Disaster Capitalism - Summer Reading Review

Several years ago, I read the book No Logo from Naomi Klein. I did not find it particularly good, but it did raise a valid concern overall. This summer I read Shock Therapy - The rise of disaster capitalism. It suffers from some of the same flaws as No Logo, namely a lot of repetition of the same idea. Here, the underlying idea is that neoliberalism does not work in practice, and often ends up being some kind of corporatism. At the same time, it is suggested that some mild socialism is often much better for the people, although, the latter is not backed by concrete examples in the book. The former is backed by numerous documents, and is analyzed accross time and countries. It starts with Chili under Pinochet, the prototypical example that force is required to impose neoliberalism, then moves around South America in general, with some cases where a strong inflation, may be enough for the people to accept neoliberalism. Then it continues with China under Deng Xiao Ping, which I find a bit too much of a stretch to make a case about any kind of neoliberalism. Russia under Yeltsin is next, and it ends with the war in Irak and the USA.

The most interesting chapters are probably the first one, and the one about Irak. The first chapter explains the creation of the shock therapy treament by psychatrists and how it morphed to become a CIA “interrogation” technique. The chapter on Irak explains in details how people high up in the government reduced the public military staff/budget, and at the same time increased significantly the budget for contractors/external companies, which were closely linked to members of the government. It also makes you understand why it ended up being such a massive failure, even though it was presented as a Marshall plan for the middle east by the American government.

The worst chapters are definitely the introduction and the conclusion. The introduction is just not interesting, and the conclusion is saying that things are becoming better for the socialists, with the changes in South America (Chavez, Ecuador, Bolivia), all of which did not really stand the test of time, since the book was written.

Some annoying facts I found is that Milton Friedman is often made to be some sort of devil and Jeffrey Sachs is portrayed during the first half as his acolyte, and then he appears much more balanced when the author has an actual interview with him. The author however did not rewrite the previous chapters, so there is some sort of inconsistency there.

More annoying is that no positive aspect of neoliberalism ideas is presented, and socialism is often presented as a better alternative, without any proof. There are so many daily life examples that show where socialism is worse than liberalism. Recently, I had to contact a company for issues on my roof. The owner of this small company did not hesitate to say

“It is difficult to find people for this kind of job, because it is not always easy with the cold or the heat. People prefer to work at the city hall, where they are always three to do anything: one to carry the tools, one to watch, and one to actually do the work. In my company, we have to do everything alone”.

Another example that struck me recently is how bad are the school books. Although those are not written by the public workers, they need some sort of approval by those, and it ends up being a very small circle who can actually have those books accepted and distributed to schools. Only a few books are accepted and those will sell in the 10K+ quantity easily. In contrast, holiday children study books, which the parents are free to buy or not at any shop, are amazingly good. Indeed, if they were bad, almost nobody would buy them.

That being said, I don’t think liberalism is always good and socialism always bad either, there is probably a delicate balance somewhere.

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