Recognizing the Language of Disaster Capitalism

Recognizing the Language of Disaster Capitalism

You may have heard the term ‘Disaster Capitalism’ mentioned. It’s basically profiting from misfortune, and disaster—wars, natural disasters, etc.

“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.” -Milton Friedman

“Lying around” implies plans for new resource management and reconstruction are already in place waiting to be enacted at the right moment. So some economic vultures survey economies’ weaknesses and are waiting to “fix” things when they break.

I’m only sharing a small observation of mine in the wake of the current tragedy in Haiti.

Taken from NPR Morning Edition Show archives. The whole interview is available here: http://www.npr.org/templates/story/story.php?storyId=122716579

This show aired on January 19, 2010. In a conversation between Adam Goldstein, President of Royal Caribbean Cruises, and one of Morning Edition’s hosts—Steve Inskeep. Here’s and excerpt from the interview:

Mr. GOLDSTEIN: Well, as you know, there's a very long history of deficiency and frustration that many people around the world have worked with the Haitian government to rectify, without a lot to show for it. And although this is a total disaster, the likes of which no one had imagined, there are people up to and including President Clinton, with whom I met, who feel that out of this tragedy, maybe some progress can be made that has been elusive in the past.

I think there was a sense prior to the earthquake that maybe there really were more opportunities than in the past to get Haiti moving forward economically. Now its been hit by this tragedy. But maybe out of this tragedy, better things can come.

INSKEEP: Like what?

Mr. GOLDSTEIN: Well, a more comprehensive global effort to not only help with the rescue and the immediate recovery - which is, of course, is what's going on right now - but a true long-term reconstruction.

INSKEEP: Can you still envision increasing your company's investment in Haiti -opening another resort, say?

Mr. GOLDSTEIN: Well, I'll tell you the kind of thing that wed really like to do, and the Haitian government is very well aware of this. The Citadel is a fortress on the top of a hill near Cap Haitien. In my opinion, it could be the greatest single attraction in the entire Caribbean area. Nobody visits it. Why? Because the land and road infrastructure and the security situation has never existed there. Well, I think as a part of the reconstruction effort we're talking about here, stuff like that needs to happen.

Royal Caribbean wants to be involved. Maybe the type of relief effort we have in mind would do road construction and road maintenance that would sustain over time. And it would be a great attraction, as it should be. I just used that as one example. There clearly are opportunities. There's been some talk about Jacmel, which is a very nice city to the south of Port-au-Prince on the south coast, which was equally devastated by the earthquake, but it hasnt gotten hardly any publicity at all. That was typically where the Haitian government was asking us and others if we'd be interested to start a second cruise port. If Jacmel was to be reconstructed, more or less, from the ground up, that's something that could be considered as well.

Why was that last line of Adam Goldstein’s statement so crucial? It is because the precept of a makeover in the way of the disaster capitalist is a “clean slate.” A virtual naught that the people of Haiti are enduring, and, while fighting for survival, rebuilding from. Economist Arnold Harberger says:

“Economic technocrats may be able to structure a tax reform here, a new social security law there, or a modified exchange rate regime somewhere else, but they really never have the luxury of a clean slate on which to set up, in full flower at it were, their complete preferred economic policy framework.”

While Mr. Goldstein is not a political leader, he’s a corporate leader who apparently has the privilege of having high level conversations with political decision makers like former presidents.

To understand what’s beginning to economically take shape in Haiti, I recommend the Shock Doctrine by Naomi Klein. http://shockdoctrine.com

PEACE,

TU