The Shock Doctrine: The Rise of Disaster Capitalism

Naomi Klein’s The Shock Doctrine hit bookshelves and internet bookseller sites in 2007 just as the storm clouds of global economic crisis were about to burst. She was not in the least concerned with US housing and the subprime mortgage and foreclosure crisis which, however improbably on the face of things, triggered the global financial crisis and eventual economic meltdown. Her focus lay not in the uncontrollable global virulence of a supposedly local crisis lubricated by the instantaneous financialization of loans and debts and credits—when capital globalizes capitalist crises globalize apace—but rather in the deliberate application of economic shock therapy administered from Washington DC and other centers of global political economic control.

From the 1970s onward, from Chile to South Africa and from Poland to Iraq, the market discipline of neoliberal shock therapy, inspired by economists known as the Chicago Boys, was visited as a plague on the world’s poor while padding the Swiss bank accounts of the world’s powerful and wealthy. Nowhere was this plunderous accumulation starker than in Moscow where, as Klein puts it, “the rise of Russia’s billionaire oligarchs proved precisely how profitable the strip mining of an industrialized state could be.” There was no collateral damage in this three-decade rampage by capital. “Disaster capitalism” was precisely the point; the application of shock, up to and including the mass violent loss of life, was calculated and intentional and its costs anticipated. “Destroy and convert” might well have been the motto of disaster capitalism.

In Klein’s own words, supported by ample evidence: the Southern Cone of Latin America was “the first place where the contemporary religion of unfettered free markets escaped from the basement workshops of the University of Chicago and was applied in the real world … [it] did not bring democracy; it was predicated on the overthrow of democracy in country after country.”

That The Shock Doctrine has had a global effect is undeniable. Translated into twenty-five languages, it was an instant best seller in many countries and garnered numerous book prizes in Europe and North America including the prestigious Publisher’s Weekly book of the year prize. However improbably, it debuted at the top of the business best seller list of the conservative Sunday Times of London. Klein is a journalist, not an academic, but the care with detail and the multifold research that constitutes this book makes it far more than a “first draft of history”; rather, it is a decisive and committed analysis of a brutal epoch in the history of capitalism. That the book was so widely read and received such a positive reception in the popular media, even in business circles, suggests that it caught a wave of public and internal disillusionment with the ideological promises of globalization and neoliberalism.

Indeed, from Bangalore to Seattle, Quebec to Genoa, the anti-globalization movement in which Klein participated had already shown that the neoliberal steamroller could be challenged and there was an alternative. The erroneously named Asian economic crisis of 1997–1999 revealed disillusionment from within, as top shock doctrine economists such as Joseph Stiglitz and Jeffrey Sachs (treated rather gently in this book) jumped ship with withering critiques of “the project”; revolts in Latin America brought popular leftist governments to power in Venezuela, Brazil and Bolivia as well as others elsewhere later on; and while the so-called “War on Terror” represented an opportunistic global power grab—the Iraq War—its generous corporate welfare giveaways to Blackwater, KBR, Bechtel and a phalanx of corporate military suppliers notwithstanding, was a disastrous strategic mistake even in the Bush administration’s own terms. The global economic meltdown after 2007 was just another nail in the coffin.

Cribbing from German theorist Jürgen Habermas, we might say that by the early twenty-first century it was clear to many that neoliberalism was “dominant but dead.” Dominant because no global alternative had yet fully blossomed; dead because the neoliberal variant of capitalism was widely discredited and had long since stopped generating new ideas. Klein caught this disillusionment.

In a more positive vein, Klein’s book makes a significant gesture in the direction of repairing a long term political rupture. Academics tend to think of the McCarthy period and the early Cold War years as a time when socialists and communists were hounded from the academy, patriotic oaths of allegiance were required, and writers were black-listed. All of this was real enough, but arguably of greater importance was the cleavage established between socialist intellectuals on one side and working class organizers, union members, and striking workers on the other. Some of this political rupture was forced from the repressive apparatus of the state but just as often it was orchestrated by right wing union leaderships themselves.

