One Year After the Publication of The Shock Doctrine, A Response to the Attacks

Exactly one year ago, I set off on a book tour to promote The Shock Doctrine. The plan was for it to last three months, quite long by publishing standards. Twelve months later, it is still going. But this has been no ordinary book tour. Everywhere I have traveled- from Calgary, Alberta to Cochabamba, Bolivia - I have heard more stories about how shock strategies have been used to impose unwanted pro-corporate policies. I have also been part of stimulating debates and discussions about how the current round of crises - oil, food, financial markets, heavy weather -- can be transformed into opportunities for progressive change.

And there have been other kinds of responses too. The Shock Doctrine is a direct attack on the intellectuals and institutions that have disseminated corporatist ideology around the world. When I wrote the book, I fully expected to get hit back. Yet for eight months following publication, there was an eerie silence from the "free-market" ideologues. Sure, a few dismissive reviews appeared in the business press. But not a word from the Washington think tanks that I name in the book. Nothing from the University of Chicago economics department. Even The Economist magazine, which used to attack me gleefully and with great regularity, never mentioned the book in print. An American television producer, who was trying to find an opponent to debate me on-air, confided that she had never been turned down so consistently. "They seem to think if they ignore you, you'll go away."

Well, the silence from the right has certainly been broken. In recent months, several articles and reports have come out claiming to debunk my thesis. The most prominent are a "background paper" published by The Cato Institute, extended into a full length book in Swedish (!), and a lengthy essay in The New Republic by senior editor Jonathan Chait.

Several readers have written to this site asking me to respond to these attacks, if only to help them defend the book more effectively. I resisted at first (clinging to my summer vacation...) but I appreciate the feedback and several points do need correcting. Since the reports by Cato and The New Republic - though purporting to come from radically different points on the political spectrum - share some marked similarities, I've decided to tackle them together. Here goes.

Sorry Boys, Milton Friedman Supported The War

Both Jonathan Chait and The Cato Institute claim that the late economist Milton Friedman was a staunch opponent of the invasion of Iraq. The Cato paper states of me that, "She claims that Friedman was a 'neoconservative' and thus in favor of an aggressive American foreign policy, and she argues that Iraq was invaded so that Chicago-style policies could be implemented there.... but nowhere does she mention Friedman's actual views about the war. Friedman himself said: 'I was opposed to going into Iraq from the beginning. I think it was a mistake, for the simple reason that I do not believe the United States of America ought to be involved in aggression.' And this was not just one war that he happened to oppose. In 1995, he described his foreign policy position as 'anti-interventionist.'"

Similarly, Chait accuses me of not knowing the difference between libertarians and neo-cons and chides me for never mentioning -- "not once, not anywhere" -- that Friedman "argued against the Iraq war from the beginning." Apparently Friedman's anti-war stance should be "morbidly embarrassing" to me.

I am not the one who should be embarrassed. Despite his later protestations, Milton Friedman openly supported the war when it was being waged. In April 2003, Friedman told the German magazine Focus that "President Bush only wanted war because anything else would have threatened the freedom and the prosperity of the USA." Asked about increased tensions between the U.S. and Europe, Friedman replied: "the end justifies the means. As soon as we're rid of Saddam, the political differences will also disappear." [Read the whole interview in German and our translation.] Clearly this was not the voice of anti-intervention. Even in July 2006, when Friedman claimed to have opposed the war from the beginning, he remained hawkish. Now that the U.S. was in Iraq, Friedman told The Wall Street Journal, "it seems to me very important that we make a success of it."

All of this has nothing to do with my book, however. In The Shock Doctrine, I describe the invasion and occupation of Iraq as the culmination of Friedman's ideological crusade because he was America's leading intellectual favoring the privatization of the state - not because he personally supported the war, which is irrelevant. For more than five years Iraq has been the vanguard of this radical privatization project. Private contractors now outnumber U.S. soldiers and corporations have taken on such core state functions as prisoner interrogation.

Furthermore, I never said Friedman was a "neo-conservative" and I discuss, at length, how difficult it is to find terms to describe the corporatist project that are acceptable to all readers. On page 17 (all page numbers refer to the Picador paperback) I write:

"In the attempt to relate the history of the ideological crusade that has culminated in the radical privatization of war and disaster, one problem recurs: the ideology is a shape-shifter, forever changing its name and switching identities. Friedman called himself a 'liberal,' but his U.S. followers, who associated liberals with high taxes and hippies, tended to identify as 'conservatives,' 'classical economists,' 'free marketers' and, later, as believers in 'Reaganomics' or 'laissez-faire.' In most of the world, their orthodoxy is known as 'neo-liberalism,' but it is often called 'free trade' or simply 'globalization.' Only since the mid-nineties has the intellectual movement, led by the right-wing think tanks with which Friedman had long associations-Heritage Foundation, Cato Institute and the American Enterprise Institute-called itself 'neo-conservative,' a world view that has harnessed the full force of the U.S. military machine in the service of a corporate agenda."

