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In economics, “shock therapy” refers to a series of neoliberal policies—such as price deregulation, privatization, and alleged state austerity—that “must be applied” simultaneously to what is perceived as a “sick economy.” The term “shock therapy” is based on the violent use of electroshock in the late 19th and early 20th centuries, amethod with zero medical or psychiatric benefits that later became a torture mechanism used by the CIA in interrogations. The supposed logic behind its use is that electroshock is a violent “but necessary” intervention if we want to reset something, to impose a new mental, political, or economic model.
In 2007, journalist Naomi Klein published The Shock Doctrine, a book that has become a classic. In a post-9/11 world, amidst the war in Afghanistan, and at a time when President Bush generated criticism and rejection (when we thought someone dumber or more evil than him couldn’t become president of the United States), Klein attempts to make sense of the changes in American politics. Her starting point is the work of the revered economist Milton Friedman, whose legacy served as a roadmap for neoliberalism as state policy, and was tested in various “third-world” countries. Today, the shock doctrine seems to be an ingredient in the recipe of several leaders with simultaneously authoritarian and libertarian governments (a conceptual oxymoron that has proven true in practice).
In Klein’s reading of Friedman, “crises” or “moments of shock” are opportunities to establish neoliberalism. In Klein’s words, it is “using moments of collective trauma to engage in radical social and economic engineering” (Naomi Klein, The Shock Doctrine, Picador editorial, 2007, hereinafter “TSD,” P. 9). From this perspective, a crisis—which could be the result of a natural disaster like Hurricane Katrina, an armed conflict, or an economic catastrophe—is the perfect opportunity to impose a new authoritarian and unequal regime that favors capitalist accumulation. To achieve this, it is necessary to bombard the public with distractions, ranging from smokescreens to crimes against humanity, so they have neither the time nor the means to protest the new system.
For Klein, Friedman’s recipe is as follows: “First, governments must remove all rules and regulations standing in the way of the accumulation of profits. Second, they should sell off any assets they own that corporations could be running at a profit. And third, they should dramatically cut back funding of social programs” (TSD P. 69.) The idea is to privatize everything: the healthcare system, the postal service, education, pensions, and natural parks. The argument is that the government is corrupt and private enterprise is more efficient. Still, the result is that many of these services, which are of public interest and benefit, begin to be run for profit, or else, why would private enterprise care about them? Deregulation is key so that people with more money can accumulate even more; it favors the creation of monopolies and, ultimately, helps corporations and individuals to have much more power than States. Defunding social programs makes life more precarious, undermines the middle class, and deprives the working class of the time and political power necessary to organize themselves.
“For more than three decades [from the 1970s to the turn of the century], Friedman and his powerful followers had been perfecting this very strategy: waiting for a major crisis, then selling off pieces of the state to private players while citizens are still reeling from the shock, then quickly making the ‘reforms’ permanent.” In one of his most important essays, Capitalism and Freedom, Friedman says: “Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.” Friedman estimated that “a new administration has some six and nine months in which to achieve major changes” (TSD P.7), as he stated in Tyranny of the Status Quo.
Shock therapy was Dr. Friedman’s prescription (with the backing of many institutions like the International Monetary Fund) for countries transitioning from a communist government and a planned economy to a free-market model. The term has been used to refer to the reforms of Pinochet’s regime, to address hyperinflation in Bolivia under the presidency of Víctor Paz Estenssoro, and during post-communist Russia. Although in some cases, these measures temporarily boosted GDP, all of them efficiently increased inequality. “By 1988, when the [Chilean] economy had stabilized and was growing rapidly, 45 percent of the population had fallen below the poverty line. The richest 10 percent of Chileans, however, had seen their income increase by 83 percent.” (TSD P.105.) Traditional standards for evaluating the economy measure wealth production but not inequality, which is why we end up saying that a country with almost half its population below the poverty line has a “healthy” economy. Klein notes that Sergio de Castro, one of the Chicago Boys and Pinochet’s minister of economy, used to say that to impose the free market, it is always best to have an authoritarian government. “There is no peaceful way to take away from millions of citizens what they need to live with dignity,” (TSD P.157.) Klein points out.
Implementing these measures would not have been possible without the use of a narrative strategy that justified and legitimized the use of violence and the impoverishment of the people. This is why so many right-wing think tanks were created, like the now ubiquitous Heritage Foundation, Friedman’s longstanding ally, mentioned several times in Klein’s book and responsible for “Project 2025”, the Trump administration’s agenda. Also key were the Chicago Boys, a group of privileged economists from around the world, educated in Friedman’s ideas at the University of Chicago, who then returned to their home countries to lead the economics faculties at the most prestigious private universities, ready to enter government with their “technocrat” credentials.
Today, shock therapy is being implemented again, in a 2.0 version that draws on a legitimacy that remains intact in many circles and adapts to new communication formats, such as social media. How have these narratives evolved? How are they similar to the original ones? How are they different? What makes them so effective?
The Bitter Medicine of El Salvador
“Our country is like a sick child. It’s now up to all of us to take a bit of bitter medicine, it’s now up to all of us to suffer a little, it’s now up to all of us to endure a little pain, it’s up to all of us to assume our responsibility,” said Nayib Bukele in his first inaugural address as president of El Salvador. The illness he referred to is, of course, the Salvadoran gangs, and the bitter medicine ended up being the state of emergency established in 2022. In a way, the medicine worked, as El País said at the time: “With more than 58,000 people detained, thousands of complaints of illegal arrests, cases of torture, forced displacement caused by the police and army, and murders inside prisons, the government of the Central American country is getting closer to the goal of defeating the gangs at the cost of the suspension of constitutional freedoms and rights and human rights violations.” In the context of this Friedmanian metaphor, the loss of human rights is just an annoying side effect.
