Disaster Capitalism | Antony Loewenstein

Summary of: Disaster Capitalism: Making a Killing Out of Catastrophe
By: Antony Loewenstein


Welcome to the fascinating world of ‘Disaster Capitalism: Making a Killing Out of Catastrophe’ by Antony Loewenstein. This book summary delves into a global phenomenon where privatisation, deregulation, and the slashing of social programs take center stage. Brace yourself for a riveting journey through an economy that exploits vulnerabilities and perpetually widens the global wealth gap. Examining the role of corporate-owned media, the privatization of war, and the emergence of the ‘artificial economy,’ this book casts a critical eye on the jaw-dropping financial gains made in the name of calamities. Loewenstein offers crucial insights into how policies benefit elites while robbing others of essential services, serving as a much-needed eye-opener for anyone willing to examine the world anew.

The Rise of Disaster Capitalism

In her book, Naomi Klein examines the concept of “disaster capitalism,” which involves the privatization and deregulation of public services and natural resources that provide a safety net for vulnerable communities. The wealthiest 1% of the world owns almost half of all assets, while 14% of Americans struggle to afford food. Private providers are given huge windfalls, with the US war on terror costing around $4 trillion – much of it going to private firms. This trend towards privatization intensifies after calamities such as the 9/11 attacks. The rise of ISIS also provides more opportunities for “disaster capitalists.” Klein argues that while this system has arisen quietly, alternative approaches are possible.

The Rise of Disaster Capitalism

Private military companies took advantage of the US invasion of Afghanistan to earn large sums of money. They provided security to journalists, UN employees, and nonprofits. These private-sector mercenaries earned $1,000 a day, far more than American, British, Australian, or South African soldiers. Initially, they worked with little regulation, heavily armed themselves, and aroused suspicion from Afghani officials. As a result, the government began to restrict their activities, including barring foreign mercenary firms. In the US, the government outsourced logistics and trash pickup to private companies with expertise, changing how the country waged war. The rise of privatization led to a 20-fold increase in private prisons across the nation since the 1990s, and the inmate population grew 31 times larger.

The Privatization of War

DynCorp’s cozy relationship with the government and the inefficacy of privatized warfare.

DynCorp, a US security company, saw demand for its services increase drastically after 9/11, winning $1 billion in contracts to assist the Afghan security forces. Despite repeated accusations of overcharging and other dubious business practices, DynCorp continued to enjoy its close relationship with big government in the age of outsourcing. DynCorp was not a diversified company; instead, 96% of its $3 billion in revenue came from the US government. The privatization of warfare resulted in unsatisfactory outcomes and inefficiency. During the first Bush administration, the public relations firm Hill+Knowlton was hired to rationalize US military action in Kuwait. In the second Bush administration, its staffers took government jobs and assisted in advocating the war on terror. Although Rumsfeld claimed that the private sector was more effective and efficient, both public and private soldiers shared comparable struggles, such as avoiding contact with civilians and living in a “military-enforced bubble.” After several years of US military presence in Afghanistan, the country was still left with a flourishing drug trade, warlords in power, and recurring suicide bombings and chaos.

Private Security, Disaster Capitalism, and Neoliberalism in Pakistan

Pakistan’s post-9/11 scenario wasn’t far from Afghanistan’s, with disaster capitalism taking over the economy that heavily relied on foreign investment from multinationals. The Pakistani government’s inability to exert control resulted in the deployment of 300,000 private contractors, making it a lucrative arrangement for security companies like G4S. The drug economy in Afghanistan flourished even after Western troops’ withdrawal in 2014, while the country’s “artificial economy” would collapse without international aid. Afghanistan received $15.7 billion in foreign aid in 2010, with the economy facing a $7.7 billion shortfall as Western troops withdraw.

Disaster Capitalism in Haiti

Following the earthquake that devastated Haiti in 2010, American corporations rushed in with reconstruction and disaster relief contracts worth millions of dollars. Despite Haiti’s desperate need for foreign investment, corrupt practices and insufficient infrastructure meant that much of the aid was ineffective or even harmful to the country’s population. This book details the exploitation of Haiti’s tragedy by “disaster capitalists” and the complicity of the media and Western governments in perpetuating the cycle of poverty and exploitation.

In January 2010, a 7.0 magnitude earthquake struck Haiti, leaving over a million people homeless and causing an estimated 316,000 deaths. Despite the country’s desperate need for aid and reconstruction efforts, American corporations swooped in to take advantage of the disaster. As the US ambassador cynically noted, “The gold rush is on.”

This book exposes the practice of “disaster capitalism” and its devastating effects on countries like Haiti. Multinational corporations often exploit disaster situations to secure lucrative contracts for reconstruction and relief efforts, knowing that desperate countries will accept almost any offer of help. In Haiti, the disaster capitalists made millions while the country remained mired in poverty and the infrastructure remained woefully inadequate.

The media and Western governments colluded in perpetuating the cycle of poverty and exploitation in Haiti by failing to demand transparency in aid spending and allowing corporations to pay poverty-level wages to Haitian workers. As a result, workers at the Caracol industrial park, funded by the US government, earned just $4 a day, while contractors siphoned off half of that for transportation and food.

This book is a powerful indictment of disaster capitalism and a call to action for better regulation and transparency in aid spending. It exposes the complicity of Western governments and corporations in perpetuating poverty and exploitation in developing countries, and highlights the urgent need for systemic change.

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