to Chile, inflation was340 percent. If Friedman really thought thatcrises were good, he would have let the

4

Friedmanthought that

richer people in agrowing economy

would begin todemand political

rights.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

Chilean (and Russian, and Yugoslav) econo-my collapse under the weight of the old poli-cies. He didn’t, because he thought that itwas better for people’s well-being and theircountries’ freedom in the long run that theyhad functioning economies. Friedman’sactual views thus amounted to an anti-shockdoctrine. The Chilean example shows theopposite of what Klein thinks it does.

Cut and Paste

As seen above, one of Klein’s preferredmethods to make Friedman the villain is totake quotes out of context. But sometimes hiswords are too far from what Klein claimsabouthim, and then she just stays silent aboutFriedman’s real views. The most obviousexample is that she holds Milton Friedmanresponsible for the Iraq War, to which shedevotes the longest part of her work.

She claims that Friedman was a “neocon-servative”23 and thus in favor of an aggressiveAmerican foreign policy, and she argues thatIraqwas invaded so thatChicago-style policiescould be implemented there. Klein even goesso far as to suggest that Bush administrationofficials disbanded the Iraqi army and de-Baathified the government because they areneoliberals who dislike the public sector,24 butnowhere does she mention Friedman’s actualviews about the war. Friedman himself said: “Iwas opposed to going into Iraq from thebeginning. I think it was a mistake, for thesimple reason that I do not believe the UnitedStates of America ought to be involved inaggression.”25 And this was not just one warthat he happened to oppose. In 1995, hedescribed his foreign policy position as “anti-interventionist.” Speaking of the GulfWar, hesaid it was “more nearly justified than otherrecent foreign interventions,” but concludedthat the arguments for it were “fallacious.”26

In other words, the person whom Kleinaccuses of welcoming wars and coups couldnot even bring himself to support a war tostop the direct aggression of Iraq againstKuwait, much less other American interven-

tions. She also never mentions that he con-sidered ending the draft his biggest politicalachievement.27

This misrepresentation is hardly unique.Klein also blames Friedman and Chicago eco-nomics for the actions of the InternationalMonetary Fundduring theAsian financial cri-sis and the Sri Lankan government’s confisca-tion of the land of fishing families to buildluxury hotels after the tsunami. Yet the fact isthat Friedman thought that the IMF should-n’t be involved in Asia, and he held that gov-ernments should be forbidden from expropri-ating property to give it to private developers.Of course, Klein could argue that Friedmanwas in some sense a source of inspiration forthose policies, even though hewas opposed tothem. But she doesn’t do that. She pretendsthat he agreed with them, and that that iswhat he and other Chicago economists want-ed all along.

One wonders if Klein has missed whatFriedman thought about these things. Thatseems unlikely, however, because she actuallyquotes from interviews where he opposes theIraqWarandthe IMF’sactions inAsia,but thenpretends that those specific sentences aren’tthere. So perhaps she is trying to deceive thereader. Or perhaps someone is deceiving her?

Here is a hypothesis: This book was neverreally about Friedman. It started as a book onthe Iraq War, but Klein soon realized that itcould be expanded into a book on crisis andcapitalism generally. But even in her first arti-cle on “disaster capitalism” in The Nation inMay 2005 there is nomention of Friedman,28

and her work never reveals any sort of famil-iarity with him or his work—she seems tothink that the neoclassical Chicago schooland the Austrian school of economics arebasically the same thing,29 and as previouslynoted, she thinks that Milton Friedman is aneoconservative. But sometime during herresearch, perhaps when Friedman died andevery paper and magazine wrote storiesabout him, she realized that she could get theworld’s free-market guru into her story.

According to Klein’s credits, and if weexclude all the field researchers she used, 12

5

One of Klein’spreferredmethods to makeFriedman thevillain is to takequotes out ofcontext.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

researchers worked with her on the book.Could it be that some of those researcherswere given the order to skim throughFriedman’s books, articles, and interviews forwords and sentences that relate to shocksand crises? The enthusiastic researchers col-lected quotes and gave them to Klein whomade a collage of them to fit her story. Thatcould explain why she takes Friedman’swords to mean the opposite of what the con-texts reveal, and why she is silent any time hiswords contradict her interpretation, evenwhen the contradictions appear in the sameinterviews and articles that she quotes from.

This is just a hypothesis. But it’s a moreattractive explanation than the alternative,which is that she is consciously deceiving thereaders even though simple checks of hersources expose the distortions.

Shock and Awe

Even though Klein is wrong about Fried-man, she couldbe right abouther broader the-sis that it is easier to liberalize in times of cri-sis, and that there is a close connectionbetween economic liberalization and violenceanddictatorships. She gives examples of dicta-torships that have liberalized the economy,like Chile and China, but she also makes ametaphorical case about the relationshipbetween “shock therapy” in economics andelectrical shocks as a means of torture. Theconnection is that they are both used to erasethe past and create something new—torture is“a metaphor of the shock doctrine’s underly-ing logic.”30 And she makes a lot of the casethat electrical shocks have sometimes beenused in countries that have attempted eco-nomic reform—like in Pinochet’s Chile or inIraq by the American forces.

It’s not subtle. She begins with EwenCameron, the psychiatrist whoused electricalshocks and other mind-altering techniqueson unsuspecting patients as part of a CentralIntelligence Agency project. The next chap-ter, on Milton Friedman and his attempts topromote free trade and free markets, is called

“The Other Doctor Shock.” And of course,later in the book electrical shocks and shocktherapy are connected to the U.S. militarystrategy of “shock and awe” in the invasionof Iraq. Shock-Shock-Shock. Get it?

Hidden in Klein’s word games is a realargument—the fact that several dictatorshipshave liberalized their economies in recentyears and that some of these have also tor-tured their opponents. But how strong is thisconnection? If we look at the Fraser Institute’sEconomic Freedom of the World statistics(EFW), we find only four economies aboutwhich we have data that haven’t liberalized atall since 1980.31 All the others have. Obviouslythis also means that we will see economic lib-eralization even in brutal dictatorships, just asin peaceful democracies.