But perhaps the medicine wasn’t so efficient, because in his second inauguration on June 1, 2024, El Salvador was no longer just a “sick child”; now it was an “adult with cancer”: “Imagine a person who goes to the doctor, who has lived for many years, their whole life, sick, with several illnesses, and has practically gotten used to living with them. He suffered from heart problems, one of their kidneys didn’t work, he had hypertension, their liver was failing, and he had lifelong illnesses. Despite that, he was still alive, unwell, but alive.” Bukele continues, listing visits to up to five “doctors,” that is, presidents, whose treatments didn’t work.
“Finally, tired but with a little bit of hope, he went to an eighth doctor. And this doctor told him that this cancer did have a cure. He told him from the very first day that he might have to take bitter medicine, but that he was going to cure him of that cancer. The doctor gave him the treatment, and the patient followed the instructions, until the cancer disappeared. The cancer had disappeared almost completely; the patient was cured. This person decided to trust the doctor without complaining, believing in him, following the prescription to the letter, and everything. Thanks to God and the treatment, he began to get better, until he was cured of the cancer that everyone had told him was terminal.” Bukele is elemental with his metaphors; he is asking the Salvadoran people for uncritical obedience to this one doctor who can cure all illnesses, one after another, until the end of time.
In Bukele’s fable, the patient gets his life back and “could now go out with his family, with his friends, he could now see his children grow up, go to places they couldn’t go before, he felt like he was winning the battle against cancer and that he wanted to live well.” It’s an idea that explains Bukele’s popularity. When Bukele was elected mayor of Nuevo Cuscatlán, he began to exhibit his authoritarian tendencies, which have enabled him to act without seeking approval or permission, and people appreciated this effectiveness, frustrated with previous incompetent governments. He granted urban development permits, and this small city became a hub for industrial development, at the cost of significant deforestation.
In his role as mayor of Nuevo Cuscatlán and later as mayor of the capital, San Salvador, Bukele departs somewhat from Friedman’s path because, instead of cutting social spending, he begins to go into debt to undertake public works projects that reclaim spaces like the Historic Center, which was considered impassable due to insecurity. He built plazas and monuments, again without asking anyone for permission, and the citizens felt there was a tangible change, a recovery of the city, regardless of the significant debt incurred. Bukele also capitalizes on the mistakes of a corrupt and incompetent Left that, when in power, sent the military onto the streets (for the first time since the peace accords) and began to antagonize the courts.
Upon reaching the presidency of El Salvador in 2019, he got to work: In his first 100 days in office, he carried out a “massive dismissal, without due process, of public workers supposedly close to the Farabundo Martí National Liberation Front (FMNL). […] Various state secretariats and programs were dismantled […] including the working groups that were in charge of reparations for the people affected by the El Mozote massacre, […] and the Office of Sexual Diversity, created during the government of Mauricio Funes—of the FMLN.” In February 2020, just over a year into his first term as president of El Salvador, Bukele entered the Legislative Assembly with armed soldiers to pressure the congress to approve funding for the next phase of his “security plan,” which the world would later know as the megaprison called the “Center for the Confinement of Terrorism,” or CECOT.
Bukele departs from the Shock Doctrine in two important ways: instead of making social cuts, he has used state funds to gain power and popularity. During the pandemic, he spent on aid and food boxes that were distributed house to house and were presented as a personal gift from the president rather than a necessary action of the state. “During the pandemic, he also distributed computers and tablets to boys and girls. But that didn’t solve the problem of connectivity and the gap in internet access. As a result, there were people in conditions of extreme poverty who had no electricity but did have a tablet. Bukele spends arbitrarily and without oversight, but I believe his motivation for spending is simply populist,” explains Mariana, a Salvadoran feminist economist, who prefers to withhold her real name due to the current repressive context. If there are public spending cuts in El Salvador today, it’s not due to a political and economic strategy; it’s simply because the money has run out.
El Salvador, Mariana explains, is a tiny country with a small, powerful elite that preceded Bukele. It is made up of the “Fourteen Families,” the fourteen surnames or clans that have accumulated wealth, first through coffee production and export, and later in other sectors such as construction, manufacturing, the financial sector, and imports, in addition to having investments throughout Latin America. In this context, Bukele is part of the new rich, often called “the Arabs,” and this point is important because one of his clear motivations is social climbing. For this reason, in opposition to what the Shock Doctrine dictates, Bukele has expanded the State, which is what allows him to measure power against these elites.
As a result, Bukele has centralized economic power in the State, through subsidies on products and services like fuel, attempting (unsuccessfully) to curb inflation and generating a dependency on the State and an expansion of the bureaucratic apparatus to manage them. Bukele has also announced mega-infrastructure projects that concentrate investment capacity and decision-making power in the State, as well as deregulation measures for the exploitation of natural resources and foreign capital investment. This last strategy has been difficult to realize because, as Mariana explains, “El Salvador is a small country with few resources and an impoverished population.” Bukele, for example, has inflated the country’s gold reserves by claiming that “studies carried out in only 4% of the potential area identified 50 million ounces of gold, valued today at $131.565 billion.” He does this to give the appearance of having an innovative plan to attract foreign investment and to justify the deregulation of mining. But these figures are simply impossible. As a report from the Heinrich Böll Stiftung points out, “These 50 million ounces are equivalent to 1,555 tons of gold, which would represent approximately 2.64% of the world’s known gold reserves. If we do a comparative exercise, 4% of El Salvador’s area (841.64 km²) would contain more gold than all of Mexico, an area that is 2,333.5 times larger and is estimated to have reserves close to 1,400 tons.”
But Bukele’s most public economic adventure has been investing large sums of state money in bitcoin, with complete opacity, and making the cryptocurrency a national currency (alongside the dollar). This move did not go well, as there has not been a massive adoption of the currency in the country (only 2 out of 10 Salvadorans use it), and later, when Bukele had to borrow from the International Monetary Fund, it demanded a reform of the Bitcoin Law to delineate the participation of the public sector.
