Naomi Klein

The Shock Doctrine
The Rise of Disaster Capitalism
Around the world in Britain, the United States, Asia and the Middle East, there are people with power who are cashing in on chaos; exploiting bloodshed and catastrophe to brutally remake our world in their image. They are the shock doctors. Thrilling and revelatory, The Shock Doctrine cracks open the secret history of our era. Exposing these global profiteers, Naomi Klein discovered information and connections that shocked even her about how comprehensively the shock doctors' beliefs now dominate our world - and how this domination has been achieved. Raking in billions out of the tsunami, plundering Russia, exploiting Iraq - this is the chilling tale of how a few are making a killing while more are getting killed.
The Shock Doctrine: The Rise of Disaster Capitalism
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Naomi Klein -- Shocking the World Bank and IMF Crowd With Her Analysis of 'Disaster Capitalism'

Mark Karlin, BuzzFlash, October 16, 2007

The window of opportunity opens up, and it is deliberately exploited, whether it's using a window of opportunity in New Orleans to close down housing projects, or using the chaos of civil war in Iraq to ram through an oil privatization law.

-- Naomi Klein, author, The Shock Doctrine: The Rise of Disaster Capitalism

Ever since we read Naomi Klein's "No Logo" -- about the relationship between globalized "branding" and the exploitation of workers and national economies -- we have a been a huge fan of her writing.

Klein (a Canadian, born of American parents) is a serious writer. She is more interested in getting it right than being a celebrity. In fact, her exhaustively researched body of work on the havoc caused by "disaster capitalism" is roundly ignored by the American mainstream press -- and generally used for target practice by the corporate Canadian media.

If there is a serious author who poses a threat to "disaster capitalism," it is Naomi Klein. In her latest book, The Shock Doctrine: The Rise of Disaster Capitalism, Klein makes a cogent argument that the Milton Friedman school of economics (which has characterized American and European global economic policy for years) thrives on national economies that are in a melt down or in the midst of crises, many of the latter created as a result of IMF and World Bank policies.

Klein is actually not personally or politically an extremist by any means. She believes in a mixed economy, but one that allows people to choose the economic destiny of their nations, not have one imposed on them by essentially the neo-colonial powers of the U.S. and the developed Western nations who run the IMF and World Bank (think Paul Wolfowitz here).

In the contemporary world where book publishing, entertainment, news, and corporate profit have largely merged into one indistinguishable ball of wax, Klein is somewhat of an anomaly. She writes compelling arguments for what she believes to be true, not to become a celebrity and increase her income to media pundit "gold card" levels.

In fact, she's chosen to journey down a road that almost guarantees that she will be shunned, in large part, by the corporate media.

Nevertheless, through word of mouth, her growing base of readers, and a growing progressive media infrastructure, The Shock Doctrine: The Rise of Disaster Capitalism has actually been selling quite well, indeed.

* * *

BuzzFlash: In the publisher's write-up describing your book, there's a sentence that I'd like you to expand on. It's that at the core of "disaster capitalism" is the use of cataclysmic events to advance radical privatization. Can you give examples of how that would be applied?

Naomi Klein: The example that is most graphic is what happened in New Orleans after the levees broke. Here you had a disaster which, in many ways, had at its roots the ideology of unfettered capitalism. and the war on the public fear. What wasn't simply a natural disaster. It was a collision between heavy weather and a weak state infrastructure. That was the disaster in New Orleans.

In the immediate aftermath of that disaster, there was a real discussion taking place in the United States in the mainstream media about how the public infrastructure had been allowed to erode in this way. It was a real wake-up call for a lot of people, this revelation that the federal government, that FEMA, was sort of an empty shell that had been totally outsourced. Everyone seemed to be on vacation.

Their response, ironically, was to leap into the chasm opened up by the disaster -- the disorientation and the chaos, and the fact that people were focused on daily concerns of survival -- and they pushed through a very radical agenda that was essentially finishing the job and wiping out the public infrastructure in New Orleans. And this was immediate.

