Naomi Klein chronicles a violent, global ‘revolt of the elites’ in her latest book The Shock Doctrine. In this interview with Left Turn editor Pranjal Tiwari, she explains how neoliberalism represents the counter-revolution of capital and thrives on disasters, wars, and crises to spread throughout the world.

Left Turn: Could you briefly discuss the concepts that you bring up in your book, especially ‘disaster capitalism’ and ‘shock’ and how they relate to each other?

Naomi Klein: Disaster capitalism the way I define it is the use of disaster, of cataclysmic events, they could be economic meltdowns or terrorist attacks or wars or natural disasters, to push through a radical economic program, a radical capitalist program, usually involving privatization of a state. Because so much of the state has already been privatized, the last frontiers in the drive to privatize the state are the functions we think of as ‘first responder’ type functions, like search and rescue, fire, policing, border control, the military. So now we are not only in a situation where disasters are used to advance privatization but the response to disasters itself is a major new privatization frontier.

Left Turn: And what about the concept of ‘shock’?

Klein: Well, it’s related. What I mean by the ‘shock doctrine’ is a philosophy of power that holds that the best time to push through these unpopular neoliberal economic policies is in the aftermath of a shock, precisely because what large scale disasters do is they make us lose our bearings and our narratives. And when we are in a state of shock, we are more vulnerable to political manipulation, so the ‘shock doctrine’ is the philosophy of power, and ‘disaster capitalism’ is how it plays out on the ground.

Left Turn: In your book you talk about how there is an ideology of market-fundamentalism or neoliberalism waiting in the wings for these disasters to happen, and waiting to capitalize on them. You talk about Milton Friedman has almost having ‘revolutionized’ this ideology. Could you tell me a bit about why you chose Friedman to single out among all the other ideologues of capitalism?

Klein: Well I think he is unique as really the guru of this phase of capitalism, this phase that we often call neoliberalism in many parts of the world. This is really a counter-revolution against Keynesianism in the North, and developmentalism or economic nationalism in the South, democratic socialism in other parts of the world. But basically it is a revolution against, a counter-revolution against the gains of workers’ movements, collective movements, that came in response to the Great Depression. That was a global event and was responded to in different parts of the world, but there was a common response was the horror at the brutality of an unregulated market, and a desire to build or to demand a more humane system. Many people were demanding socialism in response to the Great Depression and these mixed economies of social democracy, Keynesianism, developmentalism were kind of a compromise in response to resurgent left around the world.

So Milton Friedman and the Chicago School were really the Ground Zero of this counter-revolution, and I focus on Friedman because he was the great popularizer of this revolt of the elites. The reason why I call it a ‘revolt of the elites’, I’m not the person who coined the phrase but I think it’s really apt, is that from the 30s through the 60s you had tremendous gains for workers’ protection, growth of very powerful trade unions, the construction of social programs like public health care protection, unemployment programs, pension programs, much of what we think of as the welfare state. This was a period of tremendous economic growth, but it was also a period of redistribution of wealth, the rise of the middle class. So what that meant was that even though there was a lot of money being made, there was a lot of money being redistributed, and the elites not just in the US but around the world, were clearly tired of how much of what they considered to be their money was being redistributed to their workers, and to the rest of society through taxes.

So what neoliberalism is, is a revolt against the gains that were made in this period, the construction of, for lack of a better word, the welfare state, it’s a counter-revolution against that process. We see that very clearly in the United States in the ‘Reagan Revolution’. A large part of neoliberalism is the privatization of those aspects of the state that were built up under these mixed economies. David Harvey’s analysis of neoliberalism is that in an earlier era of capitalism, it was the enclosing of land and the appropriation of resources often accompanied by large amounts of violence, that fueled an earlier stage of globalization. Now we still have that old-school sort of colonialism, but we also have this neo-colonialism, neoliberalism, where it is the state that is the frontier, it is the state that provides these opportunities for dramatic accumulation of wealth through privatization.

Left Turn: And that has been pushed for a while by institutions such as the IMF, World Bank, and WTO. How does the concept of the ‘shock doctrine’ relate to these kinds of institutions and their role in imposing neoliberal policies in places like Argentina, Mexico, or Indonesia? Are they part of the same process, or is it a parallel, separate process to ‘disaster capitalism’?