“Bukele cares more about his popularity than an ideology,” explains Andrea, a Salvadoran journalist who also prefers to use a pseudonym. So far, that popularity has served him to concentrate power, and he has latched onto the idea of going down in history as “a great statesman,” “as the man who managed to turn the most horrible country in the world into the safest country in Latin America.” However, there were two important changes in 2025. On the one hand, the constitutional reform that allows for his indefinite reelection. Both Mariana and Andrea agree that Bukele needs to stay in power to avoid being held accountable for all the corruption and abuses of his government. This changes his communication strategy a bit, as there’s no longer a way to pass off the dictator as a statesman.
The second important change is the arrival of Trump in power, with an anti-migration agenda and intentions to tax remittances, a direct threat to the Salvadoran economy, as these represented 24% of the GDP in 2024, with a record of USD 8.479 billion, making it the second Latin American country that receives the most remittances in relation to its GDP. In this case, the one who has to swallow a bitter medicine is Bukele himself, as the U.S. not only has more power, it also has ongoing investigations against him, such as the one from the Department of the Treasury which, in 2021, affirmed that “the Salvadoran government had a pact with the MS13 and Barrio 18 gangs,” and that “the gangs would have offered political support to the ruling Nuevas Ideas party and in exchange Bukele would have provided financial incentives, cell phones, and prostitutes to gang leaders in prison.” Bukele is also being investigated in the U.S. for the diversion of USAID funds that ended up being used to finance gangs. In any case, Bukele knows how to adapt to this narrative. In mid-2019, Bukele gave a speech at the Heritage Foundation, talking about curbing Salvadoran migration to the United States.
With the illegal deportation of Kilmar Abrego García, a Salvadoran man resident in the United States who arrived at the CECOT “by mistake,” Bukele had his biggest narrative setback. As Andrea explains, “El Salvador went from being all over social media and trending as the ‘safest country’, to becoming the hell you can be sent to if ICE catches you in the United States.”
Mariana and Andrea also agree that, in this context, what follows is greater repression of journalists and human rights defenders in El Salvador, their main opposition. “We all thought the last person to be criminalized would be Ruth, but he started with the most important activist in the country, and that sends a message,” Andrea explains, referring to the detention in May of the renowned human rights defender, Ruth López, from the organization Cristosal, and one of the 100 most influential women in the world according to the BBC. This repression is also a form of shock therapy; it serves to create unease and has pushed many human rights defenders into exile.
Argentina’s Chainsaw
On December 10, 2023, in his inaugural address, Javier Milei announced that what was coming for Argentina was shock therapy: “It must be clear that there is no possible alternative to the adjustment.” Nor is there room for discussion between shock and gradualism. “Firstly, because from an empirical point of view, all gradualist programs ended badly, while all shock programs, except for the 1959 one, were successful.” These words echo one of the most famous shock doctors, Jeffrey Sachs, in an interview with PBS: “Look, gradualist stuff, it jus doesn’t work. When it really gets out of control you’ve got to stop it, like a medicine, You’ve got to take some radical steps, otherwise the patient is going to die.” (TSD P.187).
Milei is an economist and an admirer of the Chicago School, so he states it directly without even trying to find a simile. “The conclusion is that there is no alternative to adjustment and no alternative to shock. Naturally, this will have a negative effect on the level of economic activity, employment, real wages, and the number of poor and destitute; there will even be inflation, it’s true, but it’s not very different from what has happened in the last 12 years. […] This is the last bitter pill to swallow before we begin the reconstruction of Argentina.” Then, just like Bukele, he includes in his speech what will be a recurring justification for everything that goes wrong in his administration: it’s the fault of previous governments, those doctors who didn’t treat the patient well; it’s all their fault. “We do not seek or desire the tough decisions that will have to be made in the coming weeks; but they have left us no choice. […] We are going to make all the necessary decisions to fix the problem caused by a hundred years of waste by the political class, even if the beginning is hard. We know that in the short term the situation will worsen, but then we will see the fruits of our effort because we have laid the foundations for a solid and sustainable growth over time.”
Milei fulfilled the first part of his promise: everything got worse. Days after taking office, the dollar suffered a devaluation of 118% overnight, the largest in Argentina’s recent history. Inflation rose by 50%. It was a very strong first shock that generated a redistribution of wealth: it benefited the sectors that earn in dollars and pushed many people into poverty. As the BBC explains, in 2024, Argentina was the country with the largest economic decrease: 3.4%; poverty increased by 11 points (the largest jump in 20 years) and today, 7 out of 10 Argentine children are poor. Since then, Milei has supplanted the “invisible hand of the market” to regulate the price of the dollar, and this brought inflation down to an average of 2% per month, which is high for the world, but low for what they are used to in Argentina.
In the first month of his term, Milei passed “Decree 70” (DNU 20/2024 “Bases for the reconstruction of the Argentine economy”) and with it, he repeals or modifies more than 300 regulations, including the Rent Law and the Land Law, deregulates markets for goods and services, cuts labor rights, and allows the privatization of state-owned companies. These meassures do not pass through Congress; Milei governs by decree in a supposed situation of “necessity and urgency,” just as happened with the state of exception in El Salvador, also without passing through the Senate. And, despite Argentina being the country that owes the most to the IMF, he took out an extraordinary loan for 20 billion dollars.
Argentinian economist Candelaria Botto, director of the organization Ecofeminita, explains that Argentina has a systematic lack of dollars because the sectors that generatethem, such as agribusiness, energy, and mining, are concentrated in a few hands; the industry has lower productivity and difficulties in exporting, and the domestic market is small. Argentina, Botto explains, is the country whose population accumulates the most dollars outside the country, around the world, because the privileged classes do not take the risk of keeping them in local accounts, so the Central Bank not only does not have dollars but has a negative deficit.
