“More than 3 million customers without power this morning.” “No heat, no water,
and it’s been deadly.” “Some of the worst winter weather of their lives” In 2021, Texas
froze over. A US state known for its heat, the sudden cold snap in the winter of that year was
a brutal shock to residents across the region. Power lines froze, plumbing stopped working,
and roads were rendered undrivable. 246 people died because they were unable to access the basic
means to live. And in the midst of this disaster, when power was shut off across much of Texas
forcing people to suffer through days of intense cold, the private companies managing Texas’s
electric grids were making a killing. “Texans are now facing another major problem: sky high
electricity bills with some charging thousands of dollars for just the last few days.” Texas is just
one harbinger of what’s to come. Natural disasters are no longer natural. Not only
are they supercharged by climate change, but in the wake of these climate caused catastrophes,
businesses and free-market policy-hawks exploit those who survive. People in
the throes of disasters are unable to push back against new policies and agendas that
foreground profit and capitalist accumulation over human well being. Today we unpack this
by understanding how and why disasters like the Texas freeze are used by capitalism. Today we ask,
what is disaster capitalism and why does it matter?
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What is Disaster Capitalism? “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.” This quote, penned by the father of neoliberalism, Milton Friedman,
in his book Capitalism and Freedom is the seed of disaster capitalism. To Friedman, crisis breeds
change, but the nature of that change is tied to what ideas are available at the time. It was his
life’s work to make free-market capitalism the idea laying around. From 1962, when that quote
was first put to the page, up to today, Friedman and his followers have been remarkably successful
in that task. Indeed, it wasn’t until the aftermath of the initial invasion of Iraq in 2003,
and the subsequent terror campaign by the US military that destabilized the whole country,
that this free-market disaster agenda emerged into the limelight. After witnessing the atrocities
of Iraq, journalist Naomi Klein set out to understand how and why policies of capitalism
rooted in privatization, deregulation and the free-market, also known as neoliberalism, tend
to emerge directly after disasters. She sums up her findings in the 2007 book The Shock Doctrine,
and reveals the plans of right-wing governments and free-market hawks. “After a shocking event–
a war, coup, terrorist attack, market crash, or natural disaster. They exploit the public's
disorientation, suspend democracy, push through radical free-market policies that enrich the 1%
at the expense of the poor and middle class.” In short, capitalists harness the shock of disasters,
whether natural or unnatural, to ram through policies of privatization and austerity,
buy up property cheaply, and exploit shattered communities for profit. And as we will soon see,
disaster capitalists have been in high gear enacting this change since the 1960s.
A History of Disaster: On September 11th, 1973, a battle raged in the
streets surrounding the Chilean capitol building. A group of military officers led by general
Augusto Pinochet, and backed by the economic and political might of the United States, ousted the
democratically elected and immensely popular socialist leader of Chile, Salvador Allende. In
place of Allende’s policies, which included free milk for children, land redistribution, and the
nationalization of industries like healthcare, the U.S.-backed Pinochet regime stepped in
and instigated military rule. They rounded up thousands of suspected leftists, and tortured,
killed or disappeared them. Later reports by the The National Commission on Political Imprisonment
and Torture as well as the The National Commission for Truth and Reconciliation,
found that Pinochet’s regime committed over 30,000 human rights abuses. In the midst of this terrible
violence heaped onto the Chilean public by the new military government, Milton Friedman’s proteges in
Chile, known as the Chicago boys, began whispering policy recommendations and neoliberal ideas into
Pinochet’s ear. Policies that had been drummed up in cooperation with the CIA months before
the coup took place that foregrounded free-market ideas of privatization and deregulation. By 1975,
Pinochet had unleashed these neoliberal policies upon Chile. His regime sought to turn back much of
the nationalization accomplished by Allende. They reprivatized agricultural land distributed under
Allende, as well selling off industries like state-held mines to Pinochet’s son-in-law for
low prices. All told, Pinochet’s government sold off an estimated $3.6 billion US dollars worth
of state-owned assets. In a matter of years, Chile was brutally shocked from a socialist economy to a
capitalist one. An economy so in line with Milton Friedmen’s neoliberal ideology that he called the
reorientation a “miracle.” The Chilean coup is a textbook example of disaster capitalism, but it’s
certainly not the only example. In the wake of political crises like the fall of the Soviet Union
in the 1990s, East Timor after its decades-long war with Indonesia in 2000, and Iraq after 2003,
governments, the World Bank and NGOs rammed through neoliberal programs. East Timor,
for example, was only allowed loans from the World Bank under the condition that it cut its public
budget and personnel while simultaneously paying private contractors substantial sums of money for
advice. While in Iraq, nationalized industries were dismantled and replaced with private
corporations like Halliburton and Bechtel. Both American companies were given massive contracts
to help “rebuild” Iraq. The results of those privatization efforts speak for themselves. And
even after unmanufactured disasters like Hurricane Mitch, which ravaged Central America in 1998,
free-market policies were forced on countries in exchange for recovery aid. Honduras privatized
airports and highways, and made it easier for foreigners to buy up land, while Nicaragua
announced plans to privatize its electricity and petroleum sectors and Guatemala announced plans to
sell off its phone system, all in order to receive needed recovery financing from the World Bank. The
list of disasters used to push through neoliberal policies goes on. With each new disaster,
the threat of deregulation and privatization looms. And we are now entering into an age
of constant disaster—of climate chaos. Fossil fueled capitalism continues to put
more and more carbon dioxide into the atmosphere year after year– heating up the planet and
giving rise to even more disasters. Our current system is forging a disaster capitalist spiral:
creating the circumstances for more and ever worsening crises that it then uses
to increase corporate profits and build systems of neoliberalism that make future disasters harsher.
