Try Red Pepper in print with our pay-as-you-feel subscription. You decide the price, from as low as £2 a month.

More info ×

After shock

From Poland to Iraq and from China to New Orleans, neoliberalism has risen on the back of what Naomi Klein calls 'disaster capitalism'. She spoke to Oscar Reyes about her new book, The Shock Doctrine, and new forms of resistance

October 3, 2007
11 min read

What trajectory took you from writing about brand culture and documenting the recovered factories in Argentina to the reporting of ‘disaster capitalism’ in Iraq and elsewhere?

I was living in Buenos Aires, Argentina, and we were shooting a scene on the roof of an occupied factory when the Iraq war began. This was the root of The Shock Doctrine. The analysis of the war in Argentina and many parts of Latin America was ‘this is what happened to us’ – neoliberalism came to Latin America with blood and fire and was now being brought to the Middle East by the same means. Being there in that moment and seeing the war through a Latin American lens is what drew me to this historical look at the very real use of shocks to impose shock therapy.

There was something else, too, about watching the war from Latin America. We were there because Argentina was in the midst of a very dramatic national rejection of the Washington Consensus – the economic model that promotes the policies of privatisation, the evisceration of public services and, eventually, the remaking of the state in the interests of foreign investors. At the very moment when Argentina, this former model student of neoliberalism, was rejecting this economic model, we were seeing its imposition in Iraq by brute force.

I wrote my first column about Iraq at that time, called ‘Privatisation in disguise’. It was about how the global rejection of neoliberalism had led to the ramping up of the force that was needed to impose it. Whereas WTO, IMF and World Bank meetings still displayed the veneer of consent, suddenly the approach became ‘don’t even bother asking, just seize what you want on the battlefield of pre-emptive war’.

So, when I set out to write this book I never saw it as a change of topic. I believed that I was tracking the transition from free trade light to free trade heavy, from the arm-twisting and the quasi-peaceful imposition of this model to the overtly violent imposition of what I call ‘disaster capitalism’. This use of pre-emptive war and large-scale natural disasters to build corporate states from the rubble took place in the most anti-democratic situation you could imagine – when people were scattered, disoriented, in shock.

I thought I was going to write a book about a change, but when I looked back at the history of neoliberalism, I realised that at all of the key junctures where this ideology took its leap forward – including Chile in 1973, China in 1989, Poland in 1989, Russia in 1993, and the Asian economic crisis in 1997 and 1998 – the same logic of exploiting a moment of trauma was at work.

In the introduction to The Shock Doctrine you cite Milton Friedman’s claim that ‘only a crisis – actual or perceived – produces real change’ as the core tactical nostrum of contemporary capitalism. But many Marxists have articulated similar ideas about crises as an opportunity for change. Do you think this is also dangerous, or can crises offer the potential for positive transformation?

I think it is always dangerous, whether on the left or the right, when people say that things have to get worse before they get better. That is when the left loses its core identity of being pro-humanity and starts almost delighting in loss of life, and in pain, because that will bring about the great cataclysm. Both the left and the right have suffered from this way of thinking, but the right have been in the ascendancy for at least 35 years, so they are the ones currently capitalising on crises.

Milton Friedman’s work was shaped in opposition to Keynesianism and developmentalism rather than Marxism. More specifically, he set himself against what he perceived as the Keynesians’ successful exploitation of the crisis of the Great Depression, the market crash of 1929, which led to the imposition of the New Deal and projects like it around the world.

As far as Friedman was concerned, as he wrote in a letter to Pinochet, that is where history took its wrong turn. He contested the idea that the Great Depression was caused by deregulated markets and argued that it was caused by too much regulation of markets. He also studied how the Keynesian forces were ready with their ideas for that crisis. I think the right-wing project around the world needs to be understood as an attempt to emulate that, using extremely well funded corporate think tanks as ovens to keep ideas warm for when that crisis breaks out.

Bringing this question back to the case of Argentina is also interesting, because the collapse of the economy at the end of 2001 is what opened up space for alternatives to emerge. In fact, that is what our film The Take was about, these wonderful exciting democratic experiments that were happening in factories where, instead of allowing them to shut down, the workers were putting them back to work.

While crisis was important to the Argentinean experiment, the way of thinking of the people involved was very different to that of the shock therapists and the blank-slaters who are always dreaming of the clean sheet to start over. The people whose stories we were documenting in Argentina had a completely different idea in starting from scrap, not from scratch. It was not an ideology of erasing everything and starting over, but starting from where you are, in the rusty bits of former economic projects, and piecing them together into something new. This is more of a patchwork approach that really puts human lives and dignity at the very centre.

Some of the most exciting economic alternatives at the moment have this quality of ‘starting from scrap’, which I think emerges from learning from the past mistakes of the totalitarian left.

You mention the shift from shock therapy to shock-and-awe, but there are also attempts to soften the image of neoliberalism. Jeffrey Sachs, the economist who pioneered shock therapy, wrote his latest book on The End of Poverty. Is there any more to this than a rebranding exercise?

