The Shock Doctrine: The Rise of Disaster Capitalism

by Naomi Klein

After peaceful protests had no effect, many Shia became convinced that if majorityrule democracy was ever to become a realit...

But keeping that promise would have meant sacrificing the economic agenda behind the war, something that was never going to happen—and that is why the violent repercussions of America’s denial of democracy in Iraq must also be counted as a form of ideological blowback.

Although his just-in-time forces were capable of toppling Saddam, they had no hope of handling what Bremer’s edicts created in Iraq—a population in open rebellion and a gaping hole where Iraq’s army and police used to be.

Lacking the numbers to bring control to the streets, the occupation forces did the next best thing: they scooped the people off the streets and put them in the jails.

“the Salvador option.”15 John Sifton, senior researcher at Human Rights Watch, told me that the abuse of prisoners in Iraq did not fit the usual pattern. Usually in conflict zones, abuses take place early on, in the so-called fog of war, when the battlefield is chaotic and no one knows the rules. That’s what happened in Afghanistan, Sifton said, “but Iraq was different—things started off professional and then they got worse, not better.”

According to this timeline, the shock of the torture chamber emerged immediately following Bremer’s most controversial economic shocks. Late August was the end of Bremer’s long summer of lawmaking and

election canceling. As those moves sent ever more recruits to the resistance, U.S. soldiers were sent to break down doors and try to shake the defiance out of Iraq, one military-age man at a time.

The secret prison was so efficient that within two hours, a team of military lawyers descended on the facility with a PowerPoint presentation on why the detainees were not protected

by the Geneva Conventions, and why sensory deprivation—despite the CIA’s own research to the contrary—was not torture. “Oh, it was very fast,” Perry said of the response time. “It was like they were ready. I mean they had this two hour slide show all prepared.”

“actually has led to a situation where it is more difficult to get people to come together, not less. In Germany and Japan [after the Second World War], the population was exhausted and deeply shocked by what had happened, but in Iraq it’s been the opposite. A very rapid victory over enemy forces has meant we’ve not had the cowed population we had in Japan and Germany … . The US is dealing with an Iraqi population that is un-shocked and un-awed.”32

million people had been forced to leave their homes—roughly one in seven Iraqis. Only a few hundred of those refugees had been welcomed into the United States.34

With Iraqi industry all but collapsed, one of the only local businesses booming is kidnapping. Over just three and a half months in early 2006, nearly twenty thousand people were kidnapped in Iraq. The only time the international media pays attention is when a Westerner is taken, but the vast majority of abductions are Iraqi professionals, grabbed as they travel to and from work. Their families either come up with tens of thousands in U.S. dollars for the ransom money or identify their bodies at the morgue.

That is what happens with projects to build model societies in other people’s countries. The cleansing campaigns are rarely premeditated. It is only when the people who live on the land refuse to abandon their past that the dream of the clean slate morphs into its doppelgänger, the scorched earth—only then that the dream of total creation morphs into a campaign of total destruction.

Paul Brinkley, U.S. deputy undersecretary of defense for business transformation in Iraq, said, “We’ve looked at some of these factories more closely and found they aren’t quite the rundown Soviet-era enterprises we thought they were”—though he did admit that some of his colleagues had begun calling him a Stalinist.39

Most of the Iraq Study Group’s recommendations were ignored by the White House, but not this one: the Bush administration immediately pushed ahead by helping to draft a radical new oil law for Iraq, which would allow companies like Shell and BP to sign thirty-year contracts in which they could keep a large share of Iraq’s oil profits, amounting to tens or even hundreds of billions of dollars—unheard of in countries with as much easily accessible oil as Iraq, and a sentence to perpetual poverty in a country where 95 percent of government revenues come from oil.42 This was a proposal so wildly unpopular that

Explaining why it was justified for such a large percentage of the profits to leave Iraq, the oil companies cited the security risks. In other words, it was the disaster that made the radical proposed law possible.

Since Rumsfeld steadfastly rejected all solutions that required increasing the size of the army, the military had to find ways to get more soldiers into combat roles. Private security companies flooded into Iraq to perform functions that had previously been done by soldiers—providing security for top officials, guarding bases, escorting other contractors.

Blackwater’s original contract in Iraq was to provide private security for Bremer, but a year into the occupation, it was engaging in all-out street combat.

During the April 2004 uprising of Moqtada al-Sadr’s movement in Najaf, Blackwater actually assumed command over active-duty U.S. marines in a daylong battle with the Mahdi Ar...

The corporation that gained most from the chaos was Halliburton. Before the invasion, it had been awarded a contract to put out oil fires set by Saddam’s retreating armies. When those fires did not materialize, Halliburton’s contract was stretched to include a new function: providing fuel for the entire nation, a job so big that “it bought up every available tanker truck in Kuwait, and imported hundreds more.” 50 In the name of freeing up soldiers for the battlefield, Halliburton took on dozens more of the army’s traditional functions, including maintaining army vehicles and radios.

In scale, this kind of privatized warfare has already overshadowed the United Nations. The UN’s budget for peacekeeping in 2006–2007 was $5.25 billion—that’s just over a quarter of the $20 billion Halliburton got in Iraq contracts, and the latest estimates are that the mercenary industry alone is worth $4 billion.55

So while the reconstruction of Iraq was certainly a failure for Iraqis and for U.S. taxpayers, it has been anything but for the disaster capitalism complex. Made possible by the September 11 attacks, the war in Iraq represented nothing less than the violent birth of a new economy.