Then, in February 2024, a project known as the “Omnibus Law” arrived, which, in 380 articles, proposes to “deregulate a wide variety of economic sectors, such as labor, commercial, real estate, aeronautical, healthcare, and even soccer clubs.” The law also criminalizes protest, increasing the prison sentence to up to five years for those who “direct, organize, or coordinate a meeting or demonstration that impedes, obstructs, or hinders public or private circulation or transportation.” In the original version, the Omnibus Law intended to “declare ‘subject to privatization’ all companies in the public sector, including mixed ones or those with majority state participation. This affected 36 companies, including the state-owned oil company Yacimientos Petrolíferos Fiscales (YPF). The final text reduced the number of companies subject to privatization to 27. Among them are Aerolíneas Argentinas, Correo Argentino, the railways, the official news agency Télam, Fabricaciones Militares, and the water company AySA.” The privatization of Aerolíneas Argentinas was finalized later with Decree 873.
All these changes can be summed up in an image that went around the world: the chainsaw, a metaphor for communicating that Milei plans to cut the state into little pieces. In September 2023, while he was still a candidate, Milei first brandished a chainsaw at a small political rally in La Plata. The chainsaw became the symbol of the public spending cuts that were to come. Following the “Chainsaw Plan,” Milei closed 13 ministries; laid off some 30,000 public employees, equivalent to nearly 10% of the national workforce; halted public works; and cut money for education, healthcare, science, and pensions. The budget cuts have been especially severe in infrastructure (-74%), education (-52%), labor (-65%), social development (-60%), healthcare (-28%), and assistance to the provinces (-68%).” Of course, the austerity was not generalized, as in that same period “funds for the State Intelligence Secretariat (SIDE) grew by 216% year-on-year since January and almost 350 million dollars have been invested in the purchase of fighter jets.”
Among the sectors most affected by the cuts are pensioners, who now have to choose between eating and buying medicine; public education; and science and technology research. The result has been a reduction in the middle class (which in Argentina was made up of an organized and unionized working class and was quite large compared to other countries in the region). Milei says he wants to be like Chile or Peru, where informal employment is very high, as is inequality. Milei has also tried to deregulate foreign investment by giving tax benefits, but this has not even improved investor confidence, as they suffered losses during Macri’s government.
For Botto, the manifest cruelty of the Milei government has to do with a deep hatred of the state and a contempt for democracy. The intention, according to Botto, is to “deepen the conflict between the poor and the poor: ‘I am not poor because the system is unfair, because I was born without an inheritance; I am poor because the state guarantees a benefit to my neighbor.’ The problem, then, is not external restriction or land accumulation; the problem is that there are decent pensions and spending on public universities.”
Like Bukele, Milei has also shown an interest in cryptocurrencies, with catastrophic results. In early 2025, the president published a message on his X account promoting a cryptocurrency project called $LIBRA, saying it was a private initiative to “incentivize the growth of the Argentine economy.” Within hours, the token’s value skyrocketed due to the large number of people who invested, trusting in the apparent presidential endorsement. However, shortly after, the price collapsed abruptly and plummeted to, practically, zero. This left thousands of investors, both Argentine and from other parts of the world, with losses of millions that exceeded 100 million dollars. “In the crypto world, the scam was very poorly received, a lot of people lost money and that delegitimizes the entire universe,” Botto explains. For the economist, the fondness of these authoritarian and libertarian presidents for cryptocurrencies has to do with the fact that they do not pass through the central bank or a public institution.
Another common point among Milei, Bukele, and Trump is the positioning of feminism as their direct enemy. “Why are liberals always so conservative when it comes to talking about families?” Botto asks. “It has to do with how families are organized and how they depend on women’s unpaid domestic work and on them continuing to give birth to the working class. The autonomy of women puts that family institution in check, although not as much as the system itself, which no longer provides wages that can support a family group.” By entering paid work, women have gained autonomy, and this has allowed them to problematize the injustice involved in unpaid domestic work. The goal is not necessarily that we should leave paid work (for the middle and lower classes, it is impossible in late capitalism), but that we do it in precarious conditions and maintain domestic work outside the market. In Milei’s case, there is also an anti-feminist commitment. Even before he entered politics, Milei was deeply influenced by the anti-rights ideologue Agustín Laje, and more than as an economist, he gained popularity as a commentator by opposing feminism. “I think he genuinely has a very conservative vision,” Botto explains, “he believes that the LGBTQ community is pedophilic and that they are deviants, and he sees in feminist movements a risk of losing ‘Western society’ as we know it. And I think he’s not wrong about that; as a feminist, I really want a completely different society from the one we know.”
The growing discontent has already led to several protests, and the response from Milei’s authoritarian government has been, of course, repression. In December 2023, he announced the Public Order Maintenance Protocol, known as the “Anti-Piquetes Protocol,” a series of guidelines for federal security forces with the supposed mandate of guaranteeing free circulation that gives them a free hand to repress demonstrations without a judicial order. The person in charge of implementing the protocol is the Minister of Security, Patricia Bullrich, who also held this position during the Macri government and is remembered for the case of Santiago Maldonado, a young man who disappeared in August 2017 after the Gendarmerie’s repression of a protest by the Mapuche community in Cushamen, Chubut, and was found dead 78 days later. She is also remembered for Rafael Nahuel, a young Mapuche who, in November 2017, was killed by a shot in the back during a Prefectura operation in Bariloche. In both cases, Bullrich defended and justified the actions of the public force.
It is possible that Milei intends to stay for a reelection, but he has lost a good part of his popular support, and it remains to be seen how his party will fare in the legislative elections this year. “Many people believe that this is an adjustment and that prosperity will come afterward, but that’s not going to happen; this is a continuous readjustment where there will be prosperity for a very small group of people, and that number of people doesn’t win you elections,” Botto explains. Perhaps what he does have in his favor is that the opposition has not managed to articulate or position itself for the new elections.
