My new book Profits of Doom is released officially today. There will be an avalanche of media and events in the coming weeks and months but in the meantime my publisher, Melbourne University Publishing, has published the introduction to the work. You can buy the book via Amazon and my publisher.
Please read and share:
We can start by applying what I call ‘The Google Test’. If you can find a good or service on the internet, then the federal government probably doesn’t need to be doing it.—Tim Pawlenty, former Republican governor and business lobbyist, 2011
Today in the United States there are over six million people under some form of ‘correctional supervision’, including more black men than at the height of slavery in 1850. People of colour make up only 30 per cent of the American population, yet ethnic and racial minorities comprise 60 per cent of the prison population; one in three black men will end up behind bars in their lifetime. In 1936, the Gulag Archipelago under Joseph Stalin held fewer people in jail—five million—than currently live behind bars in America.
There are a multitude of reasons for this, not least the ineffectual ‘war on drugs’ that disproportionally targets neighbourhoods and communities where people of colour predominantly reside. But possibly the key development has been the expansion of the prison– industrial complex. In the last three decades in the United States, six times more money has been spent on jailing citizens than on educating them.
There is a massive private industry that thrives on keeping prison beds occupied, and reflects how American for-profit companies lead the world in aggressively pursuing and achieving billion-dollarcontracts. For example, the country’s largest private prison firm, the Corrections Corporation of America (CCA), recorded revenue in 2011 of US$1.7 billion. Such profits can be traced to the fact that between 1999 and 2010, the use of private prisons grew by 784 per cent in the US federal prison system and jumped by 40 per cent at the state level. Nearly half of all the prisons built between 2000 and 2005 were privately run, and nearly half of all immigrants detained by the US Government were sent to for-profit facilities.
‘The interest of private prisons lies not in the obvious social good of having the minimum number of inmates’, writes staff writer Adam Gopnik in The New Yorker,‘but in having as many as possible, housed as cheaply as possible’. He exposes a 2005 CCA annual report detailing the millions spent annually to lobby for more contracts, and warning investors of the commercial consequences of a reduction in the number of convicted prisoners:
Our growth is generally dependent upon our ability to obtain new contracts to develop and manage new correctional and detention facilities … The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction and sentencing practices or through the decriminalisation of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them.
The CCA’s long-term priorities were underlined in a letter it sent to the governments of 48 US states offering to buy their prisons, conditional on a 20-year management contract and a guarantee that 90 per cent of inmate beds would remain occupied.
America has the dubious honour of leading a global push towards privatised prisons. Its corporations spin a web of influence to keep citizens incarcerated, including campaign contributions to political candidates, the lobbying of government, and relationships with former and current officials. This means that legislators pass tough-on-crime laws that guarantee the private prison operators large profits at US taxpayers’ expense. The extent to which private prisons have infiltrated all levels of American society was high- lighted in 2013, when Florida Atlantic University renamed its football stadium after a for-profit prison firm, GEO Group. The university proudly announced that the corporation would also be funding scholarships.
Louisiana, which has a population of around four and a half million people, is the world’s prison capital. One in 86 of its citizens is behind bars, an incarceration figure five times greater than Iran’s, thirteen times greater than China’s and twenty times greater than Germany’s. The last two decades have seen an explosion in local sheriffs running the state’s institutions on the cheap, seduced by the idea of more ‘efficient’ private institutions, while less money has been spent on social programs to stop people ending up in trouble with the law. ‘The good old boys [judges, prosecutors and sheriffs] are all linked together in the punishment network’, says criminologist Burk Foster, a reality assisted by an intense and lucrative lobbying network. The American Civil Liberties Union documented in2011 how privatised prisons impede the campaign for sentencing reform, the most necessary remedy to the issue of the large number of inmates (over 9 per cent of America’s prison population) who live in private jails. It also found that ‘Ohio’s two private prison facilities offer fewer rehabilitation and training courses than their public counterparts’. It’s a similar situation in Arizona, where CCA was intimately involved in the drafting of punitive immigration legislation in 2010.
The commonly voiced argument is that private prisons save money, but this is a fallacy. Often, they only house the most healthy and therefore least expensive prisoners, leaving the more troubledinmates, or the individuals who need more care, to the public prison network.