This was the genius of Rumsfeld’s “transformation” plan: since every possible aspect of both destruction and reconstruction has been outsourced and privatized, there’s an economic boom when the bombs start falling, when they stop and when they start up again—a closed profit...

For companies that are clever and farsighted, like Halliburton and the Carlyle Group, the destroyers and rebuilders are different di...

In his 2007 State of the Union address, Bush championed the idea, announcing the creation of a brand-new civilian reserve corps. “Such a corps would function much like our military reserve. It would ease the burden on the Armed Forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them,” he said. “It would give people across America who do not wear the uniform a chance to serve in the defining struggle of our time.” 57

the U.S. State Department launched a new branch: the Office of Reconstruction and Stabilization. On any given day, it is paying private contractors to draw up detailed plans to reconstruct twenty-five different countries that may, for one reason or another, find themselves the target of U.S.-sponsored destruction,

So in the end, the war in Iraq did create a model economy—it was just not the Tiger on the Tigris that the neocons had advertised. Instead, it was a model for privatized war and reconstruction—a model that quickly became export-ready. Until Iraq, the frontiers of the Chicago crusade had been bound by geography: Russia, Argentina, South Korea. Now a new frontier can open up wherever the next disaster strikes.

Our trip began in Arugam Bay, a fishing and faded resort village on the east coast of the island, which was being held up by the government’s reconstruction team as the showcase for its plans to “build back better.” That’s where we met Roger, who gave us, after only a few minutes, a very different version. He called it “a plan to drive the fishing people from the beach.”

Making matters worse, the $80 million redevelopment project was to be financed with aid money raised in the name of the victims of the tsunami.

Aid workers complained that the Sri Lankan government was putting up roadblocks at every turn—first declaring the buffer zone, then refusing to provide alternative land to build on, then commissioning an endless series of studies and master plans from outside experts. As the bureaucrats argued, survivors of the tsunami waited in the sweltering inland camps, living off rations, too far from the ocean to begin

fishing again. While the delays were often blamed on “red tape” and poor management, there was in fact far more at stake.

Regardless of the overall state of the economy, there is now a large enough elite made up of new multimillionaires and billionaires for Wall Street to see the group as “superconsumers,” able to carry consumer demand all on their own.

“If plutonomy continues, which we think it will, if income inequality is allowed to persist and widen, the plutonomy basket should continue to do very well.”9

“We are a country blessed with so many natural resources, and we have not made use of them fully … . So nature itself must have thought ‘enough is enough’ and whacked us from all sides and taught us a lesson to be together.”14

It was a novel interpretation—the tsunami as divine punishment for failing to sell off Sri Lanka’s beaches and forests.

The penance began immediately. Just four days after the wave hit, her government pushed a bill through that paved the way for water privatization, a plan citizens had been forcefully resisting for years. Of course now, with the country still swamped with sea water and graves not yet du...

“People were vehemently opposed to these policies in the past,” he told me. “But now they are starving in the camps, and they are just thinking about how to survive the next day—they don’t have a place to sleep, they don’t have a place to be, they have lost their source of income, they have no idea how they will feed themselves in the future. So it’s in that situation that the government pushes ahead with this plan. When people recover, they will find out what had been decided, but by then the damage will already be done.”

in Sri Lanka, Chicago School policies had been blocked by the normal rules of democracy; the 2004 elections proved that. But with the country’s citizens pulling together to meet a national emergency, and politicians desperate to unlock aid money, the express wishes of voters could be summarily brushed aside and replaced with direct unelected rule by industry—a first for disaster capitalism.

“If you have something for me,” she said, “put it in my hand.”

But it was difficult even for a repressive regime to uproot tens of thousands of people from their ancestral islands, and the “population consolidation” program was largely unsuccessful. 29

In a way, the second tsunami was just a particularly shocking dose of economic shock therapy: because the storm did such an effective job of clearing the beach, a process of displacement and gentrification that would normally unfold over years took place in a matter of days or weeks.

Some of the most direct clashes took place in Thailand, where, within twenty-four hours of the wave, developers sent in armed private security guards to fence in land they had been coveting for resorts. In some cases the guards wouldn’t even let survivors search their old properties for the bodies of their children.33

Open land. In colonial times, it was a quasi-legal doctrine—terra nullius. If the land was declared empty or “wasted,” it could be seized and its people

eliminated without remorse. In the countries where the tsunami hit, the idea of open land is weighted with this ugly historical resonance, evoking stolen wealth and violent attempts to “civilize” the natives.

The aid workers still on the ground in the east, near Arugam Bay, were now dealing with a new wave of displaced people—the hundreds of thousands forced to leave their homes because of the violence. United Nations workers “who originally were contracted to rebuild schools destroyed by the tsunami have been redirected to build toilets for people displaced by the fighting,” reported The New York Times.36

The peace had always been precarious, and there was bad faith on all sides. One thing was certain, though: if peace was to take root in Sri Lanka, it needed to outweigh the benefits of war including the tangible economic benefits flowing from a war economy, in which the army takes care of the families of its soldiers and the Tamil Tigers look after the families of its fighters and suicide bombers.

In truth, the brand of peace Sri Lanka was offered was its own kind of war. Continued violence promised land, sovereignty and glory.

What did corporate peace offer, besides the certainty of land-lessness in the immediate term and John Varley’s elusive elevator in the long term?

Everywhere the Chicago School crusade has triumphed, it has created a permanent underclass of between 25 an...

At first I thought the Green Zone phenomenon was unique to the war in Iraq. Now, after years spent in other disaster zones, I realize that the Green Zone emerges everywhere that the disaster capitalism complex descends, with the same stark partitions between the included and the excluded, the protected and the damned.