This is possibly one of the most overrated books since The World Is Flat. As a critique of free market capitalism, it fails by lacking a solid empirical basis or a clear definition of what free market capitalism is. As a critique of American interventionism and neoconservatism, it says nothing that has not been stated better by other authors, and what original things it does say are too inextricably bound up in haphazard analogizing and inconsistent theory to be of much use.
The book suffers from major problems. One of which is its obsession with Milton Friedman. Friedman was indeed an orthodox libertarian - this is exactly why Klein's interpretation of him is incorrect. Klein's analysis presents a "conspiracy" in the truest sense of the word - it seems as if every single person, institution and belief system Klein disagrees with has been boiled into an evil, capitalist, warmongering gruel. The Shock Doctrine does not just oversimplify. When convenient, it does the reverse, obfuscating systems to the point where vastly different beliefs are indistinguishable. It presents us with a clear double standard. She attacks the notion that developmentalism and mixed economies were steps on the path to authoritarian communism. Her critique in that sense is legitimate, in many cases American leaders fell so far into anticommunist paranoia that social democracy and socialism, socialism and Stalinism, became inextricable.
Yet Klein asks us to reject a slippery slope on the left and embrace wholeheartedly one on the right - "neoliberal" market reforms is indistingusihable from "libertarian" free market orthodoxy is indistungishable from "neoconservative" statism and militarism. We find overwhelmingly that this is not the case. Neoconservatism and libertarianism are almost diametrically opposed belief systems. Libertarianism seeks a small government at home and a noninterventionist one abroad. A libertarian would not support "no bid" contracts, nation building, enormous increases in military expenditure, faith based initatives, torture, detention camps, wiretapping, and crony capitalism. Klein, of course, feels no need to qualify or even attempt to explain her categorization of the Cato Institute as "neoconservative" - perhaps because doing so would force her to acknowledge the overwhelming opposition of libertarians, Milton Friemdan included, to foreign intervention and torture, thus undercutting two thirds of her view of the "disaster capitalist" M.O. - invade, liberalize, repress.
Klein's selective misappropriation of Friedman's words and ideas does not end with foreign intervention. Her thesis, and her claim that Milton Friedman is its ideological lynchpin, begins in force with this quote from one of his "most influential [1962] essays:" (Oddly, the correct 1982 introduction citation comes 174 pages in)
“Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”The first statement is essentially obvious. Crisis is definitionally linked with change. The second is also true. When governments and societies respond to crisis, they generally come to ideas that have been floating in the undercurrent, unimplemented but nevertheless developed. Theories about the utility of mixed economies existed long before the Great Depression, and theories about a proper, internationalist role for the United States existed before World War II. Free market theories were "lying around" during the economic crisis of the 1970s, as were the ideas of neoconservatives during the crisis of American foregin policy in the wake of Vietnam and Iran. Klein essentially acknowledges this a third of the way through the book. However, Klein refuses to acknowledge the difference between a descriptive and a prescriptive statement. Milton Friedman was making a basic observation about how the world worked, not how it should work. Milton Friedman and other economists did not invite disasters, precisely because of the implications of what ideas were "lying around." As Klein states, Milton Friedman and the Chicago School knew their ideas were deeply unpopular - thus, during a crisis, the ideas likely to be lying around were those of the socialist and left wing variety. The point of the preface was that believers in the free market should popularize their ideas, so economic freedom and the democratic system would not be at cross purposes. It is clear that Friedman prefers gradualism in a democratic system rather than induced crisis. Klein, however, ignores the intent of her ideological enemies' remarks, so long as they contain her favorite catchphrases. One is Friedman's preference for gradual reform over "shock therapy". Friedman, in the letter published on Klein's own website, notes that:
"For a country like the US, where inflation is around 10 per cent a yer, I favor agradual policy of ending it in two or three years. But for Chile, where inflation is raging at 10 to 20 percent a month, I believe gradualism is not feasible. It would involve so painful an operation over so long a period that I fear the patient would not survive."Indeed, Friedman advocates shock therapy (that he also advocates Pinochet "[p]rovide for the relief of any cases of real hardship" is unsurprisingly omitted from Klein's analysis). Yet he explicitly states this is not the ideal form of treatment. A preference for the gradual implementation of free market reforms and macroeconomic adjustment, of course, helps to undermine Klein's thesis that a "Friedmanite counterrevolution" should consist of the inducement of crises. Nevertheless, Klein spends so much time and effort detailing Friedman's desire to separate the market and the state, she ends up, in her description of "Shock Therapy in the USA," describing a program in which enormous amounts of government spending are used to outsource government functions to corporations as "the pinnacle of the Friedmanite counterrevolution." Klein's vision of "disaster capitalism" and Friedman's views alternates between the (more accurate) laissez-faire doctrine in which industrialists hoping for government support are told to "go to hell" and a "corporatist" doctrine in which Friedmanites are purported to support what Klein herself calls a "vast protectionist racket." Klein is absolutely correct to note that Milton Friedman supported laissez faire even at the expense of industrialists and corporations. Many of the passages of Free to Choose are directed at corporations that benefit from government regulation and trade protections. She is also correct to note that the interactions between the Bush government and contractors often amount to a "mafia" arrangement between the market and state. However, to conflate Friedman's views with those of Bush for convenience is ludicrous. The fact she even uses the term Friedmanite after explicitly stating that "Chile under Pinochet and the Chicago boys was not a capitalist state... but a corporatist one" demands a serious explanation that Klein never delivers. The Shock Doctrine's tenuous linkage between these various forms of systems best summed up as "economic systems Naomi Klein doesn't like" employs fallacies of division and composition - that Friedmanite policies are perceived to favor business makes any pro-business policy automatically Friedmanite. She also presumes that since the Chilean government could only conduct free market reforms by political repression, advocating free market reforms, as Friedman did, is tantamount to promoting political repression. However, a government imposed by an unpopular coup requires political repression in some form merely to exist - any of its reforms, except ones to abolish itself, would require repression. Does Klein propose that third world dictatorships seeking to return to developmentalism and asking advice be rebuffed by technical advisors? (I await her condemnation of mixed-system and Keynesian economists for meeting with the USSR in the interwar years, and that of economists meeting with the vast majority of African and Central Asian countries today.) Even if the Chicago Boys of Chile can be blamed for the coup, foreign economists cannot. Milton Friedman wrote a letter to Pinochet and met with him for barely an hour. Friedman was not the architect of the arrangement that put Chicago economists into Chile - Klein admits that occurred long before Friedman became the dominant thinker at Chicago. The junta picked right wing economists, the economists did not pick the junta.