Klein relies on her personal interpretationof anecdotes and examples and never tries tosupply broad, statistical evidence for her case.It’s an understandable omission, because thedata don’t support her argument. There is avery strong correlation between economicfreedom on the one hand and political rightsand civil liberties on the other. The quarter ofcountries with the most economic freedomscore 1.8 on average in Freedom House’smeasure of political rights (1 = most free, 7 =least); the second freest quarter gets 2.0; thethird; 3.4, and the least economically freequarter of countries gets 4.4. On average, theeconomically freest quarter is more democra-tic than Taiwan, and the least economicallyfree quarter is less democratic than Nigeria.32

Making Liberalism Violent

A 2007 survey from the Pew ResearchCenter shows that there is a plurality in 41 of46 polled countries who think thatmost peo-ple are better off in a free-market economy. Inmost countries, an overwhelming majoritythinks so. Klein never provides us with anycountervailing surveys to prove her pointthat free markets are unpopular.33 Nor doesshe talk about rapidly liberalizing democra-cies like Iceland, Ireland, Estonia, Australia,

6

There is a verystrong correlationbetween econom-ic freedom on the

one hand andpolitical rights

and civil libertieson the other.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

or the United States during the 1980s, wherereforms were given renewed support in sever-al elections. These countries are just not suf-ficiently undemocratic and brutal.

However, she does deal with Britain underMargaret Thatcher, and argues that she alsorelied on shocks and violence to reform.Thatcher won the election in 1983 because ofthe boost she got from the Falklands War—which does nothing to prove “disaster capital-ism” as a deliberate strategy, because it was awar she did not start. Klein never mentionsthat another reason for Thatcher’s growingpopularity was that the British economyimproved rapidly at the same time, whichwouldnot fit the argument that liberalizationhurts people. (One study even looked in detailat the timing of events and the voters’ percep-tion of them and made the case that theTories only gained three percentage pointsfrom thewar, and the rest from improved eco-nomic prospects.34)

Klein further tries to tie Thatcher to vio-lence bynoting that she closeddown the state-owned coal mines despite the strikes of1984–85, an action that did lead to police vio-lence. “Thatcher unleashed the full force ofthe state on the strikers,” according to Klein,35

and she mentions specifically the attack onstrikers by8,000 riot police inOrgreave in June1984.36 Klein does not go into any detail, andshe tries to make it sound like Thatcher sentthe police to attack strikers because they wereon strike. But the violence started because thestrikers tried to block more mines and stopthe miners who wanted to work, and they didit by trying tobreak thepolice lines and throw-ing stones until the police retaliated. Ob-viously there was police brutality, but it beganas away toprotect peacefulmines,miners, andpolicemen, not as a way to impose an ideologyby force.

More damaging for Klein’s case, Thatcherwas not implementing unpopular reforms. Onthe contrary, surveys during the strike showedthat the public systematically opposed thestrikers, and that opposition grew during thestrike. In December 1984, 26 percent had themost sympathy for theminers, and 51 percent

for the employers. Only 7 percent approved ofthe strikers’ methods, and 88 percent disap-proved.37 Kleinhas it backwards. Itwasnot pri-marily Thatcher who used violence to imple-ment unpopular ideas, it was the strikers whoused violence to block popular Thatcheriteideas.

Making Violence Liberal

The essence of Klein’s argument is thatfree-market reforms coexist comfortably withthe most brutal dictatorships—and not justcoexist. In Klein’s world, the brutality and thetorture in authoritarian regimes are a way forthe ruling class to force through liberal eco-nomic reforms. It is important for her thatChile is not an exception, because if it was,thenFriedmanmight have been rightwhenhesaid that the surprising thing was not that themarket worked, but that the generals allowedit towork. Indeed, it is tempting to seeChile asan example that could be used to supportFriedman’s argument that a successful econo-my couldmoderate a brutal regime and in theend restore democracy. Therefore Klein mustmake the case that several other brutal dicta-torships were liberal reformers as well. Toavoid talking only about Chile, she alsoincludes the Argentinean military dictator-ship of 1976–83.With these two examples, shecan claim that the Southern part of LatinAmerica is where “contemporary capitalismwas born.”38 She even calls the two countries’governments “Chicago School juntas.”39

There were indeed advisers from the Uni-versity ofChicago inArgentina. There is strongdemand for Chicago economists everywhere,so they have been inmany places, and this factsupplies ample material for Klein’s conspiracytheory. But free-market reforms were barelynoticeable in Argentina. In the EFW index ofeconomic freedom from 1 (least free) to 10(most free), Argentina moved from 3.25 in1975 to 3.86 in 1985. It is interesting to com-pare these scores with the economic freedomin countries that Kleinmentions as good alter-natives to the brutal “neoliberal”models. Such

7

Klein nevermentions thatanother reasonfor Thatcher’sgrowingpopularity wasthat the Britisheconomyimproved rapidlyat the same time.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

a comparison shows that Argentina laggedbehind the gains in freedommade by nonvio-lent Sweden, which went from 5.62 to 6.63between 1975 and 1985. Sweden is a countryKlein praises for practicing “democratic social-ism.”40 Or considerMalaysia, whichwent from6.43 to 7.13 and is another one of the “mixed,managed economies” Klein prefers.41 ButArgentina tortured, so in Klein’s world, it hasto be on the fast track to liberalism.

According to Klein, Latin America’s South-ern cone was “the first place where the con-temporary religion of unfettered free marketsescaped from the basement workshops of theUniversity of Chicago and was applied in thereal world.”42 In fact, after the military dicta-torship supposedly applied those ideas withreligious zeal, Argentina’s economy was lessfree than all Eastern European communisteconomies tracked by EFW, including Poland,Hungary, and Romania.43

How does Klein manage to turn an econo-my that was less liberal than the plannedeconomies of Eastern Europe in 1985 into aChicago laboratory? Once again, she relies onimaginative metaphors. For example, someArgentinean prisoners were dehumanized bybeing forced to choose between more torturefor themselves and more torture for a fellowprisoner. Because Klein thinks that the freemarket is a zero-sum game, she interprets thisabuse as a way of forcing the prisoners intobecoming individualists. According to Klein,“theyhad succumbed to the cutthroat ethos atthe heart of laissez-faire capitalism.”44

Andon thenext page, she presents a graph-ic connection: A posh shopping mall inBuenos Aires has been built where there wasonce a torture center. Klein’s conclusion: “TheChicago School Project in Latin America wasquite literally built on the secret torturecamps.”45 So if they had built a Social Securityoffice there instead, would it have been agraphic proof of the close connection betweenthe welfare state and torture?