The significance of the "neo-con" label gaining currency in the mid-nineties is that it was then that the Republicans, under the leadership of Newt Gingrich and backed by the think tanks I mentioned, swept Congress promising a "Contract With America." At this point, the label "neo-conservatives" was not a reference primarily to hawkish foreign policy positions but to harsh economic ones. Back in the mid-nineties, many of the people most associated with the neo-con label today - David Frum and William Kristol and much of the Weekly Standard crowd - were squarely focused on demanding Friedmanite cut-backs and privatizations inside the United States. Frum, for example, first made his name in the U.S. with Dead Right, his 1994 book exhorting the conservative movement to return to its free market economic roots. After Bill Clinton embraced much of this economic agenda, several of the key neo-con warriors narrowed their focus to American dominance on the world stage, a fact that has allowed their keen interests in Friedmanite economic ideas to be largely overlooked.

Ignore the Reporting, Attack the Author

Both Chait's essay and the Cato paper are marked by a stubborn refusal to wrestle with the evidence quoted in my book. For instance, Chait dismisses out of hand my suggestion that there were economic interests behind the 1999 NATO intervention in Kosovo (though he grudingly admits I never claim that economics was the sole motivator). I do write that there were other factors motivating the war besides Slobodan Milosevic's egregious human rights violations. I base this claim on the post-war analysis provided by Strobe Talbott, Deputy Secretary of State under U.S. President Bill Clinton and the lead U.S. negotiator during the Kosovo war. In a 2005 essay (quoted on page 415), Talbott wrote:

"As nations throughout the region sought to reform their economies, mitigate ethnic tensions, and broaden civil society, Belgrade seemed to delight in continually moving in the opposite direction. It is small wonder NATO and Yugoslavia ended up on a collision course. It was Yugoslavia's resistance to the broader trends of political and economic reform-not the plight of the Kosovar Albanians-that best explains NATO's war."

Instead of explaining how the words of a top-level U.S. official could so clearly coincide with my argument, Chait chooses to completely ignore the Talbott quote. Again and again, readers of The New Republic are left with the distinct impression that The Shock Doctrine is a work of opinion journalism, rather than a thesis based on research and reporting.

When Chait and The Cato Institute do acknowledge my reliance on facts, they accuse me of manipulating them to fit my thesis. Interestingly, the first time Chait quotes my work, he does just that. To explain to his readers what kind of an extremist he is dealing with, he quotes my first book, No Logo. In it, I allegedly described the world as a "fascist state where we all salute the logo and have little opportunity for criticism because our newspapers, television stations, Internet servers, streets and retail spaces are all controlled by multinational corporate interests." If he had let the quote continue for one more sentence, his readers would have known that I went on to dismiss this worldview as overly caricatured. The next sentences read: "there is good reason for alarm. But a word of caution: we may be able to see a not-so-brave new world on the horizon, but that doesn't mean we are already living in Huxley's nightmare... Instead of an airtight formula, [corporate censorship] is a steady trend... but riddled with exceptions."

This is just the first of countless instances in which Chait twists my words to fit his thesis. When manipulation fails, he simply takes my points and passes them off as his own, without attribution. (I am well aware, for instance, that both Marxists and Keynesians have exploited crisis and disaster, which is why I explore left-wing disaster opportunism on pages 21-25, 65-70, 283, 316-317.)

Grasping at Straws

The Cato paper does, at times, acknowledge that there are facts in my book, but faults me for failing to provide sources for my statistics. This is a bold charge to make against a book with 74 pages of endnotes. The one example mentioned is the statistic "that between 25 and 60 percent of the population is discarded or becomes a permanent underclass in countries that liberalize their economies." I did not provide a source for this stat because it is an amalgamation of stats I had already cited and for which I had already provided multiple sources. This is standard practice: once a statistic has been sourced, it can repeated (for the sake of brevity) without repeating the source. So here are those stats on which the 25-60 per cent amalgamation is based, with their sources, straight out of The Shock Doctrine endnotes:

• Unemployment in Bolivia was between 25% and 30% in 1987 (page 186. Source: Mike Reid, "Sitting Out the Bolivian Miracle," Guardian (London), May 9, 1987.)
• 25% of Russians lived in desperate poverty in 1996 (page 300. Source: Russian Economic Trends 5, no. 1 (1996): 56-57 cited in Bertram Silverman and Murray Yanowitch, New Rich, New Poor, New Russia: Winners and Losers on the Russian Road to Capitalism (Armonk, NY: M.E. Sharpe, 2000), 47.)
• Unemployment for black South Africans more than doubled from 23% in 1991 to 48% in 2002 (page 272. Sources: "South Africa: The Statistics," Le Monde Diplomatique, September 2006; Michael Wines and Sharon LaFraniere, "Decade of Democracy Fills Gaps in South Africa," New York Times, April 26, 2004.)
• Unemployment in Poland was at 25% in some areas in 1993 (page 241. Source: Mark Kramer, "Polish Workers and the Post-Communist Transition, 1989-93," Europe-Asia Studies, June 1995)
• 40% of young workers were unemployed in Poland in 2005 (page 241. Source: Andrew Curry, "The Case Against Poland's New President," New Republic, November 17, 2005)
• 59% of Poles had fallen below the poverty line in 2003 (pages 241-242. Source: Przemyslaw Wielgosz, "25 Years of Solidarity," August 2005.)

Elsewhere, the Cato paper claims that, "Klein never provides the reader with any data [about Chile] over a longer period. She... never once admits that Chile is the social and economic success story of Latin America and has virtually abolished extreme poverty." In fact my economic analysis of Chile covers a 34-year span and I provide facts and data that directly challenge the claim that the country is a free market success story. Here is a relevant passage (pages 104-105):

"The only thing that protected Chile from complete economic collapse in the early eighties was that Pinochet had never privatized Codelco, the state copper mine company nationalized by Allende. That one company generated 85 percent of Chile's export revenues, which meant that when the financial bubble burst, the state still had a steady source of funds.... By 1988, when the economy had stabilized and was growing rapidly, 45 percent of the population had fallen below the poverty line. The richest 10 percent of Chileans, however, had seen their incomes increase by 83 percent. Even in 2007, Chile remained one of the most unequal societies in the world-out of 123 countries in which the United Nations tracks inequality, Chile ranked 116th, making it the eighth most unequal country on the list."

A Massacre of Straw Men

Most of the attacks on The Shock Doctrine involve manufacturing claims, falsely attributing them to me, then handily tearing them down. For example, Jonathan Chait telescopes my point about Donald Rumsfeld's holdings in the Disaster Capitalism Complex like this: "Donald Rumsfeld maintained his stock in Gilead Sciences, which holds the patent for Tamiflu, even while serving as defense secretary. Get it? Rumsfeld would stand to profit from a flu pandemic. But surely you don't have to be an admirer of Rumsfeld to doubt that he would engineer an outbreak of a deadly virus in order to fatten his stock portfolio."

Actually, that is the plot of the movie V for Vendetta; it has absolutely nothing do with my book. What I do write about is how the Pentagon, under Rumsfeld's leadership, stockpiled Tamiflu and Rumsfeld stood to profit as the value of the stock increased by 807 per cent. On pages 394-395 I write:

"For the six years that he held office, Rumsfeld had to leave the room whenever talk turned to the possibility of avian flu treatment and the purchase of drugs for it. According to the letter outlining the arrangement that allowed him to hold on to his stocks, he had to stay out of decisions that 'may directly and predictably affect Gilead.' His colleagues, however, took good care of his interests. In July 2005, the Pentagon purchased $58 million worth of Tamiflu, and the Department of Health and Human Services announced that it would order up to $1 billion worth of the drug a few months later."

There are many more straw men propped up in The Cato Institute paper. Most involve vastly inflating the role I attribute to Milton Friedman. And no little wonder. Other than the University of Chicago economics department, Cato is the institution most intimately aligned and associated with Milton Friedman's radical theories. Among other tributes, every two years, Cato hands out the Milton Friedman Prize for Advancing Liberty, worth half a million dollars. (This year it went to a 23-year-old Venezuelan student activist to further his opposition to the government of Hugo Chavez). Since Friedman continues to serve as Cato's patron saint, it has much to lose from a diminishing of Friedman's reputation, as well as a direct interest in exonerating him of all crimes, real or imagined.

