The Australian reviews Profits of Doom

The following review by Miriam Cosic appears in Rupert Murdoch’s Australian newspaper today:

In his recent book What Money Can’t Buy: The Moral Limits of Markets, American philosopher Michael Sandel explores ethical realms subverted by economic models. It is a bravura critique but there are surprising gaps when it comes to the modern nation-state’s supposed monopoly on violence.

Sandel discusses the thriving business of prison cell upgrades in the US, but doesn’t canvass the anterior discussion of whether issues of crime and punishment should be taken out of the hands of citizens’ representatives and given over to businessmen. Nor does he give the growing presence of mercenaries in American wars or the reinforcement of police forces by private security firms more than a passing glance.

Antony Loewenstein fills these gaps. In Profits of Doom, the independent Australian journalist tackles war, inter-governmental development aid, disaster relief and the detention of asylum-seekers: extreme fields with deep moral dimensions, where one might prefer not to see the profit motive at work.

In each of these areas, government and business are becoming almost surreally intertwined. If the job of government is to protect the common weal and the job of private enterprise to shake off regulation so as to make money, the two domains cannot be a comfortable fit. Each acts as a brake on the other. Even when great benefactors, the Bill Gateses of the contemporary world, give magnanimously, they quarantine their business and philanthropy aspects. It’s why foundations exist.

Loewenstein travelled widely to research this book – to Christmas Island, Derby and Broome in Australia, Papua New Guinea, Afghanistan, Pakistan and Haiti – and his findings are chilling. In chapters arranged by geographic location and type of political catastrophe, he unfolds a narrative of increasing exploitation, played out via the symbiotic relationship between government, big business and non-governmental organisations, that evokes an overpowering sense of moral complicity in the reader.

That the US has a higher pro rata incarceration rate than any other country is well known. But Loewenstein’s historical comparisons are instructive. There are more black people in jail in the US now than during the years of slavery, he writes in his introduction, and more people altogether (six million) than were in the Gulag archipelago (five million) at the height of Stalin’s terror in 1936.

Lowenstein’s figures are shaky, however. His historical comparison is drawn (and appropriately footnoted) from an article last year in The New Yorker by Adam Gopnik. Like Gopnik, he puts scare quotes around “correctional supervision”. But those American millions are not just people in jail; they include everyone “in the grip of the criminal justice system”, as Gopnik phrases it, including in prison, on probation and on parole. The number of people actually behind bars tops two million, a scary enough figure.

Between 1999 and 2010, the number of inmates in private prisons grew by a whopping 784 per cent federally and by 40 per cent at the state level, Loewenstein writes. Nearly half the prisons built between 2000 and 2005 are privately run, and nearly half of all immigrants detained are sent to such facilities. In 2001, the US’s largest private prison company, Corrections Corporation of America, reported revenues of $US1.7 billion.

Gopnik quotes from CCA’s 2005 annual report: “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 law.”

Loewenstein refers in passing to CCA’s offer last year to buy out prisons in 48 US states, conditional on a 20-year contract and 90 per cent of inmate beds remaining occupied. In fact, the American Council of Civil Liberties and a diverse coalition of 60 religious and policy groups denounced the offer in an open letter to the governors of those states as a potentially “tragic mistake” for society. So far the governors seem to have taken their point.

Elsewhere, Loewenstein examines the conflation of aid and trade. The confrontation between Bougainville residents and mining giant Rio Tinto was the stuff of regular investigative documentaries in the 1970s and 80s. The stand-off resulted in the Bougainville secessionist movement, which fought a decades-long war against the Papua New Guinea government, the corporation and what some saw as a neo-colonial system put in place after independence in 1975 to ensure Australian interests. A PNG critic of Kevin Rudd’s solution to asylum-seeker boat arrivals recently revived that description.

Loewenstein quotes former PNG prime minister Michael Somare, who claimed in 2010 that 60 per cent of Australian aid money ended up where it started: in Australia. He quotes Sydney’s The Daily Telegraph, which reported last year that seven companies had earned $1.8bn in foreign aid contracts in recent years, with little external oversight. “It seems the Australian government has never lost sight of its main goal in PNG, which is to ensure that Australian corporations have a ready market in which to turn a profit,” Loewenstein writes.

The PNG chapter is of particular interest to Australians, but US involvement in Haiti, before and especially after the catastrophic 2010 earthquake, is an even bleaker story.

In 2011, WikiLeaks released a cable to Washington from the US ambassador to Haiti, Kenneth Merten, sent three weeks after the quake. Under the title “The gold rush is on”, he wrote: “As Haiti digs out from the earthquake, different companies are moving in to sell their concepts, products and services … ” To a Haitian newspaper, he said: “Just because you’re trying to do business doesn’t mean you’re trying to be rapacious. There’s nothing insidious about that. It wasn’t worse than Iraq.”

The paper provided a wider context than Loewenstein’s quote from it. “Ambassador Merten’s announced gold rush began as Haitians were still being pulled from the rubble,” the article said. “Since then, USAID has doled out nearly $200 million in relief and reconstruction contracts. By this April, just 2.5 per cent of the money had gone to Haitian firms, according to the Centre for Economic and Policy Research.”

Port-au-Prince is still a disaster area and all that money couldn’t buy an effective response to the outbreak of cholera, attributed to UN peacekeepers, which took lives that the earthquake had spared.

Loewenstein’s chapters on the US military, its composition and its deployment in Iraq and Afghanistan are unnerving, as though the plot of a complicated and far-fetched action film is playing out. Chapters on resource exploitation and crony capitalism in Western Australia and the private detention centres on Christmas Island pack less punch because we know more about these issues.

Loewenstein’s journalism is controversial. His anti-Israel stance has alienated him from many, and the names offering advance praise for this book – John Pilger, Bob Brown, Noam Chomsky, Naomi Klein – will make some eyes roll.

Indeed this book has many irritations. The problem is less one of factual accuracy, though, despite heavy footnoting and assiduous reportage, that is not unassailable. It’s more the missionary zeal with which those facts are angled.

And yet Profits of Doom is important reading. After all, the world Loewenstein describes is being built in our name: it is democratically elected governments, not dictatorships, that are outsourcing their moral responsibilities. However, a touch less polemic, and a touch more of Sandel’s careful argument, would help Loewenstein’s cause.

Profits Of Doom: How Vulture Capitalism is Swallowing the World… 
By Antony Loewenstein
MUP, 262pp, $32.99

Miriam Cosic… is a Sydney-based author and critic