Disaster Capitalism

The Shock Doctrine book cover

What is ‘Disaster Capitalism’?

In her book The Shock Doctrine: The Rise of Disaster Capitalism (2007), Naomi Klein examined how governments or regimes could exploit national crises in order to establish controversial and questionable policies. They are able to do this ‘while citizens are so distracted (emotionally and physically) that they are unable to fully engage, develop an adequate response, and resist effectively’. 

Following the humanitarian crisis in New Orleans after Hurricane Katrina, Klein saw hordes of private military contractors descend on the city to find ways to profit from the disaster. 

I started to notice the same tactics in disaster zones around the world. I used the term “shock doctrine” to describe the brutal tactic of using the public’s disorientation following a collective shock – wars, coups, terrorist attacks, market crashes or natural disasters – to push through radical pro-corporate measures, often called “shock therapy”.

Naomi Klein, op. cit.

How to Make Money in a Crisis

Brexit is a national crisis. The vote to leave the European Union in 2016 divided the country and, two years on, there are no tangible benefits in spite of huge promises of ‘sunlit uplands’. Blue passports and the crown symbol on pint glasses were easily achievable within the EU.

Instead there has been huge damage to business – fishing, farming, banking (with centres moving from London to Amsterdam), haulage, food standards (the possibility of importing chlorine-washed chicken from US), and animal welfare (a recent deal struck to import low-standard Australian beef), to mention just a few. 

Disaster capitalism thrives on never letting a good crisis get in the way of tearing up the rulebooks, and ignoring the usual checks and balances.  

Of course there were those who were quite literally banking on Brexit being a disaster, as reported in Byline Times – hedge fund managers like Crispin Odey, for instance, who made £350 million overnight by shorting the pound in anticipation of the shock result.

Profiting from the Pandemic

Then came Covid. Tens of thousands of people dying prematurely couldn’t have been better for disaster capitalists. A perfect storm of crises to distract and disorientate the populace. 

Again, some people have done well – millions of taxpayers’ money was funnelled through a VIP lane for PPE contracts, £39 billion was spent on Track & Trace, and a further £4 billion of fraudulent Covid loans are to be written off.  Furthermore it has been revealed that more than £1m in furlough loans went to some of those same firms that were making huge profits from the pandemic contracts. 

Who’s Funding Deregulated Capitalism?

The controversial television channel GBNews has also been accused of promoting conspiracy theories, lockdown scepticism and undermining the fight against racism. It’s been compared to America’s Fox News. But who funds it, and why? 

The channel was launched in June 2020 with £60 million, some of which was provided by Dubai-based investment firm Legatum founded by Christopher Chandler, a New Zealand-born billionaire. Open Democracy believes that Chandler is a disaster capitalist.

Legatum’s trade advisor, Shankhar Singham, had unrivalled access to Brexiters and government, and is also a staunch proponent of Freeports that would further reduce workers’ rights, hard-earned pay structures, adherence to health and safety regulations – all for more profit. Freeports can also be abused for money-laundering and tax-evasion purposes, because of a lack of transparency – the reason why the EU is set to ban them.

An Economic Crime Bill that would establish new rules to stop the rich and powerful from using UK companies and property to hide their money and dodge taxes has been promised by every Conservative Prime Minister since 2016. On 26 January, Open Democracy reported that the bill was now expected to be ditched. 

Russian Plutocrats in London?

Leaders of deregulated capitalism

Singham has now left Legatum to join the Institute of Economic Affairs. This, according to Greenpeace, has linked up with American donors to push for environmental deregulation post-Brexit. He is also appointed to the new Trade Commission set up to monitor UK trade deals, a body that was set up after Parliamentary debates on the new Agriculture bill pushed that UK farming and environment standards must not be undermined by new trade deals. The fact that the trade deal with Australia is going ahead reveals that this body is not likely to be effective in holding to standards.

Daniel Hannan (now Lord Hannan of Kingsclere), a former MEP, Conservative Eurosceptic, first director of the powerful alt-right European Research Group (ERG), and founder of Vote Leave, is a leader in undermining government to favour capitalists. Following the resignation of Tory Minister, Lord Agnew, over Boris Johnson government’s “lamentable track record” in tackling fraudulent COVID-19 support funds, Hannan sought to blame a “useless civil service”, rather than ministers.  

Hannan’s article is one of dozens of newspaper attacks on, variously, judges, lawyers, doctors, scientists, teachers, and the NHS in general (far better privatised, say the ERG). Constant criticism of the structures that hold our society together can result in democracy itself being eroded.

In his book ‘Democracy for Sale: Dark Money and Dirty Politics’ (2020), Peter Geoghegan proposes that Hannan’s agenda is far more radical than might be supposed. 

“He wanted to take the institutions down from the inside,” says Edward McMillan-Scott, a former Conservative MEP who served alongside Hannan in Brussels and Strasbourg before defecting to the Liberal Democrats in 2010. “He used to say, ‘I don’t want to do anything but get out of the European Union, and if possible break the European Union up.’”

Peter Gheoghegan, op.cit.

The man behind Trump’s success – far-right political strategist Steve Bannon – has also been connected with Johnson. He has been networking across Europe to strengthen populist organisations that support Trump-like politics.


The Shock Doctrine was adapted as a feature-length documentary film by director Michael Winterbottom in 2009 and can be seen here:

A feature-length documentary film by director Michael Winterbottom

What’s surprising is that, while disaster capitalism had been operating around the world since the 1960s, it had never been visited on its own democratically elected country, the USA, until Hurricane Katrina.

Since then, in the UK, following the deregulation of the banking systems, such crises have followed thick and fast – 1987: Black Monday, markets fell by the largest percentage points in stock market history. 1992, Black Wednesday: currency speculators made fortunes betting against the £. 1997. Asian Contagion: $600 billion disappeared from stock markets in Asia. 2008: global  financial markets imploded, Lehman Brothers collapsed (but still paid $2.5 billion in bonuses a week later).

Klein ends the documentary with the optimistic view that if we know about the tactics of disaster capitalism, it’s less likely for those in power to inflict it upon us. She believes that we’re becoming ‘shock resistant’. Let’s hope she’s right.

… And in the UK

In the UK the fight-back against the misuse of public money has been led by politicians such as Margaret Hodge, formerly the chairperson of the public accounts committee (and Labour MP for Barking). The Good Law Project, headed by Jolyon Maugham, is bringing cases to the courts concerning the fraudulent pandemic contracts.