The Shock Doctrine
The Shock Doctrine: The Rise of Disaster Capitalism
by Naomi Klein – 558 p, 2007
p. 253 – This liberation from all constraints is, in essence, Chicago School economics (otherwise known as neoliberalism or, in the U.S., neoconservatism): no some new invention but capitalism stripped of its Keynesian appendages, capitalism in its monopoly phase, a system that has let itself go-that no longer has to keep us as customers, that can be as antisocial, antidemocratic and boorish as it wants. As long as Communism was a threat, the gentlemen’s agreement that was Keynesianism would live on; once that system lost ground, all traces of compromise could finally be eradicated, thereby fulfilling the purist goal Friedman had set out for his movement a half century earlier.
That was the real point of Fukuyama’s dramatic “end of history” announcement at the University of Chicago lecture in 1989: he wansn’t actually claiming that that there were no other ideas in the world, but merely that, with Communism collapsing, there were no other ideas sufficiently powerful to constitute a head-to-head competitor.
p. 273 – The truth is that Asia’s crisis is still not over, a decade later. When 24 million people lost their jobs in a span of two years, a new desperation takes root that no culture can easily absorb. It expresses itself in different forms across the region, from a significant rise in religious extremism in Indonesia and Thailand to the explosive growth in the child sex trade.
Employment rates have still  not reached pre-1997 levels in Indonesia, Malaysia and South Korea. And it’s not just that workers who lost their jobs during the crisis never got them back. The layoffs have continued, with the new foreign owners demanding ever-higher profits for their investments. The suicides have also continued: South Korea, suicide is now the fourth most common cause of death, more than double the pre-crisis rate, with thirty-eight people taking their own lives every day.
That is the untold story of the policies that the IMF calls “stabilization programs,” as if countries were ships being tossed around on the market’s high seas. They do, eventually, stabilize, but that new equilibrium is achieved by throwing millions of people overboard: public sector workers, small-business owners, subsistence farmers, trade unionists. The ugly secret of “stabilization” is that the vast majority never climb back aboard. they en up in slums, now home to 1 billion people; they end up in brothels or in cargo ship containers. They are disinherited, those described by the German poet Rainer Maria Rilke as “ones to whom neither past nor the future belongs.”
p. 291 – Gilead, for its part, sees epidemics as a growth market, and it has an aggressive marketing campaign to encourage business and individuals to stockpile Tamiflu, just in case. Before he reentered government, Rumsfeld was so convinced that he was on to a hot new industry that he helped found several private investment funds specializing in biotechnology and pharmaceuticals. These companies are banking on an apocalyptic future of rampant disease, one in which governments are forced to buy, at top dollar, whatever lifesaving products the private sector has under patent.
p. 327 – The invasion of Iraq was sold to the public on the basis of fear of weapons of mass destruction because, as Paul Wolfowitz explained, WMDs were “the one issue that everyone could agree on” —it was, in other words, the lowest-common-denominator excuse. The more rarefied reason, favored by the most intellectual proponents of the war, was the “model” theory. According to the pundits who advanced this theory, many of them identified as neocons, terrorism was coming from multiple locations in the Arab and Muslim world: the September 11 hijackers were from Saudi Arabia,Egypt, the United Arab Emirates and Lebanon; Iran was funding Hezbollah; Syria was housing Hamas’s leadership; Iraq was sending money to the families of Palestinian suicide bombers. For these war advocates, who conflated attacks on Israel with attacks on the U.S., as if there were no differences between the two, that was enough to qualify the entire region as a potential terrorist breeding ground.
p. 417 – A right-wing journal in the U.S. pronounced Blackwater “al Qaeda for the good guys.” It’s a striking analogy. Wherever the disaster capitalism complex has landed, it has produced a proliferation of armed groupings outside the state. That is hardly a surprise: when countries are rebuilt by people who don’t believe in governments, the states they build are invariably week, creating a market for alternative security forces, whether Hezbollah, Blackwater, the Mahdi Army or the gang down the street in New Orleans.
The emergence of this parallel privatized infrastructure reaches far beyond policing. When the contractor infrastructure built up during the Bush years is looked at as a whole, what is seen is a fully articulated state-within-a-state that is as muscular and capable as the ‘actual state is frail and feeble. This corporate shadow state has been built almost exclusively with public resources (90 percent of Blackwater’s* revenues come from state contracts), including the training of its staff (overwhelmingly former civil servants, politicians and soldiers). Yet the vast infrastructure is all privately owned and controlled. The citizens who have funded it have absolutely no claim to this parallel economy or its resources.
The actual state, meanwhile, has lost the ability to perform its core functions without the help of contractors. Its own equipment is out of date, and the best experts have fled to the private sector. When Katrina hit, FEMA had to hire a contractor to award contracts to contractors. Similarly, when it came time to update the Army Manual on the rules for dealing with contractors, the army contracted out the job to one of its major contractors, MPRI-it no longer had the know-how in-house. The CIA is losing so many staffers to the parallel privatized spy sector that it has had to bar contractors from recruiting in the agency dining room. “One recently retired case officer said he had been approached twice while in line for coffee,” reported the Los Angeles Times. And when the Department of Homeland Security decided it needed to build “virtual fences” on the U.S. borders with Mexico and Canada, Michael P. Jackson, deputy secretary of the department, told contractors, “This is an unusual invitation… We’re asking you to come back and tell us how to do our business.”
* One of the most worrying aspects of this industry is how unabashedly partisan it is. Blackwater, for instance, is closely aligned with the antiabortion movement and other right-wing causes. It donates almost exclusively to the Republican Party, rather than hedging its bets like most big corporations. Halliburton sends 87 percent of its campaign contributions to Republicans, CH2M H ill 70 percent. Is it beyond the realm of the imagination to conceive of a day when political parties will hire these companies to spy on their rivals during an election campaign-or to engage in covert operations too shady even for the CIA?
p. 424 [...] market crash after 2000; the terrorist outrages of September 2001; wars in Afghanistan and Iraq; friction over US policies; a jump in real oil prices to levels not seen since the 1970s; the cessation of negotiations in the Doha round [of WTO talks]; and the confrontation over Iran’s nuclear ambitions”-and yet it found itself in “a golden period of broadly shared growth.” Put bluntly, the world was going to hell, there was no stability in sight and the global economy was roaring its approval. Soon after, former U.S. Treasury Secretary Lawrence Summers described the “near complete disconnect” between politics and markets as “something out of Dickens, you talk to international relations experts and it’s the worst of all times. Then you talk to potential investors and it’s one of the best of all times-”
This puzzling trend has also been observed through an economic indicator called “the guns-to-caviar index.” The index tracks the sales of fighter jets (guns) and executive jets (caviar). For seventeen years, it consistently found that when fighter jets were selling briskly, sales of luxury executive jets went down and vice versa: when executive jet sales were on the rise, fighter jet sales dipped. Of course, a handful of war profiteers always managed to get rich From selling guns, but they were economically insignificant. It was a truism of the contemporary market that you couldn’t have booming economic growth in the midst violence and instability.
But that truism is no longer true. Since 2003, the year of the Iraq invasion, the index found that spending has been going up on both fighter jets and executive jets rapidly and simultaneously, which means that the world is becoming less peaceful while accumulating significantly more profit. The galloping economic growth in China and India played a part in the increased demand for luxury items, but so did the expansion of the narrow military-industrial complex into the sprawling disaster capitalism complex. Today, global instability does not just benefit a small group of arms dealers; it generates huge profits for the high-tech security sector, for heavy construction for private health care companies treating wounded soldiers, for the oil and gas sectors -and of course for defense contractors.