It doesn’t often get as far-fetched as this,but Klein frequently exaggerates the free-mar-ket elements in anything that she can associ-ate with a crisis. For example, she writes that

U.S. politicians used Hurricane Katrina tointroduce “a fundamentalist version of capi-talism” in New Orleans.46 This is her descrip-tion of the introduction of more charterschools—publicly funded and controlledschools run most often by nonprofit groups,which Klein confuses with Friedman’s pro-posal to introduce a school voucher system.She exaggerates not just the nature of thechange, but also its extent. She writes that theschool board used to run 123 public schools,but after the hurricane it only ran 4, whereasthe number of charter schools increased from7 to 31. She doesn’t mention that this wasright after the hurricane and the result of theschool board’s being much slower in reopen-ing its schools. As of September 2007, theboard ran 47 schools and there were 44 char-ter schools.47

In another instance she misrepresents theideas of the economist JohnWilliamson, whocoined the term “Washington Consensus,” byinserting an “all” before his recommendationthat “state enterprises should be privatized.”In fact, however, Williamson has opposedgeneral privatization. Instead, he has recom-mended that governments hold on to enter-prises when it is difficult to create competi-tion (he mentions public transport) or whenthere are externalities (for example, water sup-ply).48

But it is important for Klein to portrayWilliamson as a radical for two reasons. Thefirst reason is that this helps to make theinstitutions of the Washington Consensus(the U.S. government, the IMF, the WorldBank) seem like radical Friedmanite organi-zations and part of a global Chicago crusade.The second reason is that Williamson is theonly economist from whom she has actuallyfound a quote asking whether it might begood to provoke a smaller crisis (inflation) toget acceptance for reforms. Granted, it wasjust a question at a conference in 1993 to pro-voke a discussion, but that alone was enoughfor Klein to write on the next page that thiswas now “part of a global strategy” andthrough the rest of the book write as if it waswhat all liberal economists now believed.49

8

Klein frequentlyexaggerates the

free-marketelements in

anything that shecan associatewith a crisis.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

Rewriting TiananmenSquare

Klein sees China as another example of acountry where the leaders have adoptedFriedman’s ideas and enforced marketreform in a violentmanner. Tomake her case,she rewrites the history of the TiananmenSquare massacre of 1989 and claims that theprotesters were primarily opposed to eco-nomic liberalization. According to Klein, theCommunist Party, led by Deng Xiaoping,attacked the students in order to save its free-market program and move on with the mostsweeping reforms yet, while people were stillin shock.

AsKlein does inmany instances, she startscautiously by citing a Chinese leftist intellec-tual and protester and saying that this is oneinterpretation. But soon, without providingany new evidence for this position, sheswitches to treating it as her own interpreta-tion and stating confidently that the protest-ers opposed “the specific Friedmanite natureof the reforms” and that the “shock of themassacre . . . made shock therapy possible.”50

And in the rest of the book she includes thisas another example of how markets and vio-lence go hand in hand.

But if the studentswere protesting againsteconomic reform, they seldom expressed thatgrievance. Instead, they demonstrated infavor of democracy, government transparen-cy, and equality before the law, and againstbureaucracy and violence.51 The real story isthus very different from the one Klein tells.The protesters at first gathered tomourn theformer secretary general Hu Yaobang, one ofthe country’s most important reformers.Those students and intellectuals wanteddemocratic reforms, specifically free speech.The protests grew and included everybodywho wanted democratic reform, both thosewho wanted more economic reform andthose who wanted less (the element thatKlein equates with the whole protest).

There are no indications that themajorityof party elders decided to end the demon-

strations by force because they wanted tosave the free-market project as Klein claims.They wanted to save the party’s power, andthe majority was made up of economic con-servatives who were skeptical towards liberal-ization. Some even refused to visit the free-trade zones on principle.52 And the reformsdid not accelerate after themassacre, as Kleinwrites. For the first time since their incep-tion, they stalled.

Consider the most consistent free-mar-keter in the leadership. Gen. Secretary ZhaoZiyang. Zhao was purged because he support-ed the protesters, and he spent the rest of hislife under house arrest. Friedman had methim in Beijing in 1988 and wrote him a letterof advice—another meeting with a tyrant thatKlein blames him for. Zhao’s rivals, includingPremier Li Peng, who was pushing for a vio-lent crackdown on the protesters, now tried toroll back the market reforms and reintroducecontrols over the economy. The conservativesblamed the unrest on the openness, andDeng’s position in the party was weakened.Far from being the start of shock therapy,Tiananmen Square was almost the end of eco-nomic liberalization in China. Klein writesthat “Tiananmen paved the way for a radicaltransformation free from fear of rebellion.”53

But according to EFW, Chinawas actually lesseconomically open in 1990 than it was in1985,moving from 5.11 to 4.91 on a scale of 1to 10.

Klein fakes the chronology, and she knowsit, because she writes that Deng opened theChinese economy “in the three years immedi-ately following the bloodbath.”54 She has tochange the meaning of “immediate” into“three years,” because for three years afterTiananmen Square, the reform movementwas faltering. Dengwas forced to try to jump-start liberalization in a public way in thespring of 1992, even though he was 87 yearsold and had formally retired. His “southerntour” was a trip filled with speeches and net-working to save the reform program. The tripwas not reported in the national media atfirst, because that was controlled by Deng’srivals. Deng even had to write articles sup-

9

Far from beingthe start ofshock therapy,TiananmenSquare wasalmost the endof economicliberalization inChina. Kleinfakes thechronology,and she knows it.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

porting his agenda under a pen name to getaccess. But he was successful in winning localsupport and building alliances with provin-cial governors who were in favor of liberaliza-tion. Only when this happened did the reluc-tant president Jiang Zemin decide to supportDeng. After the tourwas over, themedia start-ed to report about the trip and the reformsstarted again.

To show that radical economic reformscan happen only in dictatorships, Klein sum-marizes by comparing China and democraticPoland during the late 1980s and early 1990s:

In China, where the state used thegloves-off method of terror, torture andassassination, the result was, from amarket perspective, an unqualified suc-cess. In Poland, where only the shock ofeconomic crisis and rapid change washarnessed—and there was no overt vio-lence—the effects of the shock eventual-lyworeoff, and the resultswere farmoreambiguous.55

Once again, Klein simply states conclu-sions without any statistics to back them up.If we take a look at the EFW data, we see thathere again Klein misreports the facts in hereffort to draw a connection between violenceand economic liberalism. China is nowherenear Poland in economic freedom, and itimproved much more slowly. In 1985,Poland’s economy was much less open, with3.93 versus China’s 5.11. In 1995, Poland hadcaught up and both scored 5.3. In 2005,democratic Poland was way ahead with 6.83,while China scored 5.9.56

Big GovernmentConservatism

Klein’s suggestion that crises benefit freemarkets and limited government is contro-versial to say the least. In fact, politicians andgovernment officials often use crises as anopportunity to increase their budgets andpowers. World War I led to communism in

Russia, and hyperinflation and depressionled to National Socialism in Germany. Warand disasters are rarely friends of freedom.Economic historian Robert Higgs showed inhis now classic work Crisis and Leviathan thatthe growth of the American governmenttook place during crises like the Depressionand the world wars.57 When the crisis is over,the government does not return to its previ-ous state, instead keeping some of the powerand money it grabbed to meet the crisis. Thestate, not the market, grows on crises.