I was in New Orleans when the city was still flooded. I was interviewing lobbyists who were already camped out at the state legislature building in Baton Rouge, talking about all the tax cuts they were going to get, and the new labor flexibility, and what a great opportunity this was, and making it very clear that they didn't plan to hire local workers to rebuild the city, but that it would be all migrant workers at lower wages. There was a great deal of excitement. This is what I mean by disaster capitalism.

If you look at what has happened to New Orleans in the two years since, we see that this process that goes by the misnomer "reconstruction" has really completed this war on the public sector. The public housing projects are boarded up and stand empty. You have condo developers circling. Their largest public hospital, Charity Hospital, is empty. This was the hospital that was treating the uninsured. The New Orleans public education system is now the country's leading laboratory in the charter school model. Half the students in New Orleans who used to go to public schools are going to charter schools.

All of that happened, not because there was a community consensus for it, but because the disaster was expertly exploited by politicians, think tanks, and lobbyists to push through radical policies in the chaos after the disaster. That's disaster capitalism.

In New Orleans, you also see this ethos of privatizing the state. New Orleans is a laboratory for the corporatization of disaster response. You had Carnival Cruise ships providing housing. You had the big contractors from Iraq such as Bechtel building privatized trailer parks guarded by private security. What we're seeing is that, first, disasters are used to push through the radical privatization of hospitals, schools, roads, and so on. Then the last frontier for privatization is the response to disaster itself. In a sense, survival becomes the ultimate luxury product.

BuzzFlash: Let's not forget, also, and I'm sure you have not, that in New Orleans, Blackwater was employed to provide "protection."

Naomi Klein: That's an important piece of that laboratory context. Many of us in New Orleans who had been to Iraq felt that the Green Zone had just been lifted out and moved to the Gulf Coast. We were all saying this to each other, because there were quite a few journalists who had been in Iraq who were in New Orleans. I guess we were part of that movable Green Zone.

The parallels were very striking. There were the same contractors -- Blackwater-Halliburton-Bechtel. The point of this is that disaster zones are laboratories. They're testing grounds. In the chaos of this moment, you have these leaps forward for the privatization agenda. What was Blackwater doing there? They claim that they had just seen the disaster on television and wanted to help, right? But this was an extraordinary incursion into what we think of as a core state function. Why wasn't the National Guard there? Where were the local authorities?

In the name of crisis response, Blackwater leaps into the gap. Then their presence becomes normalized. The model that emerges in the chaos of these disasters is highly privatized disaster response experiments. And I would include Iraq -- that whole Green Zone -- as the ultimate expression of that. New Orleans, another. Then it becomes normalized, and it's a new model for corporate government.

The best example of that, I would say, is the emergence of these contract cities in the suburbs of Atlanta. There has been a mini-explosion of wealthier suburbs deciding to incorporate as cities. The first one to do this was Sandy Springs. Because they had to build an entire city from scratch, an entire city infrastructure, they were approached by CH2M HILL OMI, which was one of the prime contractors in Iraq, performing quasi-governmental functions in that disaster zone. Its job was to oversee other contractors. It also was the leading U.S. contractor in Sri Lanka after the tsunami, building bridges and overseeing other contractors. In New Orleans, it was one of the companies that got the contract to build these trailer parks.

CH2M Hill was and is really at the vanguard of this privatized disaster response, and they have already parlayed that into a non-disaster model of public government. They approach the citizens of Sandy Springs, and they say, okay, you need to build a new city from scratch. Let us do it for you. It encompasses everything from writing the tax code to collecting the garbage. The entire city infrastructure doesn't work for the city government, but works for CH2M Hill.

BuzzFlash: In New Orleans, it was basically a natural disaster that led to a collapse in the infrastructure, meaning the levees that flooded New Orleans. So we'll count that as a natural disaster that shock capitalism took advantage of, and very, very quickly, as you said. Joe M. Allbaugh, who had formerly been head of FEMA and a right-hand man of Bush in Texas, came in with a portfolio of client firms to be contracted with. Basically, as you've pointed out, almost the entire FEMA operation was outsourced to private corporations.