Klein: The way I tell it in the book is as part of a narrative. In the first laboratories for neoliberalism, and I think we could include Indonesia in that, certainly the southern cone of Latin America, Chile in particular, really was the first all-out experiment in putting the ideology of neoliberalism and the Chicago School of Economics into practice in the real world. This meant everything from privatizing social security, to charter schools, to a flat tax. It was really Milton Friedman’s wish list made real, and not by any coincidence- Pinochet’s senior economic advisors and ministers were graduates of the University of Chicago, they had been brought to the University on scholarships from the US State Department. It was considered a very extremist school at the time, and they were brought to the University of Chicago as part of an ideological battle, since there was a great concern in the State Department that Latin America was moving to the left, and that many of the continent’s economists were so-called ‘pink-economists’. And so this was a project of ideological imperialism, of trying to interfere with, and successfully interfering with the intellectual development of the continent.

So in this first phase, which would be the late 60s and 70s, neoliberalism was imposed with blood and fire in Latin America, there was no idea of negotiations, it was US-backed dictators usually with US-trained economists (in the case of Suharto and the so-called ‘Berkeley Mafia’, or Pinochet and the so-called ‘Chicago Boys’). But as the dictatorships fell and as the tolerance for dictatorships around the world waned, and the rise of the international human rights movement really took root, that’s when the role of the IMF and the World Bank really took center-stage. The WTO wasn’t till later, here I’m talking about the early 80s where you had what in Latin America is often discussed as the transition from military dictatorships to the dictatorship of debt. Countries went through transitions from military rule to democratic rule, but these were negotiated transitions, overwhelmingly. The terms of the transition were negotiated, and again and again it was part of the negotiations that the new governments, the post-dictatorship democracies, would agree to inherit the debts of the regimes that they had just successfully confronted. Not ‘overthrown’ because if they had been overthrown they would not have needed negotiation, or to inherit the debts of their oppressors.

This was happening all over the world in the 80s, and at the same time you had something going on in Washington which was known as the ‘Volcker shock’, where Paul Volcker was the head of the US Federal Reserve and he dramatically increased interest rates. So at the same time as countries agreed to inherit the debts of their dictators, often very large and illegitimate debts (large amounts of the debts went to corruption and to Swiss bank accounts or buying the weaponry of military rule), the shock came from Washington, the so-called ‘Volcker shock’ and the effect of this was that these very large debts became unbearable debts overnight. The size of the debt in countries like Brazil or Nigeria just quadrupled in a very short period of time. And so this led to hyperinflation crises, a state of panic, and also it was the dawn of the Structural Adjustment Program. So while there wasn’t direct military rule, this was now the era of the IMF and the World Bank, and these same set of policies of privatization, deregulation, cuts in government spending, came attached to a loan in the context of a debt shock or the debt crisis.

Left Turn: In the last few years we have seen some vivid examples of the Shock Doctrine that you go into, such as in Sri Lanka after the tsunami, New Orleans after Hurricane Katrina, and of course in Iraq. Could you talk about these examples, and if you’ve been to the areas and seen what is going on there, could you talk a bit about your experiences first-hand?

Klein: I went to Sri Lanka six months after the tsunami hit, so it was a very volatile moment in the country. The ceasefire was still holding, at least in theory, the war hadn’t yet restarted, but you could really tell that things were going to change quickly. Part of the volatility had to do with the way that the reconstruction had played out, and a huge amount of anger and jealousy and competitiveness over the use of aid money for political reasons as opposed to who really needed the money. But the most striking thing for me in Sri Lanka was to see some of the patterns that I had seen in Iraq a few months earlier repeated.

In Iraq we know the story, that the ‘shock and awe’ invasion was used to push through this radical program of economic shock therapy. Paul Bremer came in with cities still burning, and the theory was that Iraqis would be too shocked and focused on the daily emergencies of the war zone to even involve themselves and pay attention to the fact that Bremer was engaging in radical social and economic re-engineering. He was passing a radical new investment law that allowed foreign companies to own 100% of Iraqi assets and take 100% of their profits out, it was described by The Economist as the wish list for foreign investors. And in Sri Lanka, I learned that only four days after the tsunami hit, and the tsunami killed 40,000 people and displaced almost half a million people there, the dead weren’t even buried yet and in the capital Colombo, a bill laying the groundwork for water privatization was pushed forward. Obviously in this moment the entire attention of the country was focused elsewhere, and here is the most controversial plank of the privatization agenda, water privatization, being slipped through when no one is looking. So that’s an example of what I mean by the ‘shock doctrine’ and ‘disaster capitalism’.

