The Shock Doctrine

The Shock Doctrine

by Naomi Klein

Some text books aren’t as bad as others for me to read, and this one helped provide perspective on economic life within our society and what drives it down – “capitalism at its worst”, as described by Naomi Klein in The Shock Doctrine.  The term ‘shock therapy’ refers to a series of actions taken with the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country. This is done in conjunction with high utilization of the private sector to do work rather than reliance on government under the theory that the private sector can ‘save’ the economy.  Klein provides clear examples in the book that suggest this is not an effective way to solve the problems of the country in question, at least not on its own.   Klein points to countries all over the world where the ‘neoliberal free market’ policies, which were crafted in-part by economist Milton Freidman (noted U Chicago faculty member), created disaster over the past 50+ years.  Klein’s examples are well studied with credible sources to back up her claims.  Examples include: the beginning of Chile’s demise through Milton Friedman and his University of Chicago outpost in that country; the transformation of South American countries to embrace capitalist markets, which led to 365% inflation rate; the rise of Boris Yeltsin as the first President of Russia (and the consequent collapse of the Russian markets); the Middle East’s demise after relying on the private sector to solve its problems;  the United States’ downfall after 9/11 with former politicians who now sell their services to the government; and a flurry of other countries from South Africa to Israel.   If you don’t have knowledge on how economics are influenced by strategy, read this book. It is thoughtful and shows how, in this age of focus on security and safety, the investment markets have changed.  Powerful and a must read for anyone studying the economics of civilizations.