The Modern Shock Doctrine

World Bank

Naomi Klein in her book ‘The Shock Doctrine’ (2007) demonstrated how neoliberalism was imposed on countries all over the world. For some, such as Chile, that involved invasions for others it was structural adjustment programmes. Yet, unsurprisingly, invasions and structural adjustment programmes are reviled by global citizens as the worldwide protests against Iraq showed as well as the riots against structural adjustment programmes in the early 2000s. In order to evade an image problem the modern shock doctrine involves ensuring countries impose neoliberalism on themselves.

This is done through the World Bank. The World Bank publishes yearly reports titled Doing Business Report which positions countries on the ‘ease of doing business’ and the less regulations a country has, the higher their position on the table. The report’s ranking system has been identified as a highly influential device for countries instigating regulatory reform, and since its conception a quarter of regulatory reform in the world has been influenced by the Doing Business Report. The power has essentially shifted to investors and corporation as countries respond to these reports by removing regulations to please the cartel that is the transnational class. The report is essentially encouraging a global trend to ‘race to the bottom.’

The indicators on the Doing Business Report include ‘employing workers’ with countries being scored down for having regulations such as minimum wage and paid vacations. The ‘paying taxes’ indicator reprimands countries in the rankings for having corporate income taxes, dividend taxes as well as financial transaction taxes which are crucial in preventing another financial crisis; while the ‘registering property’ indicator pressurizes countries into removing regulation regarding buying land which consequently has triggered a race for corporate land grabbing in developing countries.

The winners are evidently corporations as the indicators in essence favour corporate interest. Thus the indicators hold a pro-corporate ideology. Corporations gain from deregulation as it simply means more profit and less responsibility. As shown countries are becoming victims to this new shock doctrine although the state may be a winner economically due to the increase corporate activity countries gain the less regulation they have. Global citizens are being impacted negatively, hence they are losing structurally and not voluntarily as citizens and nations do not have a choice on whether to appear in the rankings. Hence it is being forced upon them. Global citizens are losers in absolute terms as this report leads to nations dismantling the social regulations that were place such as corporate tax which would fund vital public services such as education and hospitals.
We have reached a point in history where global citizens have become the losers in absolute terms as our standard of living is disparaged our health, happiness, and democracy does not count for anything anymore and effort to improve it has been deserted. Ultimately what matters more than global citizens is the ‘ease of doing business.’

Marte Vokshi


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