But let's move to Iraq, which was not a natural disaster. We recently saw the Charles Ferguson film "No End In Sight." It details the destruction of the Iraqi infrastructure during the so-called "reconstruction" period following the first phase of the war. We interviewed Charles and asked him if he thought the looting and destruction of all the ministries except the oil ministry was intentional or just incompetence. He said he couldn't be certain whether it had to do with an insufficient number of forces being sent in, or whether it was intentional. The looting we see in the film is also tied to the need for goods, which allowed for the privatization, not to mention the rewriting of Iraqi law to allow for all these American corporations to come in, and the ending of the socialized economy under Saddam Hussein.

Naomi Klein: I neither attribute it to a conspiracy nor to incompetence. I think it's the logical expression of the ideology at the core of their campaign. The goal, certainly once Paul Bremer arrived, was to build this brand-new model, a privatized state. Groups of people were brought in explicitly to do this -- to remake Iraq's health care system along privatized lines, for example. This was all explored very well in Rajiv Chandrasekaran's Imperial Life in the Emerald City. The person who was put in charge of rebuilding Iraq's universities talked about how, when he saw the Education Ministry and the universities being looted, he just figured that this was giving him a head start, because he never imagined his job as rebuilding anything. It was always about starting from scratch. It was an extraordinary imperial hubris.

All of these assumptions, I think, have to also be seen as racist assumptions -- that anything American was so vastly superior, and anything Iraqi should just be swept out of the way because it was just getting in the way. That's why there was that "stuff happens" shrug in the face of the looting.

I don't see it as a conspiracy. I don't think they brought their heads together and said we're going to create the context for this looting. But they certainly didn't care. I don't think they could have expressed that more directly than they did, both with their refusal to act to stop the looting, and, with Donald Rumsfeld's famous shrug.

The dream of building a model state in someone else's land is a deeply dangerous and racist dream, and a violent dream. Sometimes this is expressed as the idealistic side of the invasion, right? We're supposed to give credit to Paul Wolfowitz for really wanting to build this model state in Iraq. But if you want to engage in what Thomas Friedman described gleefully at the time as not country building but country creating, you have to ask the question of what's supposed to happen to the country that was? It was atrocious on the part of the architects of the war that they were at war with Iraq's history and deep civilization -- so much older, you know, than our own. If the goal was, as they said, building this model state that was to be a beacon for the region, or creating a country from scratch, obviously Iraq's history, Iraq's culture, traditions, sense of self, were all an obstacle to that.

How can we not speculate on motive when the military side of the invasion was this "shock and awe" attack on the country? These are people with a tremendous ease with destruction. They expressed that already in the first Gulf War and with the sanctions. Do we suddenly think they really care?

BuzzFlash: What I'm trying to set up here is a theoretical construct. Suppose I am trying to instill a radical economic policy of unfettered capitalism. It is a myth, and as ideologically extremist as about anything you can get. If I were going into a country and saying I want to develop this model here, wouldn't it be to my benefit to destroy all the economic and bureaucratic infrastructure that preexists there, rather than trying to graft on to it?

Naomi Klein: I think that was what we saw. In my reporting from Iraq, this was very clear. When I spoke to Iraq's Interim Minister of Industry, appointed by the U.S., he was telling me about the just straight-up refusal to get generators for Iraq's state-owned companies, who could have been participating in the reconstruction of the country, like the cement companies there. Iraq has, I think, thirteen huge cement factories that were not functioning at this key moment when cement was in huge demand during the early days of the reconstruction. Cement was being imported from abroad. The Minister, Mohammad Tawfiq, was begging Bremer to just get some emergency generators -- because, of course, the electricity was still out -- to get these factories working. He was just shut down.

He said he was shut down for ideological reasons and also for financial reasons -- that the strategy was simply to let these companies falter. From a financial point of view, if you resuscitate these firms -- if you bring them up to standard and you get them working, then they are going to sell for more. Of course, that is in Iraq's financial interest, but it's not in the interest of the foreign companies in whose interest Paul Bremer was writing the world's most generous foreign investment laws.

What Paul Bremer did was to write an investment law that is more liberal than any in the world, that allows 100% foreign ownership and 100% expropriation of profits. At the same time, he systematically starved out Iraq's assets and devalued them, so that they could be sold on the cheap. I would certainly go that far. That, to me, was clearly part of the plan, and I got that from Iraq's Minister of Industry.

I just want to add one more thing, though, to this issue of incompetence and the strategy around that. There's one thing I'm not sure about in all of this. I feel that all this generation of politicians has been doing for the past thirty years is waging their war on big government. These are not builders. These are not people who really know how to build systems. I think they never even paused to imagine that they might need more people on their own side to implement these radical plans. They had something like six guys in charge of privatizing Iraq's infrastructure. They understaffed their own privatization initiative. Such was their ideological commitment to starving out the state and boosting up the corporate sector. I think of them not simply as capitalists, but as corporate supremacists. I think they sabotaged their own plan, but I don't think their plan was to have abject chaos.

BuzzFlash: In the Shock Doctrine, you discuss the Milton Friedman school of capitalism, and the Paul Bremer school of capitalism, as a form of capitalism that is so radical it takes advantage of nations -- or cities, in the case of New Orleans -- that are in economic and social crisis and upheaval. It's almost economic anarchy. It's a relatively unregulated, unfettered marketplace for multinational corporations, allowing them to go in with pretty much free rein.

Blackwater provides one an example. The Iraqi government said, get them out. They're killing our civilians. The U.S. waited four days and said no. Well, did we bring in these companies and just let them have their way, believing that everything will improve that way? It is capitalism without any rules or regulations, left to the devices of the multinational corporations. Is that really what they want?

Naomi Klein: I can't read their minds, but I think it's really quite complicated and more of a rationale for unfettered greed than it is an actual ideology. I don't actually believe it's an honest intellectual project. This whole crusade has always been funded and bolstered and coddled by the wealthiest interests in the world and in this country. The "paid thinkers" at the University of Chicago economics department and business school and the right-wing think tank complexes think very profitable thoughts. And we see a Hobbesian nightmare created when they get their way, this chaos and anarchy.

The question I think that you're asking me is, is this really what they want? I think it is. We have to keep reminding ourselves that this is enormously profitable for a very small sector of the population. It isn't a failure for everyone. Was this was some sort of master plan? I don't think there is actually long-term planning at work here. I think that we need to consider the possibility that free market theory is just an after-the-fact rationale for unfettered greed.

The idea that, if you are free to pursue your own interests, you will benefit the most number of people, is a very handy rationale for this sort of corporate gouging that we're seeing. That's why I think that there isn't a great deal of intellectual honesty, even among the people who we describe as ideologues, because you really can't separate this ideological campaign from the economic interest it has always served and is continuing to serve.

In this historical moment that we're all agreeing is hideous and chaotic, sixteen employees at Goldman-Sachs got $16.5 billion in bonuses. Exxon-Mobil earned $40 billion in profits. These are all breaking world's records. If the goal, as I'm arguing in the book, of the Chicago school of economics was really a class war, a revolt of the elite against the New Deal, then it has been enormously successful. I actually think we can believe that, while simultaneously saying they're probably not thrilled about the chaos and the massacres. These are all just unfortunate side effects-- the collateral damage -- in the face of the goal.

BuzzFlash: Is one of the basic premises of your book that the school of unfettered capitalism says greed benefits everybody overall? It's trickle-down. Do they truly believe that this will benefit, in the end, the Iraqi people?

Naomi Klein: I don't think they do. No. I think there's an intellectual appeal to the system in its logical completeness, in its simplicity. But I'm quite clear in the book that this school emerged as a force for economic and political reasons. The Latin American Chicago Boys were trained at the University of Chicago because Latin America was moving to the left, and it threatened U.S. investment interests. It was not an organic intellectual process. It was a policy of the U.S. State Department to bring a group of students to the University of Chicago and turn them into ideological warriors who would go home and fight the left and protect the interests of the U.S. multinationals.

I think there's certainly an intellectual appeal to the system, and I think Milton Friedman was a gifted popularizer. Any ideology that claims to have all the answers is going to have its true believers, but, that said, I think it would have been pretty much dead in the water, were it not for the direct political and economic support it got from the most powerful multinationals and governments in the world.

