The Shock Doctrine: The Rise of Disaster Capitalism

by Naomi Klein

Shock therapy in Poland did not cause “momentary dislocations,” as Sachs had predicted. It caused a full-blown depression: a 30 percent reduction in industrial production in the two years after the first round of reforms. With government cutbacks and cheap imports flooding in, unemployment skyrocketed, and in 1993 it reached 25 percent in some areas—a wrenching change in a country that, under Communism, for all its many abuses and hardships, had no open joblessness. Even when the economy began growing again, high unemployment remained chronic. According to the World Bank’s most recent figures, Poland has an unemployment rate of 20 percent—the highest in the European Union. For those under twenty-four, the situation is far worse: 40 percent of young workers were unemployed in 2006, twice the EU average. Most dramatic are the number of people in poverty: in 1989, 15 percent of Poland’s population was living below the poverty line; in 2003, 59 percent of Poles had fallen below the line. 58 Shock therapy, which eroded job protection and made daily life far more expensive, was not the route to Poland’s becoming one of Europe’s “normal” countries (with their strong labor laws and generous social benefits) but to the same gaping disparities that have accompanied the counterrevolution everywhere it has triumphed, from Chile to China.