This diary is an outgrowth of a long series of comments sparked by the rec listed diary "Conspiracy theory 102." The diarists and quite a few commentators classified Klein as a "conspiracy theorist" (though some idiosyncratic definitions of that term were in play). This reading of Klein misrepresents or misunderstands the major arguments and conclusions set forth in her book. It also seriously obscures the differences between an informative institutional political analysis and the kind of thinking that is rightly dismissed as "a conspiracy theory." This two issues—clarifying Klein and teasing out the differences between an institutional analysis and a conspiracy theory—are the aims of this diary.
First, lets differentiate between a conspiracy and "conspiracy theory." Conspiracy theory is a pejorative term, used to indicate a far fetched, unrealistic explanation or to rhetorically dismiss an explanation of events as being prima facie invalid. 911 truth and the Oliver Stone explanation of the Kennedy assassination are classic "conspiracy theories."
In contrast, a conspiracy is when agents in positions of influence secretly collude to accomplish an otherwise illicit or illegal goal. For example, monopoly behavior is a conspiracy among producers to set market prices. People refer to such actions as conspiratorial but not a conspiracy theory.
Seen in this light, Klein is neither a conspiracy theorist nor is she analyzing a conspiracy but her work has been widely disparaged as a "conspiracy theory" by conservative media voices. On a progressive blog, her analysis should garner a much fairer hearing and more astute understanding of its premises.
A diary is no place to reiterate the extensive details of Klein’s book but here are few relevant points that seem to be driving some misunderstandings.
Why Shock Doctrine?
Personally, I don’t like this analogy and think she should have emphasized her other, more directly related (far less confusing trope)—disaster capitalism.
The core trope refers to an outmoded psychiatric idea from the 1950’s. To treat the psychotic mind (or even the neurotic one), you have to break it down to its most basic foundations and then rebuild it in a healthier, more fully functioning manner. In Klein’s view, the shock therapy only made mentally ill or emotionally troubled individuals worse. You can’t rebuild a broken down mind; the person is left in a permanent state of disorientation with no means to effectively relate to the world.
Klein's analogy to the IMF structural re-adjustment polices runs as follows: The idea is that economies have to be taken down to their free market essence (low taxes, eliminating social services, price controls, constraining democratic means of interfering with these economic reforms) in order to be rebuilt in a more productive and robust way. However, the result of this economic shock therapy is that the overall fabric of society is broken down, individuals become plagued by learned helplessness and lose access to the resources they need to manage their lives effectively. In this broken societies, resources are easily extracted, workers easily oppressed and exploited, and wealth concentrated.
Thus, the Shock Doctrine refers to the logic that drove the IMF/World Bank structural readjustment programs through the 1970-2000 and that former world bank head Stiglitz now vociferously condemns.
However, Klein's case studies actually focus on something else all together—the process by which profits and public sector goods become privatized. She shows that these are "reforms" that would never be accepted by the general population under normal circumstances. However, when the society becomes disoriented by a disaster that creates widespread social and economic turmoil, they become less vigilant and more malleable. Whether in the form a natural disaster (Katrina), a terrorist attack (9/11) or a political coupe (Chile), neo-liberal experts armed with institutional authority are ready to swoop in with a ready-made plan for restoring order and implementing their neo-liberal market reforms (i.e. privatizing profits and socializing losses). So, this pattern is related to shock therapy but the analogy breaks down because Klein notes that people do eventually regain their bearings and organize to overturn these reforms. To keep the reforms in place, neo-liberal reformers keep the nation in crushing debt, use propaganda (ie. The Bush years 2001-2008) or engage in heavy handed political repression—hence the natural affinity between dictators and neo-liberal policies. So, the trope of disaster capitalism much better captures the spirit of Klein’s argument.
Is neo-liberalism a conspiracy?
Absolutely not. These policies had been out in the open and institutionally justified through the celebration of the free market (See Tom Frank’s One Nation Under God). What disaster capitalism needed was for their ideology to be accepted as the standard wisdom in education, public policy and news media circles. She details how the Chicago School, via the celebrity of Milton Friedman, went about accomplishing this status and displacing Keynesian economics (under Obama, Keynesian principles are making a comeback and you can see how the orthodoxy is responding).
Is Klein a conspiracy theorist?
Absolutely not. She is doing an institutional analysis.
Conspiracy theories depend on circumstantial evidence and unsupportable inferences:
For example "you see Lee Harvey Oswald was an American citizen and he lived in the Soviet Union. So, that fact proves he was a double agent working for the CIA and KGB."
Of course, there is no proof; just a series of circumstances which could be explained by any number of factors, none of which require the conspiratorial link.
When Klein shows that the same U of Chicago trained "experts" who orchestrated the structural readjustment programs in South America were brought in by the IMF to manage the Russian economy, her analysis is not a conspiracy theory. When she shows how the Chicago School undertook de facto economic missionary work to indoctrinate members of the intellectual and political classes in developing nations (with the aid of the US government who saw this project as a means to fight the spread of Marxism), she is not engaging in a conspiracy theory.
Nor is it a conspiracy theory when Klein shows that 1) structural reforms always follow a specific pattern of implementation and have a common outcome - weakening social safety nets, privatizing profits and socializing losses and 2) that these policies have been enforced through the financial and political muscle of the IMF and World Bank; 3) that individuals who have risen to positions of authority in these institutions systematically embrace Chicago school economic theory.
What she is doing is providing an institutional analysis.
Such analyses show how shifting and tenuous alliances are formed among institutions, and by implication among those in positions of power, through the embrace of a common ideological outlook, such as neo-liberalism. It shows the means by which these alliances are continuously reinforced and modified in ways that maintain the most essential facets of their status quo structure. Their guiding ideological outlook can be adapted to a broad range of particular interests and localized applications but it generally coordinates action in ways that reproduce the dominant logic. In Klein’s case, the institutional logic at work is one that leads to the privatization of profits among a small sector of economic elites and the socialization of losses among the general public. If one looks at the general trajectory of the bail out (so far), we can see just how robust disaster capitalism really is.