BuzzFlash: Clearly, some reviewers of your book have been taking shots at you and saying it's kind of radical to say that Milton Friedman's school are just capitalists who prey on disaster or on misery. How do you respond to that criticism?

Naomi Klein: I knew this was going to be a controversial book, so I'm not surprised by the criticism. I think my argument has been deliberately misrepresented in order to score political points. I'm very clear on what I mean in the parallels I'm drawing with prisoner interrogation, with torture.

I'm looking at this idea of shock treatment and the parallels with real shock treatment. I didn't choose this metaphor. This was a metaphor that was chosen by free-market economists to describe their work. I took their metaphor seriously, and did a lot of research into real shock treatments, and real shock therapy and its connection to torture, because I think the language people choose tells us something about them.

I think economists tend to be fairly cavalier with language, and they love disease metaphors. They love to pass themselves off as doctors. But most people who pay attention to culture are aware that that kind of violent language, and the use of shock as metaphor, as Susan Sondheim wrote, reveals something about the people who use that language. It also endangers us, because once you have misdiagnosed a people as fatally ill, then any treatment you would like to prescribe is justified because, after all, the alternative is death, right?

This is why we have to pay attention to the language people use. I am very clear in the book that I'm looking at torture as one of the tools that has enforced these policies that were rejected by majorities.

Latin America in the Seventies is a pretty irrefutable example. When you are trying to turn Chile into a laboratory of the most radical vision of free markets ever attempted anywhere -- this country has just elected a socialist president -- you're obviously going to need some sort of strategy to deal with the fact that the majority of the people completely reject your world view. That strategy was state terror -- rounding up people, and summary executions, and a policy of mass torture and rendition. So I talk about torture as an enforcement policy, as a tool of enforcement for these unwanted policies. Torture is an indicator of a regime that is doing something that does not have majority support.

I'm not saying that the free market economists are the only ones who do this. Saddam did it. The French in Algeria did it. Israelis do it. If you're occupying people against their will, if you're pushing through policies that people reject as you are trying to hold onto a military dictatorship when you're loathed by your population, you need to use force. The reason why I look at this is that it is a challenge to the dominant fairy-tale myth of our time, which is that these corporate supremacy and free market ideas are not just compatible with democracy, but synonymous with it. That's why I look at torture.

I also look at torture as the microcosm of the psychology of disaster capitalism. And that's where the film comes in. It draws the parallel between what is actually written in the CIA interrogation manuals, talking about how to induce regression, and opening up a window of opportunity, and then taking advantage of that window of opportunity to get information and confessions out of prisoners. That is a remarkably similar phenomenon to what happens to all societies that go into shock after a disaster.

I'm not saying they are put into shock deliberately, but they go into shock after a major disaster, and then have that shock deepened deliberately by their political leaders. The window of opportunity opens up, and it is deliberately exploited, whether it's using a window of opportunity in New Orleans to close down housing projects, or using the chaos of civil war in Iraq to ram through an oil privatization law.

People get angry about this because I'm making a moral judgment on them, and they don't like it. They're fine with having a critique and keeping this just to a policy discussion. But I talk about the morality of taking advantage of a traumatized people to deliberately exclude them. I'm saying this is the moral equivalent of stopping by a car accident scene and, instead of helping, you pick someone's pocket.

BuzzFlash: From my perspective, the defining issue of whether the United States supports another country -- that is to say, chooses not to invade that country, or actually gives them diplomatic support -- is not the issue, as Bush claims, of bringing freedom or spreading democracy, but it is whether or not the country is economically open and cooperative to the United States' system in terms of unfettered capitalism and the provision of natural resources.

An example is Uzbekistan. We're friendly with a mad, tyrannical, torturing, barbaric dictator there. That's fine. But Saddam was horrible, because he was starting to threaten to tighten the screws on oil. The same thing with Noriega. He was fine with George Herbert Walker Bush until he started freelancing a bit, and correcting us economically a bit. Is the role of the U.S. government to spread its radical economic theory, rather than to spread democracy, as a priority? We aren't too hard on Burma.