Here are a few more examples. The Cato paper claims that I put the entire blame for Pinochet's economic policies on the shoulders of Milton Friedman - then "proves" that his direct involvement was minimal. Once again, I make no such claim. I do devote considerable space - roughly 60 pages -- to describing the impact of a U.S. State Department program that brought more than one hundred Chilean students to the University of Chicago as part of a deliberate effort to export free-market economic ideas to Chile. This is the program that gave birth to the infamous "Chicago Boys" of Chile, several of whom were actively involved in planning the Chilean dictatorship's economic program before the 1973 coup even took place. Amazingly, the Cato paper makes absolutely no mention of this academic program in its effort to exonerate Friedman personally. The writer either missed 60 pages of my book, or deliberately chose to ignore them.

The greatest challenge in responding to the Cato paper is the scope if its dishonesty. Consider this one passage:

"Klein also blames Friedman and Chicago economics for the actions of the International Monetary Fund during the Asian financial crisis and the Sri Lankan government's confiscation of the land of fishing families to build luxury hotels after the tsunami. Yet the fact is that Friedman thought that the IMF shouldn't be involved in Asia, and he held that governments should be forbidden from expropriating property to give it to private developers. Of course, Klein could argue that Friedman was in some sense a source of inspiration for those policies, even though he was opposed to them. But she doesn't do that. She pretends that he agreed with them, and that that is what he and other Chicago economists wanted all along."

Absolutely everything in this passage is wrong. I never say Friedman favored the IMF bailout in Asia, quite the opposite. On pages 335-336, I report that, "Milton Friedman himself, now in his mid-eighties, made a rare appearance on CNN to tell the news anchor Lou Dobbs that he opposed any kind of bailout and that the market should be left to correct itself." In what way could this constitute "pretending" that Friedman supported the bailout?

I also freely acknowledge the fact that Friedman opposed the IMF on principle. However, as with Pinochet's government in the seventies, I also document that the IMF, at the time of the bailout, was packed with ideological Chicago Boys - a very different point than claiming the IMF was taking orders from Friedman. On page 202, I directly address this apparent contradiction:

"Philosophically, Milton Friedman did not believe in the IMF or the World Bank: they were classic examples of big government interfering with the delicate signals of the free market. So it was ironic that there was a virtual conveyor belt delivering Chicago Boys to the two institutions' hulking headquarters on Nineteenth Street in Washington, D.C., where they took up many of the top positions."

The Shock Doctrine has room for this kind of complexity because it is not - despite what Cato claims - a book about the actions of one man. It is about a multifaceted ideological trend that has successfully served the most powerful corporate interests in society for half a century.

Furthermore, I never wrote, as Cato claims in that same passage, that Friedman had anything to do with "the Sri Lankan government's confiscation of the land of fishing families to build luxury hotels after the tsunami." His name does not appear once in my 25-page chapter on the tsunami. Once again, to write that I "pretend" that Friedman is advocating these policies is pure fabrication. Furthermore, all of these inventions and misrepresentations appear in a single paragraph. The Cato background paper is 20 pages long and is comprised of dozens and dozens of equally dishonest paragraphs. Subjecting them all to this kind of rebuttal is simply too time consuming; my full rebuttal is the book itself.

Go to the Source

Thanks to a fantastic team of researchers, especially my incredible research assistant Debra Levy, The Shock Doctrine has withstood a year's worth of intense media scrutiny in dozens of countries. It is not unscathed, but it has emerged in better shape than I dared hope. When errors are discovered, we immediately correct them in future editions and post a correction and an explanation on the book's website. So far there has been only one significant error discovered, related to the profits earned from Dick Cheney's Halliburton stocks. It was immediately corrected. Readers of The Shock Doctrine know that this is but one of many examples that make the same point about conflicts of interest in the Bush Administration; indeed I devote an entire chapter to the topic. And this is the benefit of a methodology that is grounded not in anecdotes but in thousands of sourced facts and figures: the thesis does not rise or fall on any single example.

As to my critics' charge that I am selective in my use of quotations, that's a danger for any writer. It is also why Debra and I launched the "resources" section of the book's website. On this page, readers can access dozens of original reports, letters and studies that make up some of the key source material for the book. If you are concerned that I am exaggerating Friedman's support for the brutal regime of Augusto Pinochet, read a letter Friedman wrote to Pinochet. If you are suspicious that I am making disaster capitalism seem more conspiratorial than it is, read the minutes from a meeting that took place at the Heritage Foundation just two weeks after the levees broke in New Orleans. It lays out 32 "free market solutions" for Hurricane Katrina and high gas prices, many of which have been championed by the Bush Administration.

The thesis of The Shock Doctrine was not born of whimsy but of four years of research. Debra and I put these documents online because we want educators, students and general readers to move beyond an admittedly subjective version of history - as all histories are -- and go straight to the source. We invite you to explore these documents, send us ones we missed, and come to your own conclusions.