Disaster Capitalism Strikes Puerto Rico

It has been a year since Hurricane Maria devastated Puerto Rico, leaving a trail of destruction: ruined infrastructure, destroyed homes, and thousands ...

It has been a year since Hurricane Maria devastated Puerto Rico, leaving a trail of destruction: ruined infrastructure, destroyed homes, and thousands of fatalities. Since that particular hurricane has largely faded from the news, the slow rebuild continues and defining questions loom over the process: Who is Puerto Rico for? Outside investors and tourists or Puerto Ricans? After a collective trauma like Hurricane Maria, who has the right to decide for Puerto Rico? The fight for its future is underway.

This fight began immediately after the hurricane. Electricity, hospitals, water, roads, and more: all would require rebuilding, a process that could take two paths. Given the desperation and distraction brought about by the disaster, the federal government, corporations, and investors sensed an opportunity: Puerto Rican society was at its most vulnerable, making it the perfect time to snap up bargains, privatize industry, and remake the island. A small elite of non-islanders, who own and control infrastructure and resources, would benefit from the profit-driven privatization and monetization of the island, which has been touted as the libertarian enclave of cryptowealth, a tax haven for certain private interests.

The other possibility, as the activist Naomi Klein writes in her new book, The Battle for Paradise: Puerto Rico Takes on the Disaster Capitalists (2018), is to look for positive, real change in the island’s future after decades of oppression. Now is an opportune time to stop the exploitative colonial relationship that Puerto Rico has long suffered as a result of its constructed dependence on the US for food, energy, finance, and other resources. This process would finally give political and social power to the people and increase autonomy and self-sufficiency.

But that will not be a straightforward process. The aftermath of the hurricane left the “perfect opening” for exploiting the disaster and post-storm chaos, according to Klein. The electrical grid is one such opening: In January, the governor of Puerto Rico, Ricardo Rosselló, announced that it would be privatized. This process is underway and represents a prime opening of the market for profit-motivated private energy companies. Subsequently, in March, while thousands were still without lighting or reliable water and having their insurance claims rejected, a hedge fund manager hosted the Puerto Crypto conference to promote the island as the center of the blockchain and cryptocurrency industries and as a tax and corporate haven. It’s all up for grabs: health, transport, education, and identity. Disaster creates a unique environment in which corporations and investors thrive.

This notion is the overarching theme of Klein’s 2007 book, The Shock Doctrine: The Rise of Disaster Capitalism, which traces exploitative neoliberal economic history substantiated by examples from Chile, Iraq, and New Orleans. Klein proposes that disaster—in myriad forms, from coups d’état to hurricanes to terror and wars on terror—is harnessed by governments, corporations, and investors to promote and solidify an economic and political framework of totally unrestricted markets and private enterprise. In order to generate economic gains for privileged stakeholders, the doctrine demands that the free market, free trade, and free enterprise rule, regardless of the other costs.1

Klein’s punchy recent book covers the island’s post-1898 history as a subjugated, dominated, exploited, neglected, and colonial outpost of the United States. Klein draws on contemporary examples such as the recent influx of blockchain entrepreneurs—“Puertopians”—who are there to take advantage of reduced tax rates as well as the exodus of long-term residents starved of basic resources and opportunity. Klein’s book also briefly provides vital information about the deeper crises before Maria hit the island: its colonial exploitation by the US, leading to—among other things—a debt crisis that weakened the economy and led to disinvestment. The island was bankrupt and left with a $73 billion debt to the federal government. Couple that with aged or neglected infrastructure, corruption, and mismanagement, and it is clear that the island was already in crisis before Maria hit. The fault, as Klein sees it, lies not with the island or its lack of resources but with the vicious cycle of dependence imposed by the federal government, which has kept the island in seemingly perpetual crisis.

The fight for Puerto Rico’s future is underway.

Then, when the hurricane hit, it became a disaster zone that received an inadequate government response. In June, as the 2018 hurricane season was beginning, and in September, as Florence approached the US mainland, Donald Trump congratulated the Federal Emergency Management Agency on its excellent response and perfect handling of Maria even though the large majority of fatalities were in its aftermath.2 Simultaneously, many Puerto Ricans were still without power and water, had had their insurance claims stalled or rejected, and were being offered venture loans—not aid—to get back on their feet. Through the incompetent crisis response, the cycle of dependence continued.

Puerto Rico is at a crossroads. On the one hand, prompted by disaster and vulnerability, wealthy companies and individuals are able to have a stake in the island, its infrastructure, and its identity. If everything is sold off to profiteering companies and it becomes a crypto tax haven and tourist resort, most Puerto Ricans will again be forced back into an exploitative colonial dynamic, this time according to a tweaked neoliberal model. The current conditions provide the perfect opening to establish profit-driven, privatized remodel: the island, as the governor has put it, is a “blank canvas” for innovators and investors.

