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The Real Blackwater Scandal: Build a Frontier, You Get Cowboys, Part II

Naomi Klein: Companies like Blackwater and Halliburton are already roaming the world looking for new markets in other frail states - new governments to guard, new war zones to privatize.
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Read Part I of this conversation here.

For the past couple of weeks, I've been posting pieces of my ongoing conversation with Naomi Klein, about her new book, The Shock Doctrine: The Rise of Disaster Capitalism. You can watch our first encounter here, and read our earlier conversations here and here. You can also learn more about the book and read excerpts here.

Yesterday we talked about the Blackwater scandal, setting it in the larger context of what Naomi calls the new economy of the Disaster Capitalism Complex. We also talked about cowboys, frontiers and the perennial power of John Wayne. Here's the rest of that discussion:

Cusack: So apart from getting obscenely rich, what are these private security and other contractor companies doing with this tsunami of public money that is being thrown at them?

Klein: Well, unlike the government, which has allowed the public infrastructure to erode so that we now have collapsing bridges and levees, these guys are making serious and sturdy capital investments. They're planning for the future, building infrastructure -- in Blackwater's case, paramilitary infrastructure. Founded in 1996, the company has used the steady stream of contracts during the Bush years to build up a private army of twenty thousand on-call mercenary soldiers and a massive military base in North Carolina worth between $40 and $50 million. They have armored vehicles, helicopter gunships, manmade lakes, a Boeing 767, a Zeppelin.

Cusack: Like the Hindenburg -- Eric Prince has a lot of toys. The Zeppelin -- that one had to be the fulfillment of a boyhood dream.

Klein: You hear people complain about how Hezbollah is a "state-within-a-state" in Lebanon -- what about Blackwater in the USA? And that's just one company of hundreds, and a relatively small player compared to Lockheed and GE and Booz Allen. But once again, we can't keep being surprised by this shadow world -- it is an inevitable consequence of Rumsfeld's vision of an outsourced and contracted-out state. A right-wing journal in the U.S. called Blackwater "al Qaeda for the good guys" and it's a striking analogy. Wherever the disaster capitalism complex has landed, it has produced a proliferation of armed groupings outside the state. No surprise, really -- when countries are rebuilt by people who don't believe in government, the states they build are invariably weak, creating a market for alternative security forces, whether Hezbollah, Blackwater, the Mahdi Army or the gang down the street in New Orleans.

Cusack: You've written a lot about what you call "the moveable green zone", which has extended the reach of these companies way beyond the war...

Klein: Well the first place where we all saw this happen was in New Orleans after the flood. Within weeks, the Gulf Coast became a domestic laboratory for the same kind of government-run-by-contractors that was pioneered in Iraq. And the whole Green Zone gang was there: Halliburton, Blackwater, Parsons, Fluor, Shaw, Bechtel, CH2M Hill.

But again, this is way more than just a story about shoddy work by contractors. These private companies were actually taking over state functions instead of rebuilding the public sphere. And in New Orleans, the supreme irony was that it was the very frail public sphere that caused the disaster in the first place when the levees broke and the public transit system couldn't handle the evacuation and FEMA was nowhere to be found.

This is the opposite of the New Deal, when public works created good jobs and strengthened society. In today's disasters, public money floods into corporate coffers and those corporations replace the public sphere. Look at New Orleans today: public schools have been converted into charter schools, public housing remains boarded up as condo developers circle, the levee system remains inadequate, and the city's largest public hospital -- Charity Hospital -- is still closed. Meanwhile, contractors are driving down wages and working conditions, with African-Americans virtually locked out of reconstruction jobs, and migrant Latino workers locked in, telling horror stories of modern day indentured servitude. This is what I mean when I say that disasters are dress rehearsals for a sci-fi vision of corporate rule -- it's not just that disaster response is being privatized, it's that in places like Baghdad and New Orleans, the public sphere is disappearing completely and there is no plan to bring it back. This is the warfare state you send up so brilliantly in War Inc [see the trailer here and a preview clip here] -- with the same company selling the bombs and the prosthetic limbs for the victims of those bombs. It's crazy, but we are really not that far off from your twisted imagination!

