What is Disaster Capitalism?

Disaster capitalism refers to the way corporations, governments, and elites exploit crises—whether natural disasters, economic downturns, wars, or pandemics—to push through policies and economic changes that benefit the wealthy while often worsening conditions for the general population. The term was popularized by Naomi Klein in her 2007 book The Shock Doctrine: The Rise of Disaster Capitalism, where she argued that crises create moments of shock and disorientation that make it easier to implement neoliberal economic policies—such as privatization, deregulation, and austerity—that might otherwise face public resistance.

How Disaster Capitalism Works

1. Crisis Occurs – A war, natural disaster, financial crash, or pandemic creates widespread instability and suffering.
2. Shock and Disorientation – In the wake of the crisis, people are too focused on survival to resist major policy changes.
3. Corporate and Government Intervention – Powerful interests push through economic policies that prioritize profits over public welfare, often under the guise of "emergency measures" or "rebuilding efforts."
4. Permanent Transformation – Once these policies are in place, they often remain even after the crisis has passed, leading to long-term changes that benefit corporations and elites at the expense of ordinary people.

Historical and Contemporary Examples

• Chile (1973 Coup & Economic Reforms) – After the U.S.-backed coup that overthrew socialist President Salvador Allende, the dictatorship of Augusto Pinochet implemented radical free-market reforms advised by economists from the Chicago School (led by Milton Friedman). This involved mass privatization, deregulation, and cuts to social programs, which widened inequality but benefited multinational corporations and Chile’s elite.
• Hurricane Katrina (2005) – After the hurricane devastated New Orleans, public housing and public schools were dismantled and replaced by privatized alternatives. The city’s school system became almost entirely charter-based, while real estate developers took over land that had been occupied by lower-income residents.
• Iraq War (2003-2011) – Following the U.S. invasion of Iraq, the country’s economy was opened up to foreign corporations. Companies like Halliburton and Blackwater made billions through government contracts, while Iraqis faced unemployment and instability.
• COVID-19 Pandemic (2020-Present) – Many large corporations saw record profits during the pandemic, while smaller businesses shut down. Governments funneled billions in aid to major corporations, pharmaceutical companies, and financial markets, while many ordinary people struggled with job loss, evictions, and rising costs of living.

Key Characteristics of Disaster Capitalism

• Privatization of Public Services – After disasters, public assets (such as hospitals, schools, and infrastructure) are sold off to private companies.
• Government Bailouts for Corporations – Instead of aiding ordinary people, financial relief often goes to banks, multinational corporations, and large industries.
• Austerity Measures – Governments may cut social services, pensions, and public sector jobs to "recover" from a crisis.
• Surveillance and Militarization – In some cases, crises lead to increased surveillance, police powers, and military involvement, which can become permanent.

Criticism of Disaster Capitalism

Critics argue that disaster capitalism prioritizes profit over human welfare, deepens inequality, and undermines democracy. Instead of rebuilding societies in ways that promote justice and sustainability, these policies reinforce existing power structures and allow corporations and elites to accumulate even more wealth at the expense of ordinary people.

Alternatives to Disaster Capitalism

Some economists and activists advocate for disaster collectivism—using crises as opportunities to build stronger public institutions, invest in social safety nets, and promote democratic decision-making. Examples include:

• Expanding public healthcare systems instead of privatizing them after a crisis.
• Implementing progressive taxation to fund recovery efforts equitably.
• Strengthening worker protections rather than using crises as an excuse to cut wages and benefits.

Disaster capitalism thrives when people are too overwhelmed to resist. Understanding it is the first step in challenging its effects and advocating for more just, people-centered recovery strategies.