Did China Follow The Shock Doctrine?

When China shifted its view on food subsidies this week, it was considered a major about face for a country that has been open to free trade for the last 30 years.

According to writer Naomi Klein in the conclusion of her book The Shock Doctrine: the rise of disaster capitalism, this turn is happening because China and its people are recovering from the “economic shock therapy” that the government put the people through since certain event in June 1989.

Klein says that the government used this event to push through some of the most anti-citizen-styled economic policies which were just recently corrected by the country’s new labour law that took effect on January 1st 2008. The inspiration for these policies was the economist Milton Friedman of the University of Chicago.

Friedman who advocated a pure form capitalism which was free of government intervention — and low taxes and little in the way of social services. Klein says that the only way citizens would accept a situation like this is in the wake of a major physical shock such a coup or natural disaster. The citizens would then be hit with a second economic shock in the form of Friedman’s economic policies and finally, violent physical repression would be used to ensure that those who tried to oppose the economic policies were effectively removed from society.

Klein details the history of this policy and how it was first tried in Chile with Pinochet and then through out other Latin American countries and then Indonesia with Suharto. In the late 1980s, the economic policy was pushed on Eastern European countries when they emerged from Communism. There wasn’t the same violence in Eastern Europe as in Latin America or Indonesia, but Klein seems to think that the drop in the standard of living of most of the population was just as bad. 

The final third of the book is devoted to the disaster capitalism complex, which Klein says developed mostly in the US and was able to reach its peak after 9/11 when companies such as Haliburton emerged fully prepared to help the newly established Homeland Security Department with protecting the US and the Pentagon with planning the war in Iraq.

The really reason the Bush government went to Iraq, Klein said wasn’t because of WMD or Islamofascism but instead because it wanted to use Iraq as a Middle East experiment. The Bush government wanted to open the markets of the Middle East and the easiest way they thought to do that was to destroy Iraq and remake it as a pure capitalist paradise.

The thing is you can’t completely clean the slate, people will always resist the attempts to erasing the old form and replacing it with something new. And as we know people in Iraq resisted. It didn’t help that the foreign contractors that came in such as Haliburton and Blackwater didn’t attempt to hire any Iraqis but instead brought in all their workers from abroad (something these same companies would repeat with the assistance they would give in Hurricane Katrina).

Klein concludes the book by saying that some countries are now recovering from the shock doctrine and replacing its economic theory with a component that is more beneficial to its citizens — such as the story with China I mentioned at the beginning of this piece.

In fact the opening paragraph really sums up all of the 10 or so pages that Klein writes about China in the book. China might of gotten a lot of mentions in book reviews and media interviews but it is really just a small portion of the book, but that doesn’t mean the book is not worth reading.