The United States’ Tariffs
In his first address to a joint session of Congress, President Trump defended his plan to impose tariffs on foreign products, stating that they would “protect the soul” of the country. The imposition of tariffs on other countries, based on flawed equations and used to politically pressure other countries, has been his most prominent economic policy, and also his main difference from Friedman’s legacy, which called for the liberalization of markets. Although he promised that this policy would ultimately strengthen the economy, he acknowledged there might be a “little disturbance.” To farmers, concerned about retaliatory tariffs, he said a period of “adjustment” would come and urged his supporters to “hang in there” or “have patience with me” during this transition.
The beginning of the Trump administration in 2025 was also characterized by a rapid and massive issuance of executive orders, a measure that his critics have described as an “avalanche of decrees” to implement his agenda immediately. These orders have covered a wide range of topics, from the economy to immigration and national security. The legality of several of these orders is being challenged in court, and they are expected to face prolonged legal challenges.
On April 2, 2025, President Trump signed an executive order that established a baseline 10% tariff on all U.S. imports, with higher “reciprocal” tariffs for specific countries with which the United States has a large trade deficit. This was followed by a 90-day pause on the higher tariffs, but the baseline levy remained. The measure was widely seen as a sudden and massive disruption of global supply chains and trade relations. The imposition was justified by declaring a “national emergency.” Trump invoked “his authority under the International Emergency Economic Powers Act of 1977 (IEEPA)” to address the alleged emergency, driven by “the lack of reciprocity in our trade relations and other harmful policies such as currency manipulation and the exorbitant value-added taxes (VAT) perpetuated by other countries.” Since then, tariffs have reached an average of 19%.
The erratic nature of the tariffs is in itself a form of shock, as it leads markets into such uncertainty that it surpasses the start of the pandemic, according to the Economic Policy Uncertainty Index (EPU). It is expected that consumers will bear the aggregated costs of the tariffs, reducing their purchasing power. Eight months into the new Trump administration, a pattern has begun to emerge in which the president makes bombastic and outrageous announcements on weekends, which cause people, States, and markets to panic, but which do not materialize by Monday. This earned him the nickname “TACO,” an acronym for “Trump Always Chickens Out.” The BBC says that “the term was originally coined by Robert Armstrong, a financial markets columnist for the British newspaper Financial Times, who observed that what he called the ‘TACO business’ had emerged on world stock exchanges: investors taking advantage of Trump’s apparent reversals to make money.”
One example of this was on April 9, when Trump posted a message on his social network Truth Social that read, “THIS IS A GREAT TIME TO BUY!!! DJT.” The message was published just hours before he announced a 90-day pause in the implementation of additional tariffs on imports from most countries, except China. DJT is the stock ticker symbol for “Trump Media & Technology Group,” the parent company of Truth Social. The stock of Trump’s own company soared 22% that day, twice the rate of the rest of the market. Trump was accused of inciting people to buy shares before the market recovered.
Another major shock was the creation of the Department of Government Efficiency (DODGE), which initially had tech magnate Elon Musk at its head, and whose stated goal was to make ambitious cuts and restructure the federal government. DODGE, the equivalent of Milei’s chainsaw, went on to destroy everything in its path, closing entire agencies like USAID (creating a sustainability crisis in the global human rights ecosystem), modifying critical services, and canceling thousands of contracts; there were massive layoffs of more than 200,000 federal workers. DODGE failed in its stated objective, as Musk boasted they could cut $2 billion in public spending and they only managed a cut of $150 million, barely 15% of the initial goal. Even so, the strategy was successful in what was likely its real objective: to achieve a massive dismantling of government agencies and make drastic cuts in different sectors of the federal government, creating chaos, political unease, and beginning what promises to be a reduction in public positions and a replacement of the traditional bureaucracy with officials politically aligned with the government.
“Obviously, they must have economists who know perfectly well that this shock will generate consequences within the economy,” explains Gabriela, a Colombian economist who lives and works in the United States and prefers not to give her real name to avoid complicating her immigration status. “The low competitiveness of Americans is that their wages are very high compared to the rest of the world. As I read things, they want to create an absolutely pauperized class that has to work for lower wages, and that is the only way to gain international competitiveness and reestablish domestic manufacturing. For that, they need people who will sell themselves for anything. The only way they can do that is by cutting all social investment, generating a recession where many people suddenly become unemployed and lose their assets. Workers lose all bargaining power and capitalists will say: ‘Well, I’ll employ you, but you have to work for whatever I say’,” Gabriela explains.
In May, the first report showing adverse results for the U.S. economy was published. As The Guardian explains, “Gross domestic product (GDP) shrank for the first time in three years during the first quarter, abruptly turning negative after a spell of robust growth as trade distortions and weaker consumer spending dampened activity.” Trump explained on social media that it was all the fault of the Biden administration.
In August 2025, the Bureau of Labor Statistics (BLS)—the national agency responsible for producing national labor market statistics—published an employment report showing that “an average of only 85,000 jobs per month have been created this year, which is well below the 177,000 jobs the economy was adding on average each month before the pandemic.” The president called the figures “ridiculous,” said the data was altered, and suggested that it did not reflect the reality of an economy that, according to him, is “booming.” Just hours after the report’s release, the White House announced that the BLS commissioner, Erica Groshen, would be replaced by a new nominee. “They want to hijack the data. They won’t be able to manipulate it immediately, but they’re going to stop releasing complete and timely data so they can continue to do economic gaslighting,” Gabriela explains. “A year from now we won’t know what’s real and what’s a lie.”
