“3 million customers without power.” “No heat, no water after this first storm, and it’s been deadly.” “Residents are experiencing some of the worst winter weather of their lives”

In 2021, Texas froze over.

For a US state known for its heat, the sudden cold snap in the winter of that year was a brutal shock to residents across the region.

Power lines froze, plumbing stopped working, and roads were rendered undrivable.

246 people died because they were unable to access the basic means to live.

And in the midst of this disaster, when power was shut off across much of Texas forcing people to suffer through days of intense cold, the private companies managing Texas’s electric grids were making a killing.

“Many Texans are now facing sky-high electricity bills.”

Texas is just one harbinger of what’s to come.

Natural disasters are no longer natural.

Not only are they supercharged by climate change, but in the wake of these climate caused catastrophes, businesses and free-market policy-hawks exploit those who survive.

People in the throes of disasters are unable to push back against new policies and agendas that foreground profit and capitalist accumulation over human well-being.

Today we unpack this by understanding how and why disasters like the Texas freeze are used by capitalism.

Today we ask, what is disaster capitalism and why does it matter?

“Only a crisis - actual or perceived - produces real change.

When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”

This quote, penned by the father of neoliberalism, Milton Friedman, in his book Capitalism and Freedom is the seed of disaster capitalism.

To Friedman, crisis breeds change, but the nature of that change is tied to what ideas are available at the time.

It was his life’s work to make free-market capitalism the idea lying around.

From 1962, when that quote was first put to the page, up until today, Friedman and his followers have been remarkably successful in that task.

It wasn’t until the aftermath of the initial invasion of Iraq in 2003, and the subsequent terror campaign by the US military that destabilized the whole country, that this free-market disaster agenda emerged into the limelight.

After witnessing the atrocities of Iraq, journalist Naomi Klein set out to understand how and why policies of capitalism rooted in privatization, deregulation and the free-market, also known as neoliberalism, tend to emerge directly after disasters.

She sums up her findings in the 2007 book The Shock Doctrine, and reveals the plans of right-wing governments and free-market hawks.

“After a shocking event– a war, coup, terrorist attack, market crash, or natural disaster,

they exploit the public's disorientation, suspend democracy, push through radical free-market policies that enrich the 1% at the expense of the poor and middle class.”

In short, capitalists harness the shock of disasters, whether natural or unnatural, to ram through policies of privatization and austerity, buy up property cheaply, and exploit shattered communities for profit.

And as we will soon see, disaster capitalists have been hard at work enacting this change since the 1960s.

On September 11th, 1973, a battle raged in the streets surrounding the Chilean capitol building.

A group of military officers led by General Augusto Pinochet, and backed by the economic and political might of the United States, ousted the democratically elected and immensely popular socialist leader of Chile, Salvador Allende.

In place of Allende’s policies, which included free milk for children, land redistribution, and the nationalization of industries like healthcare, the U.S.-backed Pinochet regime stepped in and instigated military rule.

They rounded up thousands of suspected leftists, and tortured, killed or disappeared them.

Later reports by the National Commission on Political Imprisonment and Torture as well as the National Commission for Truth and Reconciliation, found that Pinochet’s regime committed over 30,000 human rights abuses.

In the midst of this terrible violence heaped onto the Chilean public by the new military government, Milton Friedman’s proteges in Chile, known as the Chicago boys, began whispering policy recommendations and neoliberal ideas into Pinochet’s ear.

Policies that had been drummed up in cooperation with the CIA months before the coup took place that foregrounded free-market ideas of privatization and deregulation.

By 1975, Pinochet had unleashed these neoliberal policies upon Chile.

His regime sought to turn back much of the nationalization accomplished by Allende.

They reprivatized agricultural land distributed under Allende, as well as sold off industries like state-held mines to Pinochet’s son-in-law for low prices.

All told, Pinochet’s government sold off an estimated 3.6 billion US dollars worth of state-owned assets.

In a matter of years, Chile was brutally shocked from a socialist economy to a capitalist one.

An economy so in line with Milton Friedmen’s neoliberal ideology that he called the reorientation a “miracle.”

The Chilean coup is a textbook example of disaster capitalism, but it’s certainly not the only example.

In the wake of political crises like the fall of the Soviet Union in the 1990s, East Timor after its decades-long war with Indonesia in 2000, and Iraq after 2003, right-wing governments, the World Bank and NGOs rammed through neoliberal programs.

East Timor, for example, was only allowed loans from the World Bank under the condition that it cut its public budget and personnel while simultaneously paying private contractors substantial sums of money for advice.

While in Iraq, nationalized industries were dismantled and replaced with private corporations like Halliburton and Bechtel.

Both American companies were given massive contracts to help “rebuild” Iraq.

Results of those privatization efforts speak for themselves.

Rebuilding in Iraq has consumed tens of billions of dollars in the massive effort which started with high hopes but is now mired in problems of corruption waste and mismanagement.

And even after unmanufactured disasters like Hurricane Mitch, which ravaged Central America in 1998, free-market policies were forced on countries in exchange for recovery aid.

Honduras privatized airports and highways, and made it easier for foreigners to buy up land, while Nicaragua announced plans to privatize its electricity and petroleum sectors and Guatemala announced plans to sell off its phone system.

The list of disasters used to push through neoliberal policies goes on.

With each new disaster, the threat of deregulation and privatization looms.

And we are now entering into an age of constant disaster—of climate chaos.

Fossil fueled capitalism continues to put more and more carbon dioxide into the atmosphere year after year – heating up the planet and giving rise to even more disasters.

Our current system is forging a disaster capitalist spiral: creating the circumstances for more and ever worsening crises that it then uses to increase corporate profits and build systems of neoliberalism that make future disasters even harsher.