Naomi Klein on disaster capitalism

Naomi Klein’s recently published book The Shock Doctrine is itself a shocking revelation of the cynicism underpinning the relentless manner in which what she calls “disaster capitalism” opportunistically (mis-)uses various kinds of collective disorientation to establish new “markets”.

Behind all of this lurk the economic theories of Milton Friedman — once discredited in the US, but later hailed as the prophet of the “free market”.

In a nutshell, “disaster capitalism” derives from Friedman’s “shock doctrine” (quoted by Klein), that “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.” Just as some people stockpile food in anticipation of disasters, Friedman’s followers stockpile “free-market ideas”, and do their best to implement them in the wake of a major disaster or any other kind of social disorientation.

Supporters of the so-called “free” market may exclaim: “So what? It’s only economics!” The problem is that the post-disaster implementation of these ideas does not leave the lives of ordinary people untouched; quite the contrary. Among the instances that Klein elaborates on are New Orleans after Katrina in 2005, Sri Lanka after the devastating tsunami in 2004 and Iraq after the US military invasion. Obviously these cannot be discussed in detail here — Klein’s book numbers 558 pages — but it is possible to extract the gist of her argument, supported by relentless investigative journalism.

Before the hurricane-induced (the severity of which was itself probably global-warming-induced) floods in New Orleans, there were 123 functioning public schools and only seven “charter schools” (schools funded by the public, but operated by private companies as they see fit, in many cases for profit). In the space of 19 months after the disaster, this public school system was all but destroyed, and replaced by a private (“charter”) school system: only four public schools remained, while the charter schools grew to 31. How was this possible, drastically reducing the opportunities for “same-standard education” (for which the civil rights movement in the US had fought so hard) available to all schoolchildren, regardless of their economic circumstances?

It is instructive to note that 93-year-old Milton Friedman wrote an op-ed for the Wall Street Journal (the Bible of neoliberal capitalism) about three months after the storm, observing that, because the homes and schools in New Orleans were tragically “in ruins”, it was “an opportunity to radically reform the educational system”.

His disciples heeded his calls — in a gesture of betrayal of the ordinary (especially poor) people of the city, most of the public schools in New Orleans were auctioned off to private entities; in this way reversing some of the crucial gains of the civil rights movement for many people across the US.

I need not elaborate on the injustice this entails in a country that prides itself on its putative commitment to human rights. While some unscrupulous “developers” are basking in their accumulating profits (the god of capitalism), many people, in this case especially schoolchildren, are disadvantaged in the process.

In Sri Lanka, Klein shows, much the same thing happened in the wake of the tsunami: in true Friedmanite fashion, a suspiciously cooperative Sri Lankan government and international investors (ab-)used the opportunity afforded by the chaos that ensued to make the beautiful coastline available to developers, who, in a relatively short time, constructed large resorts — playgrounds for the rich — effectively preventing the people who depended on fishing for their sustenance (hundreds of thousands of them) from reconstructing their devastated villages near the sea. Another “world-class tourist destination” was created in the atmosphere of disorientation left in the wake of a natural disaster.

As Klein further shows, it is not only natural disasters that create the circumstances for “free market” entrepreneurs to strike, exploiting opportunities of collective trauma on the part of communities (or entire societies) for mainly their own economic benefit. Disruptive political, social and military events similarly open up these opportunities — a case in point being post-invasion Iraq.

In South Africa, it seems (Klein devotes a chapter to South Africa’s transition to a country embracing Friedman’s “Chicago School” neoliberal economic principles), the relative social “disorientation” after the fall of apartheid in 1994 (which was in itself a good thing, of course) provided similar opportunities for “free market” colonisation of areas of social and economic activity previously largely under state control.

Although Klein concentrates on the rather ironic transition, on the part of the ANC government, from a largely socialist-oriented adherence to the principles enshrined in the Freedom Charter (she quotes a note penned by Mandela in 1990, where he still insisted that nationalisation of key economic areas was the “unavoidable” policy of the ANC) to the neoliberal economic policies dictated by the Washington Consensus, I don’t think it is far-fetched to say that the establishment of the private health “industry” (as opposed to a good public health system) may be understood in terms of what Klein terms the “shock doctrine”.

Since 1994, in an atmosphere where everyone in South Africa, understandably, expected fundamental changes to occur, the private hospitals have had the ideal opportunity to make a killing, in financial terms, because under post-apartheid conditions regarding economic expectations, few citizens would have the guts to object to their merciless imposition of exorbitant fees (after all, it is merely part of “economic development”), especially because it has been accompanied by the erosion of the public health system. Those who can “afford” private healthcare generally shut up and pay up — and the private hospital groups laugh all the way to the bank.