A central merit of The Shock Doctrine, therefore, is Klein’s coverage of the violent repression of workers and unionists, the targeted assault on working-class power both before and during the capitalist shock treatment administered to various countries, and to a lesser extent her focus too on the organizational responses of workers, unions, peasants, women’s groups, indigenous movements and many others. Especially in the US context, Klein’s energetic prose helps reunite workers’ struggles with a long history of socialist ideas, aspirations and possibilities as she diagnoses the same onslaught against unions and working people in the United States itself (and in Thatcher’s Britain, for that matter), particularly in the brutal state clampdown after Hurricane Katrina broke the New Orleans levees in 2005 and the working class largely African-American population was corralled in the flood waters at the cost of an estimated 1500 lives.

To be sure, there are limits to Klein’s socialist alternatives. She is clear in condemning the brutal tragedy of Stalinism, but leaves the door slightly ajar for a kinder, gentler socialism. Yet her sense of alternatives cleaves just as much to a social democratic gloss on capitalism: a redistributive capitalism with strong state regulation over wages and working conditions, the provision of public health, housing and education, the nationalization of oil companies, banks and other crucial facilities—none of this is inimical to a parallel free market: “Markets need not be fundamentalist.” Like many on the left she holds fast, therefore, to the idea of a Keynesian style new New Deal. But this alternative strikes me, especially amidst continuing fallout from the global economic meltdown, as rather unambitious.

The old New Deal, moreover, was not such a great deal for many. First, Keynes himself was not interested in the diminution of social inequality or in social welfare per se, but rather in the narrow economic goal of stimulating investment via consumption. Second, the New Deal was geared largely to the white working and lower middle classes, selectively omitting coverage for African-Americans. This was most evident in the New Deal’s housing provisions which functioned to stimulate suburban development and white flight, with the consequent class and race geographies we now know. Third, as feminist and labor critiques have pointed out exhaustively, the various social welfare programs and union organizing concessions, whatever else they did, functioned as powerful means of social control and disciplining aimed first and foremost at women and workers.

In addition, the old New Deal did not arrive in a vacuum. Its somewhat benevolent hand of the state was matched every inch by a thoroughly repressive posture. Thus, Franklin Roosevelt did not initiate the New Deal out of patrician benevolence, however much that is the liberal story that has come down to us. Rather, after 1933 he confronted rising labor militancy with more strikes in the auto, coal and other major industrial sectors; escalating unionization; high unemployment and the persistence of “hooverville” tent camps housing the homeless; and growing communist and socialist organization. FDR understood well that revolution was potentially in the cards and the New Deal was intended to blunt its momentum. But at the same time, the Roosevelt administration applied extreme repressive measures against strikers, unions, women’s organizations and the unemployed.

Advocacy of a new New Deal today, therefore, puts the cart of radical change before the horse of political organization. It was meant to save capitalism more than transform it, and the advent of neoliberalism in the 1970s proves the adaptability of capitalist class relations to multiple specific forms. FDR established the New Deal because he had to; he was under extreme political pressure. The lesson for today, and Klein would doubtless agree, is that the first step is one of building organized power among workers, racial and ethnic minorities, migrants, women’s and environmental activists, and so forth. Only then does the political power exist to seriously propose and fight for radical alternatives. The tragedy of the Obama administration’s first year in power is precisely that it failed to encourage the conversion of the mobilization that brought him to power into a political movement. That such a political movement would have held his feet to the fire, demanding vocally that campaign promises be met—and then some!—surely goes a long way toward explaining its non-appearance.

The Shock Doctrine is a legitimately angry and radical book. One gets the sense that Naomi Klein’s powerful narrative and evidence, which scream “SOCIAL REVOLT!” from every page, are fighting against her own caveat that a kinder gentler capitalism might just be finessed. More even than her earlier book, No Logo, this volume will have a lasting and radicalizing effect across old political chasms. 

