A Crock of a Doctrine

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My friend and former colleague Johan Norberg has just produced a devastating, 20-page debunking of Naomi Klein's The Shock Doctrine, a book he rightly calls "hopelessly flawed at virtually every level," with a thesis that rests on a "malevolent distortion" of Milton Friedman's views. The full report, released as a Cato Briefing Paper, is available here. A representative sample of Norberg busting Klein on bowdlerizing Friedman's writing:

When Klein talks about Friedman's suggestions to reduce inflation, she writes, "Friedman predicted that the speed, suddenness and scope of the economic shifts would provoke psychological reactions in the public that 'facilitate the adjustment.'"

Klein gives the impression that Friedman was brutal and wanted to inflict pain to disorient people and push his reforms through. The use of the words "psychological reactions" is also important, because Klein tries to associate liberal reforms with psychological torture and electrical shocks. But the quote in its entirety shows that Friedman had something very different in mind. He actually wrote that if a government chooses to attack inflation in this way: "I believe that it should be announced publicly in great detail . . . . The more fully the public is informed, the more will its reactions facilitate the adjustment."

In other words, if the people are not ignorant, and not disoriented, but fully informed of the reform steps, they would facilitate the adjustment by changing their behavior when it comes to negotiations, saving, consuming, and so on. Friedman's view was the complete opposite of what Klein pretends it is.

I wrote previously about Klein's book here and here. Matt Welch on "disaster capitalism" here.

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  1. joe,

    Please place all of your defenses of Klein, insults to Michael, challenges to free markets, queries about Cato’s independence, and fear of alligators into one post, for convenience. I’m a busy man.

  2. 20 pages? All you need is this; the first words from her website when you google Naomi Klein:

    “Exposing these global profiteers…”

    That’s all I need to see…

  3. Really, isn’t this just a fill-in-the-blanks exercise?

    a devastating, __-page debunking of Naomi Klein’s _____________________, a book he rightly calls “hopelessly flawed at virtually every level,” with a thesis that rests on a “malevolent distortion”

  4. Friedman’s view was the complete opposite of what Klein pretends it is.

    Shocker. I wonder what her publisher thought about that?

  5. Yep, she’s coated in slime.

  6. I do have one beef with the analysis:

  7. When you fellas are finished with your two minutes’ hate, come back to the real threads.

    We miss you terribly.

  8. Crap! I deleted the close tag:

    I do have one beef with the analysis: the Tiannamen Square demonstration was prompted in part by resistance to market reforms.

    Many of the protesters felt that the market reforms were betraying Mao’s revolution. They were upset at the lack of official support for egalitarianism and the increasing inequalities in wealth.

  9. When you fellas are finished with your two minutes’ hate, come back to the real threads.

    I don’t know about the rest of you, but when Naomi Klein is involved, it’s more of a two minutes’ point and laugh for me.

  10. I believe the paper reflected the diversity of views in regard to market reforms at the protest.

    The protesters at first gathered to mourn the former secretary general Hu Yaobang, one of
    the country’s most important reformers. Those students and intellectuals wanted democratic reforms, specifically free speech.
    The protests grew and included everybody who wanted democratic reform, both those
    who wanted more economic reform and those who wanted less
    (the element that Klein equates with the whole protest).

  11. tarran,

    But that doesn’t fit Cato’s simple story.

    China is an interesting case as they have had significant market reforms without political reforms to match…which also interferes with Cato’s narrative.

  12. Clearly the desire for political reform was at the heart of the T-square protests.

    When market reforms are seen as empowering the powerful (which they do), it is easy to see why people who lack political power would oppose them as one more power grab by the powerful.

    It may be that political reforms lead to market reforms, but it is less clear if that relationship works in the opposite direction, imho.

  13. Neu Mejican,

    Cato’s only interested in economic reforms?

  14. well, here’s the in depth analysis that joe asked for. Dunno if I have the time to read it, but I’d sure like to hear joe’s opinion on it.

  15. tarran, I believe your correction falls afoul of RC’z law:

    I found the original post:

    I do have one beef with the analysis:

    to be pithy, and not necessarily improved by the “correction”.

  16. China is an interesting case as they have had significant market reforms without political reforms to match…which also interferes with Cato’s narrative.

    What are you talking about? Here’s what Norberg wrote:

    But if the students were protesting against economic reform, they seldom expressed that grievance. Instead, they demonstrated in favor of democracy, government transparency, and equality before the law, and against bureaucracy and violence.51 The real story is thus very different from the one Klein tells.

    It’s quite clear, as tarran points out, that Norberg is discussing the political reforms being demanded.

    And tarran, how does that transcript reinforce your argument that the protests were a rejection of market reforms, and not a rejection of political processes? Norberg clearly states that protesters included both pro-reform and anti-reform, and that the cohesion among the protesters was the demand for political reform.

  17. I did it out of memory: I saw the documentary a while ago. Here is the snippet I was remembering:

    NARRATION

    Deng Xiaoping’s reforms, which had been so popular, were disappointing a lot of people by the end of the 80’s.

    Workers could no longer count on life-long employment, the iron rice bowl, and the socialist safety net of medical benefits and pensions was being dismantled.

    ZHAO HONGLIANG

    Factories had trouble paying their workers, so they kicked out a bunch of people. But they didn’t use the word “fire.” They called it “re-prioritizing the work force.” All these things came with reform.

    HAN DONGFANG

    Everyone knows what happened in the early stages of capitalism. The competition was savage, and there was no protection for the weak. In the quest for profits there was a total disregard for the impact on the society and the environment. This is exactly what’s happening in China right now.

    We’re in a transitionary period. The reforms are necessary, but workers have to protect their own interests.

    NARRATION

    To get rich was glorious, said the government, but those who got rich were mostly people in power and insiders who had always done well.

    Only government and industry cadres could work the turnover: buying goods at fixed government prices and selling them on the free market at a big profit.

    More than anything else, workers complained of corruption.

    ZHAO HONGLIANG

    The officials take and take, damn it. So why can’t we take? How come when we take, we’re called criminals and when you take, you’re not?

    MOURNING FOR HU YAOBANG AT SQUARE

    HAN DONGFANG

    People needed to vent their anger, but they were worried because so many had been persecuted in the past just for speaking out.

    In a crowd, they felt it was safe to let off steam. Often someone would rant and rave and then quickly disappear back into the crowd.

    But I felt that the reason for a lot of my suffering was that hardly anyone took responsibility for what they said or did. I thought I should try and set an example. So I told people my name whenever I spoke, to show that I was prepared to take the consequences for what I said. I wanted to indicate to people that to change a society you had to start with yourself.

    NARRATION

    Students and intellectuals had been among the strongest supporters of the reforms. Yet after a decade of economic growth, they enjoyed few of the benefits.

    FENG CONGDE

    There’s a saying in Beijing: “You’re as poor as a professor, and as dumb as a Ph.D.” This was really true. No matter how hard you worked, you couldn’t get anywhere.

    CHAI LING

    There is something really wrong with the reforms. Those in power have benefited from them, not the people. Although there is superficial economic prosperity, the masses and intellectuals have been deprived of any hope or initiative.

    Yes, the focus was on political freedom. The point is, though, that a significant portion of the students were allied with a faction of the Communist Party that was hostile to Deng’s reforms. A guy named Lee Feigong wrote a history of the whole incident. A significant group was trying to return to a purer past where worker collectives spread the wealth evenly.

    Again, this is a minor quibble. HAving read a little of her work, and having heard her interviewed on TV, I think Naomi Klein is a collosal idiot and is only correct by accident; it just happens that some of the facts to match her prejudices. If the Tiananmen protesters had all been Rothbardian anarcho-capitalists waving copies of Man Economy and State and demanding the abolition of the Communist government, I’m sure she would have have tried to paint them as opponents of free market reforms nonetheless.

    I just want to disabuse people from the notion that the protesters were somehow “western social democrats” being crushed by “communist conservatives”. That narrative is not correct; yes, there were people who wanted to have greater political and economic freedom in the group. The dominant factions, though, were in favor of communist democracy, where the means of production were controlled democratically. They advocated the sort of syndicalist policies that an extremist version of Kucinich might embrace. They were not happy with the growth of private property and personal wealth that accompanied the crony capitalism espoused by Deng – not merelly because it accrued to the politically connected, but also because they were opposed to it’s existence.

  18. I just want to disabuse people from the notion that the protesters were somehow “western social democrats” being crushed by “communist conservatives”. That narrative is not correct;

    I don’t see that as the narrative being adopted by Norberg.

  19. I would like to offer again my view that Maoists in China are not “conservatives.” Confucianism has traditionally been the backbone of the Chinese civilization, and a conservative would want to reorient society along those lines.

  20. I would also suggest that Klein hasn’t been “bowdlerizing” Friedman’s writing, because that would imply she removed the shocking parts to make it more palatable. Instead, she’s done more or less the reverse – made up stuff to make Friedman *less* palatable.

  21. China is an interesting case as they have had significant market reforms without political reforms to match…which also interferes with Cato’s narrative.

    What are you talking about?

    The narrative that opening markets will lead to political reforms….not, btw, a specific response to this particular essay.

    Pro Lib,

    Cato’s interests are wider than economic freedom. But they place economic freedoms at the apex, imho.

  22. In other words,

    tarran said it better.

  23. MCM, I read the review of your esteemed (in your view) pal, and it is hardly worth the paper it is written on. “No genocide in 2005 outside of Darfur?” So what is the slaughter of one-million-plus Iraqis supposed to be? Humane collateral damage in the cause of spreading democracy and freedom? Yeah, right! And as for the claims of more and more democracy, how does that jibe with mass computerized voting fraud committed in the last two U.S. presidential elections?

    In truth, JN hardly even addresses NK’s arguments. But I did enjoy the fried bowdlerizers with my eggs and ham this morning! Very nutritious!

  24. oh ha ha ha ha ha!! the Cato Institute attempting to debunk Naomi Klein and coming to the defense of Milton Friedman. how delightful. sort of like the fox and the henhouse, eh?

    Cato Institute = Corporate Propaganda Machine

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