[1] My husband and I were spending a lovely evening with another couple when the conversation turned to the subject of controlling spouses, and whether there were any power imbalances in our own marriages. “Phil’s not henpecked,” declared Patti. “Phil,” she demanded, “Tell them you’re not henpecked.” When the laughter subsided after Phil had responded to Patti’s order with the meek assurance that he was not indeed hen-pecked, Patti recalled that even as those words escaped her mouth, she had wanted to reach into the air, capture the very sound waves that carried them, and stuff them away in a dark, soundproof cell.

[2] And so I think it must be for Jeffrey Sachs, economist, professor, author and policy wonk whose affiliation with the terms, “shock treatment” and “shock therapy,” has been exploited to great effect by Naomi Klein in her recent book, The Shock Doctrine.[1],[2] To Klein’s way of reasoning, Sachs’s endorsement of moving quickly to stabilize an economy in the face of hyperinflation is akin to torture, murder, kidnapping and clandestine disappearances. Economic usage of the terms “shock treatment” and “shock therapy” – which, by the way, were not coined by Sachs himself but rather seem to have made their first appearance in a 1953 paper by Swedish economist Per Jacobbson[3] – simply means responding to an economic crisis with sweeping fiscal and monetary changes enacted speedily so as to avoid both adaptive, self-interested behavior by economic actors, and political instability brought about by a prolonged state of economic disequilibrium.

[3] While Klein insists on attributing the terms, and all their discordant connotations, to Jeffrey Sachs, Sachs himself claims that, “I never picked the phrase ‘shock therapy’ and I have to say I don’t much like it. It was something that was overlaid by journalism and public discussion.”[4] Sachs himself uses a less colorful term, “rapid price liberalization,”[5] to describe his preferred means of helping an economy move from state-sponsored socialism to a market economy. Indeed, the first time Sachs himself uses the phrase “shock therapy,” he refers to it parenthetically, and as an “awful term.”[6] When Sachs does use the word “shock,” he uses it as a noun, and not as an adjective, to describe an unexpected and exogenous change to an economic system, like the oil price shock caused by the formation of the OPEC cartel in the early 1970s.[7]

[4] Transition economists like Sachs have long debated among themselves the relative merits of rapid versus gradual reform of markets in which government-set prices have created problems that their societies wish to remedy.[8] The debate focuses not only on the relative efficacy of the two approaches, but also with their impact on citizen well-being and political institutions supporting the transitioning societies. Those favoring rapid reform argue that it is best to “bring all the bad news forward.”[9] To these economists, the hyperinflation encountered by economies transitioning out of state-sponsored socialism is “the beast at the door,” that poses “the single greatest risk to the continued peaceful change” of these transitioning societies.[10] As such, it must be addressed speedily. Those who endorse gradualism emphasize “the danger of severe economic dislocation if too much change is attempted quickly.”[11]

[5] Klein’s text, however, reveals nothing of these careful, data-driven debates. Sachs’s noun becomes Klein’s adjective as she moves from a graphic, painful discussion of “shock therapy” as employed by Dr. Ewen Cameron as part of his “maniacal quest to erase and remake the human mind,”[12] to “shock doctrine” as allegedly employed by economists like Sachs. In Klein’s hand, “shock doctrine” has nothing to do with whether it is better for an economy to undergo structural change quickly or gradually, rather, “shock doctrine” is Klein’s term for the use of “sadistic acts…committed with the deliberate intent of terrorizing the public…to prepare the ground for the introduction of radical free-market ‘reforms.’”[13] It is quite a leap from “rapid price liberalization,” to “sadistic acts,” but it’s a leap Klein is more than willing to goad the reader into taking.

[6] But first the critical reader needs to ask, “Why?” Why would economists, normally a rather sober lot, embrace a doctrine that demands “the systematic murder of tens of thousands and the torture of between 100,000 and 150,000 people”?[14] Klein’s answer comes in the form of yet another economic term which she borrows and colorfully edits: disaster capitalism. While capitalism refers to an economic system in which wealth, and the means of creating it, are in the hands of private individuals who are free to employ their wealth as they deem fitting, disaster capitalism, as invented by Klein, is characterized by a series of “orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities.”[15] The shock doctrine allegedly employed by Western economists in the service of tyrants throughout the globe is just one way of creating the disaster, “the coup, the terrorist attack, the market meltdown, the war, the tsunami, the hurricane – that puts the entire population into a state of collective shock,” which causes citizens “to give up things they would otherwise fiercely protect.”[16] In other words, the shock doctrine is employed to allow enterprising, opportunistic and evil oligarchs to appropriate as private property those goods which were held in common, prior to the disaster. When natural disasters, like Katrina or a tsunami occur, disaster capitalists take advantage of the resulting chaos to exploit the most vulnerable members of society, taking away whatever goods and services they had enjoyed before. And if natural disasters occur too infrequently to satisfy the acquisitive desire of the disaster capitalists, the doctors of economic shock therapy will visit their own form of terror on society. Klein’s thesis, in a nutshell, is that under the supervision of a gang of economists, torturous shocks have been applied to developing economies throughout the world so that their pain-wracked citizens will not resist when their governments convert publicly held goods to private assets.

[7] As such, Klein’s book is not about development per se. Although she certainly condemns rapid price liberalization, Klein never shares with her readers her own ideas about what response, if any, would best address the social and economic chaos that exists in countries facing high unemployment, inflation, and escalating debt resulting from government control of prices and wages. While opposed to relying on private property and private exchanges as a means of determining the prices and income across a society, she never attempts to outline her normative view of what economic and social conditions should exist in their place. Her arguments are solely contrarian; Klein offers no alternative to the reader, nor does she complicate her analysis by including any details that might seem to contradict her thesis that these instruments work to destroy already vulnerable economies. Furthermore, she avoids the complicated task of examining the historical antecedents to the crises that created the economic environment which made massive economic and social change necessary. As such, Klein’s is an ideological tract, and should not be confused with the work of serious writers seriously committed to improving society.

[8] Klein’s use of rhetoric in place of rigor prevents her from becoming mired in complicated and nuanced national histories which might blur, or even contradict the clear arc of her narrative. Had she engaged in research on the Argentine economy, for example, she would have had a difficult time arguing, as she does, that the hyperinflation Argentina experienced in 1989 was engineered by the IMF and Chicago-trained economists to induce the shock that would allow the country to part with its nationalized railroad system and public utilities. A cursory examination of Argentina’s economic history is all that is necessary to convince the objective reader that, unfortunately for both Klein’s thesis and for Argentina itself, Argentina is all too familiar with hyperinflations. Klein’s narrative ignores the fact that Argentina has experienced hyperinflations under the populist governments of both Juan and Isabel Perón, as well as under its various military regimes. As such, Argentine hyperinflation appears to be less of a tool created to achieve a particular end than an unfortunate reflection of the ability of Argentina’s powerful labor syndicates to win wage concessions from the Argentine Congress, even in the face of severe inflationary pressures. Indeed, Argentina’s “plan económico de shock,” was unveiled in June of 1975 under populist President Isabel Perón, not under Carlos Menem, nor his predecessor Raúl Alfonsín, nor even the military junta that governed Argentina from 1976 until 1983. Perón’s admittedly futile attempt to weaken Argentina’s labor syndicates was itself a response to the inflationary pressures caused by legislatively sanctioned wage increases of as much as 100 percent in a single year. Had Klein examined the state of the public utilities privatized under Carlos Menem, she would have discovered that Argentina did not sell off its crown jewels, rather, it transformed subsidy-dependent public utilities into private corporations from which the Argentine government now extracts billions of dollars per year in taxes. Revenues from these taxes have been used to erase Argentina’s external debt, as well as offer social programs, like national unemployment insurance that was instituted in 1991, that had never before existed in this country. Had Klein not been so intent on keeping her story line clean, she could have offered a way to compare the benefits of the improved dependability and increased availability of Argentine public utilities after Menem’s privatization program with the increased costs such improvements necessitated. But that would have required Klein to admit to the possibility that the economic policy changes introduced by Menem were not instruments of torture and repression, but were simply economic reforms initiated in response to real challenges. Whether these reforms accomplished all they set out to accomplish, whether they could have been improved upon, whether the efficiency gains they generated justified the hardships they imposed – these are all interesting and critical questions that Klein has dismissed or avoided in order to keep her plot simple, her villains evil, and her victims pure.

[9] This is a dark book, with a darker thesis that requires one to believe in the existence of a global system of organized terrorists masquerading as scholars and economists. To make such an argument stick requires an exhaustive amount of research which Klein appears unwilling to offer. Instead, she bases her case on circumstantial evidence. Given the ubiquity of both evil and economics, it is hardly difficult to find the two existing at the same time and in the same place, and Klein’s text carefully describes the situations where she has found the two co-existing in Chile, Argentina, Bolivia, Brazil, Poland, Russia, Sri Lanka, China, Iraq, South Africa, and even the post-9/11, post-Katrina United States. But correlation hardly proves causation, and Klein’s “thesis” is simply an attempt to discredit all advocates of market economies by linking these advocates to both a controversial and provocative form of psychotherapy; bloody, sadistic civil wars and revolutions; and botched federal emergency responses. If she wants to prove that economists are part of a group of torturers, she needs to find some better evidence.

[10] Given her distaste for hastily crafted and implemented economic policies, one can only imagine how tortured Ms. Klein must be as the United States’ Congress and President discuss openly their plans for stimulating the American economy with speedily enacted, prodigious changes in government spending, tax structures, and regulation. One can understand how alarmed she must be when our new president urges us, in terms reminiscent of the rhetoric of shock therapy, to “take dramatic action as soon as possible, ” to implement a “whole new approach to meeting our most urgent challenges,” which promises to “break the vicious cycles that are crippling our economy.”[17] One hopes that Klein, after engaging in “breakthrough historical research and four years of on-the-ground reporting” as background for this book,[18] would have words of both caution and advice for this administration, this economy, and these times.

[11] But she doesn’t. Klein’s work only contributes to that unfortunate Marxist historical tradition of assigning blame for the world’s ills without offering any solution. One slogs through 466 pages of text blaming every economic ill on any and all Western economists – from Sachs to Friedman, from Keynesian to Neoclassical – hoping that, in the end, Klein might put her own economic policy position on the table for discussion and debate. But she fails to show her hand. The book ends with some platitudinous paragraphs prophesizing a post-apocalyptic reconstruction movement that does “not seek to start from scratch but rather from scrap, from the rubble that is all around.”[19] Who belongs to this movement, what its purpose is, how it organizes production and consumption, how it distributes property, and how it goes about making the world “better and more equal,”[20] we don’t know. We only know that, like the rise of the Marxist proletariat, we will experience this “communal recovery” after the “corporatist crusade” meets its “violent decline.”[21]

[12] I have always been uncomfortable with the Marxist view that we can be agents of our own salvation. Following the salvific narrative characteristic of Marxism, Klein portrays us as part of an historic struggle that, as Klein herself predicts, will end with the violent decline of the corporatist crusade, leaving in its place a classless, stateless and oppression-free heaven-on-earth in which “there will no longer be shortages of food, housing, jobs, health care and education.”[22] I am impatient with the Marxists’ need, so evident in Klein’s text, to create devils and angels out of members of social classes. Much as I find myself disagreeing with Milton Friedman at almost every turn, I sincerely believe that Friedman, Sachs, and so many of the other economists targeted in Klein’s screed were motivated by a genuine desire to make the world a better place. Like all humans, we economists may be in error, we may be blinded by pride and ignorance, we may misjudge the effects of our policy prescriptions, but we are not Satan incarnate, nor are Klein and her followers angels in human form.

[13] Genuine development is obtained, not by ideological commitments, but rather when conditions are created that allow individuals full expression of their humanity. Therefore, as described by Nobel laureate Amartya Sen, genuine development is best measured in terms of freedom.[23] A developed country is one populated with citizens free from hunger; free from avoidable diseases; free to experience the joys and liberation of education; free to participate in government; free to make, or be excused from, religious, cultural and familial commitments; and free to determine what to do with the resources entrusted to their personal stewardship. A serious examination of “shock therapy” would have examined the extent to which these freedoms were expanded or curtailed following its application. A valid appraisal of attempts to implement a particular economic policy would not place all Western economists within the same school of thought, nor ascribe to all in power the same, corrupt motive. But this is neither a well researched book, nor a valid appraisal. It is instead a polemic against private property, market economies, and anything and anyone that supports or encourages them.