Shameless Disaster Capitalism: How Companies Are Already Planning to Get Rich Off Superstorm Sandy
Photo Credit: AFP
Less than three days after Sandy made landfall on the East Coast of the United States, Iain Murray of the Competitive Enterprise Institute blamed New Yorkers’ resistance to big-box stores for the misery they were about to endure. Writing on Forbes.com, he explained that the city’s refusal to embrace Walmart will likely make the recovery much harder: “Mom-and-pop stores simply can’t do what big stores can in these circumstances,” he wrote.
And the preemptive scapegoating didn’t stop there. He also warned that if the pace of reconstruction turned out to be sluggish (as it so often is) then “pro-union rules such as the Davis-Bacon Act” would be to blame, a reference to the statute that requires workers on public-works projects to be paid not the minimum wage, but the prevailing wage in the region.
The same day, Frank Rapoport, a lawyer representing several billion-dollar construction and real estate contractors, jumped in to suggest that many of those public works projects shouldn’t be public at all. Instead, cash-strapped governments should turn to “public private partnerships,” known as “P3s.” That means roads, bridges and tunnels being rebuilt by private companies, which, for instance, could install tolls and keep the profits.
Up until now, the only thing stopping them has been the law—specifically the absence of laws in New York State and New Jersey that enable these sorts of deals. But Rapoport is convinced that the combination of broke governments and needy people will provide just the catalyst needed to break the deadlock. “There were some bridges that were washed out in New Jersey that need structural replacement, and it’s going to be very expensive,” he told The Nation. “And so the government may well not have the money to build it the right way. And that’s when you turn to a P3.”
Ray Lehmann, co-founder of the R Street Institute, a mouthpiece for the insurance lobby (formerly a division of the climate-denying Heartland Institute), had another public prize in his sights. In a Wall Street Journal article about Sandy, he was quoted arguing for the eventual “full privatization” of the National Flood Insurance Program, the federal initiative that provides affordable protection from some natural disasters—and which private insurers see as unfair competition.
But the prize for shameless disaster capitalism surely goes to right-wing economist Russell S. Sobel, writing in a New York Times online forum. Sobel suggested that, in hard-hit areas, FEMA should create “free trade zones—in which all normal regulations, licensing and taxes [are] suspended.” This corporate free-for-all would, apparently, “better provide the goods and services victims need.”
Yes that’s right: this catastrophe very likely created by climate change—a crisis born of the colossal regulatory failure to prevent corporations from treating the atmosphere as their open sewer—is just one more opportunity for more deregulation. And the fact that this storm has demonstrated that poor and working-class people are far more vulnerable to the climate crisis shows that this is clearly the right moment to strip those people of what few labor protections they have left, as well as to privatize the meager public services available to them. Most of all, when faced with an extraordinarily costly crisis born of corporate greed, hand out tax holidays to corporations.
Is there anyone who can still feign surprise at this stuff? The flurry of attempts to use Sandy’s destructive power as a cash grab is just the latest chapter in the very long story I have called The Shock Doctrine. And it is but the tiniest glimpse into the ways large corporations are seeking to reap enormous profits from climate chaos.
One example: between 2008 and 2010, at least 261 patents were filed or issued related to “climate-ready” crops—seeds supposedly able to withstand extreme conditions like droughts and floods; of these patents close to 80 percent were controlled by just six agribusiness giants, including Monsanto and Syngenta. With history as our teacher, we know that small farmers will go into debt trying to buy these new miracle seeds, and that many will lose their land.
When these displaced farmers move to cities seeking work, they will find other peasants, indigenous people and artisanal fishing people who lost their lands for similar reasons. Some will have been displaced by foreign agribusiness companies looking to grow export crops for wealthy nations worried about their own food security in a climate stressed future. Some will have moved because a new breed of carbon entrepreneur was determined to plant a tree farm on what used to be a community-managed forest, in order to collect lucrative credits.
In November 2010, The Economist ran a climate change cover story that serves as a useful (if harrowing) blueprint for how climate change could serve as the pretext for the last great land grab, a final colonial clearing of the forests, farms and coastlines by a handful of multinationals. The editors explain that droughts and heat stress are such a threat to farmers that only big players can survive the turmoil, and that “abandoning the farm may be the way many farmers choose to adapt.” They had the same message for fisher folk inconveniently occupying valuable ocean-front lands: wouldn’t it be so much safer, given rising seas and all, if they joined their fellow farmers in the urban slums? “Protecting a single port city from floods is easier than protecting a similar population spread out along a coastline of fishing villages.”