The abuses of logic are carried further - since the Chicago School taught a few Argentines and was associated with a junta in Chile, it occurs naturally to Klein that Argentina must have been a "Chicago School junta" as well. Yet there is little evidence of Argentina having anywhere near the same economic experience as Chile under its junta. While Jose Martinez de Hoz, Argetine financial minister, did reduce developmentalist trade barriers and deregulate the finance sectors, she fails to note that during the he allowed for massive amounts of inflation and his most infamous economic policy tools were wage and price controls coupled with the a bond and treasury policy that essentially amounted to fraud - he ws hardly a free market acolyte, but an economic nationalist seeking to strengthen Argentina's economy. Klein uses a letter describing torture and "planned misery" as "Chicago School" despite Klein's earlier admissions that a pro-business policy is not automatically a Chicago School policy; simultaneously it is clear Argentina's alternations between crackdowns on anti-business groups, government interventions and mixed deregulation point to crony capitalism or "corporatism" rather than the Chicago School. Of course, these ideas are only separate when they suit Klein's purposes. Klein only bothers to connect Argentina's government with actual "Chicago Boys" two decades later during the Argentine fiscal crisis, long after the terror.
Argentina's true "financial" shock of deregulation and "Chicago Boy" policy comes long after its shocks of intervention and repression. Klein, in the opening of her book, outlines Chile, Iraq, and other countries as examples of a clear pattern - disaster, economic change, and repression to protect it. She also stresses continually that "shock" requires these things occur in concert. No such thing occurs in Argentina, and her example falls apart elsewhere. Where was the torture in New Orleans after Katrina (and no, simply having the presence of security personnel and the National Guard doesn't count as "repression")? What, beyond the school reform, were the free market reforms?
Klein delights in the fact that no multiparty democracy has gone "full-tilt free market." By her own admission, Chile was corporatist, Iraq is a racket, and any reasonable examination of China today demonstrates a country practicing something closer to mercantilism or "state capitalism" rather than laissez-faire. So what society then, has gone "full-tilt free market?" Although Milton Friedman himself supported anti-trust legislation and emissions taxes, he is certainly a laissez-faire economist (though not as much as the Austrians, again something Klein admits). The reality is that the main flaw of Friedman's laissez-faire economics is not that they cannot be implemented in a democracy or without repression, but that they cannot be implemented. The government with the power to implement such laissez-faire reforms over the natural voting interests of people and lobbyists would naturally taint its economic reforms with "corporatism" just as naturally as the government with the power to implement complete socialism over the natural voting interests of people and lobbyists would taint its economic reforms with bureaucratic cronyism. There is nothing wrong with critiquing the practicability of laissez-faire or the brutality of armed corporatism. But the amount of self-contradictions in Klein's work, the twisting of history to fit an "all-encompassing" thesis, and its attempt to refute "neoliberal" reforms by conflating everything that smells of capitalism into an impossible system with no true ideological constituents is absurd. Free market economists widely acknowledge that successful free market reform is better taken in gradual doses rather than extreme "shock therapy"- the Chicago School is not representative of mainstream free market economic thought, nor has it ever been. In focusing her attacks on Friedman, she forfeits a legitimate critique of entirely separate economic systems. So too does she ignore the small triumphs of capitalism in the developing world, slowly liberalizing but rapidly growing. Klein is absolutely correct to state that extreme free market ideals are unpopular, but she is incorrect to assume then that this encourages "laissez-faire" "disaster capitalists" to team up with "corporatists" to try and implement them forcibly. The median economist, as Bryan Caplan and others note, is a centrist Democrat - supportive of a government role and sensible policy changes, but agreed on basic economic principles about the dangers of price controls, excessive regulation, and protectionism - policies that Klein seems to be very supportive of. Many support this book on the basis that the overwhelming praise for Friedman must be balanced out. This is foolish, firstly because Milton Friedman's most basic premise - that in general, economic liberty is a positive thing - is as true as any general claim about the benefit of responsible government. But secondly, much more reasonable and balanced criticisms of Friedman's economic policies come from left-leaning and centrist analysts with peer-reviewed, empirical studies. The deeper the left draws from the gutters to attack Friedman and other systems, the more the left plays into the conservative claim that the ultra-capitalists are in the "true" mainstream, and everyone else is supporting socialism - "unfettered capitalism" emerged after such crusades against its supporters, and it would be wise for the American left not to prime such another swing for the future. You do not need to prove that Milton Friedman and capitalism are the spawn of Satan to critique either.
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