Disaster capitalism doesn't work

Free-market boosters claim relief is best left to the "invisible hand." Bad idea, says a scholar of catastrophes

Published November 2, 2012 4:12PM (EDT)

There’s a reason Mitt Romney keeps dodging questions about how he wanted to defund FEMA. Most Americans aren’t crazy about the idea of handing over disaster relief to the states. And they're even less keen on farming it out to private business. And yet, in a Thursday Forbes Op-Ed, the Competitive Enterprise Institute’s Iain Murray argued we’ve got it all wrong: Rather than showing “the need for big government,” Murray says that “disaster relief provides an excellent example of how the invisible hand of the market works to alleviate suffering and bring quick relief to those in need.”

That sure doesn't sound right. But is it? Salon went for guidance to SUNY disaster historian Jacob Remes , author of the forthcoming book "Disaster Citizenship: Urban Disasters and the Formation of the North American Progressive State." What follows is a condensed and edited version of our conversation.

So are our intuitions wrong here? Is Hurricane Sandy really an argument for big business, and against big government?

I think that’s a false dichotomy. The opposite of big government is certainly not big business. In disasters, you need local government and you need local community. The best disaster relief is offered through solidarity, horizontally, through organizations that people are already members of. Sometimes that’s government. Often it’s not. Neoliberalism tries to dismantle government, but at the same time it creates this dynamic where all of the private interactions we have are economic exchanges. And that’s just as bad, especially in disaster relief.

What other organizations should we be looking to?

I might sound like a family-values Republican here, but churches, unions -- in the past, fraternal orders. Really any organization where people come together and build ties of solidarity on a regular basis can expand to doing this on an emergency basis. So we see Occupy Wall Street gearing up and doing a lot of disaster relief.

A lot of scholars argue that these kinds of organizations have been in decline for decades.

Yes, and it’s really troubling. People are increasingly isolated in the United States. The best disaster preparedness we can have is to build the kinds of communities we want to live in anyway.

Murray says that when it comes to disasters and relief, regulations do more harm than good. Is he right?

It depends on what your goal is. Is your goal to rebuild quickly? Or is your goal to build a community that’s going to be more resilient in the future?

Without government there is no flood insurance. People who live in flood plains get flooded regularly, so you can’t have a normal insurance market, because insurance markets depend on people who buy insurance and never use it. You can make an argument that people shouldn’t be living in Atlantic City, or New York City, or New Orleans, but then everyone’s going to living in Phoenix, which has its own problems.

The thing about these environmental regulations is that, left unchecked, what capitalism is going to do is build in places and ways that make short-term profits. You fill in wetlands. You build private sea walls that redirect surf and make it worse somewhere else. Government regulation puts a brake on that desire for short-term profits. It says we are going to build to standards that stand up to tornadoes or hurricanes. If you don’t want that, then you want people to continue to die in disasters.

Murray also holds up Wal-Mart as an example of efficiency that eludes government. He says New York City could suffer for excluding “Big Box” stores.

I honestly don’t know if Wal-Mart’s by-all-accounts quite excellent logistical abilities depend on its being a terrible employer. But I don’t think they’re intrinsic to Wal-Mart, or to the Big Box model. There are Wal-Marts on Long Island, and in New Jersey; are they going to have gas and food before New York City does? I doubt it.

I heard from a Wal-Mart worker outside D.C. who says she was forced to work after all their competitors had already closed down because of the hurricane.

People experience disasters in very different ways. The people who are most hurt by the subway shutting down are workers who have exploitative bosses forcing them to come in to work.

[New York Mayor Mike] Bloomberg came on the radio and said this isn’t a night to go to the movies or to go out to dinner. That was a comment directed at New Yorkers as consumers, not workers. The person Bloomberg was talking to goes to movies – he or she did not work at the movie theater.

You’ve argued that “natural disasters” is a misnomer.

Disasters aren't "natural." As disaster historians, we don’t even use the term. What makes something a disaster, as opposed to just a hazard, is the way it interacts with society, with the built environment. Much of Zone A, which was evacuated in Manhattan, is on landfill. Of course that’s going to be most likely to be flooded. People in the evacuation zone were about twice as likely to live in public housing as the rest of the city. That’s not natural; that’s about how we organize society.

Disasters are not blind. We have this rhetoric of disasters affecting rich and poor equally and that’s just not true. People who evacuated from Battery Park took a cab --  maybe to summer homes, maybe to hotels. People who took crowded city buses from public housing are now sleeping on the floor of a high school gym. And we see the way class intersects with all these other groups: After Katrina, we saw rising rates of sexual violence. And the elderly poor and the disabled poor are particularly at risk. The people who die are the people who die alone.

So what should we have learned from Katrina?

One lesson that could have been learned after Katrina was about climate change. And I don’t think we learned it.

Something else we saw in New Orleans was the massive militarization of the relief effort, driven by the National Guard and the military. The lesson we should take from that is that we actually need local, civilian disaster relief that works. Like any type of charity, there’s a power relationship built into disaster relief. We need to invest in our local governance so we’ll need the federal government’s money, but not the federal government’s control. One relatively correct argument of Murray’s is that you do need localism, so a community can respond in a subtle and specific way. The Army doesn’t do that very well.

I don’t think the federal government is necessarily very good at people-driven relief. But I certainly don’t think Wal-Mart is either.

By Josh Eidelson

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Disaster Capitalism Hurricane Sandy Natural Disasters