But, you might wonder, isn’t there a joblessness crisis in most of these cities? Nothing a little “reform of labor markets” and free trade can’t fix. Besides, cities, they explain, have “social strategies, formal or informal.” I’m pretty sure that means that people whose “social strategies” used to involve growing and catching their own food can now cling to life by selling broken pens at intersections, or perhaps by dealing drugs. What the informal social strategy should be when super storm winds howl through those precarious slums remains unspoken.
For a long time, climate change was treated by environmentalists as a great equalizer, the one issue that affected everyone, rich or poor. They failed to account for the myriad ways by which the superrich would protect themselves from the less savory effects of the economic model that made them so wealthy. In the past six years, we have seen the emergence of private firefighters in the United States, hired by insurance companies to offer a “concierge” service to their wealthier clients, as well as the short-lived “HelpJet”—a charter airline in Florida that offered five-star evacuation services from hurricane zones. “No standing in lines, no hassle with crowds, just a first class experience that turns a problem into a vacation.” And, post-Sandy, upscale real estate agents are predicting that back-up power generators will be the new status symbol with the penthouse and mansion set.
It seems that for some, climate change is imagined less as a clear and present danger than as a kind of spa vacation; nothing that the right combination of bespoke services and well-curated accessories can’t overcome. That, at least, was the impression left by the Barneys New York pre-Sandy sale—which offered deals on Sencha green tea, backgammon sets and $500 throw blankets so its high-end customers could “settle in with style”. Let the rest of the world eat “social strategies, formal or informal.”
So we know how the shock doctors are readying to exploit the climate crisis, and we know from the past how that would turn out. But here is the real question: Could this crisis present a different kind of opportunity, one that disperses power into the hands of the many rather than consolidating it the hands of the few; one that radically expands the commons, rather than auctions it off in pieces? In short, could Sandy be the beginning of a People’s Shock?
I think it can. As I outlined last year in these pages, there are changes we can make that actually have a chance of getting our emissions down to the level science demands. These include relocalizing our economies (so we are going to need those farmers where they are); vastly expanding and reimagining the public sphere to not just hold back the next storm but to prevent even worse disruptions in the future; regulating the hell out of corporations and reducing their poisonous political power; and reinventing economics so it no longer defines success as the endless expansion of consumption.
These are approaches to the crisis would help rebuild the real economy at a time when most of us have had it with speculative bubbles. They would create lasting jobs at a time when they are urgently needed. And they would strengthen our ties to one another and to our communities— goals that, while abstract, can nonetheless save lives in a crisis.
Just as the Great Depression and the Second World War launched populist movements that claimed as their proud legacies social safety nets across the industrialized world, so climate change can be a historic moment to usher in the next great wave of progressive change. Moreover, none of the anti-democratic trickery I described in The Shock Doctrine is necessary to advance this agenda. Far from seizing on the climate crisis to push through unpopular policies, our task is to seize upon it to demand a truly populist agenda.
The reconstruction from Sandy is a great place to start road testing these ideas. Unlike the disaster capitalists who use crisis to end-run democracy, a People’s Recovery (as many from the Occupy movement are already demanding) would call for new democratic processes, including neighborhood assemblies, to decide how hard-hit communities should be rebuilt. The overriding principle must be addressing the twin crises of inequality and climate change at the same time. For starters, that means reconstruction that doesn’t just create jobs but jobs that pay a living wage. It means not just more public transit, but energy efficient affordable housing along those transit lines. It also means not just more renewable power but democratic community control over those projects.
But at the same time as we ramp up alternatives, we need to step up the fight against the forces actively making the climate crisis worse. Regardless of who wins the election, that means standing firm against the continued expansion of the fossil fuel sector into new and high-risk territories, whether through tar sands, fracking, coal exports to China or Arctic drilling. It also means recognizing the limits of political pressure and going after the fossil fuel companies directly, as we are doing at 350.org with our “Do The Math” tour. These companies have shown that they are willing to burn five times as much carbon as the most conservative estimates say is compatible with a livable planet. We’ve done the math, and we simply can’t let them.
We find ourselves in a race against time: either this crisis will become an opportunity for an evolutionary leap, a holistic readjustment of our relationship with the natural world. Or it will become an opportunity for the biggest disaster capitalism free-for-all in human history, leaving the world even more brutally cleaved between winners and losers.
When I wrote The Shock Doctrine, I was documenting crimes of the past. The good news is that this is a crime in progress; it is still within our power to stop it. Let’s make sure that this time, the good guys win.