Empirical test of "Shock Doctrine"

Ok, so this September we've had a big "Shock", a crisis in the financial system. Naomi Klein's thesis is that it will be used to torture the public with free-market reforms. The standard libertarian thesis is that it will be used to torture the public with increased state power and spending.

So what are you seeing in the news: Disaster Capitalism or Disaster Socialism? Hmm...the 3 largest corporate bailouts in the history of the country in rapid succession (AIG, FNM, FRE), and now a proposal for the largest single spending bill ever, with the insistence that it be hurriedly passed.

Guess the libertarians win this round.

Really it's just common sense - in times of crisis, does power get decentralized and given up? Do politicians usually react to emergencies by passing new laws or undoing old ones? The answer is pretty damn obvious. One can cherry-pick occasional rare situations where things go the other way, but in general, war and crisis are the health of the state. (hat tip to Steve Horwitz.)

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I am pretty sure Klein will

I am pretty sure Klein will be comforted in her belief though. After all, aren't they are using the crisis as a pretext to give money to the financial companies, "the ultimate capitalists"... they are using the crisis to divert tax money from social projects to pay bankers, etc, etc.

Does power get decentralized and given up? Do politicians usually react to emergencies by passing new laws or undoing old ones?

You perceive the asymmetry between the state favoring capitalism or socialism. These people don't. These people take state power for granted, everything is the will of the state, therefore it is never a matter of freedom but of policy. The state is always seen as imposing a policy, which might be good (socialist) or bad (capitalist).

Doesn't Really Hit Klein...

Because what she's reply is, OF COURSE these corporate big-wigs, when it comes time to bail THEMSELVES out, drop the free market nonsense. When they push that is when they want to buy some poor contry's state-run oil company at a fire sale price."

I'm not saying her thesis is (entirely) correct, just that _this example_ is pretty easy for her to handle.

Unfalsifiable?

OF COURSE these corporate big-wigs, when it comes time to bail THEMSELVES out, drop the free market nonsense.

But her general thesis is that crisis is used to push Friedmanian neoliberalism, so presumably if the crisis were used in this case to push for deregulation, she would consider herself vindicated.

So in short, her theory is unfalsifiable - at least in this respect. Whatever happens, she can claim vindication.

Confusion of concepts

Capitalism "You keep using the word. I do not think t means what you think it means."

Someone needs to teach Ms. Klein the meaning if the word Mercantilism so she can accurately talk about this stuff.

Naomi Klein dutifully

Has her cake and eats it

She actually has it both ways.

What Gingrich's wish list tells us is that the dumping of private debt into the public coffers is only stage one of the current shock. The second comes when the debt crisis currently being created by this bailout becomes the excuse to privatize social security, lower corporate taxes and cut spending on the poor.

Whatever happens - a step toward socialism or a step away - will be taken as confirmation. And if the government steps toward socialism, hits a financial brick wall, and then backs away, then that will simply be double confirmation.

Promoting statism? Or promoting the powerful?

Haven't read the book. That said, the blurbs suggest to me that Klein's thesis is that people in power seek to use every emergency, natural or manufactured, to reinforce their power at the expense of everyone else.

Thus, while people on this blog see the world in a libertarian-vs.-statist prism, I sense Klein sees the world in a powerful-vs.-everybody-else prism. "Free market policies," "emergency measures," "national security measures" -- the powerful are happy to embrace any theory or no theory to promote their own power.

But that doesn't make the thesis unfalsifiable. Just demonstrate how the proposed bail-out will promote the interests of the majority at the expense of the powerful, and you'll have refuted her thesis.

And good luck with that!

Not Klein's thesis

That said, the blurbs suggest to me that Klein's thesis is that people in power seek to use every emergency, natural or manufactured, to reinforce their power at the expense of everyone else.

That's a fine thesis and it is not Klein's thesis.