A lot of people are under the impression that Jeffrey Sachs has renounced his past as a shock therapist and is doing penance now. But if you read The End of Poverty more closely he continues to defend these policies, but simply says there should be a greater cushion for the people at the bottom.

The real legacy of neoliberalism is the story of the income gap. It destroyed the tools that narrowed the gap between rich and poor. The very people who opened up this violent divide might now be saying that we have to do something for the people at the very bottom, but they still have nothing to say for the people in the middle who’ve lost everything.

This is really just a charity model. Jeffrey Sachs says he defines poverty as those whose lives are at risk, the people living on a dollar a day, the same people discussed in the Millennium Development Goals. Of course that needs to be addressed, but let us be clear that we’re talking here about noblesse oblige, that’s all.

Do the tools exist for reconstructing a more just society exist?

Many of them do, and we see how deliberately they’re attacked in these moments of disorientation. Look at what has happened to New Orleans in the years since Katrina struck. The city was turned into a laboratory for these right-wing, corporate-funded think-tanks. I start The Shock Doctrine by discussing an op-ed written by Milton Friedman, written three months after the levees broke in New Orleans, in which he calls for the privatisation of the city’s schools. Well, this has really happened – following a particular form of privatisation that is favoured in the US called ‘charter schools’.

Two years after Katrina, the subsidised housing projects that allowed low-income people to live in downtown New Orleans rather than be exiled to the margins are the ones slated for demolition to be turned into condos. The original idea behind the city’s largest public health facilities, like the Charity Hospital, was also one of closing the gap, although they had been allowed to decay for decades.

These are the bridges, and it is the bridges that get bombed first by this ideology – the public housing, the public health facilities, the public schools. The central message of my book is that we’ve been told that our ideas have been tried and failed but, in fact, it is the opposite. Our ideas work, but they cost. They are very good for economic growth but they really eat into super-profit, and that is why there has been such an aggressive attempt to paint them as failures.

It sounds as though you’re also talking about the degradation and closure of public spaces, but this can go wider than using traumatic events. Take the example of the preparations for the Olympics. It is not a ‘shock’, but the mega-event of the Games ends up being used to displace communities and gentrify whole neighbourhoods.

That’s a good point, and it fits into the idea of states of exception. Leszek Balcerowicz, the former finance minister who worked with Jeffrey Sachs to impose shock therapy in Poland in 1989, said that the ideology advances in moments of extraordinary politics. He listed these moments of extraordinary politics as ends of war and moments of extreme political transition. But you are absolutely right that even Games can play that role, because they are moments of exception when our cities are no longer our cities, when other rules apply. We are going through that same thing now in Vancouver in preparation for the 2010 Winter Olympics. It is interesting because there are two states of exception that are really transforming that city. One is the increasing Canadian involvement in the war in Afghanistan and the other is the Winter Olympics. It is games and guns.

What opportunities for hope do you see in today’s world?

The project kind of came full circle. It began in Argentina on the roof of an occupied factory. I looked back at these moments of extraordinary politics, when the dream of a real alternative emerges, a non-New Labour third way between totalitarian communism and savage capitalism. Looking back at those junctures, the dream that has come up again and again is this idea of cooperatives.

This idea of co-operatives did not fail – it was never tried. Solidarity never got a chance to enact its real economic programme in Poland before those dreams were betrayed with shock therapy. In Russia there was a very clear choice not to democratically remake the economy, despite the fact that 67 per cent of Russians stated that their preferred means of privatising state companies was to hand them over to the workers as workers’ cooperatives.

I find it tremendously hopeful to realise that these ideas that we have been told are impractical did not fail. The notion that our ideas are already discredited is the major source of weakness on the left. It is what makes us tentative in key moments. Pulling these lost worlds out of the narrative of our last 35 years shows that what the vast majority of people wanted in South Africa, Poland, Russia and China did not fail, but was crushed. It was crushed by military tanks and crushed by think tanks.

Knowing how shock works can help you to steal yourself against it. Once prisoners understand how shock works as an interrogation technique they can resist these methods. I think the same is true on a mass scale. Societies that have learned from their past traumas – and many Latin American societies fit into that category – are more shock resistant, and its harder to exploit them in moments of trauma.

What we witnessed in Argentina – with the collapse of its economy and citizens suddenly being locked out of their banks – was as traumatic for Argentineans as the Great Depression. The president declared a state of siege on 19 December 2001, saying ‘everybody stay in your homes, the country is under threat, trust me’. The people poured out of their homes with pots and pans and overthrew him. If you ask everyone there why, they tell you that this had happened to them before and they weren’t going to let it happen again.

Meaning: we know how shock works and we were not going to return to a state of fearful regressed acceptance of people in positions of authority. I draw my hope from that example.

The Shock Doctrine: The Rise of Disaster Capitalism is published by Penguin, price £25

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.

