The Shock Doctrine

The Shock Doctrine: Using Crises to Impose Pro-Corporate Policies In the aftermath of Hurricane Katrina, as the residents of New Orleans grappled with loss and devastation, a different kind of activity was stirring in the halls of power. Corporate lobbyists and politicians saw the disaster not as a tragedy, but as a clean slate and a golden opportunity. Economist Milton Friedman, then ninety-three, proposed that instead of rebuilding the city’s public schools, the government should use the disaster to permanently convert the system into a network of private charter schools. Within nineteen months, while many of the city’s poorest residents remained in exile, the public school board’s reach was reduced from 123 schools to just four, and thousands of unionized teachers were fired.

This phenomenon, where orchestrated raids on the public sphere follow catastrophic events, is the core of disaster capitalism. It is the practical application of the shock doctrine: the belief that only a crisis—actual or perceived—can produce the kind of rapid, fundamental change that would be impossible during normal times. While ordinary people seek to salvage and repair their lives after a disaster, disaster capitalists aim to erase what remains of the public sphere and replace it with a corporate model. This strategy relies on the psychological state of shock, which leaves a population disoriented and unable to protect its own interests, much like a prisoner undergoing coercive interrogation.

The roots of this doctrine trace back to the mid-1970s in Chile. Following General Augusto Pinochet’s violent coup, the country was traumatized by both political terror and hyperinflation. Under the guidance of Friedman and his followers from the University of Chicago, Pinochet imposed a rapid-fire economic makeover involving mass privatization and deep cuts to social spending. This economic shock treatment was facilitated by literal shocks in torture chambers, used to break the will of those who resisted the new order. This pattern—a collective trauma followed by radical economic engineering—has been repeated globally, from the Tiananmen Square massacre in China to the collapse of the Soviet Union and the aftermath of the 2004 Indian Ocean tsunami.

The shock doctrine eventually returned to its place of origin in the United States following the attacks of September 11, 2001. The Bush administration utilized the resulting atmosphere of fear and disorientation to launch a privatized War on Terror abroad and create a massive corporate security complex at home. This led to a new economy where war and disaster response are no longer just means to open markets, but are themselves the primary markets. Functions once considered core to the state, from intelligence gathering to disaster relief, were outsourced to private firms, turning the government into a venture capitalist that funds its own contractors. This corporatist alliance between big business and big government does not free the market; instead, it merges political and corporate elites to appropriate public wealth.