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by
Naomi Klein
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April 3 - April 21, 2025
I call these orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities, “disaster capitalism.”
The bottom line is that while Friedman’s economic model is capable of being partially imposed under democracy, authoritarian conditions are required for the implementation of its true vision.
“Here’s how I think we should do it. Instead of cutting incrementally—a little here, a little there—I would say that on a single day this summer we eliminate three hundred programs, each one costing a billion dollars or less. Maybe these cuts won’t make a big deal of difference, but, boy, do they make a point. And you can do them right away.”25
The Bush team seized the moment of collective vertigo with chilling speed—not, as some have claimed, because the administration deviously plotted the crisis but because the key figures of the administration, veterans of earlier disaster capitalism experiments in Latin America and Eastern Europe, were part of a movement that prays for crisis the way drought-struck farmers pray for rain, and the way Christian-Zionist end-timers pray for the Rapture. When the long-awaited disaster strikes, they know instantly that their moment has come at last.
Only since the midnineties has the intellectual movement, led by the right-wing think tanks with which Friedman had long associations—Heritage Foundation, Cato Institute and the American Enterprise Institute—called itself “neoconservative,” a worldview that has harnessed the full force of the U.S. military machine in the service of a corporate agenda.
In every country where Chicago School policies have been applied over the past three decades, what has emerged is a powerful ruling alliance between a few very large corporations and a class of mostly wealthy politicians—with hazy and ever-shifting lines between the two groups.
But because of the obvious drawbacks for the vast majority of the population left outside the bubble, other features of the corporatist state tend to include aggressive surveillance (once again, with government and large corporations trading favors and contracts), mass incarceration, shrinking civil liberties and often, though not always, torture.
This desire for godlike powers of total creation is precisely why free-market ideologues are so drawn to crises and disasters. Nonapocalyptic reality is simply not hospitable to their ambitions.
This, it turns out, was the true purpose of MKUltra: not to research brainwashing (that was a mere side project), but to design a scientifically based system for extracting information from “resistant sources.”49 In other words, torture.
What most captured the imagination of Kubark’s authors, more than any individual technique, was Cameron’s focus on regression—the idea that by depriving people of their sense of who they are and where they are in time and space, adults can be converted into dependent children whose minds are a blank slate of suggestibility.
Is this what they did to Britney?!
Disaster capitalists share this same inability to distinguish between destruction and creation, between hurting and healing.
The Second World War lent new urgency to the war against poverty. Nazism had taken root in Germany at a time when the country was in a devastating depression, provoked by the punishing reparations imposed after the First World War and deepened by the 1929 crash.
In the face of these allegations, and with Allende still in power, the U.S. Senate, controlled by Democrats, launched an investigation and uncovered a far-reaching conspiracy in which ITT had offered $1 million in bribes to Chilean opposition forces and “sought to engage the CIA in a plan covertly to manipulate the outcome of the Chilean presidential election.”41
Pinochet, the operation’s vain and volatile commander (built like one of the tanks he rode in on), clearly wanted the event to be as dramatic and traumatic as possible. Even if the coup was not a war, it was designed to feel like one—a Chilean precursor to Shock and Awe. It could scarcely have been more shocking. Unlike neighboring Argentina, which had been ruled by six military governments in the previous four decades, Chile had no experience with this kind of violence; it had enjoyed 160 years of peaceful democratic rule, the past 41 uninterrupted.
Thousands ended up in the two main football stadiums in Santiago, the Chile Stadium and the huge National Stadium. Inside the National Stadium, death replaced football as the public spectacle. Soldiers prowled the bleachers with hooded collaborators who pointed out “subversives”; the ones who were selected were hauled off to locker rooms and skyboxes transformed into makeshift torture chambers. Hundreds were executed. Lifeless bodies started showing up on the side of major highways or floating in murky urban canals.
Is 9/11/73 an inspiration for The Handmaid’s Tale? And is it a reason the date 9/11 was picked for 2001 attack?
Freed of the naysayers, Pinochet and de Castro got to work stripping away the welfare state to arrive at their pure capitalist utopia. In 1975, they cut public spending by 27 percent in one blow—and they kept cutting until, by 1980, it was half of what it had been under Allende.27 Health and education took the heaviest hits. Even The Economist, a free-market cheerleader, called it “an orgy of self-mutilation.”
Pinochet had deliberately sent his country into a deep recession, based on the untested theory that the sudden contraction would jolt the economy into health. In its logic, it was strikingly similar to that of the psychiatrists who started mass-prescribing ECT in the 1940s and 1950s, convinced that deliberately induced grand mal seizures would magically reboot their patients’ brains.
Reining in inflation requires not only changing monetary policy but also changing the behavior of consumers, employers and workers. The role of a sudden, jarring policy shift is that it quickly alters expectations, signaling to the public that the rules of the game have changed dramatically—prices will not keep rising, nor will wages. According to this theory, the faster expectations of inflation are driven down, the shorter the painful period of recession and high unemployment will be. However, particularly in countries where the political class has lost its credibility with the public, only
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Causing a recession or a depression is a brutal idea, since it necessarily creates mass poverty, which is why no political leader had until this point been willing to test the theory. Who wants to be responsible for what BusinessWeek described as a “Dr. Strangelove world of deliberately induced depression”?32
Trump would.
The country was certainly convulsing under its “treatments.” And contrary to Friedman’s sunny predictions, the unemployment crisis lasted for years, not months.
He calculated what it meant for a Chilean family to try to survive on what Pinochet claimed was a “living wage.” Roughly 74 percent of its income went simply to buying bread, forcing the family to cut out such “luxury items” as milk and bus fare to get to work. By comparison, under Allende, bread, milk and bus fare took up 17 percent of a public employee’s salary.
If that track record qualifies Chile as a miracle for Chicago school economists, perhaps shock treatment was never really about jolting the economy into health. Perhaps it was meant to do exactly what it did—hoover wealth up to the top and shock much of the middle class out of existence.
He saw the sun for a total of eight hours over eleven and a half years. So deprived were his senses during this time that he “forgot colors—there were no colors.”n77
Weird that right now I’m reading a book called “All the colors of the dark”
The system Walsh was describing was Chicago School neo-liberalism, the economic model that would sweep the world. As it took deeper root in Argentina in the decades to come, it would eventually push more than half the population below the poverty line. Walsh saw it not as an accident but the careful execution of a plan—“planned misery.”
Sergio de Castro, Pinochet’s Chicago Boy economics minister who oversaw the implementation of shock treatment, said he could never have done it without Pinochet’s iron fist backing him up. “Public opinion was very much against [us], so we needed a strong personality to maintain the policy. It was our luck that President Pinochet understood and had the character to withstand criticism.”
Trump Trump Trump
An estimated five hundred babies were born inside Argentina’s torture centers, and these infants were immediately enlisted in the plan to reengineer society and create a new breed of model citizens. After a brief nursing period, hundreds of babies were sold or given to couples, most of them directly linked to the dictatorship. The children were raised according to the values of capitalism and Christianity deemed “normal” and healthy by the junta and never told of their heritage,
Handmaid’s Tale again
Significantly, it is the only truth commission report published independently of both the state and foreign foundations. It is based on the military’s court records, secretly photocopied over years by tremendously brave lawyers and Church activists while the country was still under dictatorship. After detailing some of the most horrific crimes, the authors pose that central question so studiously avoided by others: Why? They answer matter-offactly: “Since the economic policy was extremely unpopular among the most numerous sectors of the population, it had to be implemented by force.”23
Thatcher brushed aside the United Nations much as Bush and Blair did in the run-up to the war in Iraq, uninterested in sanctions or negotiations. Glorious victory was the only outcome that either side had any interest in.
his response to a strike by the air-traffic controllers. By not showing up to work, they had “forfeited their jobs and will be terminated,” Reagan said. Then he fired 11,400 of the country’s most essential workers in a single blow—a shock from which the U.S. labor movement has yet to fully recover.32
However, if an economic crisis hits and is severe enough—a currency meltdown, a market crash, a major recession—it blows everything else out of the water, and leaders are liberated to do whatever is necessary (or said to be necessary) in the name of responding to a national emergency. Crises are, in a way, democracy-free zones—gaps in politics as usual when the need for consent and consensus do not seem to apply.
a certain breed of sectarian leftist is forever calculating the exact conditions under which capitalism will reach “the crisis,” much as evangelical Christians calibrate signs of the coming Rapture.
One immediate result of this resolve was that many of Bolivia’s desperately poor were pushed to become coca growers, because it paid roughly ten times as much as other crops (somewhat of an irony since the original economic crisis was set off by the U.S.-funded siege on the coca farmers.)
Some years later, the influential free-market economist John Williamson coined a term for what Paz did: he called it “voodoo politics”; most people simply call it lying.
