SHOCK CAPITALISM : THE RISE OF DISASTER CAPITALISM
Naomi Klein (Knopf)
Naomi Klein is one of the more popular left wing observers. In fact she's a bit of a poster girl for the left - her books sell in large quantities and she's a sought after speaker. I would of reviewed Shock Capitalism earlier but the half a dozen copies available through the Canterbury Public Library have been constantly out of loan.
But I managed to get a copy recently and, I have to say, I was slightly disappointed. This book will go down well in the liberal milieu (there are actually still people in the Labour Party who think they are liberal) but those of us looking for something more socialist than liberal-left this book will not satisfy.
Naomi Klein is a good writer - no impenetrable and stodgy language here - and she displays a considerable talent for paring down large amounts of research material and getting to the root of the matter.
Klein's objective is to show how capitalism not only exploits disasters around the world but also creates them as well in order to benefit from them. From the CIA-backed overthrow of Allende in Chile to he invasion of Iraq, Klein describes how U.S.-led neo-liberal capitalism-inspired by Milton Friedman and his Chicago School disciples- have rolled back economic advances via torture, death squads, and severe IMF-led economic policies..
It’s not exactly a new thesis but one of the strengths of this book is that Klein includes more recent crisis, such as the United States invasion of Iraq and the 2004 Asian Tsunami, within this thesis.
But Klein’s argument can only be stretched so far, as some other writers have pointed out. For example, Klein’s argument cannot explain how Bill Clinton - in crisis-free America - was able to launch a series of attacks on the welfare state throughout the 1990s.
The basic flaw with Klein’s book is that she paints a vivid picture of contemporary capitalism but largely fails to explain how we arrived at this point.
In fact Klein tends to reduce the rise of neo-liberal capitalism to the efforts of certain individuals - free market ideologues like Milton Friedman and Jeffrey Sachs, for example.
But why was neo-liberalism embraced by traditional social democracy? In New Zealand, how do we explain the emergence of a formerly social democratic Labour Party that has implemented and promotes free market policies - including free trade agreements with low wage countries?
I don’t pretend to be an expert on economics but from what I’ve read it seems that the 1973-74 global recession triggered a fundamental change in global capitalism. The writer Eric Hobsbawm described this as the end of the golden age of capitalism that had lasted since 1945. A social democratic consensus existed throughout this time but this recession created the conditions for the re-emergence of laizez-faire economics - that had previously been discredited by its failure to respond to the Great Depression of the 1930s.
But with the sharp decline in profits, neo-liberalism, with its emphasis on cutting soil spending (taxes) and government regulation, offered an alternative to the regulated economy and strong welfare state.
Yet Klein completely ignores the 1973-74 recession.
Klein’s solution is a return to Keynes. While we must support immediate reforms that will benefit workers, the social democratic economic policies of the past - even if they could still be implemented - provide no long term solution. That is something that socialists will have to provide.
Klein doesn’t recognise that the problem is not free market capitalism but capitalism itself.