None of this would be possible without a political, economic and financial environment that encourages corporate vultures to swoop down upon the carcasses of weakened institutions and industries. It’s an unaccountable ideology that has taken root in America without most of the population even knowing about it. And it’s a cancer that is spreading, this systematic dismantling of transparent government in the name of ‘efficiency’ and a hefty bottom line. One city in America, California’s Maywood, has outsourced every public service to the private sector. ‘Austerity’ is the catchword of the times, though in reality this often means cuts to government services that end up being run by the private sector. ‘It’s about using deficit panic as an excuse to dismantle social programs’, writes the economist Paul Krugman. The International Monetary Fund and the World Bank specialise in pushing this toxic agenda globally.
Why does any of this matter? Because there’s no evidence that selling off these assets brings either greater efficiency or service. ‘As more and more government functions get privatised’, arguesKrugman,‘states become pay-to-play paradises, in which both political contributions and contracts for friends and relatives become a quid pro quo for getting government business’.
But it also goes to the heart of the question of what kind of community we all want to live in: one run by an unaccountable private sector whose primary aim is to make a profit, or one made up of individuals and groups striving to serve the common good.
Crowded, privately run prisons are a classic example of a man-made social disaster promoted as good public policy, and CCA, and companies like it, are the main beneficiaries of this ideology. Sorarely challenged by major party politicians and mainstream journal- ists, it’s sold as inevitable and necessary progress in a capitalist society.
The term ‘disaster capitalism’ was coined by Canadian journalist Naomi Klein in her best-selling 2007 book The Shock Doctrine: The Rise of Disaster Capitalism. She observes that privatisation, government deregulation and deep cuts to social spending are often imposed after megadisasters, man-made or natural,‘all before victims of war or natural disaster [are] able to regroup and stake their claims to what [is] theirs’.
The aim of privatising government itself has existed for decades, but the attacks of 11 September 2001 accelerated the process in the United States because the Bush administration saw its ‘war on terror’ as a boon for the private sector. ‘Now wars and disaster responses are so fully privatised’, Klein argues, ‘that they are themselves the new market: there is no need to wait until after the war for the boom—the medium is the message’. These forced changes are implemented despite populations across the world routinely opposing them—if they know about the policies at all, that is. Resistance occurs because inefficiency, abuse, corruption and death cloud the sunny rhetoric offered by privatisation’s loudest defenders. Still, all too often, corporate power wins. The social andenvironmental costs of this are what I document in these pages.
Predatory capitalism goes way beyond exploiting disaster. Many ongoing crises seem to have been sustained by businesses to fuel industries in which they have a financial stake. These corporations are like vultures feeding on the body of a weakened government that must increasingly rely on the private sector to provide public services. It’s surely inarguable that the corporation is now fundamentally more powerful than the nation state, and that it is often the former that dictates terms to the latter—a profound shifting of authority that has taken place over the last half-century.
I’ve been reading Klein since her 1999 breakthrough book No Logo, which challenged the idea of uncontrolled global capitalism and documented the growing resistance to it. Klein spoke in Melbourne in the early 2000s, and her arguments resonated with me. She exposed global injustices, but instead of just attacking the individual or group at fault, she took her critique far deeper, into the economic system itself. Follow the money, she argued.
In the aftermath of Hurricane Sandy, which wreaked havoc in New York state in 2012, Klein wrote how the rich ‘would protect themselves from the less savoury effects of the economic model that made them so wealthy’. The ‘shock doctors’, she lamented, ‘are readying to exploit the climate crisis’. After Sandy ground up America’s east coast, The New York Times referred to the ‘Mad Max Economy, a multibillion-dollar a year collection of industries that thrive when things get really, really bad’.
Calling out the corporations that are causing global environmental damage is vital, as I explore in this book, as is accepting leading American environmentalist Bill McKibben’s assertion that ‘we need to view the fossil fuel industry in a new light. It has become a rogue industry, reckless like no other force on Earth’. However, I have expanded Klein’s thesis to focus not just on environmental catastrophe, war and the hidden costs of foreign aid, but also what happens when the resources sector and detention centres are privatised. These two industries are thriving in the twenty-first century and operate with an alarming disregard for human rights. Nothing less is required, in the words of Guardian columnist George Monbiot, than a ‘democratic mobilisation against plutocracy’.
My definition of ‘disaster’ has been expanded to include companies that entrench a crisis and then sell themselves as the only ones who can resolve it. Resources and detention centres are just the latest in a long line of assets and institutions that are vulnerable to unaccountable private power. Whether we call this disaster capitalism or just a product of the unavoidable excesses and inequalities of capitalism itself, the end result is still a world ruled by markets.
It is not too fanciful to imagine the end point being the privatisation of the natural world itself. No good can come of all this.