On the other hand, there is the push for a “Puerto Rico that is equitable, democratic, and sustainable for all” through local, inclusive grassroots initiatives centered on public education, renewable energy, and agro-ecology. This approach rejects the doubling down on the exploitation rooted in the longstanding colonial enterprise that has defined the island’s history as a United States territory.3 This is, then, a fight for sovereignty that has been pushed into the foreground by the hurricane but that has deeper roots. Puerto Ricans—represented more accurately by the mayor of San Juan, Carmen Yulín Cruz than the governor Ricardo Rosselló—are tired of not being heard, of being unequal citizens, and of having no say in the decision-making process. Seen in this way, this moment constitutes a humanitarian crisis and a case of the abuse of citizens’ rights. The question now is whether a different future is possible.

Puerto Rico is not the only place where disaster capitalism has taken root or where people dream of something else emerging from the ruins of exploitative neoliberal capitalism. This second option requires a fundamental rethinking of priorities, according to activist and author George Monbiot in Out of the Wreckage: A New Politics for an Age of Crisis (2017).

The neoliberal “story,” as Monbiot calls it, rejects the “over-mighty state” to restore order “in the form of free markets, delivering wealth and opportunity, guaranteeing a prosperous future for everyone.” We tell ourselves that this dominant organizing structure is the way of the world. That guiding idea, however, never materialized and instead led to an age of multidimensional crisis: environmental, political, social, and economic, depending on where and how keenly you look. The neoliberal “prosperous future”—the purported trickling down of capital to benefit all—has long been a fallacy. Take Puerto Rico, for example. Years of constructed dependence followed by Hurricane Maria have created extreme crisis and inequality. And yet one solution is to reinforce and extend similar neoliberal structures that have so adeptly harmed the island.


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For Monbiot, certain features of contemporary capitalist societies—economic exploitation, acute inequality, climate degradation, political corruption, and so on—generate a deepening and seemingly perpetual crisis. These salient, increasing inequalities and persistent human injustices are in fact integral features of the dominant Western ideology of our times. How is it, Monbiot asks, that the “neoliberal story” persists when its pitfalls and egregious exploitation are so apparent? Monbiot contends that through a “failure of the imagination,” we—the “silent majorities”—“have failed to understand what is possible, and above all failed to tell a new compelling story of transformation and restoration.” If that were to change, there would be nothing that this “small minority” could do and once people realize “how powerful they are and how useful they can be, and how politics and government can belong to all of us rather than only a remote elite, we will become unstoppable.” Monbiot backs up these stirring claims with examples that include “near misses” that gestured towards some fundamental change: the near nomination of Bernie Sanders, for example. Other examples flesh out a new “politics of belonging,” in which we are all, or should be, equal stakeholders in the commons. This is the story that Klein writes optimistically in Puerto Rico; it is the other possible future, one with democratic equity in decision-making, the right to self-determination.

Disaster capitalism sees the implementation of an economic system in the shadow of a disaster. This new system—the neoliberal doctrine, Klein would call it—changed the way of doing business, in which state involvement is diminished while private, corporate interests are promoted. The “shock” that Klein discusses is felt during the transition to an extreme neoliberal, free-market iteration in the wake of a disaster that can come in various forms. For example, the coup d’état in Chile in 1973, promoted and facilitated by the CIA, deposed of socialist president Salvador Allende and installed Augusto Pinochet, whose rule centered on neoliberal ideology and free-market principles. Or, Hurricane Katrina: the shock of the original disaster of the flooding and evacuations (disproportionately impacting poor African-American residents) was followed by the economic shock therapy that exploited the chance to make money from the valuable opportunities at cut-price and under a short-termist guise of “rebuilding,” which would disproportionately benefit those with financial stakes: public schools could be turned into charter schools, public housing projects into condominiums. Then there was the occupation of Iraq, when the War on Terror gave carte blanche to the US military and its contractors to “democratize” the Middle East, opening up new markets to “economic freedom,” supposedly for everyone’s gain but ultimately benefiting a very select few. And, of course, there’s Puerto Rico, just one of countless examples.

That there are many cases of disaster capitalism is a point made by journalist Antony Loewenstein in his book, Disaster Capitalism: Making a Killing out of Catastrophe (2015), and in the 2018 documentary Disaster Capitalism. In these comprehensive and unsettling works, he covers war (in Afghanistan), aid (in Haiti following the 2010 earthquake), and environmental exploitation (in Papua New Guinea). He also cites many other examples of exploitative economic practices—those that aim to make money for corporations or purposefully impoverish citizens—in Greece, the UK, the US, and Australia.

Early on in the book, Loewenstein makes an important terminological point: “Whether we call this disaster capitalism,” he writes, “or just a product of the unavoidable excesses and inequalities of capitalism itself, the end result is still a world ruled by unaccountable markets.” Although Loewenstein neglects to flesh this out, it is a crucial observation: what he sees in disparate locations and contexts is not necessarily produced or predicated by a disaster or extraordinary event.4 The crisis that Loewenstein documents pervades capitalist societies and lies in actors systematically embracing exploitative and damaging practices in the unfolding of the neoliberal story.

Capitalism is inherently disastrous and in crisis, not exceptionally.