In Iraq, I have the feeling that we know what the original plan was, to use the shock of the invasion to create a corporate state, a model free-market economy in the heart of the Middle East, and that obviously failed. But I think what we can see is that a new economy has emerged in Iraq, and it wasn’t Plan A, but it was kind of a Plan B, in the sense that the economic project of the war was rigged so that the US couldn’t lose. So even if Wal-Mart and McDonald’s weren’t going to come to downtown Baghdad and open up outlets and stores, the worse things have gotten and continue to get in Iraq, the more the economy of privatized occupation expands. From the beginning the invasion and occupation of Iraq was another kind of shock therapy, a kind of shock therapy that actually began in the US under Donald Rumsfeld and the radical measures to privatize the US military. So the worse things get in Iraq, the more functions the private contractors take over, and the larger role they perform in the war zone.

Left Turn: As you mention in the book, it’s dividing Iraq into ‘Green Zones’ and ‘Red Zones’, something that is in many ways replicated around the world.

Klein: Well this is what neoliberalism does, and we just see a more exaggerated form of it in Iraq. Neoliberalism creates very rapid profits and massive disparities, and often the wealthy have to protect themselves from the inequalities and violence they produce by building these fortresses and ‘bubbles’. This is a common sight around the so-called ‘developing world’, more and more you see gated communities that have their own infrastructure. You see this in Indonesia, you see it in India, you see it in South Africa, you see it in Brazil, the booming economies with the massive inequalities. So where you can have a glistening hypermodern factory zone surrounded by open sewers, because the infrastructure was never built to support the development. So this is really the hallmark of the neoliberal age, the massive gaps and more and more these fortified bubbles, and in Iraq there’s the ultimate fortified bubble which is the ‘Green Zone’ inside this raging ‘Red Zone’. But I don’t think we should see that as an exception, I think we should see it as an intensified version of the inequalities of this economic model.

Left Turn: It reminds me of the Special Economic Zones or Export Processing Zones that were set up in many countries under neoliberal programs, where you have both the neoliberal economic policies and also the institutional violence of the kind that you describe in your book.

Klein: Absolutely. There’s a parallel in the private security, in the lack of access. When I was writing No Logo I spent some time in a Special Economic Zone in the Philippines, called Cavite Export Processing Zone, which is the largest Export Processing Zone in the country, and it’s so striking that you had 200 factories but the people who lived in the town of Cavite couldn’t go into the zone. Outside the zone there wasn’t even anyone to collect the garbage, even with all this Foreign Direct Investment.

Left Turn: Going back to the economic ideology that you’ve talked about, I think it’s Chile, Hong Kong, Singapore, and New Zealand that are described as the more ‘pure’ free market models in the world. But they are very different in the way that the ideologies were imposed.

Klein: New Zealand maybe doesn’t belong on that list. New Zealand did have a ‘shock therapy’ episode certainly, and they did go through a very rapid transformation, but they have more social protections than the United States, for example. They had such a strong welfare state to begin with that it isn’t a pure neoliberal state. But it did begin with a shock, it began with a currency crisis, and that’s what created the pretext for New Zealand’s neoliberal reforms.

In the other areas you didn’t or don’t have democracy, in Singapore you have one-party rule for example. What I’m trying to challenge in the book and the reason why I stress the need for crises and shocks to advance neoliberalism is that that is a direct challenge to the fairy tale that we are told about how free markets and free people go hand in hand, and that these are the same and an inseparable project. Now I’m not arguing that neoliberals are the first people, the first ideologues to use shock to advance an unpopular economic project, this is a tactic that is well worn. But the attraction of crisis is that it circumvents democracy.

I think with Hong Kong, China, Singapore, many of the more successful neoliberal states in terms of economic growth, what you see is that this economic model thrives and is indeed most successful in the absence of democracy. I mean, China is the most successful economy in the world at the moment, there is no denying it. And it also has advanced in this way by skipping the democracy stage entirely. I mean, it’s a laboratory for cutting-edge surveillance techniques at the moment, and is in fact pioneering the economy of surveillance. Not only in the city of Shenzhen do you have worker populations under cutting-edge surveillance using everything from networked CCTV cameras to GPS to biometric ID cards with a huge range of personal information embedded in them, but the selling of these technologies is one of the fastest growing businesses in China’s economy. Which is really interesting when you think about the rhetoric of globalization in the 1990s, which said that the high-tech companies were going to go to China and democracy would soon follow. In fact the opposite has happened, trade hasn’t brought democracy to China, and one of the fastest growing areas of trade is in repression and surveillance.

Left Turn: Well, another aspect of that rhetoric is the idea of peace and security through free markets. But what the book seems to do is to highlight the violence that has accompanied this ideology around the world, and that is required to keep it alive.