The last ten years have found me in some of the more challenging places on earth, and the evidence before my eyes convinced me to undertake this project—to visit a range of countries and sites of rampant privatisation. I am proud to be an activist and a journalist. I believe that bearing witness to what I saw, and giving unequal players the right of reply, contributes balance to the privatisation debate, rather than the construct of ‘balance’. A constant theme in my previous books, My Israel Question and The Blogging Revolution, is uncovering the untold stories in the 24-hour news agenda. In this book, I scrutinise an economic system that thrives on ordered chaos and autocracy.
Far too few reporters demand transparency or challenge capitalism, preferring instead to operate comfortably within it. But so-called embedded journalism makes having insights close to impossible, and I’ve always opposed the concept. Heavily pushed by governments and the military after 9/11, it has led to a media that views business and political leaders as far more important than the individuals and societies affected by them. This work is an antidote to such thinking. It is my contribution to the ongoing fight against silence and complicity in our post-9/11 world. For beyond the shocking stories of torture, rendition, war, drone attacks and disappearances that occasionally flicker in the mainstream media, before disappearing to make room for news about the latest reality TV show, lie narratives that are routinely ignored. The effects of policies crafted in Western capitals have clear ramifications for citizens all around the world, but only if we care to look. This book considers the view from below, the experiences of people who are all-too-often invisible in the daily media cycle.
John Pilger writes in the introduction to his book Heroes that citizens in the developing world are mostly framed in the West as ‘demons or victims’, a characterisation that automatically excludesperhaps the dirtiest word in modern English: imperialism. There isn’t a country I visit in the context of this book where this legacy hasn’t scarred the landscape and its people, and the offence is worsened by its omission from Western media reportage. It’s comforting to imagine that this ideology disappeared along with the age of sepia-tinged film, but that’s not the case. The propaganda has simply become more sophisticated and its proponents more brazen.
Predatory capitalism doesn’t just infect the developing world. Far too often, policies that have been tried and failed in poor nations are equally applied in wealthier nations in a time of profound weakness. In the wake of the 2011 earthquake and tsunami in Japan, it didn’t take long for commentators to call for ‘reform’, code for mass privatisation that would allow big business a free hand in redeveloping the devastated areas using generous tax breaks. Murray McLean, Australia’s former ambassador to Japan, argued that trade liberalisation was one viable solution, but he was worried that leaders would remain ‘bogged down in policymaking malaise’. His suggestions sounded benign, but they were remarkably similar to the prescriptions described by Klein in The Shock Doctrine in relation to the Boxing Day 2004 tsunami in Sri Lanka. These included ‘public–private partnerships’,‘flexible labour laws’ and the opening up of the economy to privatisation. It should not be revolutionary to include moral calculations when discussing economic models.
For this book, I visited places that provide unique insights into the cashed-up world of disaster profiteers, resource hunters, war contractors and aid leeches. The narrative of supposed progress is seemingly unstoppable and beyond critique. After all, who doesn’t want to help the people of Papua New Guinea (PNG) become independent through mining if this is the path to nirvana? But the facts on the ground tell a different story.
Australia has privatised all of its detention centres for asylum seekers, which are now run by multinational companies. Few other countries have so comprehensively outsourced such facilities to so few companies and with so little government oversight and media scrutiny. I visited two of the more remote facilities, to investigate the reality of this privatised world and how it affects refugees and the staff who work there.
The struggle for valuable resources is happening not just in developing countries but much closer to my home. The Kimberley in Western Australia is experiencing a monumental fight over a proposed Woodside-managed liquefied natural gas (LNG) plant at James Price Point. The area could become one of the world’s major providers of gas in the coming decade, and I delve into the conflict taking place between environmentalists, the state and federal governments, and the local Indigenous community. This is a proxy battle in the coming war against catastrophic climate change amid conflicting ways of achieving a cooler earth.
I travel to PNG, the recipient of the greatest amount of Australian aid annually, to see whether its mining boom has helped or hindered the country. Like so many other poor nations blessed with abundant resources, PNG is plagued by multinationals that have operated there for decades, investing billions of dollars in exploiting what lies beneath the ground while residents recoup few tangible benefits and see little effect on their standard of living. The environmental costs have been massive. Corruption is rife. The so-called resource curse is alive and well.
The role of privatised militaries and intelligence gatherers since the attacks on New York and Washington on 11 September 2001 prompt me to visit Pakistan and Afghanistan, the heart of the West’s war on terror. It’s a murky world, far away from the slick rhetoric voiced in London, Washington and Canberra. There, I meet muscled contractors making a packet in the pursuit of profit ideals that have nothing to do with democracy or freedom.