Share on Facebook

Print Friendly

A Street Party on Meinzer Strasse, 1990

Before the book, a place and time: Berlin, summer, 1990. Or actually, the road to Berlin. I’d spent the last two days on the move, hitchhiking without sleep to get from Amsterdam to Berlin. I was delirious, having spent hours talking to a Dutch businessman who spewed a stream of racist bile about Muslims taking over his country and an even longer time with an Italian truck driver who insisted that he was carrying a large consignment of weapons for the Sicilian mafia. Beggars can’t be choosers. Night blurred into day and back again. Now I was on the final leg of the journey, crammed into a dilapidated Opel with a disheveled elevator salesman and his advertising gear. The highway ran like an artery of light through what I knew was the pitch-black East German countryside. Groggy with sleep, I struggled to keep up a conversation with the driver. The surreal sense of being deep under water I felt coming over me was brought up short when we pulled into a grimy gas station glued to the dark margin of the highway. As I got out to stretch I saw the East German soldiers, their machine guns pointing at the ground, standing around smoking cigarettes.

The next day, after crashing on the floor of friends of friends in West Berlin, I made my way across the city to Checkpoint Charlie. As I approached the crossing on the elevated metro line, I saw the graffiti-covered remnants of the wall and, equally oppressive, the huge gash running through the center of the city, an ominous blank space carved out for hundreds of feet on either side of the wall to ensure maximum visibility of escapees. At Checkpoint Charlie, the wall was no longer intact, but the guard tower from which East German security once watched over and at times killed their compatriots, was still there. I walked through the crossing, feeling as if history was turning upside down on my way to Mainzer Strasse.

During the Cold War, Berlin was the only city in which young West German men could escape mandatory military service. Supported by the Allies as a symbol of resistance to communism, the city ironically became a haven for West German dissidents and a forcing house for the diverse social movements that came to be known as the autonomen: anti-war, anti-racist, feminist, environmentalist and many other strands of the German extra-parliamentary Left who retained strong links with the traditions of direct, participatory democracy pioneered by the New Left during the late 1960s and by subsequent radical tendencies such as the Greens. The autonomen were concentrated in the relatively poor, heavily Turkish neighborhood of Kreuzberg, which, during the Cold War, was located in the far eastern section of West Berlin. After the wall was torn down in November, 1989, the autonomen moved east into neighborhoods where huge numbers of late nineteenth century apartment buildings had been left vacant by the East German government whose plans to demolish them and build hideous tower blocks in their place had been scuttled by the collapse of communism. Now, West Germans and East Germans, as well as radicals from Italy, Japan, Peru, and other points around the world, joined to occupy over a hundred buildings in the neighborhood just across the River Spree from Kreuzberg.

Mainzer Strasse was special, though. Most squats were isolated, or existed in clumps of two or three houses. On Mainzer Strasse, an entire block of twelve abandoned tenement buildings had been occupied. There was an autonomen movie theater; several infoshops distributing radical zines, books, and films; separate gay and lesbian houses; and autonomen cafés and bars, each with decoration more imaginative than the next—my favorite was the wedding themed bar in the lesbian house, with a gigantic white wedding bed that seated at least twenty people. The reputation of Mainzer Strasse had travelled all the way to the United States; friends told me that I had to go to on a pilgrimage to the place while I was in Germany to polish my language skills before taking the mandatory exams in grad school.

After walking through seemingly endless streets filled with once elegant but now ramshackle five-story apartment buildings, I finally turned into Mainzer Strasse. After walking past several houses that seemed completely uninhabited, I stopped in front of one with a bright purple façade where two young guys were sitting in the sun playing chess. Biting the bullet, I blurted out an awkward hello in German and then explained in English that I was in Berlin for the summer and wondered if they had a place for me to stay. Neither seemed particularly nonplussed by what seemed to me a ridiculously bold and invasive request. Oliver turned with an amused look on his face to Mischa and said that he thought they probably had room. Mischa replied that yes they probably did, but they’d have to ask the house council if I could stay. I sat around watching them play chess and smoke hand-rolled cigarettes with exotic Dutch tobacco. They seemed quite personable and we talked about where I was from and what I wanted to do during the summer.

This information came in handy a couple of hours later when they put my case to the house council. Even though I was in Berlin to polish my German, I didn’t understand much of the business conducted at the council, which took place in a volatile mix of West German, East German, and international autonomen argot. The mixture of people from both parts of the country—so soon after the dismantling of the wall—was impressive, as was the pretty even mix of men and women in the squat. I felt distinctly uneasy, though, when discussion turned to my application to be a member of the house and I felt people’s eyes on me. Oliver whispered to me that things were going relatively well, although there was quite a lot of suspicion of an unknown outsider like me since the “Osi’s” had grown up subjected to the pervasive spy network of the hated Stasi, the East German secret police, and the “Wesi’s” had been battling the authorities’ anti-squatter moves for much of the last decade. Perhaps equally worrying, I was an “Ami,” a citizen of the universally hated imperialist power across the Atlantic. But though I felt nervous, I also felt elated: this was my first experience of radical participatory democracy in a commune.