Naomi Klein: Yes. I think if we follow the coups, in all of the places where the U.S. has been involved in regime change -- gunpoint regime change -- armed intervention takes place, not when states threaten the freedom or human rights of their people, but when they threaten, or are seen as a threat to, a very specific economic interest.

BuzzFlash: We saw that in the 1953 overthrow of a democratically elected, charismatic leader in Iran. He wanted to gain at least some control over the British oil concession.

Naomi Klein: Exactly. That was the first CIA-sponsored coup.

BuzzFlash: That, in many ways, lays the seeds of the conflict with Iran today. Then we see another aspect in the film, Life and Debt, which is about the idea of World Bank subjugation of Jamaica. How does the World Bank figure into this?

Naomi Klein: In the Eighties and Nineties, the primary shocks that advanced radical free-market transformations of countries were not the coups and military torture that enforced these radical transformations in the 1970s. In the Eighties, you had the so-called democratic wave, and the major tool of enforcement became debt. In this moment when dozens of countries around the world were liberating themselves from tyrannical regimes, the decision was made to force new democratically elected governments to pay the debts of their former dictators, of their former oppressors. The idea was to pass on the debt in the name of market discipline.

One of the things you have to remember about a country that has come out of a reign of terror is that it is actually quite timid, as a rule. The reality is that movements of liberation are often tentative, and when you have people who have been terrorized quite systematically for a couple of decades, they are not likely to take huge risks that could invite more terror. One example would be Argentina in 1982, when finally the junta falls. Thirty thousand people had been "disappeared." And finally you have an elected government.

The transition is a negotiated transition, and this is a key thing. You brought up the pattern of pulling support from dictators when they start to become threats. I think there's also a pattern of realizing when a dictator's days are numbered, and making the judgment that it is more strategic to gain control over the transition process, and to prevent it from being a true revolution. Then the energy gets poured into supporting the opposition with funds and imposing conditions.

In a country like Argentina, on the one hand, the government is really warned off seeking prosecution for the crimes of the dictatorship, so the criminals of the dictatorship are still free and are still a threat to the population. This is key. It's a key method of enforcement. The other condition is passing on the inherited debt.

Then the World Bank, the International Monetary Fund and the different regional banks and lending institutions play their roles. In a way, it was a handover from the tyranny of dictatorships to what could be called the dictatorship of debt. You had this handover of very large debts accumulated under oppressive regimes. Then you have the Volcker shock -- the Paul Volcker interest rate increase -- which was like a taser gun fired from Washington to the global south. Suddenly these debts that were already very large tripled or quadrupled in size. Suddenly these countries are spiraling in hyper-inflation. This is called the debt shock, or the Volcker shock.

So this was another kind of shock that enforced these policies. When countries went to the World Bank and the IMF asking for aid, they were given loans with structural adjustment programs attached. The structural adjustment programs were Chicago school, free-market makeover plans.

BuzzFlash: In Jamaica, in essence, you had the IMF and the World Bank come in and say the price to get out of debt is to trash your indigenous economies. Your people have to work for and buy products from the United States and Western Europe at a lower rate, which then puts your indigenous dairy farm out of business, your indigenous hog farm, and so forth.

Naomi Klein: That's always been a key plank of what's called the Washington Consensus package of policies -- enlisting trade tariffs, and stripping protections for national industry.

BuzzFlash: In essence, a country like Jamaica becomes an economic colony of the United States. Its indigenous industry is ruined. I recall, in Life and Death, the DVD, the dairy farmers and poultry farmers went out of business because the U.S. unloaded products at a very cheap price on Jamaica.

Naomi Klein: In Iraq, we saw a more dramatic phenomenon. Immediately after Paul Bremer's arrival, he declares the country open for business, and allows absolutely unrestricted foreign imports to flood across the borders. Not only were there no tariffs, but there was no health and safety inspection. There was absolutely nothing -- just wide-open borders. Iraq's local industry was told, welcome to the free market. Compete.

Now, this would have been unfair under any circumstances. But in Iraq, you really see the absurdity of the claim that there is any belief in the free market, because, of course, at that point, Iraq didn't have electricity. Iraqi industries were being invited to compete in the dark. They couldn't even get their machines running. They were also not given emergency generators. Very graphically, it puts a lie to the claim that this is anything but a legalized looting.

