Disaster Capitalism During Covid-19. By: Edward Liger Smith

Naomi Klein’s 2007 book The Shock Doctrine: The Rise of Disaster Capitalism details a long history of the United States using times of disaster as an opportunity to push for neoliberal policies. Klein begins her book using Hurricane Katrina as an example. In the aftermath of Katrina, famed free market economist Milton Friedman wrote an op-ed for the Wall Street Journal. Freidman said “Most New Orleans schools are in Ruin… This is a tragedy. It is also an opportunity to radically reform the Education system.”[1] By radically reforming the education system, Freidman of course meant transitioning from Government funded public schools, to privately managed charter schools. Freidman saw that New Orlean’s education system had been completely decimated by the hurricane, and would need to be rebuilt. Friedman urged New Orleans to seize the opportunity and rebuild their school system from scratch with a focus on privately operated schools.
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The Bush administration heeded Friedman’s advice, and began dumping millions of dollars into the creation of new charter schools in New Orleans. In a matter of 19 months, the school board went from managing 123 Public Schools to 4, the number of Charter schools increased from 7 to 31, and the teacher’s union contract was shredded, leading to forty-seven hundred teachers being fired.[2] The free market advocates had successfully used the chaos created in the wake of a natural disaster to implement neoliberal policies, while framing these policies as the solution to the problems many New Orleans residents were facing. This playbook is what Naomi Klein calls “The Shock Doctrine.” Using chaos in the wake of natural or political disaster as an opportunity to push for neoliberal free market policy. The Covid-19 Pandemic provides another clear example of the shock doctrine, and what Naomi Klein calls in her book “disaster capitalism.”
           
An area of heavy focus in Klein’s book, is the 1973 coup in Chile. The CIA famously allied with Agusto Pinochet’s military government, who overthrew and killed socialist leader Salvador Allende.[3] Pinochet’s government was notoriously brutal. Upon taking power Pinochet ordered the massacre of approximately 20,000 people suspected of being communists. The political murders took place in the Estadio Nacional Julio Martinez Pradones, which is Chile’s official national fútbol stadium. Pinochet’s rapid seize of power, and following acts of political violence, left the Chilean people in a place of fear and chaos. It was at this time, the aforementioned Milton Freidman became chief economic advisor to Agusto Pinochet. In addition, many Freidman trained economists from the Chicago School became advisors to Pinochet. Chile would then be subjected to a series of free market neoliberal economic reforms. All government spending besides military was cut 10%, price controls were lifted, and unlimited foreign imports were now allowed. Additionally, leftists and union activists were hunted and killed by the Pinochet military dictatorship.[4]  These policies had a disastrous effect on average Chilean workers. Unemployment hit as high as 30%, while simultaneously corporate profits soared.[5] Katrina shows how the shock doctrine is applied domestically, while Chile provides an example of how the Shock Doctrine playbook is used as a tool of imperialism.

Currently the US is using the Covid-19 pandemic as a chance to destabilize Venezuela, as they did Chile years ago. Prior to Pinochet taking power, the US had placed Chile under economic embargo, blocking them from trading with most the world. This same strategy has been used on Venezuela for years, however it has been ramped up to new heights as of late. Venezuela now has 150 economic sanctions placed on their country by the United States.[6] The US has blatantly ramped up sanctions on Venezuela, during a time when the Latin American country is attempting to fight against the Covid-19 pandemic. As the UN and EU call for the US to alleviate sanctions during the pandemic, the Trump administration has instead created new sanctions. Including sanctions imposed on March 12, cracking down on a Russian firm, which was helping to sell Venezuelan oil. Venezuelan expert Jeffery Sachs says “sanctions have weakened both countries’ (Iran and Venezuela) health infrastructure by curtailing access to foreign exchange and the capacity to import key medical inputs”[7] The increase in sanctions follow the shock doctrine playbook closely. The US is attempting to use the Global Pandemic as a tool to achieve the regime change they desperately want. After blocking Venezuela from importing medical supplies, the US can turn and President Maduro, and the Venezuelan Government for people’s suffering. The US backed Venezuelan opposition party, will no doubt parrot this anti Government narrative to struggling Venezuelans.

Were the US to be successful in overthrowing the Venezuelan Government, Venezuela would no doubt follow the same path as Chile. Juan Guaidó, or another neoliberal puppet from the Venezuelan opposition party, would take power and immediately implement neoliberal reforms. US sanctions would be lifted, and GDP along with corporate profits would skyrocket, while social programs and unions would be destroyed. Free Market advocates would claim victory, and point to Venezuela’s increased GDP as a success story of capitalism, claiming that the country had been saved from the evils of socialism. These Free Market advocates would never mention the US of sanctions used to starve Venezuela out during a pandemic. This is a playbook the free market advocates have been using for years. The US destabilizes a region using sanctions or other measures, then when a US friendly leader is appointed, the sanctions are relieved, and GDP skyrockets. The Free Market economists then claim victory, as the country in question becomes a source of cheap resources and labour for multi-national corporations.

Venezuela sits on 300 billion barrels of oil, the largest oil reserves in the world.[8] Now blocked off from trading with the rest of the world, the oil based economy now has an abundance of commodities to sell, but nobody to sell them too. The government is trying desperately to sell the countries’ oil to anyone who will buy it, in order to properly fund the Venezuelan healthcare infrastructure. Now a pandemic is tearing through the country, and the response from the US has been to increase sanctions and destabilize Venezuela further. This is what Naomi Klein calls Disaster Capitalism. In a world that makes sense, the global community would come together during a pandemic. The resources and productive power of all human beings should be used to help every nation fight this deadly pandemic. Instead the imperialists who rule the world see the pandemic as an opportunity. An opportunity to destabilize enemy nations, and implement neoliberal policy reforms.

​This reveals the true nature of capitalism. A system which incentivizes only greed, and the acquisition of more commodities. It is a system which creates a psychology among the ruling class, where even in a pandemic which effects the whole of humanity, the system remains focused on profit. Capitalists no longer view Venezuela as a country with millions of regular people living their day to day lives. Venezuela is nothing but a metaphorical gold mine to them. A giant pool of oil that can be extracted and sold at a profit. For the ruling class this Pandemic is not a horrible tragedy, but an excellent business opportunity. If the pandemic can be used as a tool to destabilize Venezuela and allow corporations to access those 300 billion barrels of oil, that is exactly what will happen. Greed takes precedent to human life, and natural disasters are no longer tragedies, but tools for destabilization. This is disaster capitalism, and it is the modern state of human civilization. 

​Citations


[1] Friedman, Milton. “The Promise of Vouchers.” The Wall Street Journal. Dow Jones & Company, December 5, 2005. https://www.wsj.com/articles/SB113374845791113764.

[2] Klein, Naomi. “Introduction.” Essay. In The Shock Doctrine: the Rise of Disaster Capitalism, 5–5. London: Penguin, 2014.

[3] “CIA Cover-Up on Chile.” National Security Archive, August 11, 2017. https://nsarchive.gwu.edu/briefing-book/chile/2016-09-09/cia-cover-chile.

[4] The Pinochet Myth. Youtube.com, 2018. https://www.youtube.com/watch?v=gIwJCtboXQA&t=87s.

[5] Klein, Naomi. “Introduction.” Essay. In The Shock Doctrine: the Rise of Disaster Capitalism, 5–5. London: Penguin, 2014.

[6] Service, Congressional Research. “Venezuela: Overview of US Sancitons.” FAS.org, 2020. https://fas.org/sgp/crs/row/IF10715.pdf.

[7] D. Sachs and Francisco Rodriguez – Project Syndicate, Jeffery. “A Pandemic Is No Time for US Economic Sanctions.” Venezuelanalysis.com, July 8, 2020. https://venezuelanalysis.com/analysis/14822.

[8] “Top Ten Countries with World's Largest Oil Reserves, from Venezuela to Iraq.” NS Energy, April 5, 2019. https://www.nsenergybusiness.com/features/newstop-ten-countries-with-worlds-largest-oil-reserves-5793487/.