The Shock Doctrine and the Neoliberal Imaginary

William E. Connolly
Johns Hopkins University

In a compelling book, entitled The Shock Doctrine, Naomi Klein charts how the neoliberal right follows the double-barreled strategy introduced years ago by its patron-saint, Milton Friedman.  Right wing think-tanks first prepare a set of market deregulations, anti labor actions, and tax cutting policies, waiting for an acceptable time to enact them. Then a rightist administration deploys any new shock that comes along to push them through. Friedman himself tested this strategy in Chile, after Allende, with probable American help, was killed in a coup and General Pinochet took over. It has since been deployed often. An economic crisis in Argentina? Use the IMF to impose neoliberal policies and deregulation. A recession in the United States in the late 1970's?  Give large tax breaks to the rich and decrease regulation when Reagan gains office. An economic meltdown in 2009 created by deregulation, bank adventurism and high frequency trading?  More bailouts, joined to militant resistance to reorganize the neoliberal policies that created the disaster.

Klein’s book, which appeared before the latest meltdown, is compelling. She does not argue that the “neos–-the neoliberals and neoconservatives in tandem--create every crisis. But they are ready to impose preconceived policies each time one arises, as the drumbeat on Fox News and CNBC financial 'reporting' reveals. As Friedman himself said, revealing neoliberalism to be a politico-economic doctrine from the start, 'only a crisis produces real change...That I believe is our basic function: to develop alternatives to existing policies, to keep them alive..until the politically impossible become politically inevitable.” (quoted in Klein, p. 140) The shock doctrine was enacted again after 9/11: the attack by Al Qaeda was used by Bush and Cheney to launch a reckless, destructive war against Iraq the neocons had wanted all along.

If I were to criticize Klein, it would be to suggest that she underplays how a significant minority of the populace is primed by existential temperament and/or economic position to embrace this double-barreled strategy. A large section of affluent and aspirational consumers, feeling entitled to cheap oil, two or more houses, SUV’s, and yearly bonuses, are primed to neglect the dangers of oil dependence, to accept destructive military policies, and to embrace market deregulation to inflate housing values and investment portfolios. A section of white blue-collar workers, offended by minority movements that ignored their grievances for too long, are attracted to the utopian promises of this constellation. Many on the right edge of evangelism, joined by some Catholics, act as if God himself is a protector of market adventurism. If they need support for such a strange idea, they can appeal to George Gilder’s 1981 book, Wealth and Poverty. That book helped to spur the unholy alliance between neoliberalism and evangelism I call the evangelical-capitalist resonance machine. 

Here is a question that deserves more attention on the democratic left:  Why are so many constituencies eager to reinstate the neoliberal myth so soon after each new disaster discloses its utopian character and destructive tendencies? There was the 1970's reinstatement only a few decades after the Great Depression and fascist responses to that crisis in several countries had seemingly taught (nearly) everyone how disastrous such a utopian vision can be. And it has now occurred again, this time only a few months after the last meltdown.

We can see why Wall Street and corporate elites are so eager to forget. But why such dangerous forgetfulness among large sections of the populace?  Is it bound to a problematic conception of individual freedom through the acquisition of private fortune that requires the myth of an untrammeled market to sustain it? Is it tied to the quest by a large section of white working and middle class males to redeem their dignity in a tough economy by castigating minorities who would otherwise make additional claims upon them? Does it flow from a generalized American demand for special entitlement in the world in which those claims increasingly face resistance? Does it reflect failure on the Left to devise an ideal appropriate to the times after the demise of socialist models of productivism? Perhaps it reflects all of these, as they work back and forth on each other to varying degrees for different constituencies. 

Sure, The Wall Street Journal, Fox News and CNBC preach neoliberalism daily, playing up its aspirational side while obscuring its draconian disciplines. But that repetition, again, does not sufficiently explain the lure of the myth or the intensity of denials about its harsh disciplines and contributions to periodic crisis, unemployment, a crumbling infrastructure, debt, racial division, and climate change.

One thing seems certain. While the democratic left must expose the shock doctrine of Milton Friedman and his gang, we ourselves need more militant strategies to press “Independents” and “blue dog democrats” to rethink their priorities. And we also need to articulate an interim vision that speaks more sharply to the systemic risks and personal troubles of today. My sense is that one place to start is in the sphere of consumption, showing how the established infrastructure of consumption simultaneously renders it difficult for many to make ends meet, encourages unwise economic decisions, and endangers the planet. An infrastructure, for instance, may be organized either to demand the automobile or support mass transit, to demand oil and coal generated electricity or provide a grid that supports sustainable energy production, and to provide expensive hi-tech care out of the reach of many or support preventative health care. The latter in each case reduces the costs of consumption for low income consumers while supporting sustainability for future generations.

As you show people how apparently autonomous consumption decisions are channeled by the market and state sustained infrastructure in which they are set, it may be possible to pose changes to that infrastructure itself that speak to the issues of household cost and sustainability, Along the way it will be important to show how neoliberal policies, promising a reduction in the size of the state, actually produce powerful pressures to expand the state to maintain its own preconditions of existence without reducing pressures on household budgets. But that is a topic for another time.