The “Big Beautiful Bill” (over 900 pages long) is not the official name of a law, but a label that President Trump uses in his public discourse to refer to a combination of legislative proposals that his administration is pushing in 2025. The main point of criticism is that the permanent tax cuts and the increase in infrastructure spending (especially for detention and prisons) could significantly increase the national deficit and debt. The Penn Wharton Budget Model estimated that the extension of tax cuts alone could increase the debt by trillions of dollars in the coming years. To offset the loss of tax revenue, the government has proposed drastic cuts to social programs, such as health services, Medicaid (it’s estimated that 12 million people will be left without health insurance), and food assistance. This would affect low-income families who depend on these programs.
The “Big Beautiful Bill” also allocates $45 billion to toughen immigration policies. The deportation of millions of workers (many of them in their productive years) would drastically reduce the workforce, slowing economic growth. Studies by the U.S. Congress’s Joint Economic Committee suggest that mass deportations could cause a drop in GDP and that the economy would lose millions of dollars in federal and state taxes. As of 2024, the average cost to deport a single individual has increased to almost $14,000, which includes the costs of arrest, detention, legal processing, and transportation. When considering the goal of deporting one million people a year, an annual cost of billions of dollars is projected.
The construction and maintenance of border barriers, walls, and detention centers represent a multi-billion dollar investment. The “Big Beautiful Bill” allocates more than $170 billion over four years for border security and the construction of new detention centers, which in the United States are managed by private, for-profit companies (the stocks of companies dedicated to this, like GeoGroup and CoreCivic, rose with Trump’s election). The government has invested in hiring thousands of new agents for the Department of Homeland Security (DHS), which includes the Border Patrol (CBP) and Immigration and Customs Enforcement (ICE). These salaries, bonuses, and training costs add a considerable financial burden. These agencies have been very effective at spreading fear among the population, as they carry out mass arrests, frequently illegally detaining documented individuals, and sending them to detention centers where they are left incommunicado and without guarantees of human rights. Bukele has also offered the services of CECOT to the U.S. for the detention and torture of those arrested.
The Trump administration has also deployed the National Guard in Los Angeles and Washington D.C. to suppress protests against its immigration policies, despite violent crime being at historic lows. Protesters have reported the disproportionate use of force, arbitrary detentions, and the denial of rights such as habeas corpus.
The recession is a manufactured crisis. Gabriela explains that with the 2008 crisis, “they realized that the recession destroyed the liquidity of many, but others took advantage to buy stocks. In 2020, unemployment mainly affected vulnerable classes, but a minority got rich. It’s not that they don’t understand that a recession is coming; they are preparing for it to absorb even more wealth and concentrate it—a very specific class domination.” The Trump administration has also pushed for the extension of the Tax Cuts and Jobs Act (TCJA), which drastically reduced the corporate tax rate from 35% to 21% in his first term. Additionally, a further reduction has been proposed, which would give companies more capital to reinvest in growth, technology, or hiring. The elimination of the federal estate tax has also been proposed, which would benefit high-net-worth entrepreneurs and families. This would facilitate the transfer of fortunes to the next generation without a massive tax burden. He has also declared his intention to reverse the previous administration’s climate initiatives. Executive orders have been issued to relax environmental regulations and expand domestic fossil fuel production, such as oil and gas, which directly benefits companies in the energy sector. Furthermore, the door has been opened for retirement plans to be invested in private capital and cryptocurrencies.
During his first term and in his early campaigns, Trump was known for his critical stance on cryptocurrencies, going so far as to call them a “threat” to the U.S. dollar. In 2025, President Trump has adopted an openly favorable discourse towards cryptocurrencies, presenting them as a tool for economic freedom and innovation; through executive orders and changes in regulatory agencies, the government has sought to create a more friendly environment for crypto companies. The Securities and Exchange Commission (SEC) has been pressured to expedite the approval of crypto-related investment products and adopt a less confrontational approach with companies in the sector. Trump’s campaign also accepted cryptocurrency donations, and he has given cryptocurrencies a level of legitimacy in the political sphere they did not have before. Additionally, anonymous developers created the “TRUMP” cryptocurrency. The value of this cryptocurrency has grown exponentially since Trump took office in 2025, driven by political fervor and investors who see the token as a way to bet on the success of his presidency.
In August 2025, in an authoritarian move that distances him from the free market and would give Friedman hives, Trump threatened to “fire” Lisa Cook, one of the seven members of the U.S. Federal Reserve (FED) Board of Governors, who is part of the twelve-member committee in charge of setting interest rates in the country. It is believed that Trump wants to force the FED to lower interest rates, and that’s why he has gone after Cook, who is also a Black woman. This is “the biggest threat in decades to central bank independence, which is widely seen as key to keeping down inflation and maintaining stability in the global financial system.”
Regarding the Trump administration’s sexist rhetoric, Gabriela believes that “the United States is moving towards a theocratic government where there is an ideology that justifies the reduction of women’s labor participation and their economic opportunities. We are returning to a ‘you should be at home taking care of your children, why do you want to work?’ mentality, and this leads to lower household income and contributes to pauperization, even more so in a state that no longer provides any kind of aid and is even cutting health insurance.” The repression of women’s rights also seeks the same economic impact of pauperization and wealth concentration. “The states with the most restrictive laws on abortion are the conservative states. There’s nothing new about that. But they are also the states with the most female poverty,” Gabriela explains. The impact of taking away reproductive rights is that women’s labor participation begins to fall, especially in a context where there are no care alternatives. Today it’s estimated that care services can take up on average between 10% and 17% of family income. They also aren’t interested in women having opinions and influence because they feel we are getting out of control. It has also been proven that women are much more progressive than men, and the way to control us is by taking away our economic power.”
The Marketplace of Ideas
The traditional American right, that of the “establishment,” combined conservative social values with a defense of the free market, and although these groups sometimes had differences, they were united by anti-communism. The new American right is an economic nationalism that moves away from the free market and seeks to close borders, both for people and for trade. “Communism” has taken a back seat as a unifying enemy, and today its place is occupied by “migrants” (not all, just racialized migrants from the Global South) and “woke ideology,” which is their term for feminism, LGBT+ rights, and antiracist movements, like Black Lives Matter, which was strengthened after the murder of George Floyd in May 2020. Therefore, it is no coincidence that Bukele, Milei, and Trump place anti-feminist discourse at the center of their communication.