“War is a friend of the state. . . . In time ofwar, government will take powers and dothings that it would not ordinarily do,” said afamous economist explaining why heopposed the Iraq War. That economist wasMilton Friedman—the person Klein claimslonged for war and disasters to ram throughlaissez-faire.58 Friedman was right when itcame to the Iraq War. The Bush administra-tion used the war to expand the federal gov-ernment’s powers dramatically, and Bush hasincreased federal spending more than anyother president since Lyndon Johnson(another war president), even excludingspending on themilitary and national securi-ty.59 And this is not just the impression of dis-appointed libertarians. A poll in 15 key dis-tricts just before the mid-term elections in2006 showed that more than 55 percent ofAmerican voters said that the Republicanswere a Big Government party.60

One would think that Klein should find itdifficult to explain this major exception toher thesis. But she doesn’t. Instead she usesthe United States after 9/11 as amajor exam-ple for her thesis. She claims that the terroristattacks gave the Bush administration theopportunity to implement Friedman’s ideas,by benefiting friends in the defense and secu-rity industries with new contracts andunprecedented sums of money. Klein neverclearly explains why this is Friedmanite. Inthe real world, Friedman “had always empha-sized waste in defense spending and the dan-ger to political freedomposed bymilitarism,”in the words of his biographer, LannyEbenstein.61 It is possible for Klein to make

10

Politicians andgovernment

officials often usecrises as an

opportunity toincrease theirbudgets and

powers.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

this connection for one reason only—thatKlein never clearly defines what Friedman’sideas are and what they aren’t, and she givesno indication that she understands them. Soshe confuses Friedman’s limited-governmentliberalism with both neoconservatism andoutright corporatism—the granting of spe-cial privileges to corporations beyond whatthey could earn without government help.

As Klein sees it, in Bush’s America “youhave corporatism: big business and big gov-ernment combining their formidable powerto regulate and control the citizenry.”62 Thissounds, improbably enough, like a healthylibertarian critique of the administration.The only problem is that Klein thinks thatthis is the “pinnacle of the counterrevolutionlaunched by Friedman”63 and that the Bushteam that implemented it is “Friedmanite tothe core.”64

Even when the federal government breaksall the rules in Milton Friedman’s book,Klein blames Friedman for it. At one pointKleinwrites about the lack of openness in theIraqi economy:

All the . . . U.S. corporations thatwere in Iraq to take advantage of thereconstruction were part of a vastprotectionist racket whereby the U.S.government had created their mar-kets with war, barred their competi-tors from even entering the race,then paid them to do the work, whileguaranteeing them a profit to boot—all at taxpayer expense.65

Again, this would be an excellent Fried-manite critique of how governments enrichtheir friends at the cost of open competitionand taxpayers, if it weren’t for the fact thatKlein finishes the paragraph in this way:“The Chicago School crusade . . . had finallyreached its zenith in this corporate NewDeal.”66

Klein repeatedly identifies libertarianism(or “neoliberalism”) with neoconservatism.She seems to think that they are the same,and she even calls the Cato Institute a neo-

conservative think tank, twice.67 She writesabout “the neocon movement—Friedmaniteto its core.”68 So every time Bush expands thegovernment to promote conservative goals,and every time something is being done bythe United States in Iraq as a result of theoccupation, Klein holds Milton Friedmanand other libertarians such as the CatoInstitute responsible for it, even though eachopposed both the government expansionand the Iraq War.

It is obvious that Klein does not knowwhat neoconservatism is and has not both-ered to find out. She writes in passing thatFriedman was neoconservative and suggeststhat neoconservatives long for “the elimina-tion of the public sphere, total liberation forcorporations and skeletal social spending.”69

The founder of American neoconservatism,Irving Kristol, defines the movement’s ideasquite differently. Back in 1979, he explained:“Neoconservatives are not libertarian in anysense. A conservative welfare state is perfectlyconsistent with the neoconservative perspec-tive.” He reiterated that viewpoint in a recentmanifesto: “Neo-cons do not feel that kind ofalarmor anxiety about the growth of the statein thepast century, seeing it as natural, indeedinevitable.”70 And if neoconservatives and lib-ertarians have important differences ondomestic policy, their differences on foreignpolicy are even starker. That Friedmanite coremust bemassive indeed to contain suchwide-ly divergent views!

A Suicidal Impulse

Klein also confuses libertarianismwith cor-poratism, arguing that tax-funded corporatewelfare is the zenith of Chicago’s free-marketrevolution. Klein accepts that corporate wel-fare is not what the Chicago liberals originallypromoted: “But it’s not an aberration; it iswhere the entire Chicago School crusade—with its triple obsession—privatization, dereg-ulation and union-busting—has been lead-ing.”71 But she doesn’t explain why thisseparation of government and the economy

11

Klein neverclearly defineswhat Friedman’sideas are andwhat they aren’t,and she givesno indicationthat sheunderstandsthem.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

would lead to more cronyism and corporatewelfare. Her only argument begs the ques-tion—it has happened in countries that havebeen led by people she considers Friedmanite,and we know they are Friedmanite becausethey enrich companies when they have achance.

The idea seems to be that Friedman andother libertarians like corporations, so if gov-ernments give corporations contracts, subsi-dies, protection and privileges, that must beFriedmanite—to the core. At times it seems likeshe thinks that any policy is neoliberal if pri-vate companies are involved—if a private com-pany produced the eavesdropping devices, forexample. If her misunderstanding of neocon-servatism is the result of ignorance, this confu-sion is the result of her being seduced by classi-cal leftist rhetoric. Libertarians have alwaysbeen accused by their opponents ofwanting toenrich corporations, so if something enrichescorporations, it must be libertarian.