Finally, in Haiti, the poorest country in the Western Hemisphere, which is still recovering from the devastating earthquake of January 2010, I see the collusion between multinationals, NGOs, government officials, armed UN troops, aid groups and donors, all of whom regard the outsourcing of essential tasks to for-profit companies as progress.
These are stark examples of capitalism that has gone off the rails, though sadly they are not exclusive ones. I could have visited Equatorial Guinea, an oil-rich country beset by corruption and violence. Or I could have gone to Iraq and researched the Western firms that made a fortune after signing resource deals with the brutal former Baghdad regime, and the current one. Then there are the Western food and drink multinationals that are forging new markets in developing countries, which is leading to increased rates of diabetes, obesity and heart disease. Or what about Mongolia, the fastest-growing state in the world due to its copper and gold deposits? When I was there in 2000, the boom hadn’t yet happened and all I saw was a resilient people desperate to emerge from decades of oppressive policies dictated by Beijing and Moscow. Today, US lobbyists see Mongolia as experiencing a resource rush, but really it is just open season for vulture capitalists who can once again plunder a new frontier while leaving the vast majority of the locals with little.
Every place I investigate is culturally, politically and socially different, but what connects them all is that they are subjected to the predatory ideology of corporations aiming to make money on a global scale. To understand why this is happening in the twenty-first century requires the challenging of cherished beliefs concerning aid and development, war and democracy, and in particular the modern, borderless nature of capitalism. Capitalism and the partner concept of privatisation are feverishly pursued by their most dedicated followers, who institute logical market principles in disaster zones, impoverished nations and developed countries with a refugee ‘problem’. Yet time and time again, they fail to enrich anybody other than the handful of individuals clever enough to jump on board the well-stocked gravy train.
Advocates of privatisation tend to make wildly inaccurate claims about its benefits. Scottish historian Niall Ferguson, an enthusiastic supporter of the rehabilitation of the supposed benefits of Americanand British colonialism, articulates the thoughts of the privatising, deregulating, capitalist mind. ‘The mystery is why freedom-loving Americans are so averse to privatisation’, he laments, ‘a policy that has been a huge success nearly everywhere it’s been tried’. This is the mainstream consensus, echoed by the media and major political parties—that privatisation is essential to continued growth. But Ferguson is fundamentally wrong. He cites Britain, from Margaret Thatcher onwards, as an ideal model, conveniently ignoring the fact that the gap in wages between the highest and lower earners in the UK has widened in the last quarter-century, and that the number of working people living in poverty has never been higher.
Presumably, Ferguson would suggest that selling off more public assets is the answer, a ‘sale of the twenty-first century’. Of course, this didn’t help Greece in 2011, when it announced what turned out to be a futile 50-billion-euro fire sale to privatise even more assets in the country. Regardless, The New York Times has encouraged more of the same failed policies, an outsourcing mantra that is endlessly repeated despite intelligent and legitimate public opposition. ‘While we sympathise with Greek protests against excessive austerity’, the paper lectured,‘we have no patience with politicians who continue to drag their feet over pro-growth reforms and privatisations’. A counterview comes from Rolling Stone journalist Matt Taibbi, who argues that capitalism has become little more than a ‘tendency to marry the near-limitless power of the federal government with increasingly concentrated, increasingly unaccountable private financial interests’.
The extent of collusion between private interests and the state has never been stronger, and thought being given to sustainability never rarer. Documents uncovered in 2012 by American legalorganisation The Partnership for Civil Justice Fund (PCJF) revealed a web of connections between the FBI, state and federal governments, and the big US banks concerning a plan to disrupt violently the burgeoning Occupy movement, a global protest against economic and social inequality. ‘Federal agencies functioned as a de facto intelligence arm of Wall Street and Corporate America’, argued PCJF executive director Mara Verheyden-Hilliard, who further claimed that peaceful activists were labelled a ‘terrorist threat’. This is because contractors are keen to expand their markets into domestic heartlands instead of just operating in overseas theatres. Certainly, some are keen to practise local damage control. After BP and Halliburton caused a massive oil spill on the US Gulf Coast in 2010, BP hired Blackwater (a private military company, now called Academi) to stop reporters from venturing onto public beaches, so that an accurate view of the environmental damage could not be determined.34 This happened in allegedly democratic America, though it is what occurs in remote locations, far away from prying NGOs and journalists, that I document in this book.