That was the clear message when, on May 20, 1989, the government of the People’s Republic of China declared martial law. On June 3, the tanks of the People’s Liberation Army rolled into the protests, shooting indiscriminately into the crowds. Soldiers stormed onto buses where student demonstrators were taking cover and beat them with sticks; more troops broke through the barricades protecting Tiananmen Square, where students had erected a Goddess of Democracy statue, and rounded up the organizers. Similar crackdowns took place simultaneously across the country.
In the three years immediately following the bloodbath, China was cracked open to foreign investment, with special export zones constructed throughout the country. As he announced these new initiatives, Deng reminded the country that “if necessary, every possible means will be adopted to eliminate any turmoil in the future as soon as it has appeared. Martial law, or even more severe methods, may be introduced.”ag53 It was this wave of reforms that turned China into the sweatshop of the world, the preferred location for contract factories for virtually every multinational on the planet. No
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Of South Africa’s 35 million black citizens, only five thousand earn more than $60,000 a year. The number of whites in that income bracket is twenty times higher, and many earn far more than that amount.47
A middle-age Muscovite told a foreign camera crew in horror, “People supported [Yeltsin] because he promised us democracy, but he shot up that democracy. Not only did he violate it, but he shot it up.”
Woof
But Chicago School economics does seem particularly conducive to corruption. Once you accept that profit and greed as practiced on a mass scale create the greatest possible benefits for any society, pretty much any act of personal enrichment can be justified as a contribution to the great creative cauldron of capitalism, generating wealth and spurring economic growth—even if it’s only for yourself and your colleagues.
What we have been living for three decades is frontier capitalism, with the frontier constantly shifting location from crisis to crisis, moving on as soon as the law catches up.
Lawlessness on the frontier, as Adam Smith understood, is not the problem but the point, as much a part of the game as the contrite hand-wringing and the pledges to do better next time.
Growing numbers of Americans were also paying close attention to Huey Long, the populist senator from Louisiana who believed that all Americans should receive a guaranteed annual income of $2,500.
He reminded his audience of the infusions of aid that had gone to Europe and Japan after the Second World War, “vital for Japan’s later magnificent success.” He told a story about getting a letter from an analyst at the Heritage Foundation—ground zero of Friedmanism—who “believed strongly in Russia’s reforms but not in foreign aid for Russia.
The letter was, however, turned into a play in 1996 called Mr. Budhoo’s Letter of Resignation from the I.M.F. (50 Years Is Enough), put on in a small theater in New York’s East Village. The production received a surprisingly positive review in The New York Times, which praised its “uncommon creativity” and “inventive props.”24 The short theater review was the only time Budhoo’s name was ever mentioned in The New York Times.
It turned out that the countries were victims of pure panic, made lethal by the speed and volatility of globalized markets. What began as a rumor—that Thailand did not have enough dollars to back up its currency—triggered a stampede by the electronic herd.
The ugly secret of “stabilization” is that the vast majority never climb back aboard. They end up in slums, now home to 1 billion people; they end up in brothels or in cargo ship containers. They are the disinherited, those described by the German poet Rainer Maria Rilke as “ones to whom neither the past nor the future belongs.”
And with that, Rumsfeld launched his “war.” Every department needed to slash its staff by 15 percent, including “every base headquarters building in the world. It’s not just the law, it’s a good idea, and we’re going to get it done.”
So this has happened before..
The two men remained close over the years, with Rumsfeld attending an annual birthday celebration for Friedman, organized every year by the Heritage Foundation’s president, Ed Feulner.
It’s safe to say that if you could patent the sun, Donald Rumsfeld would have long since put in an application with the U.S. Patent and Trademark Office. His former company Gilead Sciences, which also owns the patents on four AIDS treatments, spends a great deal of energy trying to block the distribution of cheaper generic versions of its lifesaving drugs in the developing world.
What happened in the period of mass disorientation after the attacks was, in retrospect, a domestic form of economic shock therapy. The Bush team, Friedmanite to the core, quickly moved to exploit the shock that gripped the nation to push through its radical vision of a hollow government in which everything from war fighting to disaster response was a for-profit venture.
First, the White House used the omnipresent sense of peril in the aftermath of 9/11 to dramatically increase the policing, surveillance, detention and war-waging powers of the executive branch—a power grab that the military historian Andrew Bacevich has termed “a rolling coup.”
