Wednesday, September 26, 2007


By Thomas Riggins

This article is a review of Naomi Klein’s important article in the October 2007 issue of Harper’s Magazine (“Disaster Capitalism: The new economy of catastrophe”) based on her new book, The Shock Doctrine.

A major theme in this article is the analogy between the effects of war and of “natural” disasters on people and the environment. The contrast between the Green Zone in Iraq (a safe haven) and the Red Zone (the rest of Iraq) is analogized with the aftermath of Katrina and the difference between the areas of New Orleans inhabited by the rich (reconstructed and prospering) and the poor (neglected and festering).

Just as areas of Iraq outside the Green Zone have been destroyed and the people brutalized by Bush’s war, so have many areas throughout the world faced the same type of treatment and the people have seen their regions “demolished by ideology, the war on ‘big government’, the religion of tax cuts, [and] the fetish for privatization.”

In many areas of the Third World infrastructure (what little there is) is failing under the assault of the philosophy of “free trade.” Klein gives as an example the failure of the sewer system in Jakarta (capital of Indonesia). Earlier this year, 57 people died and half the city was inundated by raw sewage. This was due to policies that cut back on public investment and social spending in order to enrich the private sector.

The same is happening here in the US. The bridge collapse in Minneapolis, the subway flooding in New York, all due to the neglect of the public sphere so that tax cuts and incentives can be dished out to the private sector. Klein points out that The American Society of Civil Engineers states that the US public infrastructure (“roads, bridges, schools, dams”) has been neglected to such an extent that it would five years and 1.5 trillion dollars just to get it back up to standard.

This is the background for the development of “disaster capitalism.” Ms Klein writes: “Every time a new crisis hits-- even when the crisis itself is the direct by-product of free-market ideology-- the fear and disorientation that follow are harnessed for radical social and economic re-engineering.” That is to say, the ruling class is using disasters, both natural and those brought about by their polices, to ram through social structural changes in their interests that they never could have brought about using the democratic process. Getting rid of public housing for the poor in New Orleans, for example.

What is happening is that private corporations are rushing to take over the role of disaster relief and reconstruction and make super profits as a result. They are aided and abetted by those politicians who push the ideology of free market capitalism and slam as “socialism” any measures by the public sector to solve social problems. It is quite instructive, in this regard, to compare Alan Greenspan’s rapturous description of the wonders of the free market in his book The Age of Turbulence, with what Naomi Klein has found on the ground in her travels around the world.

Klein sees the development of disaster capitalism as an evolution and extension of the older concept of “the industrial-mililtary complex” that President Eisenhower spoke of back in 1961 [originally “the industrial-military-congressional complex” because Ike knew the US Congress was a completely corrupt and complicit equal component of this complex -- as it still is-- but he allowed his speech writers to delete “congressional” to keep the illusions of bourgeois democracy alive for that fraction of the population that still voted].

This new "disaster-capitalism complex" she describes as one "in which all conflict - and disaster - related functions (waging war, securing borders, spying on citizens, rebuilding cities, treating traumatized soldiers) can be performed by corporations at a profit."

What has happened is that a state within a state has been created-- a virtual corporate run state that now carries out many of the functions that the state represented by the US government used to perform. The Bush administration, for example, gave out 3.4 billion dollars in no bid contracts to its corporate buddies to rebuild after Katrina. E.g., Blackwater provides guards for FEMA operations for $950 a day per guard!

Its all our tax payer money that goes to fund these corporate crooks. The "shadow state," Klein writes, "has been built almost exclusively with public resources... and is all privately owned and controlled." This is how the famous free market works-- it simply loots the public sector for its profits.

This new disaster capitalist market now, Klein says, has to be protected. That means NGOs, charities, and government entities are seen as potential enemies and rivals by the new corporate state. For example the mercenary providers, firms such as Blackwater, are looking for bigger and better contracts. They now say "they are better equipped than the UN to engage in peacekeeping in Darfur." Just give them a big for profit contract and the African Union troops can stay home.

And it is not just Darfur. Klein quotes a Lockheed Martin representative about the contracting out of the police and fire departments of American towns and cities to private firms: "What they do for the military in downtown Fallujah [leave it as a pile of rubble?--TR] they can do for the police in downtown Reno."

And if this isn't bad enough, Klein gives us a quote from Fast Company magazine on the results of the "War on Terror" [the unleashing of the US military as a result of the fluke 9/11 attack]. The "end result" will be "a new more resilient approach to national security, one built not around the state but around private citizens and companies .... Security will become a function of where you live and whom you work for, much as health care is allocated already."

This is another major theme of Klein's article. That the country is turning into a domestic copy of the Iraqi Green Zone. There will be gated and protected areas with state of the art schools, hospitals, police and fire protection, nice housing, etc. areas walled off from the rest of the common lower class herd of Americans, and all run by private companies.

We can see this trend in New Orleans today, Klein writes. Gated communities for the well off (mostly white) protected by private security forces, and FEMA villages: "desolate, out-of-the-way trailer camps for low-income evacuees, built by Bechtel or Fluor subcontractors and administered by private security companies that patrolled the gravel lots, restricted visitors, kept journalists out, and treated survivors like criminals."

An ominous new factor to note is, that heretofore terrorist attacks and national disasters used to send the stock market down. Now they make it jump up. The new disaster capitalists stand to make fortunes out of the human misery of these disasters now that the government just turns over no bid contracts for them to do the follow up. And they don't even have to do the work. There is little or no supervision or accountability. Any problems with poor results are explained away by the corporations and taken at face value by the Bush administration.

What used to be a "truism" of capitalist dogma, Klein says, is no longer so: namely, "that you couldn't have booming economic growth in the midst of violence and instability." At least for some parts of the economy and for the biggest corporations in the stocks representing aerospace, defense and homeland security, and, of course oil and gas just the opposite is the case. "The oil and gas industry," Klein says, "is so intimately entwined with the economy of disaster -- both as a root cause behind many disasters and as beneficiary from them -- that it deserves to be treated as an honorary adjunct of the disaster-capitalism complex."

It is important to note the relationship between the disaster capitalists and, Klein points out, "elite opinion makers." Not only do they have many members of Congress in their pockets (from both parties), but also many areas of the mass media is under their control and they fund "think tanks" to churn out propaganda in their interests (especially the National Institute for Public Policy and the Center for Security Policy).

So, Daddy Warbucks is alive and well. We can expect the US, I think, to bomb Iran for no other reason than to have an excuse to spend public money on corporations to sell the government the bombs and other weapons. Wars and disasters are ends in themselves-- an excuse to enrich the industrial- military complex [AKA disaster capitalism].

Wouldn't it be interesting if the Bushites were in Iraq not to "win" but simply to destroy as much as they could of both our own resources, human and material, and the Iraqi's, just so they could justify the transfer of billions, if not trillions, of dollars from the public funds of the US to the corporate allies of the Bush administration.

After all many, if not most, of the Pentagon big shots, after retirement, end up making real money on the boards of disaster capitalist companies. In any case, Iraq is a "win win" situation. Win, and you get the oil. Lose and you get to enrich the corporations anyway by all the expenditures. And, if Exxon can't have the oil, selling it for $80 a barrel is a good consolation.

No comments: