Disaster Capitalism - by Richard Hiatt: January 2008

There's Marx for the West and Marx for the East. Western Marxists are obviously trained to discredit Marx the man while deifying others like Milton Friedman - called, ironically, the "Marx of capitalism."

Yet virtually all of Marx's predictions about "class" have transpired. And when capitalists can suppress that fact no longer, they do what they do best - privatize the information industry and "broker" what Americans know and don't know about their own economic system.

We need not dwell on the most classic dilemmas: workers reduced to "what they do" (Marx's theory of "exploitation"); misdistributions of wealth (Marx's theory of "surplus value" and "class polarization"); the overproduction of worthless junk whose value is diminished by the machines making them (Marx's "labor theory of value"); "corporatocracy," mergers, outsourcing, "wealthfare;" five percent of the population owning 90% of our capital assets; profits for the wealthiest skyrocketing while plummeting for the poor, etc., etc.

But perhaps the most prophetic reality is the one just now surfacing, one that forces market capitalism to question not only its future but its very legitimacy.

For years what made our system work was making "crises" (domestic and international) catalysts for the making of new markets which would then work to establish relative peace and stability. Indeed, stability was essential for economic growth (even when other markets profited by causing the crises in the first place). It was understood that citizens and government sought economic stability together.

No more. Capitalism has crossed a Rubicon. According to author Naomi Klein ("Disaster Capitalism," Harper's, October, 2007) something is happening that isn't new but is now beyond any doubt: the bankrupting of the government by allowing the nation's infrastructure (toll roads, bridges, healthcare, energy, fire/police protection, public schools, levees, sewers, pipelines, subways, even our military) to go broke. Then, turning "disaster" into opportunities for free-market economic "re-engineering" - i.e., deregulation.

When New York's subways shut down, news editorials read, "Sell the Subways." When a Minneapolis bridge collapsed, the Wall Street Journal said to "tap private investors." When London's Heathrow Airport got hit with cancellations, The Economist urged "radical reform" for terminals to "compete." And after Katrina, the New York Times saw New Orleans as a "laboratory" for new gated communities for the rich - "paved highways, safe bridges, boutique charter schools, fast-lane airport terminals, and deluxe subways." The poor get the remains of a dilapidated public infrastructure.

The 2007 World Economic Forum now acknowledges a new contract between "favorable economics" and disaster, says Klein in the Harper's article. In fact stock market crashes, terrorist attacks, and foreign wars now boost the national economy. Companies like Lockheed Martin receive billion-dollar government contracts, and share prices for construction companies in Iraq can actually increase 300 percent. "Reconstruction is now such big business that investors greet each new disaster with the excitement of hot initial public stock offerings …. Terrorist attacks, which used to send the stock market spiraling downward, now receive an upbeat market reception."

Capitalism has reached a (Marxist) phase whereby the stock market depends on the wholesale suffering of people, the bankrupting of equal protection/justice, investments in disaster and divestments in programs designed to prevent it. As always, it's about profit (at any cost). But now what is "expendable" is the investor himself. The Money God has outgrown its creator and is having him for supper.


Richard Hiatt   January 200