Here isKlein’s interpretationof Friedman’sviewpoint:

Whatheunderstoodwas that innormalcircumstances, economic decisions aremade based on the push and pull ofcompeting interests—workers want jobsand raises, owners want low taxes andrelaxed regulation, and politicians haveto strike a balance between these com-peting forces.72

This is why Friedmanites need crises,because they suspend “normal circum-stances” andmake it possible to benefit own-ers and implement their agenda when peopleare busy thinking about other things. Klein’swords sound like a summary of somethingFriedman said, but she never explains wherehe “understood” this. There is no footnote.The reason is that this is not Friedman’spoint of view. On the contrary, he arguedthat “jobs and raises” were the long-termresults of “low taxes and relaxed regulation.”But he also thought that corporate lobbyinginterests frequently tried to destroy thosebeneficial effects.

One would probably have a hard timefinding any economist who was more persis-tent than Friedman in warning about howcorporations and capitalists conspire againstthe public to get special privileges, subsidies,and protection. As Friedman pointed out:

Business corporations in general arenot defenders of free enterprise. On thecontrary, they are one of the chiefsources of danger. . . . Every business-man is in favor of freedom for every-body else, but when it comes to himselfthat’s a different question. We have tohave that tariff to protect us againstcompetition from abroad. We have tohave that special provision in the taxcode. We have to have that subsidy.73

Friedman called this search for favors “thesuicidal impulse of the business communi-ty,” which was the title of a lecture he gaveseveral times. It was a constant theme inFriedman’s works. In the first episode of hisclassic TV series Free to Choose, it is almost asif Friedman takes aim at Klein’s depiction ofFriedman himself:

I do not believe it’s proper to put thesituation in terms of industrialist ver-sus government. On the contrary, oneof the reasons why I am in favor of lessgovernment is because when you havemore government industrialists take itover, the two together form a coalitionagainst the ordinary worker and theordinary consumer. I think business isa wonderful institution provided it hasto face competition in the marketplaceand it can’t get away with somethingexcept by producing a better productat a lower cost; and that’s why I don’twant government to step in and helpthe business community.74

Friedman’s description of how the systemworks is very close to Klein’s: “Big Govern-ment joins forces with Big Business to redis-tribute funds upward.”75 The difference, of

12

Libertarians havealways been

accused by theiropponents of

wanting to enrichcorporations.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

course, is that Klein accuses Friedman ofbeing in favor of this state of affairs. But farfrom being a defender of corporate welfare,Friedman was one of its most consistentopponents: “Private enterprise is entitled toreceive the rewards of success only if it alsobears the penalties of failure. . . . No obstacles,no subsidies should be the rule.”76

Instead of accusing Friedman of saying theopposite of what he actually did say, Kleincould have made the case that corporate wel-fare is the unintended consequence of an openeconomy and a limited government. But shedoesn’t supply us with arguments for this cor-relation, and her examples support the oppo-site view. She writes about Russian oligarchs,the United States post-9/11, and privatizationin Latin America. But the oligarchs and manyof the Latin American deals were the result ofexcluding outsiders and foreigners from theprocess,whichKlein admits butdoesn’t see theimplications of.77 Meanwhile, the corporatewelfare in the United States and Iraq is a resultof a massive increase in public spending and—according to Klein herself—barring competi-tors from deals. Anti-Friedmanite to the core.

Attitudes towardDemocracy

If we strip away obvious misunderstand-ings and distortions, there is not much left ofKlein’s arguments against libertarianism andMilton Friedman in The Shock Doctrine. Is hercase against a movement really that its gurueconomist used crises to get people to buy hisideas and flattered fascist and communist dic-tators to get their support? That one of theeconomist’s famous followers has only nicethings to say about dictators, political mur-derers, and terrorists as long as they have theright ideas about themarket? That those ideascoexist comfortably with political oppression?

If that is the case, Klein has a problem.Because the economic guru is her ownfavorite, the British economist John MaynardKeynes, who rose to prominence because ofthe Great Depression and the Second World

War, who talked about the Soviet Union as“impressive,” andwho explained that his ideaswere well adapted to a totalitarian system inthe introduction to theGerman translation ofhis General Theory in 1936.78And the followerwho says nice things about dictators is NaomiKlein herself, who has nothing but praise forCuba,79 CheGuevara,80 andHezbollah81 whenshe mentions them in her book, and whodefended the Iraqi radical leader Muqtada al-Sadr as representing the mainstream of Iraqand as fighting only in self-defense.82 And theleaderswho implement the “economicnation-alism” Klein asks for are people like VladimirPutin, Hugo Chavéz, and Mahmoud Ahmed-inejad, who do it while dismantling indepen-dent and democratic institutions. In otherwords, Klein does not seem tomind dictators,fascists, and murderers, as long as they don’tlower taxes and trade barriers.83

Klein’s interpretation of Russia in the1990s reveals her attitude toward democracy.She blamesRussian president Boris Yeltsin fordestroyingdemocracy in the fall of 1993,whenhe ignored the anti-Yeltsin majority in parlia-ment. When legislators occupied the buildingand called forhis resignation, Yeltsindissolvedthe legislature by force and called for new elec-tions. She admits that there were “proto-fas-cist” groups in the parliamentary camp, butdoesn’t seem to mind—when you are fightingfor democracy you can’t be too choosy aboutyour friends, apparently. Yet Fred Kaplan, oneof the reporters who visited the communistand ultranationalist occupiers, calls thisdescription “ludicrous”:

I was one of many reporters who spentan eerie afternoon in the parliamentbuilding, talking with its armed, black-booted, and stinking-drunk occupiers.Believe me—and Klein should, sinceshe quotes one of my Globe reports indescribing the soldiers shelling thebuilding the next morning—there wereno democrats among that lot.84

Once again, Klein has had to change thechronology to make it fit her case. She claims

13

Klein does notseem to minddictators, fascists,and murderers,as long as theydon’t lower taxesand tradebarriers.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

that Yeltsin dissolved parliament violently toimplement shock therapy. But the only shocktherapy inRussia—the lifting of price and cur-rency controls—took place more than a yearand a half earlier. Since then, Yeltsin hadreplaced the liberal prime minister YegorGaidar with the technocrat Viktor Cherno-myrdin and had used almost $7 billion to bailout state-owned factories. But that is not thepoint here. Something else is more interest-ing.