Klein: It’s interesting because the book has come out in a few different languages and I presented it in Italy and Spain most recently. What was really interesting was to hear from activists there that in the US it’s all about the ‘war on terror’ and this is fueling this economy of Homeland Security. But in Europe it’s all about fear of immigrants, more particularly Muslim immigrants. This constant fear of the “Muslim invasion” fuels a Homeland Security state, what is often referred to as ‘Fortress Europe’. Which is also privatized, the biometric IDs, the virtual fences, the detention centers, it is also an economy. So the fear comes from many sources. Look at what our news channels are feeding us constantly, it’s a steady diet of fear of terrorism, fear of immigrants, now climate change is fueling the fear economy. This state of constant fear is required to justify keeping the tap open and the steady transfer of public wealth into private hands to build the security state.

Left Turn: And In Chile previously and now in Iraq, torture is also used to that effect. Could you talk a bit about how that is used, the link between the torture of the individual and the overall effect it has on society?

Klein: In the book I talk about a ‘triple shock’ formula that we see repeated again and again. In Latin America in the 70s, in the first laboratories for neoliberalism, you had these three distinct mutually reinforcing shocks. The shock of the coup, the shock of the economic crisis and the ‘shock therapy’ to transform the economy supposedly in response to these crises, and then the shock of torture, which is really the shock of enforcement. It’s the shock that’s used as a warning to society to anyone who would think of opposing the economic shocks. Of course, these are unwanted policies, if they weren’t unwanted policies, military coups would be unnecessary. But even so, there’s the threat of rebellion and resistance, and it’s in that context that torture is an extraordinarily effective instrument of social control. I think this is something that has amazingly been forgotten, because it’s such an obvious point. Our collective understanding of the role torture has played in repressive regimes is as a form of social control, torture is understood as a technique of state terror. It’s not just an interrogation technique; it is a technique of state terror.

We talk about torture in the United States as a question of whether or not it extracts useful information or reliable information. That whole debate overlooks the fact that torture is about communicating information, and it is communicating information to the broader society. While we’re having debates about whether ‘waterboarding’ is torture or not, the rest of the world and anybody who considers themselves potentially profiled by the US ‘war on terror’, the message is very clear: the US does torture. And that is a technique of state terror; that is a terrorist technique. People do get that message, and fear is spread, which is to say that torture works. It may not work to get effective information, but its primary role has never been just to get information. The primary role of torture is to communicate the message of obedience and the danger of resistance. And I think torture is working.

Left Turn: Well, to pick up on the thread of resistance… late in the book you talk about ‘shock wearing off’ and people’s reconstruction. What kind of examples of this are you inspired by, and what are some striking examples of resistance and reconstruction in times of shock?

Klein: Well one of the things I’ve been struck by is the importance of history in becoming shock-resistant. I just came back from Spain and it was an interesting time to be in Spain because the verdicts were just handed down for people accused of the March 11 bombings in Madrid, which were certainly a shock to Spanish society. But Spaniards reacted so differently to those terrorist attacks than Americans did to September 11; it’s really a study in contrasts. In thinking about how societies become resistant and resilient in the face of shocks, I think realistically we are not going to be able to escape crises and disasters, so we need political disaster strategies. Spain I think is really an inspiring example because after those attacks, people did something very different to what happened in the US, which was an immediate impulse to gather, to have protests. What people were protesting was their own fear, and the political manipulation of the event by their government, by the government of Jose Maria Aznar, then-Prime Minister, who immediately seized upon the tragedy to blame ETA, the Basque separatist group, and then to simultaneously use the attacks as somehow a justification for why there were Spanish troops in Iraq even though most Spaniards opposed the war. He was just going off in all directions, much like George Bush does, using it for whatever advantage he could and clearly just trying to capitalize on it. But people rejected it, and had these huge marches against fear, and two days after the attacks there were national elections, and Aznar’s party was roundly defeated.

When people were asked why they responded with such powerful rejection, which was so different to the way Americans responded after September 11 when there was just this tremendous level of unquestioning support for the political leadership, they said it was because Aznar reminded them of Franco. So there was this collective memory of how Spain had been coerced in an earlier time into giving up civil liberties and their democracy, and a desire to learn from those experiences, and an inability in a moment of crisis to choose to respond by turning to each other as opposed to their leaders.

