by Naomi Klein
For the people left behind, there is a different kind of privatized solution. In 2006, the Red Cross signed a new disaster-response partnership with Wal-Mart. “It’s all going to be private enterprise before it’s over,” said Billy Wagner, chief of emergency management for the Florida Keys. “They’ve got the expertise. They’ve got the resources.” He was speaking at the National Hurricane Conference in Orlando, Florida, a fast-growing annual trade show for the companies selling everything that might come in handy during the next disaster. “Some folks here said, ‘Man, this is huge business—this is my new business. I’m not in the landscaping business anymore; I’m going to be a hurricane debris contractor,’” said Dave Blandford, an exhibitor at the conference, showing off his “self-heating meals.”25
Much of the parallel disaster economy has been built with taxpayers’ money, thanks to the boom in privatized war-zone reconstruction. The giant contractors that have served as “the primes” in Iraq and Afghanistan have come under frequent political fire for spending large portions of their income from government contracts on their own corporate overhead—between 20 and 55 percent, according to a 2006 audit of Iraq contractors.26 Much of those funds have, quite legally, gone into huge investments in corporate infrastructure—Bechtel’s battalions of earth-moving equipment, Halliburton’s planes and fleets of trucks, and the surveillance architecture built by L-3, CACI and Booz Allen.
Most dramatic has been Blackwater’s investment in its paramilitary infrastructure. Founded in 1996, the company has used the steady stream of contracts during the Bush years to build up a private army of twenty thousand mercenary soldiers on call and a massive military base in North Carolina worth between $40 million and $50 million. According to one account, Blackwater’s capacity now includes the following: “A burgeoning logistics operation that can deliver 100-or 200-ton self-contained humanitarian relief response packages faster than the Red Cross. A Florida aviation division with 26 different platforms, from helicopter gunships to a massive Boeing 767. The company even has a Zeppelin. The country’s largest tactical driving track…. A 20-acre man-made lake with shipping containers that have beenmocked up with ship rails and portholes, floating on pontoons, used to teach how to board a hostile ship. A K-9 training facility that currently has 80 dog teams deployed around the world…. A 1,200-yard-long firing range forsniper training.”*27
A right-wing journal in the U.S. pronounced Blackwater “al Qaeda for the good guys.”28 It’s a striking analogy. Wherever the disaster capitalism complex has landed, it has produced a proliferation of armed groupings outside the state. That is hardly a surprise: when countries are rebuilt by people who don’t believe in governments, the states they build are invariably weak, creating a market for alternative security forces, whether Hezbollah, Blackwater, the Mahdi Army or the gang down the street in New Orleans.
The emergence of this parallel privatized infrastructure reaches far beyond policing. When the contractor infrastructure built up during the Bush years is looked at as a whole, what is seen is a fully articulated state-with in a-state that is as muscular and capable as the actual state is frail and feeble. This corporate shadow state has been built almost exclusively with public resources (90 percent of Blackwater’s revenues come from state contracts), including the training of its staff (overwhelmingly former civil servants, politicians and soldiers).29 Yet the vast infrastructure is all privately owned and controlled. The citizens who have funded it have absolutely no claim to this parallel economy or its resources.
The actual state, meanwhile, has lost the ability to perform its core functions without the help of contractors. Its own equipment is out of date, and the best experts have fled to the private sector. When Katrina hit, FEMA had to hire a contractor to award contracts to contractors. Similarly, when it came time to update the Army Manual on the rules for dealing with contractors, the army contracted out the job to one of its major contractors, MPRI—it no longer had the know-how in-house. The CIA is losing so many staffers to the parallel privatized spy sector that it has had to bar contractors from recruiting in the agency dining room. “One recently retired case officer said he had been approached twice while in line for coffee,” reported the Los Angeles Times. And when the Department of Homeland Security decided it needed to build “virtual fences” on the U.S. borders with Mexico and Canada, Michael P. Jackson, deputy secretary of the department, told contractors, “This is an unusual invitation…. We’re asking you to come back and tell ushow to do our business.” The department’s inspector general explained that Homeland Security “does not have the capacity needed to effectively plan, oversee and execute the [Secure Border Initiative] program.”30
Under Bush, the state still has all the trappings of a government—the impressive buildings, presidential press briefings, policy battles—but it no more does the actual work of governing than the employees at Nike’s Beaverton campus stitch running shoes.
The implications of the decision by the current crop of politicians to systematically outsource their elected responsibilities will reach far beyond a single administration. Once a market has been created, it needs to be protected. The companies at the heart of the disaster capitalism complex increasingly regard both the state and nonprofits as competitors—from the corporate perspective, whenever governments or charities fulfill their traditional roles, they are denying contractors work that could be performed at a profit.
“Neglected Defense: Mobilizing the Private Sector to Support Homeland Security,” a 2006 report whose advisory committee included some of the largest corporations in the sector, warned that “the compassionate federal impulse to provide emergency assistance to the victims of disasters affects the market’s approach to managing its exposure to risk.”31 Published by the Council on Foreign Relations, the report argued that if people know the government will come to the rescue, they have no incentive to pay for privatized protection. In a similar vein, a year after Katrina, CEOs from thirty of the largest corporations in the United States joined together under the umbrella of the Business Roundtable, which includes in its membership Fluor, Bechtel and Chevron. The group, calling itself Partnership for Disaster Response, complained of “mission creep” by the nonprofit sector in the aftermath of disasters. Apparently charities and NGOs were infringing on their market by donating building supplies rather than having Home Depot supply them for a fee. The mercenary firms, meanwhile, have been loudly claiming that they are better equipped to engage in peacekeeping in Darfur than the UN.32
Much of this new aggressiveness flows from the fact that the corporate world knows that the golden era of bottomless federal contracts cannot last much longer. The U.S. government is barreling toward an economic crisis, in no small part thanks to the deficit spending that has bankrolled the construction of the privatized disaster economy. That means that sooner rather than later, the contracts are going to dip significantly. In late 2006, defense analysts began predicting that the Pentagon’s acquisitions budget could shrink by as much as 25 percent in the coming decade.33
When the disaster bubble bursts, firms such as Bechtel, Fluor and Blackwater will lose much of their primary revenue streams. They will still have all the high-tech gear and equipment bought at taxpayer expense, but they will need to find a new business model, a new way to cover their high costs. The next phase of the disaster capitalism complex is all too clear: with emergencies on the rise, government no longer able to foot the bill, and citizens stranded by their can’t-do state, the parallel corporate state will rent back its disaster infrastructure to whoever can afford it, at whatever price the market will bear. For sale will be everything from helicopter rides off rooftops to drinking water to beds in shelters.
Already wealth provides an escape hatch from most disasters—it buys early-warning systems for tsunami-prone regions and stockpiles of Tamiflu for the next outbreak. It buys bottled water, generators, satellite phones and rent-a-cops. During the Israeli attack on Lebanon in 2006, the U.S. government initially t
ried to charge its citizens for the cost of their own evacuations, though it was eventually forced to back down.34 If we continue in this direction, the images of people stranded on New Orleans rooftops will not only be a glimpse of America’s unresolved past of racial inequality but will also foreshadow a collective future of disaster apartheid in which survival is determined by who can afford to pay for escape.
Looking ahead to coming disasters, ecological and political, we often assume that we are all going to face them together, that what’s needed are leaders who recognize the destructive course we are on. But I’m not so sure. Perhaps part of the reason why so many of our elites, both political and corporate, are so sanguine about climate change is that they are confident they will be able to buy their way out of the worst of it. This may also partially explain why so many Bush supporters are Christian end-timers. It’s not just that they need to believe there is an escape hatch from the world they are creating. It’s that the Rapture is a parable for what they are building down here—a system that invites destruction and disaster, then swoops in with private helicopters and airlifts them and their friends to divine safety.
As contractors rush to develop alternative stable sources of revenue, one avenue is disaster-proofing other corporations. This was Paul Bremer’s line of business before he went to Iraq: turning multinationals into security bubbles, able to function smoothly even if the states in which they are functioning are crumbling around them. The early results can be seen in the lobbies of many major office buildings in New York or London—airport-style check-ins complete with photo-ID requirements and X-ray machines—but the industry has far greater ambitions, including privatized global communications networks, emergency health and electricity, and the ability to locate and provide transportation for a global workforce in the midst of a major disaster. Another potential growth area identified by the disaster capitalism complex is municipal government: the contracting-out of police and fire departments to private security companies. “What they do for the military in downtown Falluja, they can do for the police in downtown Reno,” a spokesperson for Lockheed Martin said in November 2004.35
The industry predicts that these new markets will expand dramatically over the next decade. A frank vision of where these trends are leading is provided by John Robb, a former covert-action mission commander with Delta Force turned successful management consultant. In a widely circulated manifesto for Fast Company magazine, he describes the “end result” of the war on terror as “a new, more resilient approach to national security, one built not around the state but around private citizens and companies…. Security will become a function of where you live and whom you work for, much as health care is allocated already.”36
Robb writes, “Wealthy individuals and multinational corporations will be the first to bail out of our collective system, opting instead to hire private military companies, such as Blackwater and Triple Canopy, to protect their homes and facilities and establish a protective perimeter around daily life. Parallel transportation networks—evolving out of the time-share aircraft companies such as Warren Buffett’s NetJets—will cater to this group, leapfrogging its members from one secure, well-appointed lily pad to the next.” That elite world is already largely in place, but Robb predicts that the middle class will soon follow suit, “forming suburban collectives to share the costs of security.” These “‘armored suburbs’ will deploy and maintain backup generators and communications links” and be patrolled by private militias “that have received corporate training and boast their own state-of-the-art emergency-response systems.”
In other words, a world of suburban Green Zones. As for those outside the secured perimeter, “they will have to make do with the remains of the national system. They will gravitate to America’s cities, where they will be subject to ubiquitous surveillance and marginal or nonexistent services. For the poor, there will be no other refuge.”
The future Robb described sounds very much like the present in New Orleans, where two very different kinds of gated communities emerged from the rubble. On the one hand were the so-called FEMA-villes: desolate, out-of-the way trailer camps for low-income evacuees, built by Bechtel or Fluor subcontractors, administered by private security companies who patrolled the gravel lots, restricted visitors, kept journalists out and treated survivors like criminals. On the other hand were the gated communities built in the wealthy areas of the city, such as Audubon and the Garden District, bubbles of functionality that seemed to have seceded from the state altogether. Within weeks of the storm, residents there had water and powerful emergency generators. Their sick were treated in private hospitals, and their children went to new charter schools. As usual, they had no need for public transit. In St. Bernard Parish, a New Orleans suburb, DynCorp had taken over much of the policing; other neighborhoods hired security companies directly. Between the two kinds of privatized sovereign states was the New Orleans version of the Red Zone, where the murder rate soared and neighborhoods like the storied Lower Ninth Ward descended into a post-apocalyptic no-man’s-land. A hit song by the rapper Juvenile in the summer after Katrina summed up the atmosphere: “We livin’ like Haiti without no government”—failed state U.S.A.37
Bill Quigley, a local lawyer and activist, observed, “What is happening in New Orleans is just a more concentrated, more graphic version of what is going on all over our country. Every city in our country has some serious similarities to New Orleans. Every city has some abandoned neighborhoods. Every city in our country has abandoned some public education, public housing, public healthcare, and criminal justice. Those who do not support public education, healthcare, and housing will continue to turn all of our country into the Lower Ninth Ward unless we stop them.”38
The process is already well under way. Another glimpse of a disaster apartheid future can be found in a wealthy Republican suburb outside Atlanta. Its residents decided that they were tired of watching their property taxes subsidize schools and police in the county’s low-income African-American neighborhoods. They voted to incorporate as their own city, Sandy Springs, which could spend its taxes on services for its 100,000 citizens and not have the revenues redistributed throughout the larger Fulton County. The only difficulty was that Sandy Springs had no government structures and needed to build them from scratch—everything from tax collection, to zoning, to parks and recreation. In September 2005, the same month that New Orleans flooded, the residents of Sandy Springs were approached by the construction and consulting giant CH2M Hill with a unique pitch: let us do it for you. For the starting price of $27 million a year, the contractor pledged to build a complete city from the ground up.39
A few months later, Sandy Springs became the first “contract city.” Only four people worked directly for the new municipality—everyone else was a contractor. Rick Hirsekorn, heading up the project for CH2M Hill, described Sandy Springs as “a clean sheet of paper with no governmental processes in place.” He told another journalist that “no one in our industry has done a complete city of this size before.”40
The Atlanta Journal-Constitution reported that “when Sandy Springs hired corporate workers to run the new city, it was considered a bold experiment.” Within a year, however, contract-city mania was tearing through Atlanta’s wealthy suburbs, and it had become “standard procedure in north Fulton [County].” Neighboring communities took their cue from Sandy Springs and also voted to become stand-alone cities and contract out their government. One new city, Milton, immediately hired CH2M Hill for the job—after all, it had the experience. Soon, a campaign began for the new corporate cities to join together to form their own county, which would mean that none of their tax dollars would go to the poor neighborhoods nearby. The plan has encountered fierce opposition outside the proposed enclave, where politicians say that without those tax dollars, they will no longer be able to afford their large public hospital and public transit system; that partitioning the county would create a failed state on the one hand and a hyperserviced one on the
other. What they were describing sounded a lot like New Orleans and a little like Baghdad.41
In these wealthy Atlanta suburbs, the three-decade corporatist crusade to strip-mine the state was complete: it wasn’t just every government service that had been outsourced but also the very function of government, which is to govern. It was particularly fitting that the new ground was broken by CH2M Hill. The corporation was a multimillion-dollar contractor in Iraq, paid to perform the core government function of overseeing other contractors. In Sri Lanka after the tsunami, it had not only built ports and bridges but was “responsible for the overall management of the infrastructure program.”42 In post-Katrina New Orleans, it was awarded $500 million to build FEMA-villes and put on standby to be ready to do the same for the next disaster. A master of privatizing the state during extraordinary circumstances, it was now doing the same under ordinary ones. If Iraq was a laboratory of extreme privatization, the testing phase was clearly over.
CHAPTER 21
LOSING THE PEACE INCENTIVE
ISRAEL AS WARNING
Big border fences belong not to the world of the gulag but to the world of noise barriers along highways, luxury boxes in sports stadiums, no-smoking areas, security zones in airports and “gated communities.”…They make explicit the privileges of the haves and the envy of the have-nots in a way that is embarrassing for both. That is not the same as saying they do not work.