My application for membership approved by consensus by the house council, it was time for me to learn the ropes in the commune. Mischa took me to see my room, which faced onto the backyard of the building, beyond which lay a cemetery studded with beautiful cypress trees. My room was on the first floor of the building, and consequently abutted onto an imposing steel security door that clamped down with a huge wheel across the stairway leading up from the ground floor café to the rest of the house. The whole affair seemed rather like something one might encounter on a submarine or in a space station. There was a buzzer system that allowed people to get in after curfew each night. Mischa explained to me that just recently a group of neo-Nazis had broken into a nearby house and savagely beaten some autonomen living there. Neo-Nazis who’d squatted a house in a nearby neighborhood also apparently liked to blast down our street in their jeep, firing flare guns into the houses. Mischa told me that sentries were posted with walkie-talkies at either end of Mainzer Strasse, and that the autonomen were worried that they’d be attacked by a mob of either neo-Nazis or police sometime soon.

Needless to say, I had trouble going to sleep. Although I eventually dropped off, I woke in horror in the middle of the night to a deafening clanging on the steel security door. After nearly pissing myself with fear, I eventually realized that the clanging wasn’t the noise of someone trying to dismantle the door but rather of someone patiently trying to wake the evening sentry up and get into the house. But this was cold comfort—perhaps it was a neo-Nazi trap! Eventually someone else woke up and came down the stairs cursing in colorful German. It turned out that the person whose turn it was to keep the buzzer in their room had closed it out on the landing and gone to sleep, leaving a partygoer to wake half the house in order to get in.

The next morning, while I was eating breakfast, Oliver asked me if I’d like to come to a protest against the neo-Nazis. This seemed like a good idea after the terrible night I’d had! When I agreed, Oliver asked me if I had a motorcycle helmet with me. Sure, didn’t he see the motorcycle in my backpack yesterday? Okay, no problem, but bring your passport with you in case you’re arrested, he said—you don’t want to get stuck in an East German jail with no identification.

As autonomen gathered for the march, I saw that Oliver hadn’t just been trying to wind up the new Ami housemate. Dressed almost exclusively in black, the autonomen around me really were gearing themselves up with helmets and other homemade riot gear. The march nevertheless set off towards the neo-Nazi squats with a remarkably carnivalesque air. When we got to the street occupied by the fascists, though, we found that a convoy of East German police trucks was blocking the way. This, Oliver told me, was typical. Since the wall came down, neo-Nazi movements had sprung up across Germany. Judges sentenced perpetrators of increasingly-frequent attacks on immigrants to short jail terms or light fines, while the Social Democrats had joined with conservatives to deport tens of thousands of Roma and help rewrite the country’s constitution to seal the borders to political refugees. The autonomen, growing out of an anti-imperialist movement and very much aware of their links with the German Left in the 1930s, sought to protect Roma and other immigrants from the marauding neo-Nazis, but, unlike the neo-Nazis, they were violently repressed by the police on both sides of the old border. For the autonomen, the East German volkspolizei or people’s police lined up in front of them were supporting the fascists by defending their squat.

While most of the autonomen marched past hurling only jeers, a group clad in helmets and leather jackets waded into the cops with the pipes and trash can lids they’d brought along for the occasion. This most militant segment of the black bloc seemed a pretty even match for the relatively lightly armed East German police. Soon, though, the melee heated up as Molotov cocktails went flying and police trucks caught on fire. In the United States, of course, the police would have just shot the “terrorists.” But instead, the thin green line of East German police held fire and held firm, the neo-Nazi squats remained safe, and the march moved on. I was shocked by the violence, but appreciated the willingness of the autonomen to put their bodies on the line to challenge the Nazis. After being attacked a number of times by skinheads during the course of the summer, I came to understand the autonomen’s militant attitude a bit more.