Journalist Zack Beauchamp explains in Vox that conservative and anti-rights groups have made a large historical investment in the “marketplace of ideas,” generating opportunities and incentives for young talent to become right-wing ideologues. If a young and progressive student wants to get into the market of ideas, they can look for an internship at a liberal publication or a think tank, but the opportunities are scarce and pay very little. Beauchamp points out that the right-wing student, on the other hand, has a wide range of possibilities that include the National Review’s Buckley Fellowship, the Rhodes Journalism Fellowship, or the Claremont Institute’s Publius Fellowship. “Those are two examples of numerous well-funded programs explicitly designed to usher as many bright young people into the institutional conservative world as possible. If you’re an ambitious young college grad, and anywhere on the spectrum from libertarian to hardcore Trumpist, you’ve got tons of options to get into the ideas game. […] A young person nowadays could attend college at right-wing Hillsdale, build their law school life around membership in the Federalist Society, and then get a job writing right-wing papers for the Heritage Foundation — all while getting their news from Fox News and Mark Levin’s radio show.”
These spaces, Beauchamp explains, allow young people to find mentors among high-profile figures, with whom they spend time in person, so that a reciprocal interest in each other’s professional success develops. “These [programs] work, in large part, by being intellectually exciting. It’s not just that you get to go on all-expenses-paid trips with nice meals; it’s that you are put in an environment where you’re reading and debating classic works of political thought and literature with other people who share those interests. If you’re the kind of nerd who wants to debate the finer points of Locke and Hamilton during undergrad summers, you’re the kind of nerd who might one day be someone who matters in US politics — and the right’s fellowships are there to help make sure you’re mattering on their side.”
Another narrative success of the conservative model for the marketplace of ideas is connecting philosophy with public policy: “It trains young people in the big-picture ideas, like conservative visions of political morality and religion, and teaches them to connect those things to everyday policy discussions. You aren’t learning about abstract ideas or concrete policy, but rather learning a comprehensive worldview that treats policy issues as downstream of specific values,” Beauchamp explains. In this way, authoritarian leaders with such differences in personality and context as Bukele, Trump, and Milei find common ground, sharing values and scapegoats.
In Latin America, we have several right-wing ideologues with transnational popularity and a strong presence in academia, the publishing world, and social media. Figures like the Argentine Agustín Laje and the Brazilian Sara Huff do not achieve such an impact because of their talent or intellectual abilities, but because they are willing to do the work of ideology and are being funded by those large capitals. The financial support comes from various organizations and think tanks, such as the aforementioned Heritage Foundation, Atlas Network, Cato Institute, the John Templeton Foundation, and the Koch Network.
The right-wing ideology presents a narrative that suits authoritarian governments and large capitalists. Klein points out that “where the left promised freedom for workers from their bosses, for citizens from dictatorships, for countries from colonialism, Friedman promised ‘individual freedoms,’ a project that elevated atomized citizens above collective needs and liberated them to express an absolute freedom of will through their choices as consumers” (TSD P.63). Individualization, selfishness, the breakdown of the social fabric. In an article by journalist Brock Colyar for New York magazine, covering a party celebrating Trump’s inauguration, some of the young people who attended said they had supported Trump so they could freely (that is, without criticism) express their discriminatory opinions and offensive slurs. “There’s a whole new industry of media personalities coming together to fight for our side of the aisle.” At least one TikTok employee who works in the “policy” department was there; asked about changes to the app’s guidelines in recent months, he told me cheerfully, “We’re letting a lot more stuff through. A lot.” […] This was the media ecosystem that flourished under the noses of the Democrats while they busied themselves trying to court Taylor Swift and Beyoncé. “MAGA is MTV for Gen Z. This isn’t the fringe. This is youth pop culture. I’ve been saying this for years,” said Mitchell Jackson, a publicist and crisis consultant who works with conservative podcasters”,.
The Ideology of a “Non-Ideological” Economy
One of the most significant narrative achievements of mainstream economic discourse (in which Friedman is inscribed) was making the world believe that economics is an exact science. If the market is a natural force, then economics is a scientific discipline like physics or chemistry, based on an impartial examination of facts. As Álvaro Bardón, Undersecretary of the Economy during Pinochet’s dictatorship, said, “If we acknowledge economics as a science this immediately implies [apparently] less power for government or the political structure, since both loose responsibility for making such decisions” (TSD, P. 257). This has allowed for a separation of free-market economic policies from their social effects, making them seem as if they have no political agenda, so that no one could see that their economic positions were in fact an ideology (since, as Klein points out throughout her book, they are not even backed by the facts). Of course, this does not extend to left-wing economic theories, such as Marxism, which are seen as biased and highly politicized.
The apparent separation between ideology and economics has allowed governments to claim they defend minorities and human rights while simultaneously deregulating to strengthen the free market, as if one thing had nothing to do with the other. Many centrist positions present progressive values superficially while endorsing neoliberalism, privatization, and hindering measures that could redistribute wealth more fairly, such as taxes on the rich and churches or the redistribution of land accumulated by elites. Klein notes that the human rights movement born in the 1970s, especially the more technical and legalistic international organizations, prioritized documenting and denouncing crimes against humanity more than interrogating why they were occurring. These dictatorships did not kill and torture people simply to display power; the goal was to impose a political and economic agenda, but in many international spaces, this conversation was evaded to achieve a generalized condemnation of human rights violations “regardless of whether you are left or right.” Perhaps it is easier to make this claim in retrospect; it is possible that at the time, that was the only option.