A parliamentary majority accuses the pres-ident of undemocratic and unconstitutionalacts and wants him removed. The presidentignores this opposition, and the parliamentaccepts the help of authoritarians to fight forwhat they claim is democracy. Doesn’t thisresemble another episode in modern politicalhistory? That is what happened in Chile inAugust 1973, when themajority in parliamentcalled on the military’s help to removeSalvador Allende, whom they accused of turn-ing the country into adictatorship.85However,Klein considers Allende “a fierce democrat,”86

whereas she calls Yeltsin, without intentionalirony, “a Russian Pinochet.”87

I am not arguing in favor of anything thathappened in either of these episodes. What Iam doing is drawing attention to the factthat Klein calls one president’s fight againstparliament an attack on democracy, andanother president’s similar fight a strugglefor democracy. But the difference isn’t thatone of them was more democratic than theother. At least not in a way that favors Klein—for all its faults, Yeltsin’s administration wasarguably the most democratic in his coun-try’s history, whereas the same could hardlybe said of Allende’s turbulent reign. No, thecritical difference between Chile’s Allendeand Russia’s Yeltsin is that one of these pres-idents was broadly in favor of free marketsand the other opposed them. Apparently,whoever happens to fight against free mar-kets, even if they try to remove a democrati-cally elected president, is a fighter for“democracy” in Klein’s world. So this book isnot about democracy.

And neither is it about shocks and crises.

Nothing in The Shock Doctrine suggests thatKlein thinks that there is something wrongwith using crises to promote your ideas. Thistactic, it seems, is only wrong if it advancesthe wrong ideas. Klein herself has never hesi-tated to suggest her own solutions to theproblems after Katrina or the Iraq War, andshe would never dream of considering it as acynical way to take advantage of sufferingpeople—she would say that it was a way ofhelping others. Her only reason for thinkingit cynical and evil when libertarians do exact-ly the same thing is that she thinks that thoseideas are evil and produce horrible conse-quences. But that is a claim that she doesn’tprovide any arguments for. Onemust take allthis for granted to see anything of value inKlein’s criticism of “disaster capitalism.”

Life under SavageCapitalism

Astonishingly, in a book of more than 500pages, Klein offers almost no argument to theperson who isn’t already convinced that freemarkets are bad. She does give a few examplesof how poverty and unemployment haveincreased soon after a planned economy hascollapsed, or soon after hyperinflation hasbeen brought down. But that is not strange,andoften it ispreciselywhat economistswouldpredict. However, they would also say that thisis the only way to reduce poverty and unem-ployment in the long run. And that is preciselywhy Klein never provides the reader with anydata over a longer period. She says that thereforms turned the Chilean working class into“the disposable poor,” but never once admitsthat Chile is the social and economic successstory of Latin America and has virtually abol-ished extreme poverty. She writes that reformshave increased income gaps between cities andrural areas in China, but she never mentionsthat those developments also led to the biggestpoverty reduction in history.

In two instances,Kleindoesbrieflymentionthe broad picture and the long run. They arevariations on the same claim—that between 25

14

Whoever happensto fight against

free markets,even if they try

to remove ademocratically

elected president,is a fighter for

“democracy” inKlein’s world.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

and 60 percent of the population is discardedor becomes a permanent underclass in coun-tries that liberalize their economies.88 Shedoes-n’t explain what she means by those figures,and she doesn’t say where they come from.There is no footnote and no source.

A look at the EFW data shows that Kleinhas it backwards. Poverty and unemploymentare lowest in countries with themost econom-ic freedom. In the freest fifth of countries,poverty according to the United Nations is15.7 percent, and in the rest of the world it is29.8 percent. Unemployment in the freestquintile is 5.2 percent, which is less than halfofwhat it is in the rest of theworld. In the leasteconomically free quintile, filled with thekinds of restrictions on private property, busi-nesses, and trade that Klein claims are ways ofhelping the people against the powerful,poverty is 37.4 percent and unemployment is13 percent.89

Klein writes that global capitalism haslapsed into “its most savage form” since1990.90 If she is right about the connectionbetween freemarkets and deprivation, povertyshould have increased at a dramatic speedsince then. The opposite has happened.Between 1990 and 2004, extreme poverty indeveloping countries was reduced from 29 to18 percent, according to theWorld Bank. Thismeans that extreme poverty has been reducedby54,000people everydayunder “savage” cap-italism.91 And the proportion of people inslums, which is another result of liberalizationaccording to Klein, has been reduced from 47to37percent during the same time.92 Averagesdon’t tell the whole story, so it’s important topoint out that the biggest improvements tookplace in the parts of the world that liberalizedthe most, whereas there have been setbacks inless liberalized countries.

If Klein is right about the connectionbetween freemarkets andpolitical violence,weshould also have seen more war and dictator-ships in the era of “savage” capitalism. Kleininsists that “the world is becoming less peace-ful” without documenting it.93 She is wrong.According to the Human Security Centre atthe University of British Columbia, the num-

ber of military conflicts involving at least onestate declined from almost 50 in 1990 to 31 in2005. The number of war deaths in 2005 wasthe lowest in half a century. In 1990 therewerenine ongoing genocides around the world. In2005, there was only one, in Darfur. Despite afew conspicuous exceptions, the world isbecomingmore peaceful in the era of “savage”capitalism.94

The world has also becomemore democra-tic, contrary to the implications of Klein’s the-sis. In fact, while markets have been opened,the world has simultaneously undergone ademocratic revolution. Between 1990 and2007 the number of electoral democraciesincreased from 76 to 121. In 1990 there weremore countries defined as “not free” byFreedomHouse than were ranked as “free.” In2007 therewere twice asmany “free” countriesas there were “not free” countries.95

So in the absence of serious argumentsagainst the consequences of free markets, weare left with Klein’s reasonable critique of tor-ture, dictatorships, government corruption,and corporatewelfare. In the final analysis,TheShock Doctrine boils down to the curious claimthat Milton Friedman and free markets arebad because governments are incompetent,corrupt, and cruel. It is probably not a coinci-dence that there are blurbs from four fictionwriters on the back of the book.

Notes1. John Gray, “The End of theWorld asWe KnowIt,” review of The Shock Doctrine, by Naomi Klein,The Guardian, September 15, 2007, http://books.guardian.co.uk/review/story/0,,2169201,00.html.

2. Joseph Stiglitz, “Bleakonomics,” review of TheShock Doctrine by Naomi Klein, New York Times,September 30, 2007, http://www.nytimes.com/2007/09/30/books/review/Stiglitz-t.html.

3. Quoted in Naomi Klein, The Shock Doctrine: TheRise of Disaster Capitalism (London: Allen Lane,2007), p. 6.

4. See http://www.naomiklein.org/shock-doctrine/short-film.

5. Milton Friedman, Capitalism and Freedom (Chi-

15

It is probablynot a coincidencethat there areblurbs from fourfiction writers onthe back of thebook.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

cago: University of Chicago Press, 1982), p. ix.