We marched on towards a complex of housing blocks where Vietnamese immigrant workers had been living in terror for months, unable to get back to their country and repeatedly attacked by the neo-Nazis. Along the way to these tower blocks, the marchers stopped briefly to torch a truck filled with cigarettes from a recently arrived Western corporate cigarette company. After a buoyant march through the dreary concrete jungle of outer East Berlin, an autonomen delegation peeled off to meet with representatives of the Vietnamese workers and to express solidarity with their struggle against racism in the new Germany. As the balmy summer afternoon wore down, the autonomen dispersed, with clumps of black-clad men and women waving flags of the former German Democratic Republic, the bottom golden stripe ripped out to leave only black and red stripes over the embossed hammer, compass, and grain insignia of worker, farmer, and intellectual unity.

Now we go to Tacheles, Oliver told me. Located in the once predominantly Jewish neighborhood of Berlin Mitte, and subsequently used by the Nazis to house French prisoners of war, Tacheles was a hulking derelict former department store that had been occupied by autonomen a scant three months after the wall came down. Tacheles had blossomed into a community arts center, and now boasted scores of artists’ workshops, exhibition spaces, a bar, and a movie theater. The building itself was a labyrinthine gaping wound. Once the entrance to the Friedrichstadt-Passage, a shopping complex akin to the covered shops written about by Walter Benjamin, Tacheles featured historically important early steel architecture, but had been partially demolished by penniless communist functionaries after World War II and was slated for final demolition in spring of 1990. The autonomen blocked this demolition and created a vibrant space for experiments in communal living and aesthetics.

When we arrived at Tacheles, the sun was just beginning to set. The entire back wall of the building had been removed, leaving its rooms exposed like a giant honeycomb. This particular evening an Irish performance artist had spread canvas from floor to ceiling in each room. Inside each room she had stationed a slide projector; each projector was in turn wired to a central computer control. She had created a gigantic version of one of Nam June Paik’s video installations. The net effect was a mesmerizing collage of coruscating images, sometimes flashing in completely disconnected rhythms, sometimes composing themselves into a single six-story canvas, all in time to music played by a jazz band in the massive courtyard behind Tacheles. Oliver gestured to me, and we began climbing up the scaffolding attached to the outside of the building, the giant images flashing in front of our faces as we climbed. When we got half way up, we turned around, twined our legs round the scaffolding, and sat watching the sun go down over a free Berlin.

•  •  •

When I returned to grad school at the end of that summer, I found myself studying with quite a few colorful professors, but Sylvère Lotringer was one of the more memorable. He was teaching a class on mutant French theory: Bataille, Artaud, Deleuze and Guattari during their polymorphous perversity phase. At the time he was helping a member of the Black Panthers who’d just been released from jail put together a collection justifying the party line. When Lotringer heard that I had been living with the autonomen in Berlin and that I spoke Italian, he immediately gave me a dog-eared copy of his journal Semiotext(e) from the late 1970s. The theme of the journal: autonomia.

Autonomia, which has recently been reissued in the Semiotext(e) foreign AGENTS series, contains the collective efforts of intellectuals active in radical Italian organizations such as Lotta Continua and Potere Operiao to gain a theoretical grip on events during the country’s anni di piombo or “years of lead,” when the nation was convulsed by a startling variety of extra-Parliamentary radical movements. In the mid-1970s, the Italian Communist Party (PCI), repudiating Soviet dogmatism, had forged a “historic compromise” with the country’s long-serving, endemically corrupt Christian Democrats. It thus fell to the PCI to discipline increasingly restive workers during the first major economic downturn of the post-war period. Workers began organizing autonomously of the Communist-controlled labor unions, engaging in spontaneous actions to shorten the work week, to overturn management control in workplaces, and to demand higher wages, all by organizing in workplace councils.