I feel, even though this book certainly makes for some harrowing reading, the very process of having a narrative of how we ended up with this extreme form of capitalism, having that story and connecting ourselves globally to a narrative of how neoliberalism has spread around the world and understanding how shock works on our societies and on our brains, does make us more resilient. Because what a state of shock is and the reason it makes us vulnerable is that it is the moment when we lose our story. When we don’t have a story, when there are gaps between events and the information that we have to explain those events, we are very vulnerable to those who want to manipulate us. So anything that we can have that we can hold on to in a crisis, that we can identify the early signs, like Spaniards did in identifying those early signs as they were taking place and saying we don’t want to go down this road again, we desperately need those tools.

In terms of people’s reconstruction, another inspiring experience I had in New Orleans on the second anniversary of the levees breaking. I was there for a really amazing exchange that was organized by Action Aid international where a group of tsunami survivors from Tamil Nadu, community organizers who had organized in response to the tsunami and the land grabs of various kinds, had traveled to New Orleans to meet with community organizers from the Gulf Coast. And it really felt like the birth of a new movement, it really felt like a new kind of civil rights movement, a disaster survivors’ rights movement. There is the beginning of a list of rights of survivors, the right to return and the right to control the money that is raised in the name of survivors, and it’s a really profound questioning of the roles that NGOs play in these disaster zones and what can be asked and demanded of NGOs. More than that, it really felt like it was breaking this disorientation strategy, because trading information about how disaster capitalism has played out in different parts of the world, and trading strategies about resistance and what works and doesn’t work, and telling each other what to anticipate, then the politics of shock loses its most effective tactic, which is surprise. That is what threw us off our game after September 11 and why so many of our movements for social and economic justice lost so much momentum. We were surprised, scared, we lost the script. If we are able to fill those gaps for each other, then there is also a history where crises and shocks have in the past been moments of democratization, of populism, and community building. This happened in Mexico after the earthquake in 1985, and in many ways the global response to the Great Depression was an example of a democratic populist response to crisis. That was a tremendous shock to the global economy, and people responded to that shock by demanding a more just economic system around the world. Sometimes that took the form of socialism, sometimes it took the form of Keynesianism, and sometimes it took the form of economic nationalism and developmentalism. But it was a sea change. And it is in fact that sea change that neoliberalism has sought to dismantle.

Left Turn: Through a global counter-revolution.

Klein: Exactly.

Left Turn: Then how hopeful are you, or are you even hopeful, about the prospects for resistance and for democracy surviving amidst this counter-revolution, its authoritarianism, and its neoliberal economic policies?

Klein: You know, one thing that makes me hopeful is the level of rage I’m seeing in the United States. I think people are angrier than I’ve ever seen them in this country. And I think there might be a moment where people are ready to let go of some of their illusions, and I think this is really crucial. Because there is a response, there are parts of the world that are coming out of shock and developing alternatives to neoliberalism. We see it most clearly in Latin America, where you have a continent that is not just rejecting neoliberalism but building ‘shock-absorbers’ into its economy and identifying all the ways in which the continent has been shocked in the past and trying to pre-emptively block them. There’s countries, most recently Bolivia, announcing that they won’t send students to the School of the Americas anymore, or Rafael Corea, President of Ecuador, saying that when the lease on the military base in Ecuador comes up in 2009 he is not going to renew it unless Ecuador is allowed to open a military base in Miami. And the fact that the IMF is really losing its foothold in Latin America, because Venezuela has become a lender of last resort. These are where the shocks have come from in the past, through US military interference, US military and police training programs, and the IMF. So we are seeing not just a rejection of neoliberalism but a new kind of ‘shock-resistant’ politics, which is very exciting.

Left Turn: But you also have, in Asia for example, countries developing in the other way. China, for example, which through its increasingly neoliberal policies seems to be setting itself up for a shock rather than protecting against them.

Klein: That’s true, but on the other hand you also see the Chinese people regaining the courage that was shocked out of them at the end of the 1980s, when there was tremendous repression, the Tiananmen Square massacre and mass imprisonments, because there were 87,000 protests in China in 2005, which is a staggering number, and there have been more every year, and that’s according to official government statistics. Eighty-seven thousand protests, mostly workers’ protests and protests resisting land appropriations. And India as well, there is an increasingly militant rejection of neoliberalism, much of it in response to Special Economic Zones.

But absolutely, the ledger is by no means clear. I don’t believe that neoliberalism is in its death throes, and I think that this is why we at least have to begin by identifying the economic logic that we’re up against. One of the things that I think has been so damaging about the Bush years is the extent to which oppositional politics in the US are so personalized on the figures of the Bush administration, or partisan politics, and hatred of the Republicans. Before Bush came to office, we were talking about a global economic system, and that’s the discussion that was shocked out of the way by September 11. It’s a discussion that has continued in other parts of the world, but we need to get back to that discussion in North America.