The Shock Doctrine: The Rise of Disaster Capitalism

by Naomi Klein

If these freelance interrogators are to keep landing lucrative contracts, they must extract from prisoners the kind of “actionable intelligence” their employers in Washington are looking for.

U.S. intelligence agents let it be known that they would pay anywhere from $3,000 to $25,000 for al Qaeda or Taliban fighters handed over to them. “Get wealth and power beyond your dreams,” stated a typical flyer handed out by the U.S. in Afghanistan,

Soon enough, the cells of Bagram and Guantánamo were overflowing with goatherds, cabdrivers, cooks and shopkeepers—all lethally dangerous according to the men who turned them over and collected the rewards.

In the declassified transcript, the prisoner appears incredulous. “Come on, man,” he replied, “you know what happened. In Pakistan you can buy people for $10. So what about $5,000?” “So they sold you?” the tribunal member asked, as if the thought had never before occurred to him. “Yes.”

It is a track record that is a grave indictment of the quality of intelligence produced by the administration’s market-based approach to terrorist identification.

In just a few years, the homeland security industry, which barely existed before 9/11, has exploded to a size that is now significantly larger than either Hollywood or the music business.

When information about who is or is not a security threat is a product to be sold as readily as information about who buys Harry Potter books on Amazon or who has taken a Caribbean cruise and might enjoy one in Alaska, it changes the values of a culture.

There have been and are debates, of course—about the constitutionality of the Patriot Act, about indefinite detention, about torture and extraordinary rendition—but discussion of what it means to have these functions performed as commercial transactions has been almost completely avoided.

While these CEOs saw their compensation go up an average of 108 percent between 2001 and 2005, chief executives at other large American companies averaged only 6 percent over the same period.

There’s something civil servants have that the private sector doesn’t. And that is the duty of loyalty to the greater good—the duty of loyalty to the collective best interest of all rather than the interest of a few. Companies have duties of loyalty to their shareholders, not to the country. —David M. Walker, comptroller general of the United States, February 2007

“Dulles had two lifelong obsessions: fighting Communism and protecting the rights of multinational corporations,” writes Kinzer. “In his mind they were … ‘interrelated and mutually reinforcing.’”8 That meant he didn’t need to choose between his obsessions: if the Guatemalan government took an action that hurt the interests of the United Fruit Company, for instance, that was a de facto attack on America and worthy of a military response.

When Dick Cheney and Donald Rumsfeld conflate what is good for Lockheed, Halliburton, Carlyle and Gilead with what is good for the United States and indeed the world, it is a form of projection with uniquely dangerous consequences. That’s because what is unquestionably good for the bottom line of these companies is cataclysm—wars, epidemics, natural disasters and resource shortages—which is why all their fortunes have improved dramatically since Bush took office.

That is pretty much the philosophy: stay in government just long enough to get an impressive title in a department handing out big contracts and to collect inside information on what will sell, then quit and sell access to your former colleagues. Public service is reduced to little more than a reconnaissance mission for future work in the disaster capitalism complex.

They embody the ultimate fulfillment of the corporatist mission: a total merger of political and corporate elites in the name of security, with the state playing the role of chair of the business guild—as well as the largest source of business opportunities, thanks to the contract economy.

While Congress played a rubber-stamp role during the pivotal decision-making years, and Supreme Court rulings are treated as little more than gentle suggestions, these mostly volunteer advisers have wielded enormous influence.

Their power stems from the fact that these advisers used to perform key roles in government—they are former secretaries of state, former ambassadors and former undersecretaries of defense. All have been out of government for years and, in the meantime, have set up lucrative careers in the disaster capitalism complex. Because they are classified as contractors, not staff, most are not subject to the same conflict-of-interest rules as elected or appointed politicians—if they are subject to any restrictions at all.

Carlyle has benefited enormously from the war, thanks to sales of robotics systems, defense communications systems, and a major Iraq contract to train police awarded to its holding, USIS. The $56 billion company has a defense-oriented equity firm that specializes in collecting defense contractors and taking them public, a very profitable enterprise in recent years. “It’s the best 18 months we ever had,” said Carlyle’s chief investment officer, Bill Conway, referring to the first eighteen months of the war in Iraq.

But there was a price. In exchange for these services, the documents said, the government of Kuwait would have to invest $1 billion with the Carlyle Group. It was straight-up influence peddling: pay Baker’s company to get protection from Baker.

The day after my story about Baker was published in The Nation, Carlyle backed out of the consortium, forfeiting its hope of landing the $1 billion; several months later, Baker cashed out of the Carlyle Group and resigned as general counsel.

Baker’s mandate was to erase 90 to 95 percent of Iraq’s debt. Instead, the debt was merely rescheduled and is still equivalent to 99 percent of the country’s GDP.

Shultz did not disclose to his readers that he was, at the time, a member of the board of directors of Bechtel, where he had served many years earlier as CEO. The company would collect $2.3 billion to reconstruct the country that Shultz was so eager to see destroyed.31 So, in retrospect, it seems worth asking, when Shultz called on the world to Act Now, was he speaking as a concerned elder statesman or as a representative of Bechtel—or perhaps Lockheed Martin?

Even though the committee was formed at the explicit request of the White House to be the propaganda arm of the war, no one had to step down from Lockheed or sell his shares. Which was certainly good for committee members, since Lockheed’s share price jumped 145 percent thanks to the war they helped engineer—from $41 in March 2003 to $102 in February 2007.

There is nothing that enrages Richard Perle more than the suggestion that his advocacy of unlimited war to end all evil is in any way influenced by the enormous profitability of that proposition for him personally.