Britain has allowed predatory capitalists more access to public assets than most other democratic countries. The British multinational G4S is at the forefront of securing government business, having already benefited from the privatising of everything from probation services to police tasks such as criminal investigations and the detaining of suspects. The firm’s record in abusing the human rights of the most vulnerable in its care, including asylum seekers and those forcibly deported, has not adversely affected its ability to obtain more state contracts. Another British company, Serco, continues to thrive at a time when public service austerity is a political catchcry; in 2013, Serco announced a 27 per cent rise in profits. Such corporations are transglobal, operating across jurisdictions in the pursuit of profit making.
There is corporate logic in outsourcing, but that seemed to go missing when G4S botched its delivery of 10,000 security guards for the 2012 London Olympics. Interestingly, the ensuing controversy largely focused on the company’s cock-up rather than the inherent problem of relying on a corporation that bills itself as the ‘world’s leading international security solutions group’. British columnist Laurie Penny rightly wondered why ‘the state still has a legal monopoly on violence but it is now prepared to auction that monopoly to anyone with a turnover of billions and a jolly branding strategy’. The multinational’s theme song, set to cheesy synths, should have rung alarm bells: ‘The enemy prowls, wanting to attack, but we’re on the wall, we’ve got your back’.
Resistance to outsourcing in Britain grew after the London Olympics. However, in response, a government home affairs committee delivered a report into the debacle merely recommending that the government institute a register of ‘high-risk’ corporations that fail to deliver effectively public services. This occurred despite the fact that the outsourcing business model sells itself as an essential replacement for government, not as complementary to it. The democratic control of essential services is lost, and wages and conditions lowered for workers, when privatisation is pursued.
This political synergy and belief in privatisation within a two-party, neoliberal system has another spin-off: a revolving door between government and private industry.38 Former British defences ecretary John Reid went from privatising government services to becoming a G4S director. Countless Ministry of Defence officials move seamlessly between arms manufacturers and government jobs. Disaster capitalism is sustained when the lines between the public and private realms are rendered invisible. Indeed, it hasn’t escaped the attention of millions of British public service workers, who are often in the redundancy firing line when privatisation occurs, that the bulk of the profits gained by outsourcers come from the taxpayer. And those profits can be enormous. The Channel 4 program Dispatches revealed that the salary of G4S head Nick Buckles in 2009 was nearly £4 million; Serco boss Chris Hyman earned more than £5 million in the same year.
It’s vital for citizens to understand the neoliberal economic model. This is not to idealise the public sector, which can also be filled with inefficiency, corruption and abuse. But clearly a greater level of accountability is needed from commercial-in-confidence agreements.
This book is a product of the post-9/11 environment. The mass expansion of the privatised surveillance state was in the realm of science fiction before that fateful September day in 2001. Today, there are close to one million Americans who hold top-security clearance. Robert Greiner, who was the CIA station chief in Islamabad, Pakistan, on 9/11, claimed in 2010 that he believed at least half of the staff working at the CIA’s counterterrorism centre were private contractors.
‘The world is a battlefield’ is a military ideology pursued by both Democrat and Republican administrations and detailed by investigative journalist Jeremy Scahill. This view is only bolstered by WikiLeaks documents, released in 2010, which uncovered a glut of previously unreported murders committed by privatised security and intelligence forces in the Afghan and Iraq conflict zones. These ghost figures operate in the shadows in dozens of countries, kidnapping, interrogating and killing suspects without oversight. Modern-day mercenary companies, justified by the state as essential to fighting terrorism, have been completely integrated into America’s endless war.
The war on terror has brought untold riches to corporations keen to profiteer from fear. These include the world’s largest aerospace company, Boeing, which was complicit in ‘extraordinary rendition’ flights, delivering suspects for torture. Lloyds Banking Group was also found to have invested in a company that flew individuals to global ‘black sites’. Often, the corporate state is brazen about such exploitation, as are its government associates. British Defence Secretary Philip Hammond told companies to ‘pack their suitcases’ to gain construction contracts at the tail end of the NATO campaign against Libya’s Muammar Gaddafi in 2011.
It’s hard to escape the conclusion that wars are often fought for the key reason of liberating new and willing markets. And with the war on terror likely to continue for decades, there will not be a shortage of new business to secure. Even the United Nations is increasingly relying on unaccountable mercenary firms such as DynCorp and G4S, two companies with dubious records.
This erosion of democracy is being met with barely a whimper from the political and media establishments. The selling of valuable assets occurs because public resistance to it is so minimal, though it’s far stronger in countries where people’s lives are literally at risk. This book aims to shock and provoke and reveal a world that has developed by stealth.
A different planet is possible.