Disaster Capitalism

The privatisation of aid after Katrina offers a glimpse of a terrifying future in which only the wealthy are saved
How to Make Money Out of Misery
Naomi Klein
Wednesday August 30, 2006
The Guardian

The Red Cross has just announced a new disaster-response partnership with Wal-Mart. When the next hurricane hits, it will be a co-production of Big Aid and Big Box. This, apparently, is the lesson learned from the US government's calamitous response to Hurricane Katrina: businesses do disaster better.

"It's all going to be private enterprise before it's over," Billy Wagner, emergency management chief for the Florida Keys, currently under hurricane watch for tropical storm Ernesto, said in April. "They've got the expertise. They've got the resources." But before this new consensus goes any further, perhaps it's time to take a look at where the privatisation of disaster began, and where it will inevitably lead.

The first step was the government's abdication of its core responsibility to protect the population from disasters. Under the Bush administration, whole sectors of the government, most notably the Department of Homeland Security, have been turned into glorified temp agencies, with essential functions contracted out to private companies. The theory is that entrepreneurs, driven by the profit motive, are always more efficient (please suspend hysterical laughter).

We saw the results in New Orleans one year ago: Washington was frighteningly weak and inept, in part because its emergency management experts had fled to the private sector and its technology and infrastructure had become positively retro. At least by comparison, the private sector looked modern and competent.

But the honeymoon doesn't last long. "Where has all the money gone?" ask desperate people from Baghdad to New Orleans, from Kabul to tsunami-struck Sri Lanka. One place a great deal of it has gone is into major capital expenditure for these private contractors. Largely under the public radar, billions of taxpayer dollars have been spent on the construction of a privatised disaster-response infrastructure: the Shaw Group's new state-of-the-art Baton Rouge headquarters, Bechtel's battalions of earthmoving equipment, Blackwater USA's 6,000-acre campus in North Carolina (complete with paramilitary training camp and 6,000-foot runway).

I call it the Disaster Capitalism Complex. Whatever you might need in a serious crunch, these contractors can provide it: generators, watertanks, cots, port-a-potties, mobile homes, communications systems, helicopters, medicine, men with guns.

This state-within-a-state has been built almost exclusively with money from public contracts, including the training of its staff (overwhelmingly former civil servants, politicians and soldiers). Yet it is all privately owned; taxpayers have absolutely no control over it or claim to it. So far, that reality hasn't sunk in because while these companies are getting their bills paid by government contracts, the Disaster Capitalism Complex provides its services to the public free of charge.

But here's the catch: the US government is going broke, in no small part thanks to this kind of loony spending. The national debt is $8 trillion; the federal budget deficit is at least $260bn. That means that sooner rather than later the contracts are going to dry up. Insiders call it the "homeland security bubble".

When it bursts, firms such as Bechtel, Fluor and Blackwater will lose their primary revenue stream. They will still have all their hi-tech gear giving them the ability to respond to disasters, while the government will have let that precious skill wither away - but now they will rent back the tax-funded infrastructure at whatever price they choose.

Here's a snapshot of what could be in store in the not-too-distant future: helicopter rides off rooftops in flooded cities at $5,000 a pop ($7,000 for families, pets included), bottled water and "meals ready to eat" at $50 a head (steep, but that's supply and demand), and a cot in a shelter with a portable shower (show us your biometric ID, developed on a lucrative homeland security contract, and we'll track you down later with the bill).

The model, of course, is the US healthcare system, in which the wealthy can access best-in-class treatment in spa-like environments while 46 million Americans lack health insurance. As emergency-response, the model is already at work in the global Aids pandemic: private-sector prowess helped produce life-saving drugs (with heavy public subsidies), then set prices so high that the vast majority of the world's infected cannot afford treatment.

If that is the corporate world's track record on slow-motion disasters, why should we expect different values to govern fast-moving disasters such as hurricanes or even terrorist attacks? It's worth remembering that as Israeli bombs pummelled Lebanon not so long ago, the US government initially tried to charge its citizens for the cost of their own evacuations. And, of course, anyone without a western passport in Lebanon had no hope of rescue.

One year ago, New Orleans's working-class and poor citizens were stranded on their rooftops waiting for help that never came, while those who could pay their way escaped to safety. The country's political leaders claim it was all some terrible mistake, a breakdown in communication that is being fixed. Their solution is to go even further down the catastrophic road of "private-sector solutions."

Unless a radical change of course is demanded, New Orleans will prove to be a glimpse of a dystopian future, a future of disaster apartheid in which the wealthy are saved and everyone else is left behind.

· Naomi Klein's book on disaster capitalism will be published in spring 2007.

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