BuzzFlash: In the United States, as we've said, the C word -- Capitalism -- is sort of a sacred word. If you even begin to talk about it or question it, the corporate press condemns you as a radical. Obviously, you and I and others see the Milton Friedman school of economics as practiced by Paul Bremer and countless others -- Kissinger in Chile, and so forth -- as radical. As I've said earlier, it's almost tantamount to economic anarchy to believe that if you just let these corporations loose, somehow it benefits everyone without regulating them. What do you say to people who say that you're radical? Their view is that you are denouncing the basic economic structures of the Western economies, particularly the United States, and, to a certain degree, Canada. What, then, would you offer as an alternative economy?

Naomi Klein: I'm not really in the business of offering alternative economies. What I do in the book is I show that every one of the key junctures that I re-examine, where this ideology of unfettered capitalism took one of its great leaps forward -- like Russia in the Nineties, and China in the late Eighties, Poland after the election of Lech Walesa of Solidarity, South Africa in the mid-Nineties -- in all of these cases, the rhetoric was that there is no alternative, this is the end of history, and that explained the fact that these countries accepted this radical prescription of free market economic shock therapy.

What I do in the book is sort of pull out the alternatives that existed at the time, and that people voted for and wanted at the time but were never allowed to try out or test. I'm not the type of writer who lays out ten-point plans for how economies should function -- I'd be interested to read that, but that's not what I write. I am certainly interested in what I consider to be genuine democracy, true self-determination, and that deep democracy that actually has the muscle to affect economic policy.

That's the vision of democracy that emerged in all these key transition moments. In Poland, in 1989, when Poles voted overwhelmingly for Solidarity, if you read Solidarity's economic program, the vision was to transition from a state-controlled communist economy not to a radical free market economy, or what Lech Walesa, at the time, called the evils of capitalism, but some kind of a democratic third way, which would have as its centerpiece the transformation of the state-owned companies into worker-run cooperatives. I can't tell you for sure whether that would have worked, but I certainly think it was worth a try. If we look at what Poland has now -- 40% unemployment for young workers, and a rise in fascism in that country -- I don't think their alternative worked particularly well.

South Africa is another example where I pull one of these alternatives out of the dustbin of history. The economic program of the African National Congress -- what they were elected to implement in 1994 -- was laid out in the Freedom Charter, which remains the statement of principles for the ANC.

What the Freedom Charter promised, and what Nelson Mandela promised before he left jail, was the nationalization of the mines and the banks and these key industries that were the symbol of apartheid, with the concentration of wealth in the hands of a tiny white elite. The ANC was very clear that true liberation was not just voting. It had to include redistribution of this wealth that was based on a racist system. And that never happened either. The market shocked ANC in such a way that the leadership didn't have the courage to try these policies. It wasn't because people didn't want it. In fact, they desperately wanted it. The country is increasingly in revolt today because of the broken promises of liberation and the widening gap between rich and poor in that country.

So my goal in the book is, first, to challenge the myth and the radical vision that asserts that capitalism and democracy go hand in hand. Secondly, it's to address the myth that every alternative policy has already been tried and failed. I actually think that there isn't a crisis of ideas. I think there's a crisis of confidence in those ideas. I think the crisis of confidence is very much rooted in this lie that every alternative but this radical vision of capitalism has been tried and has failed.

I think, being a Canadian and living in a country that has successfully had a form of social democracy for many years, even if we have a right-wing government that's trying to dismantle it right now, I know it's not a disaster. In fact, at its best, Canada had the highest-ranking standard of living, according to UN measures, year after year.

I don't actually think the book is extremist, because these free market fundamentalists have been given a free ride.

BuzzFlash: Well, as George Lakoff would say, they framed the notion that their radicalism is centrist, when it really is radicalism. Therefore, a critique of it seems extremist. But it's what they've redefined as the center that's extremist.

What you're essentially saying is to let people decide. If we have true democracies, the people can determine the economic fates of their own nations.

Naomi Klein: Yes.

BuzzFlash: Thanks, Naomi.

Naomi Klein: Great to talk to you.

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