Klein gives the example of Amnesty International’s 1976 report on Argentina. “In fact, in its ninety-two-page report, it made no mention that the junta [the supreme body of the dictatorship composed of the three Armed Forces that came to power after the coup that year] was in the process of remaking the country along radically capitalist lines. […] It carefully lists all the junta laws and decrees that violated civil liberties but named none of the economic decrees that lowered wages and increased prices, thereby violating the right to food and shelter […]. If the junta’s revolutionary economic project had been even superficially examined, it would have been clear why such extraordinary repression was necessary […] In another major omission, Amnesty presented the conflict as one restricted to the local military and hte left-wing extremists. No other players are mentioned -not the U.S. government or the CIA; not local landowners; not multinational corporations. Without an examination of the larger plan to impose ‘pure’ capitalism on Latin America, and the powerful interests behind that project, the acts of sadism documented in the report made no sense at all -there where just random free-floating bad events, drifting in the political ether, to be condemned by all people of conscience but impossible to understand.” (TSD, P. 149).
Something similar happens with abortion; anti-rights groups insist that the problem is moral or religious to make us argue with them about whether fetuses have souls or not, when in reality the prohibition of abortion is a cornerstone for increasing poverty, making women and girls more precarious, and leaving them ready for exploitation. Thus, they make us believe that a savage capitalism would be fine if only crimes against humanity were not committed, when in reality, a savage capitalism cannot exist without violence, atrocities, and human rights violations. This is why we have, for example, people in the United States who say they are socially liberal and economically conservative; that is, even though they defend progressive values at the dinner table, they are in favor of the accumulation of wealth, and that is not possible without violating human rights.
Violence, abuse, and torture, for Klein, are a sign that an attempt is being made to impose a system that does not benefit the majority of people. The tortures of Bukelism in his megaprison, the violent repression of protest by Milei in Argentina (in a recent protest by pensioners, police repression left several elderly people injured), serve to keep people in fear, so that we cannot organize ourselves. If the free market were so “natural,” it would not have to be imposed by force.
Narratives of Shock
Milton Friedman, a Nobel laureate in Economics and one of the most influential men of the 20th century, went from being a charismatic professor to having the ear of world leaders. He achieved this thanks to a careful strategy that appealed to the greed of the most powerful and a very efficient narrative trick: making us believe that economics is an exact science, a force of nature that can be measured and interpreted, an algebraic formula with graphable, “technical” answers, without ideology. There is an important distance between the experiments to implement shock theory in the 20th century and what is happening in the 21st century, but it is difficult not to see a common structure.
Today’s applications are more nationalistic and protectionist, placing barriers on that absolute free market, but they achieve the most important objective: “It was obvious that the dictatorship’s ‘free market’ rules were doing exactly what they were designed to do: they were not creating a perfectly harmonious economy but turning the already wealthy into the superrich and the organized working class into the disposable poor. These patterns of stratification have been repeated everywhere the ideology of the Chicago School has triumphed” (TSD, P. 562).
Under Pinochet’s command, Chile pioneered “an evolution of corporatism: a mutually supporting alliance between a police state and large corporations, joining forces to wage all-out war on the third power sector -the workers-” (TSD, P. 105). This is evident in El Salvador, Argentina, and the United States. The governments of Bukele, Milei, and Trump have made cuts to social spending, deregulated environmental protection laws and laws that controlled the accumulation of private capital, have used pension reserves for speculation and cuts, and have extraordinarily increased debt.
To achieve this, they have passed extensive laws that allow them to concentrate power, by declaring states of exception or emergency, which enables them to make and execute decisions without going through the legislative branch. All three want to take advantage of the deregulation of the crypto world, and have placed social media at the center of their communications. As for their narrative strategies, all have resorted to bombarding the media and the public with news (mostly distressing), so that there is no time to articulate a resistance; they have used the rhetorical device of the “bitter pill” to justify the loss of quality of life for the citizenry and have put feminism in the place of “the enemy to be defeated to save civilization,” which was previously occupied by communism.
The three presidents know that to execute this strategy, a real or manufactured crisis is needed. In the case of El Salvador, the crisis was the gangs. For a time, Bukele was a victim of his own invention and was looking for new rhetorical crises to justify his concentration of power, a simulation that may not be necessary now that he has indefinite reelection. In the case of Argentina, the crisis was inflation and the bad economic situation that Milei himself has not been able to solve. In the case of the United States, the crisis is Trump himself. In the campaign, they narratively constructed the crises of inflation (which did increase post-COVID, but, for example, never came close to Argentina’s levels) and the migration to the United States of racialized people from the Global South, a narrative they have invested much more in since Trump came to power, and which is nothing more than a racist, aporophobic, and fascist discourse. They also have in common that their economic policies increase inequality, and this weakens democracies because citizens lose power and capital is accumulated by a few who concentrate wealth and political power.
Another common point, fundamental to these authoritarian projects, has been the repression of protest and freedom of the press and expression. It is very telling that in such a “technical” article as this one, three of the four experts consulted have asked for source protection. There is something disruptive about revealing the economic motives behind what appear to be political and social measures, and about showing the political motivations behind economic measures.
The great irony of all this is that Friedman must be turning in his grave. With his erratic and politicized tariffs, Trump is betting on techno-feudalism, with billionaires replacing feudal lords and global vassalage relationships, and causing a geopolitical reorganization that is far from the free market. Bukele, for his part, is an authoritarian who wants El Salvador to be his private plantation. The only one who truly seems to be betting on the free market is Milei, although not even he has refrained from intervening.
Friedman designed a strategy to impose the free market, which consists of a combination of opportunism, authoritarianism, and a communication plan that keeps the public permanently on edge so they can neither react nor protest. Today, that strategy is still being used, but no longer to impose the free market, but to allow the accumulation of wealth and increase inequality. If the free market survives, it is only as a rhetorical strategy for Bukele, Milei, and Trump to continue capitalizing on the equivalence that was built for years between “free market” and “freedom” and “democracy.”