Even more alarmingly for authorities, social struggles began to move out of the factory, with autoriduzione (auto-reduction) movements coping with the rising cost of living by collectively determining a reduced price to pay for public services, transportation, housing, electricity, and groceries. In addition, sectors of the population invisible to traditional Marxist theory began to assert themselves. Groups like Rivolta Femminile challenged the patriarchal values that pervaded Italian society in general, but also the workers’ movement and the PCI. Feminists introduced new styles of organizing in small groups with horizontal links rather than the top-down vanguard style of many traditional vanguard groups, and pioneered fresh discursive and decision-making strategies based on open general assemblies and consensus. In tandem, youth movements began to assert their right to the autonomous self-governance of education. A vibrant, playful counter-culture quickly developed in Italy’s major cities that struggled to build centri sociali (autonomous social centers) where young people could escape the oppressive confines of the patriarchal family and carve out a vision of community outside the alienating confines of the mass consumerist society of the spectacle.

The articles collected in Autonomia track and attempt to theorize these polymorphous Italian social struggles. Writers such as Mario Tronti, Sergio Bologna, and, of course, Toni Negri articulate the tenets of operaismo (workerism), the theoretical approach to conceptualizing autonomous worker activism developed in Italy during the struggles of the late 1960s and 1970s. The operaismo analysts drew in their work on a long tradition of radical theory, the most prominent branch of which led back to France’s Socialism or Barbarism Group, where Cornelius Castoriadis had first articulated notions of workers’ autonomy. In turn, Socialism or Barbarism had been influenced by the investigations of wildcat strikes in American auto plants carried out by the Johnson-Forest Tendency, a dissident Trotskyist group founded by Trinidadian polymath C.L.R. James and Russian exile Raya Dunayevskaya. Writing in journals such as Quaderni Rossi, Negri and his colleagues challenged the hierarchical tenets of Marxist-Leninist theory, focusing instead on the “spontaneous” forms of shop floor organizing evolving in sites such as FIAT’s giant car factory on the outskirts of Turin. Operaismo theorists also revamped classical Marxist theories of value by arguing that in modern societies wealth was produced increasingly through “immaterial” or “social” labor—the collective work of social reproduction carried on outside the wage relation by women, students, the unemployed, etc. Although it remained grounded in theories of class struggle, operaismo expanded the definition of the working class to include many of the social movements that were transforming the political landscape of Italy during the 1970s. Italian autonomia had a dramatic impact in Germany, helping to catalyze the movement in which I participated in Mainzer Strasse.

Looking back at Autonomia from my current vantage point—which coincides with the twentieth anniversary of the fall of the Berlin wall and the tenth anniversary of the Battle of Seattle—I’m struck by the germinative character of these theoretical labors. Not that they lack flaws: as its name suggests, operaismo retained an emphasis on production that ineluctably marginalized many of the issues around which social movements such as feminism and the youth counter-culture mobilized. In addition, the theorists of autonomia remained relatively silent on the unfolding new international division of labor. This perhaps helps to explain the blindness in Toni Negri’s subsequent attempt to theorize Empire as a decentered, all-pervasive force that leaves accounts of nation-state-centered imperialism in the dustbin of history. The Iraq War put an end to such modish pomo accounts of power. Nevertheless, in their attempts to theorize new forms of grassroots organizing and to develop fresh theories of the production of value in contemporary capitalism, the work of the autonomia theorists was prescient and remains valuable.

For all its faults, autonomia has provided one of the most expansive theoretical frameworks for understanding the spontaneous, horizontal politico-social forms that I experienced among Berlin’s autonomen and that have since become a crucial feature of the global justice movement. While other theorists such as Manuel Castells also tracked the development of grassroots struggles in urban locations around the world, few have reinvigorated historical materialism and provided the framework for conceptualizing fresh efforts at organizing from below to the extent of autonomia. Indeed, we might think of autonomia as one of the most useful articulations of historical struggles that bind together such disparate phenomena as the autonomen in Germany and other parts of northern Europe, the efforts of the Brazilian Workers’ Party to establish participatory budgeting, the independent township groups of the Mass Democratic Movement that brought down apartheid in South Africa, and the struggle of the Zapatistas against neo-liberalism and for autonomous indigenous governance in the Lacandon jungle in southern Mexico.

The Mainzer Strasse commune I lived in no longer exists. Three months after my return to the United States, the Social Democratic government of Berlin sent in more than three thousand police, including SWAT teams, and smashed the autonomen resistance. But while the Battle of Mainzer Strasse was lost, the struggle against the forms of dispossession and alienation imposed by neo-liberal capitalism lives on. All power to the communes!

Share on Facebook

Print Friendly