Disaster Capitalism - The Kenyan Example
by andrew@JijniMarkets - Fri 06 Jun 2008
The book 'The Shock Doctrine' by the anti-capitalist Naomi Kline (of 'No Logo' fame) will send chills down your spine and probably make you very angry with the lengths that now seem necessary for capitalism to spread. Disaster Capitalism is the name given to the new phenomenon of not only profiting from disasters but the entire industry that has grown out of creating then profiting from these disasters.
The book gives an extensive array of examples ranging from the 2004 tsunami (that "cleared" the poor from idyllic beaches and enabled rich hoteliers to grab prime beach properties) to the war in Iraq (which became a frenzy for private companies bidding for contracts ranging from supplying weapons to rebuilding infrastructure to, in some cases, actually fighting the war as private defense companies). The underlying argument that Naomi Kline makes is that pure capitalism as preached by institutions like the World Bank and IMF to developing nations is only possible in the absence of peace and democracy and can only be implemented during times of "shock" like wars and natural disasters when the population is disoriented and pre-occupied. The reason behind this is simple: In a true democracy, the poor will always vote for a government that aims to help the poor through equal distribution of wealth and social programs - ideas abhorred by pure capitalists; As the poor will almost always outnumber the rich (ironically, due to the unequal distribution of wealth created by capitalism) it is not difficult to see which sort of governments will dominate. In other words, true democracy and pure capitalism cannot truly co-exist.
This got me thinking about the Kenyan situation and whether we have this in evidence here. The disastrous elections last year pitted an economist and a socialist; one arguing that the economy was growing and businesses were doing well and the other positioning himself as fighting for the poor. Granted, the voting patterns had tribal undertones but in a country in which more than 50% of the population is said to live under $1 a day, it was not difficult to predict the likely choice of the majority. In the end, both sides resorted to shock tactics to get what they wanted: one side opted for a rigged election and the instant suspension of the democratic rights to protest, free speech and a free media; while the other opted for violence to obtain the land redistribution and international pressure they sort.
In the end, I feel, this is the irony of pure capitalism. If you encourage people to only look after their own self interest and not consider the less fortunate, you cannot begrudge them for using all means available to them - including corruption, crime and ultimately violence - to obtain what they feel is in their self interest.
The book briefly mentions an interesting idea. In any society you have the three forces of Labour, Business and Government. Labour and Business are in a constant tag of war (for wages, workers' rights, working conditions, etc) and the role of government is to act as arbitrator and regulator of the needs of the two. Where government completely sides with Labour you get communism and socialism. Where government completely sides with business you get pure capitalism. The answer lies somewhere between socialism (where the state provides free healthcare, education and maybe welfare) and capitalism (where business drives innovation and economic growth).
It took the disaster of electoral violence to make it possible but now that Kenya has the socialist and the capitalist both in government, my hope is that the balance between capitalism and socialism can be achieved. Anything less, will be - and I suspect will lead to - another disaster.
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