Daily Times

The correlation between Shock Doctrine and Neoliberalism originated from the work of Psychologist Ewan Cameron who researched the people who have a connection with communism during the Cold War in the early 1960s. He introduced Electroconvulsive Therapy (ECT) in which a shock was given to people to reprogram and redesign their memories which the communist lineage tried to remove. Professor of Chicago School Milton Friedman took the idea of Shock Therapy to surface a new concept of Disaster Capitalism. The fundamental gist of the Chicago School group of economic policymakers was to implant the desired ideology in any state by giving shock to the states and nations in the first place. Neoliberalism, or Economic Liberalism in the modern lexicon, shared its roots in the philosophy of Milton Friedman and his disciples at the Chicago School of Economics. The foundational philosophy of Neoliberalism is rooted in the Shocks to the existing structure of nations’ economic positions and then implementing the Neoliberalism Economic Doctrine in such nations.

Neoliberalism prevails in the state as an experiment doctrine when such states are under some kind of recession and natural calamity the owners of Neoliberalism appears as the saviour of such states and aids them, which eventually open the road for implementing their economic model and hand over them the economic structure of the states. Disaster Capitalism prevails in states based on these two doctrines; firstly, the Shock Therapy and secondly, the Crisis Therapy. Naomi Klein a Canadian writer in her book, “The Shock Doctrine,” outlined the three strategies through which Neoliberalism catches its roots in national policies. Complete freedom to market, removal of the public sphere in the economic policies, and cutting down the social spending in the state benefitted a small elite of the capitalist class. If these principles come into force in any state policy, it gives birth to a new kind of oligarchy in which a few politicians and corporate owners combined and hand over the public sphere to private hands. Fundamental Capitalism prevails and the welfare features of the state collapse which leads to the division in society and empowerment of few at the disposition of many and eventually causes social polarization and instability in the state.

The fundamental policies of Milton Friedman were impracticable for American society due to the strengthening of democracy.

It is easy to shock such states where democracies are backsliding and eroding so the people will be compromised by the elite culture. The fundamental policies of Milton Friedman were impracticable for American society due to the strengthening of democracy. So they decided to choose the Middle Eastern and Latin American States to make an experiment on the Shock Doctrine of Neoliberalism and Disaster Capitalism. In 1953 the President of Iran Mohammad Mosaddegh decided to nationalize all oil corporations in Iran under the governmental rule to delineate the Welfare Policies for the state citizens. A kind of Shock was given to the Iranian State by a Coup against the President. He was dismissed and brought Shah Mohammad Reza came into the Political realm of Iran and was in favour of the narrow elite and corporate. The crisis was created wilfully to enforce the neoliberal economic policies of the free market at the hand of fear of communism in the Iranian State.

In Chile “shock and awe” was created when the neoliberal-friendly government came and start privatization and selling government-owned institutions to the private sector. The private sector started to import products and labour from overseas sources and the regional economy collapsed. This led to weak economic growth, unemployment, and inflation. Chile is now in a state where the inequality index is high. Neoliberalism promised short terms benefits to the states which are very lucrative and provocative for states and governments in times of social turmoil and economic stagnation but in the long-term, it extracts the national resources to benefit the MNCs and international corporations at the hands of the peripheral states to enrich the core states.

Global Warming is an existential threat to the world population. With the advent of the Neoliberal economic model, the independent democratic decisions of the states are underpinned by multinational corporations. These corporations through aid and political engineering authorized the friendly policies from the states in the third world countries and exploit the climate policies because such developing states are least concerned about the climate. The weak climatic policies in the underdeveloped states appear as heaven for the MNCs and they excessively exploit the climate of such countries for their corporations. In her book “Capitalism versus The Climate “Naomi Klein argues that Neoliberalism functions at the principle of Extractivism, which is not reciprocal. Neoliberalism in underdeveloped states extracts natural resources and left the sites poisoned and drained.

Neoliberalism should add the features of reciprocity and ethical consumerism to function as an effective and humane model of economics otherwise from climates of economies of the Peripheral states will gradually plummet and collapsed in the end.

The writer is a published columnist.