Perle blew up, calling Hersh, a Pulitzer Prize winner, “the closest thing American journalism has to a terrorist, frankly.” He told Blitzer, “I don’t believe that a company would gain from a war … . The suggestion that my views are somehow related for the potential for investments in homeland defense is complete nonsense.”39 It was a strange claim. If a venture capital firm that was set up to invest in security and defense companies managed not to gain from a war, it would surely be failing its investors.

Whenever members of this Washington clique are confronted with their economic interests in the wars they support, they invariably respond the way Perle did: the entire suggestion is preposterous, simple-minded, vaguely terrorist. The neocons—a group that includes Cheney, Rumsfeld, Shultz, Jackson and, I would argue, Kissinger—take great pains to project themselves as egghead intellectuals or hawkish realists, driven by ideology and big ideas, not anything so worldly as profit.

Even their most committed critics tend to portray the neocons as true believers, motivated exclusively by a commitment to the supremacy of American and Israeli power that is so all-consuming they are prepared to sacrifice economic interests in favor of “security.”

With the War on Terror, the neocons didn’t abandon their corporatist economic goals; they found a new, even more effective way to achieve them. Of course these Washington hawks are committed to an imperial role for the United States in the world and for Israel in the Middle East. It is impossible, however, to separate that military project—endless war abroad, and a security state at home—from the interests of the disaster capitalism complex, which has built a multibillion-dollar industry based on these very assumptions.

The introverted schizophrenic or melancholic may be likened to a walled city which has closed its gates and refuses to trade with the rest of the world … . A breach is blown in the wall, and relations with the world are re-established. Unfortunately we cannot control the amount of damage done in the bombardment. —Andrew M. Wyllie, a British psychiatrist,

I had asked if he could introduce me to a few Iraqis concerned about the plans to privatize their economy. “No one here cares about privatization,” Michael told us. “What they care about is surviving.”

The job of an outsider, he argued, is to try to document the reality of war and occupation, not to decide what Iraqi priorities ought to be.

they knew that while Iraqis were consumed with daily emergencies, the country could be auctioned off discreetly and the results announced as a done deal.

After the crusade had conquered Latin America, Africa, Eastern Europe and Asia, the Arab world called out as its final frontier.

Andrew ran with his camera to the wreckage; I tried not to, but ended up following. After only three hours in Baghdad, I was already breaking my one rule: no bomb chasing.

“Bombs, not journalists, set the agenda here.” And they certainly do. They don’t just suck oxygen into their vortex, they demand everything: our attention, our compassion, our outrage.

extreme violence has a way of preventing us from seeing the interests it serves.

that the architects of the invasion had unleashed ferocious violence because they could not crack open the closed economies of the Middle East by peaceful means, that the level of terror was proportional to what was at stake.

So what was it about this part of the world, they asked, that produced terrorism? Ideologically blinded from seeing either U.S. or Israeli policies as contributing factors, let alone provocations, they identified the true cause as something else—the region’s deficit in free-market democracy.az4

Laughable

Within the internal logic of this theory, fighting terrorism, spreading frontier capitalism and holding elections were bundled into a single unified project.

he announced plans for the “establishment of a U.S.-Middle East free trade area within a decade.”7 Dick Cheney’s daughter Liz, a veteran of the Soviet shock therapy adventure, was put in charge of the project.

Between March 20 and May 2, the weeks of “major combat,” the U.S military dropped more than thirty thousand bombs on Iraq, as well as twenty thousand precision-guided cruise missiles—67 percent of the total number ever made.

From the start, the invasion was conceived as a message from Washington to the world, one spoken in the language of fireballs, deafening explosions and city-shattering quakes. In The One Percent Doctrine, Ron Suskind explains that for Rumsfeld and Cheney, “the primary impetus for invading Iraq” was the desire “to create a demonstration model to guide the behavior of anyone with the temerity to acquire destructive weapons or, in any way, flout the authority of the United States.” Less than a war strategy, it was a “global experiment in behaviorism.”

… I was terrified, and I did not want to be tortured. I would say anything to avoid torture.”17 The technique Arar was being subjected to is known as “the showing of the instruments,” or, in U.S. military lingo, “fear up.” Torturers know that one of their most potent weapons is the prisoner’s own imagination—often just showing fearsome instruments is more effective than using them.

In his report, McIntyre said that even if it was never used, the bomb’s very existence “could still pack a psychological wallop”—a

In hostile interrogations, the first stage of breaking down prisoners is stripping them of their own clothes and any items that have the power to evoke their sense of self—so-called comfort items.

McGuire Gibson, an archaeologist at the University of Chicago, called it “a lot like a lobotomy. The deep memory of an entire culture, a culture that has continued for thousands of years, has been removed.”

It’s hard to believe—but then again, that was pretty much Washington’s game plan for Iraq: shock and terrorize the entire country, deliberately ruin its infrastructure, do nothing while its culture and history are ransacked, then make it all okay with an unlimited supply of cheap household appliances and imported junk food. In Iraq, this cycle of culture erasing and culture replacing was not theoretical; it all unfolded in a matter of weeks.

“Getting the rights to distribute Procter & Gamble products would be a gold mine,” one of the company’s partners enthused. “One well-stocked 7-Eleven could knock out 30 Iraqi stores; a Wal-Mart could take over the country.”

Like the prisoners in Guantánamo’s love shack, all of Iraq was going to be bought off with Pringles and pop culture—that, at least, was the Bush administration’s idea of a postwar plan.

According to an official State Department report on the gathering, Belka pounded the Iraqis with the message that they had to seize this moment of chaos to be “forceful” in pushing through policies that “would throw many people out of work.”

In Iraq, Washington cut out the middlemen: the IMF and the World Bank were relegated to supporting roles, and the U.S. was front and center.