Capitalism loves the climate crisis:
Thirteen years ago, ex-Wall Street banker Phil Heilberg, was traveling through South Sudan
buying up land. He wasn’t purchasing millions of acres of fertile land in South Sudan because
he wanted to move there or because he had dreams of becoming a farmer. Phil Heilberg was betting
on disaster. According to the reporting by Mckenzie Funk in Rolling Stone Magazine,
Heilberg sought to cash in on a looming food crisis. At the time global food prices
were doubling and tripling and Heilberg saw this disaster as an opportunity to strike it rich. If
he owned huge tracts of arable and healthy land, he could potentially make a killing by leasing
or selling that land to farmers in desperate need of healthy soil to grow their crops.
This is what’s in store for us under a future of climate change. Indeed, land grabs like Heilberg’s
have already begun with billionaires buying up thousands of acres of land. To those hell bent on
capitalist accumulation and free-market policy, climate change will, as the 2006 Stern Review,
a 700-page report on the economics of climate change concludes “create significant business
opportunities.”As if it wasn’t bad enough that capitalism has given rise to the climate crisis
and the disasters it’s leaving in its wake, it will continue a vicious cycle of profiting
off climate-disasters as well– using disasters to solidify its reign. Capitalism is both the hunter
and the scavenger. It bolsters industries fueling climate chaos and then picks at the
remains in a way that renders communities already ravaged by climate change even more vulnerable.
Let’s head back to Texas in 2021 to see this emerging climate disaster capitalism
in action. Since 1999, Texas has steadily marched down the road of energy deregulation.
In the name of competition, better prices, and service, the Texas government gutted
energy standards and allowed a host of private utility companies to compete for contracts.
Texas’s electric grid was beginning to look like something right out of Milton Friedman’s playbook.
But this meant companies cut corners. Utilities failed to winterize gas pipelines and maintain
emergency energy reserves as well as ignoring known failure points in the system. And then in
February 2021, the stretching of the polar vortex, which could be the result of climate change,
led to a brutal cold snap. The Texas energy grid quite literally froze over. Millions were left
without power. In the midst of this disaster, energy companies were raking in profits. To keep
the heat on, customers were charged inhumane prices. Texas utility companies made so much
money that one executive boasted to investors that the week of the cold snap was “like hitting the
jackpot.” Deregulation made the climate disaster worse, then capitalists reaped the benefits while
the rest suffered. This also happened with Puerto Rico in the wake of Hurricane Maria—a
disaster supercharged by climate change and made worse by decades of austerity measures
forced on Puerto Rico in exchange for escape from the shackles of illegitimate debt. After
the storm flattened Puerto Rico’s electric grid, the government awarded a private company, Luma,
with a contract to help rebuild it, and continued its history of austerity policies by shutting down
over 300 schools, all in the name of balancing the budget and freeing up money for recovery. Disaster
capitalism struck again after Hurricane Irma decimated the island of Barbuda. For centuries the
people of Barbuda have held resources and land on the island in common, but after the storm struck,
the prime minister of Antigua and Barduda sought to push land reform, luxury resorts, and foreign
investments onto Barbudans against their will in order to kickstart the island’s recovery efforts.
But disaster capitalism hasn’t been the only recovery model at play. In the wake of Maria,
another way stood in defiance of this disaster capitalist model. One based not
on how much profit can be squeezed out of the land and people, but instead on something else…
Towards a collective response:
Despite the crushing sadness and anger that comes from witnessing disaster capitalism,
it also gives me hope. Going back to that Milton Friedman quote, when a crisis occurs
“the actions that are taken depend on the ideas that are lying around.” Key to this
is that these ideas don’t have to be neoliberal capitalism, they can instead be life-affirming,
zero-carbon ideas centered on helping people and planet, not on increasing profits. This is exactly
what happened when Hurricane Maria left the barrio of Mariana without electricity, internet access,
food stores and roads to the outside world for weeks. Unlike crypto millionaires swooping in
to snatch up lucrative property, or harnessing the shock of a hurricane to place the electric grid in
private hands, the people of Mariana came together and used the strength of their community to not
only survive but thrive in the face of disaster. This looked like quickly establishing a community
health center, a central hub for free food distribution, and connecting with other aid groups
to bring Wi-Fi and solar panels back to the area. One community member, Christine Nieves Rodriguez,
writes about this collective resilience: “Within five days [of Maria] we had launched Proyecto
de Apoyo Mutuo. By day ten we were feeding three hundred people, Monday to Friday, all completely
self-organized and self-funded efforts. Donations started coming in, but the most
important thing was people on the ground, who worked tirelessly and contributed whatever food,
skills, and money they had. They all contributed their whole selves so that the place was full of
respect and solidarity” Instead of neoliberal policies and profit-hunting, the ideas laying
around for this community were ones of collective responsibility and sustainability– of mutual aid.
Climate change will continue to pound the world with disasters. If we continue to do nothing,
disaster capitalism will inevitably seek to shape the world of those on the front lines
to its image. But if we struggle for something more. If we recognize that neoliberalism,
and more broadly capitalism, is hamstringing any efforts to recover and create resilience in the
face of climate chaos, we have a chance. That struggle must include alternatives,
like the community of Mariana’s Apoyo Mutuo project. We must have policies, ideas,
and networks of care in place so that when disaster strikes, we not only have the means
to recover, but we also have the means to forge a world where resilience and collective
healing is foregrounded. In that world, maybe disaster doesn’t have to mean catastrophe.
One of those ideas is eco-socialism. Something that I’ve touched on a lot in my videos,
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