Be it detention centers in the US, relief aid in Haiti, military contractors in Afghanistan, economic sanctions on Greece, complicit corporate-sponsored NGOs in the developing world, or prison systems across much of the Western world, “predatory behavior” does vary “from country to country, but the strategy is the same: exaggerate a threat, man-made or natural, and let loose unaccountable private-sector contractors to exploit it.” Loewenstein frequently uses the term “disaster” seemingly interchangeably with terms like “exploitative,” “crisis,” and “predatory” as descriptors of capitalism. That he settles on no single word is not a weakness, but rather an intriguing diagnosis: capitalism in its current expression and at its worst is all of those things and more.

Once you pry open the terminology a little bit, as Loewenstein implies, one finds that the leverage of “disaster capitalism” now stretches far beyond that which Klein identified. In Loewenstein’s reckoning, there are still the more “traditional” disasters and economic shock therapy “solutions,” and perhaps it is those more obvious shocks that generate the conditions that allow for a particularly nefarious and obvious expression of largely harmful neoliberal capitalism, as is beginning to unfold in Puerto Rico.

In the background, however, a more unsettling picture also emerges, in which those exploitative machinations continue to take hold, progressively and aggressively, even without a disaster or shock. Indeed, after reading Loewenstein’s book, one is left wondering what isn’t impacted by the nefarious tendrils of “disaster” capitalism—education, the aid system, non-profit organizations, the democratic electoral system, privacy, healthcare, big tech, big data, underemployment. Nothing is safe from the imperial reach of a commodified system of capital. Disaster or not, it now seems that capitalism seeks to get into unexplored cracks and expand whether or not we like or even recognize it. A disaster often serves to foreground these ever-present traits. As such, “disaster” may no longer refer to specific shocks or changes in the economic system but rather to the system itself. “Disaster” can serve as a modifier concerning the very nature of capitalism and its development within a broad framework of neoliberalism. That is, it is inherently disastrous and in crisis, not exceptionally.

Klein, Monbiot, and Loewenstein chime with the positive possibility of resolution and change, often by citing cases in which the greedy reach of capitalism has been at least limited: the ongoing fight for Puerto Rico is testament to that. The three authors also ultimately demand—somewhat hopefully, or perhaps hopelessly—a need for modern societies “to view humans as more than just consumers.” Monbiot goes further, pushing for a “regime change,” in which the system is replaced rather than reformed.5 As such, their objective seems not to be “benevolent capitalism” or “sustainable capitalism” but rather “not capitalism.”


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Aside from wishful thinking, however, is there either an individual or a collective impulse to make that change? Monbiot’s argument relies on massive hopes and expectations: a fundamental change of discourse, a willing regression of development, and a form of deglobalization and contraction of capital financial systems predicated on the end of excess, a restriction of consumption, the end of inequality and inequity, and living within our means. The question remains as to whether this “age of crisis” represented by contemporary neoliberalism is profound enough to bring about this sort of change, or whether the increasingly disastrous development of capitalism will continue apace even as an apparent existential threat looms.

In the meantime, are we able, as Monbiot asks, to act more justly in order to pursue the collective good through a “new politics”? Or is the broader ideology of capitalism so indoctrinated and accepted in the West that we will just carry on, repressed by a system guided by inherent injustice and inequality, one defined by faceless entities, multifaceted crises, and purposefully exploitative practices? This second option seems more likely, at least until catastrophic events—running out of resources, rising temperatures and sea levels, mass migrations, and so on—directly impact many millions (in the West), forcing a profound, systemic change in thinking.

Puerto Rico, which suffered a disastrous, catastrophic event just a year ago, lives in hope for meaningful, positive change that reaches the whole population. But the playing field is uneven: Puerto Rico’s future is currently being decided elsewhere, in Washington, DC and corporate boardrooms. This iteration of capitalism that thrives on crisis will continue the exploitation and inequality that Puerto Rico has suffered for years. Except now, if all goes according to plan, a small minority will have even more power and money: capitalism at its malicious and exploitative peak. Is another future possible? For now, it seems not.


This article was commissioned by Caitlin Zaloom. icon

  1. Disclosure: the author is not related to Michael Winterbottom, the director of the 2009 documentary inspired by Klein’s book.
  2. The official US government figure put the death toll at 64 shortly after the hurricane; a recent Harvard University study estimates that approximately 4,645 lost their lives. This estimate includes deaths directly caused by the hurricane and in the three months following, largely a result of inadequate crisis response and a lack of food, water, and electricity.
  3. This quote comes from the foreword to Klein’s book, penned by five professors who represent PAReS (Professors Self-Assembled in Solidarity Resistance), a collective created to defend public education during the 2017 University of Puerto Rico student strike—another pre-Hurricane Maria crisis.
  4. The inequality inherent in capitalism is the central axis of Thomas Piketty’s Capital in the Twenty-First Century (2013).
  5. “We are not fighting to tinker with reforming a system that needs to be replaced,” writes Arundhati Roy in Capitalism: A Ghost Story (2014).
Featured image: Morning after Hurricane Maria. Photograph by Roosevelt Skerrit / Flickr