In her new book The Shock Doctrine: The Rise of Disaster Capitalism, Canadian writer Naomi Klein uses the example of public sector dismantling in both New Orleans and Iraq as an illustration of Milton Friedman's idea that crisis presents an opportunity to push a pre-existing agenda and achieve sweeping change. This is both an important point and a timely warning, as the developing international credit crunch is arguably approaching a critical phase. The inability to roll over short term commercial paper, often backed by dubious loans, is presenting an enormous challenge to a banking system short of cash. The coming economic upheaval could be sufficient to precipitate far-reaching socio-political changes on a global scale.

On the energy front, CIBC World Markets claims that Canada has 50-70% of the investable oil reserves in the world, for oil majors increasingly shut out of producing regions. However, those reserves suffer from a shortage of pipeline capacity for both inputs and output. Saskatchewan decides against 'clean coal' on cost grounds, but continues to maintain a low royalty, low tax regime for natural resources. In the meantime, the Canadian wind industry is being consolidated in fewer and fewer hands, and there is strong resistance to uranium mining in rural Ontario.

As for environmental news, Holland is developing a 200 year plan for climate change, but with the assumption that sea-levels will rise very little despite evidence of rapid change in Greenland's icesheets. There is considerable concern over the potential for warming to activate microbial oxidation of the organic matter of the arctic tundra, which could ignite a devastating spiral of positive feedback.

Naomi Klein: The Shock Doctrine

In one of his most influential essays, Friedman articulated contemporary capitalism's core tactical nostrum, what I have come to understand as "the shock doctrine". He observed that "only a crisis - actual or perceived - produces real change". When that crisis occurs, the actions taken depend on the ideas that are lying around. Some people stockpile canned goods and water in preparation for major disasters; Friedmanites stockpile free-market ideas. And once a crisis has struck, the University of Chicago professor was convinced that it was crucial to act swiftly, to impose rapid and irreversible change before the crisis-racked society slipped back into the "tyranny of the status quo". A variation on Machiavelli's advice that "injuries" should be inflicted "all at once", this is one of Friedman's most lasting legacies....

....I started researching the free market's dependence on the power of shock four years ago, during the early days of the occupation of Iraq. I reported from Baghdad on Washington's failed attempts to follow "shock and awe" with shock therapy - mass privatisation, complete free trade, a 15% flat tax, a dramatically downsized government. Afterwards I travelled to Sri Lanka, several months after the devastating 2004 tsunami, and witnessed another version of the same manoeuvre: foreign investors and international lenders had teamed up to use the atmosphere of panic to hand the entire beautiful coastline over to entrepreneurs who quickly built large resorts, blocking hundreds of thousands of fishing people from rebuilding their villages. By the time Hurricane Katrina hit New Orleans, it was clear that this was now the preferred method of advancing corporate goals: using moments of collective trauma to engage in radical social and economic engineering.