6. Klein, The Shock Doctrine, p. 6.

7. Milton and Rose Friedman, The Tyranny of theStatus Quo (San Diego: Harcourt Brace Jovanovich,1982).


9. Milton and Rose Friedman, Two Lucky People(Chicago: University of Chicago Press, 1999), p.592. (Emphasis added.)

10. In her short film The Shock Doctrine, NaomiKlein takes this distortion of Friedman one stepfurther: “He advised politicians that immediatelyafter a crisis, they should push through all thepainful policies at once, before people couldregain new footing.” http://www.naomiklein.org/shock-doctrine/short-film.

11. Lanny Ebenstein,Milton Friedman: A Biography(New York: Palgrave, 2007), p. 61.

12. Ibid., chap. 10.


14. The letter is published in Friedman andFriedman, Two Lucky People, p. 591.


16. Rossana Castiglioni, “The Politics of Retrench-ment: The Quandaries of Social Protection underMilitary Rule in Chile, 1973–1990,” Latin AmericanPolitics and Society (Winter 2001).

17. Ibid.


19.MiltonFriedman, “EconomicFreedom,HumanFreedom, Political Freedom,” address at the SmithCenter, California State University, Hayward, Cali-fornia, November 1, 1991, http://www.sbe.csuhayward.edu/~sbesc/frlect.html; “Response,” October3, 1975, in Friedman and Friedman, Two LuckyPeople, p. 595.


21. Milton Friedman, “Milton Friedman @ Rest,”interview by Tunku Varadarajan, Wall StreetJournal, January 22, 2007.

22. “Response” in Friedman and Friedman, TwoLucky People, p. 595.

23. Klein, The Shock Doctrine, pp. 56, 444.


25. Milton Friedman, “The Romance of Econom-ics,” interview by Tunku Varadarajan, Wall StreetJournal, July 22, 2006.

26.Milton Friedman, “Best of BothWorlds,” inter-view with Brian Doherty, Reason, June 1995.

27. Ibid.

28. Naomi Klein, “The Rise of Disaster Capital-ism,” TheNation, May 2, 2005.


30. Ibid., p. 15.

31. James Gwartney and Robert Lawson, EconomicFreedom of the World, 2007 (Vancouver: FraserInstitute, 2007).

32. Gwartney and Lawson, 2007, p. 27.

33. “Pew Global Attitudes Project: Spring 2007Survey,” Pew Research Center, 2007.

34.David Sanders,HughWard, andDavidMarsh,“Government Popularity and the Falklands War:AReassessment,”British Journal of Political Science 3,1987.

35. Klein, p. 138.

36. Accounts of the events at Orgreave vary consid-erably, but even left-leaningpublications admit thatthe strikers provoked thepolice. SeeTristramHunt,“The Charge of the Heavy Brigade,” The Guardian,September 4, 2006, http://www.guardian.co.uk/theguardian/2006/sep/04/features5.

37. British Political Opinion 1937–2000: The GallupPolls, ed. Anthony King (London: Politico’s, 2001).


39. Ibid., p. 90.

40. Ibid., p. 450.

41. Ibid., p. 267.

42. Ibid., p. 102.

43. Gwartney and Lawson, 2007.


45. Ibid., p. 114f.

46. Ibid., p. 6.

16

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

47. JanArild Snoen, “Skolene iNewOrleans trengtesjokkterapi,” Dagbladet, September 28, 2007. Kleinmentions that “manyAfrican-American parents” inNew Orleans oppose more choice in educationbecause they see it as “awayof reversing the gains ofthe civil rights movement.” She doesn’t mentionthat African Americans are the groupmost sympa-thetic to school vouchers nationally. A survey lastyear showed that 45 percent of the general popula-tion and 68 percent of African Americans were infavor of vouchers. William G. Howell, Martin R.West, and Paul E. Peterson, “What AmericansThink about Their Schools,” EducationNext 7, no 4,(2007).

48. John Williamson, “What Washington Meansby Policy Reform,” in Latin American Adjustment:How Much has Happened? ed. John Williamson(Washington: Peterson Institute for InternationalEconomics, April 1990).

49. Klein, The Shock Doctrine, p. 256f.

50. Ibid., pp. 187, 190.

51. See for instance Liu Xiaobo et al., “June 2Declaration of a Hunger Strike,” in China’s Searchfor Democracy: The Student and Mass Movement of1989, ed. Suzanne Ogden et al. (Armonk, NY: M.E. Sharpe, 1992).

52. Jonathan Fenby, “The Tiananmen Square Peg,”Comment Is Free, September 10, 2007, http://commentisfree.guardian.co.uk/jonathan_fenby/2007/09/the_tiananmen_square_peg.html.

53. Klein, p. 189.

54. Ibid., p. 190.

55. Ibid., p. 191.

56. Gwartney and Lawson, 2007.

57. Robert Higgs, Crisis and Leviathan (New York:Oxford University Press, 1987).

58. Milton Friedman, “Friedman’s Heresy HitsMainstream,” interview with Carolyn Lockhead,San Francisco Chronicle, June 5, 2005.

59. Stephen Slivinski, Buck Wild: How RepublicansBroke theBankandBecame theParty of BigGovernment(Nashville: Nelson Current, 2006), p. 149.

60. See http://www.clubforgrowth.org/2006/11/new_poll_people_want_limited_g.php. Kleinwrites as if Friedman were in favor of Republicanpower, even though he has consistently spokenout in favor of divided government as the bestway to control the government.

61. Ebenstein, p. 232.


63. Ibid., p. 299.

64. Ibid., p. 298.

65. Ibid., p. 355.

66. Ibid., p. 355.

67. Ibid, pp. 15, 322.

68. Ibid., p. 322.

69. Ibid., p. 15.

70. Irving Kristol, Reflections of a Neoconservative(NewYork: BasicBooks, 1983), p. 77; IrvingKristol,“The Neoconservative Persuasion,” Weekly Stand-ard, August 25, 2003.


72. Ibid., p. 140.

73.MiltonFriedman, “WhichWay forCapitalism?”Reason, May 1978.

74. Milton Friedman, Free to Choose 1: The Power ofthe Market, 1980.


76. Friedman and Friedman, Two Lucky People, p.593.


78. John Maynard Keynes, “Foreword to the Ger-man Edition,” General Theory, http://tmh.floonet.net/articles/foregt.html. For Klein’s own apprecia-tion of Keynes, see Klein, pp. 53–57.