Interview: Queer British Art
James O'Nions talks to author Alex Pilcher about the Tate’s Queer British Art exhibition and her book A Queer Little History of Art

Cable the enabler: new Lib Dem leader shows a party in crisis
Vince Cable's stale politics and collusion with the Conservatives belong in the dustbin of history, writes Adam Peggs

Anti-Corbyn groupthink and the media: how pundits called the election so wrong
Reporting based on the current consensus will always vastly underestimate the possibility of change, argues James Fox

Michael Cashman: Commander of the Blairite Empire
Lord Cashman, a candidate in Labour’s internal elections, claims to stand for Labour’s grassroots members. He is a phony, writes Cathy Cole

Contribute to Conter – the new cross-party platform linking Scottish socialists
Jonathan Rimmer, editor of Conter, says it’s time for a new non-sectarian space for Scottish anti-capitalists and invites you to take part

Editorial: Empire will eat itself
Ashish Ghadiali introduces the June/July issue of Red Pepper

Eddie Chambers: Black artists and the DIY aesthetic
Eddie Chambers, artist and art historian, speaks to Ashish Ghadiali about the cultural strategies that he, as founder of the Black Art Group, helped to define in the 1980s

Despite Erdogan, Turkey is still alive
With this year's referendum consolidating President Erdogan’s autocracy in Turkey, Nazim A argues that the way forward for democrats lies in a more radical approach

Red Pepper Race Section: open editorial meeting – 11 August in Leeds
The next open editorial meeting of the Red Pepper Race Section will take place between 3.30-5.30pm, Friday 11th August in Leeds.

Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people
Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite

Power to the renters: Turning the tide on our broken housing system
Heather Kennedy, from the Renters Power Project, argues it’s time to reject Thatcher’s dream of a 'property-owning democracy' and build renters' power instead

Your vote can help Corbyn supporters win these vital Labour Party positions
Left candidate Seema Chandwani speaks to Red Pepper ahead of ballot papers going out to all members for a crucial Labour committee

Join the Rolling Resistance to the frackers
Al Wilson invites you to take part in a month of anti-fracking action in Lancashire with Reclaim the Power

The Grenfell public inquiry must listen to the residents who have been ignored for so long
Councils handed housing over to obscure, unaccountable organisations, writes Anna Minton – now we must hear the voices they silenced

India: Modi’s ‘development model’ is built on violence and theft from the poorest
Development in India is at the expense of minorities and the poor, writes Gargi Battacharya

North Korea is just the start of potentially deadly tensions between the US and China
US-China relations have taken on a disturbing new dimension under Donald Trump, writes Dorothy Guerrero

The feminist army leading the fight against ISIS
Dilar Dirik salutes militant women-organised democracy in action in Rojava

France: The colonial republic
The roots of France’s ascendant racism lie as deep as the origins of the French republic itself, argues Yasser Louati

This is why it’s an important time to support Caroline Lucas
A vital voice of dissent in Parliament: Caroline Lucas explains why she is asking for your help

PLP committee elections: it seems like most Labour backbenchers still haven’t learned their lesson
Corbyn is riding high in the polls - so he can face down the secret malcontents among Labour MPs, writes Michael Calderbank

Going from a top BBC job to Tory spin chief should be banned – it’s that simple
This revolving door between the 'impartial' broadcaster and the Conservatives stinks, writes Louis Mendee – we need a different media

I read Gavin Barwell’s ‘marginal seat’ book and it was incredibly awkward
Gavin Barwell was mocked for writing a book called How to Win a Marginal Seat, then losing his. But what does the book itself reveal about Theresa May’s new top adviser? Matt Thompson reads it so you don’t have to

We can defeat this weak Tory government on the pay cap
With the government in chaos, this is our chance to lift the pay cap for everyone, writes Mark Serwotka, general secretary of public service workers’ union PCS

Corbyn supporters surge in Labour’s internal elections
A big rise in left nominations from constituency Labour parties suggests Corbynites are getting better organised, reports Michael Calderbank

Undercover policing – the need for a public inquiry for Scotland
Tilly Gifford, who exposed police efforts to recruit her as a paid informer, calls for the inquiry into undercover policing to extend to Scotland

Becoming a better ally: how to understand intersectionality
Intersectionality can provide the basis of our solidarity in this new age of empire, writes Peninah Wangari-Jones

The myth of the ‘white working class’ stops us seeing the working class as it really is
The right imagines a socially conservative working class while the left pines for the days of mass workplaces. Neither represent today's reality, argues Gargi Bhattacharyya

The government played the public for fools, and lost
The High Court has ruled that the government cannot veto local council investment decisions. This is a victory for local democracy and the BDS movement, and shows what can happen when we stand together, writes War on Want’s Ross Hemingway.

An ‘obscure’ party? I’m amazed at how little people in Britain know about the DUP
After the Tories' deal with the Democratic Unionists, Denis Burke asks why people in Britain weren't a bit more curious about Northern Ireland before now

The Tories’ deal with the DUP is outright bribery – but this government won’t last
Theresa May’s £1.5 billion bung to the DUP is the last nail in the coffin of the austerity myth, writes Louis Mendee