Analysis Of Naomi Klein's Shock Doctrine And Golden Straitjacket

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Naomi Klein’s “Shock Doctrine” and Tom Friedman’s “Golden Straitjacket” characterize the policies needed to globalize a country’s economy. Both policies follow similar underlying themes, yet they take entirely different positions on whether or not these policies help or harm a country’s economic development.
The chapter given on Naomi Klein’s “shock doctrine”, discusses the use of “economic shock therapy” to remodel South American economies in the 1970s. The chapter focuses on the coup in Chile led by General Augusto Pinochet and a group of Chilean economists that had been trained at the University of Chicago in the Economics department. The department had been funded by the CIA and advised by Milton Friedman. Friedman, a big believer in ultra …show more content…

Countries must strap themselves in this jacket in order to receive the “golden” benefits of free trade and capitalism. Once on, the garment causes countries’ economies to grow and politics to shrink, but also limits the economic policy and government choices of those in power. The only way to get more room to maneuver in the Golden Straitjacket is by growing it, and the only way to enlarge it is by keeping it on tighter. That is its one major trait: the tighter you wear it, the more economic success it produces and the more padding you can then put into it for your …show more content…

According to Chapter 7 in The Lexus and the Olive Tree, “the global market today is an Electronic heard of often anonymous stock, bond and currency traders and multinational investors, connected by screens and networks.” If governments deviate too far from the golden rules, it will cause the herd to stampede away. If it accepts and adopts the “golden rules”, its country is rewarded by investment capital from the international financial markets. When and if a country decides not to bear the Golden Straitjacket, the herd flees and takes all their capital with them. They are able to do this through credit-ratings agencies such as Moody’s Investors Service and Standard & Poor’s. They are investigators for the Electronic Herd that roam through the worlds economies, constantly looking over countries and identifying those that are slipping out of the

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