80. Ibid., pp. 104, 443.

81. Ibid., p. 461.

82. Naomi Klein, “Bring Najaf to New York,” TheNation, September 13, 2004. To criticize Kleinwith her own methods one could also make a bigfuss about the fact that her European anti-global-ization friends are called ATTAC.

83. In passing, she explains that genuine democ-racy presupposes “fair rules preventing corpora-tions frombuying elections” (The ShockDoctrine, p.134), which seems to suggest that it takes some

17

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

limits on free speech and voluntary association tobuild her kind of democracy.

84. Fred Kaplan, “Blame Yeltsin,” Slate, October 2,2007.

85. The Chamber of Deputies Resolution of Aug-ust 22, 1973, http://www.josepinera.com/pag/pag_tex_quiebredemoc_en.htm.


87. Ibid., p. 220.

88. Ibid., pp. 405, 442.

89. James Gwartney and Robert Lawson, Economic

Freedom of the World 2005 (Vancouver: FraserInstitute, 2005).


91. ShaohuaChen andMartinRavallion, “Absolutepoverty measures for the developing world,1981–2004,” World Bank, March 2007. These fig-uresmight have to be revised down after theWorldBank’s recent change in measures of purchasingpower of different currencies.

92. United Nations, The Millennium DevelopmentGoals Report 2007, p. 26.

93. Klein,TheShockDoctrine, p. 424.Her source onlydocuments that military spending has increased.

18

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

OTHER STUDIES IN THE BRIEFING PAPERS SERIES

101. WHO’s Fooling Who? The World Health Organization’s ProblematicRanking of Health Care Systems by Glen Whitman (February 28, 2008)

100. Is the Gold Standard Still the Gold Standard among Monetary Systems?by Lawrence H. White (February 8, 2008)

99. Sinking SCHIP: A First Step toward Stopping the Growth ofGovernment Health Programs by Michael F. Cannon (September 13, 2007)

98. Doublespeak and the War on Terrorism by Timothy Lynch (September 6,2006)

97. No Miracle in Massachusetts: Why Governor Romney’s Health CareReform Won’t Work by Michael Tanner (June 6, 2006)

96. FreeSpeechand the527ProhibitionbyStephenM.Hoersting (April 3, 2006)

95. Dispelling theMyths:TheTruthaboutTABORandReferendumCbyMichael J.NewandStephenSlivinski (October 24, 2005)

94. The Security Pretext: An Examination of the Growth of Federal PoliceAgencies byMelanie Scarborough (June 29, 2005)

93. Keep theCap:WhyaTax IncreaseWillNotSaveSocialSecuritybyMichaelTanner(June8, 2005)

92. ABetterDeal atHalf theCost: SSAScoringof theCatoSocialSecurityReformPlanbyMichaelTanner (April 26, 2005)

91. MedicarePrescriptionDrugs:MedicalNecessityMeetsFiscal Insanityby JosephAntos and JagadeeshGokhale (February 9, 2005)

90. Hydrogen’sEmptyEnvironmentalPromisebyDonaldAnthrop (December7, 2004)

89. CaughtStealing:Debunking theEconomicCase forD.C.BaseballbyDennisCoates andBradR.Humphreys (October 27, 2004)

88. ShowMetheMoney!DividendPayouts after theBushTaxCutbyStephenMooreandPhilKerpen (October 11, 2004)

87. TheRepublicanSpendingExplosionbyVeroniquedeRugy (March3, 2004)

86. SchoolChoice in theDistrict ofColumbia: SavingTaxpayersMoney, IncreasingOpportunities forChildrenbyCasey J. Lartigue Jr. (September19, 2003)

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

85. SmallpoxandBioterrorism:Why thePlan toProtect theNation IsStalledandWhat toDobyWilliam J. Bicknell,M.D., andKennethD.Bloem(September5, 2003)

84. TheBenefitsofCampaignSpendingby John J.Coleman (September4, 2003)

83. Proposition13andStateBudgetLimitations:PastSuccesses andFutureOptionsbyMichael J.New (June19, 2003)

82. FailingbyaWideMargin:MethodsandFindings in the2003SocialSecurityTrusteesReportbyAndrewG.Biggs (April 22, 2003)

81. Lessons fromFlorida: SchoolChoiceGives IncreasedOpportunities toChildrenwithSpecialNeedsbyDavidF. Salisbury (March20, 2003)

80. StatesFaceFiscalCrunchafter 1990sSpendingSurgebyChrisEdwards, StephenMoore, andPhilKerpen (February 12, 2003)

79. IsAmericaExportingMisguidedTelecommunicationsPolicy?TheU.S.-JapanTelecomTradeNegotiationsandBeyondbyMotohiroTuschiya andAdamThierer(January7, 2003)

78. This IsReform?Predicting the Impactof theNewCampaignFinancingRegulationsbyPatrickBasham(November20, 2002)

77. CorporateAccounting:Congress andFASBIgnoreBusinessRealitiesbyT. J.Rodgers (October 25, 2002)

76. FatCats andThinKittens:ArePeopleWhoMakeLargeCampaignContribu-tionsDifferent?by JohnMcAdamsand JohnC.Green (September25, 2002)

75. 10 Reasons to Oppose Virginia Sales Tax Increases by Chris Edwards andPeter Ferrara (September 18, 2002)

74. Personal Accounts in a Down Market: How Recent Stock MarketDeclines Affect the Social Security Reform Debate by Andrew Biggs(September 10, 2002)

73. Campaign Finance Regulation: Lessons from Washington State byMichael J. New (September 5, 2002)

72. DidEnronPillageCalifornia?by JerryTaylor andPeterVanDoren (August 22, 2002)

71. Caught in the Seamless Web: Does the Internet’s Global Reach JustifyLess Freedom of Speech? by Robert Corn-Revere (July 24, 2002)

Published by the Cato Institute, Cato BriefingPapers is a regular series evaluating governmentpolicies and offering proposals for reform. Nothing inCato Briefing Papers should be construed asnecessarily reflecting the views of the Cato Institute oras an attempt to aid or hinder the passage of any billbefore Congress.

Contact the Cato Institute for reprint permission.Additional copies of Cato Briefing Papers are $2.00each ($1.00 in bulk). To order, or for a completelisting of available studies, write the Cato Institute,1000 Massachusetts Avenue, N.W., Washington,D.C. 20001. (202) 842-0200 FAX (202) 842-3490.

110948 Cato_Bp102.qxp 5/1/08 5:12 PM

the klein doctrine: the rise of disaster polemics · ofiraq.shock-shock-shock.getit? hidden in...

Documents