Cusack: Some things are so vicious, you have to look at them through a different lens or you could never get out of bed. It's hard, even in absurdist satire, to stay one step ahead of this crew. Of course, the business will keep coming for these companies. Even if a momentary peace breaks out, natural disasters will ensure that the market will expand for the Disaster Capitalism Complex as a whole. They'll just diversify. A perfect flexibility built into the design.

Klein: Put it this way: after the recent earthquake in Peru, a private U.S. company called Aramark got a contract to manage evacuee camps and they had mini-McDonald's franchises in them.

That was a first -- McRelief.

Cusack: It fills one with pride.

Klein: It's time to face the fact that climate change has created a major new market. And I'm not talking about a new market for sustainable energy, which would be positive, but a market to profit from the disasters caused in large part by our fossil fuel addiction. Responding to the increasing numbers of emergencies is seen as simply too hot an emerging market to be left to the non-profits -- why should UNICEF rebuild schools when Bechtel can do it? Why put displaced people from Mississippi in subsidized empty apartments when they can be housed on Carnival cruise ships? Why deploy a major international peacekeeping force to Darfur when Blackwater has been lobbying for months to go in and get the job done? Why let the CIA read our email when there are hundreds of security "start ups" that want the gig?

This is a transformation of profound consequence. Eisenhower warned of the military-industrial complex, but it was economically insignificant compared to today's disaster capitalism complex. Before 2001, wars and disasters only provided opportunities for a narrow sector of the economy -- the makers of fighter jets, for instance, or the construction companies that rebuilt bombed-out bridges. The primary economic role of wars was as a means to open new markets that had been sealed off and to generate postwar peacetime booms. Now wars and disaster responses are so fully privatized that they are themselves the new market; there is no need to wait until after the war for the boom -- the medium is the message.

And the scariest part of it is the disappearance of any line whatsoever between these private players and the government, as we discussed earlier.

Cusack: Right, you have a quote in the book: "It's impossible to tell where the government ends and Lockheed begins." And the most unbelievable thing about it besides the carnage and the hubris and the insanity of it all is how blatantly they lie about their dedication to strict economic Darwinist rules. It's the mother of all con jobs -- free market rhetoric is being used as the cover story for crony capitalism... They are the biggest welfare freaks on the planet.

On Democracy Now recently, you recited Alan Greenspan's definition of crony capitalism to his face and asked him if the U.S. fits the bill:

"When a government's leaders or businesses routinely seek out private-sector individuals or businesses, and, in exchange for political support, bestow favors on them, the society is said to be in the grip of 'crony capitalism'. The favors generally take the form of monopoly access to certain markets, preferred access to sales of government assets, and special access to those in power."

He dodged the question, of course, but that seems to be a precise description of the Bush administration and its relationship to its favorite corporations. Not exactly the free-market propaganda they've been selling around the world, is it?

Klein: No, and it's most outrageous in Iraq. When I was in Baghdad, it was clear that this was one of the things that most enraged Iraqis -- watching the non-stop conveyor belt of corporate welfare going to western companies while having to listen to patronizing lectures about the free market. My favorite was from Michael Fleischer -- former White House press secretary Ari Fleischer's brother. In the kind of nepotism rampant in the Green Zone, Michael was put in charge of Iraq's "private sector development" during the first year of the occupation. At one point he told a group of Iraqi business leaders that they would have to lose all their subsidies and trade protections because "protected businesses never, never become competitive."

Cusack: He said this with a straight face?

Klein: Yes -- he seemed entirely unconcerned by the irony that Halliburton, Bechtel, Parsons, KPMG, Blackwater et al were in Iraq, madly gorging off this vast protectionist racket in which the U.S. government had created their markets with war, barred their competitors from even entering the race (remember, French companies weren't invited...), then paid them to do the work on "cost-plus" contracts, which guaranteed them profits -- all at taxpayer expense.

In fact, the Disaster Capitalism industry has been built almost exclusively with public resources: 90 percent of Blackwater's revenues come from state contracts and virtually its entire staff is made up of former soldiers, which means that the training also came at public expense. Yet this vast infrastructure is all privately owned and controlled. The citizens who have funded it have absolutely no claim to this shadow state or its resources.

So I've become quite cynical about the claim that the architects of this new system are free-market ideologues. They are in fact corporate supremacists. The proof is that they will betray their supposed libertarian beliefs at the slightest opportunity if that betrayal will turn a profit for a crony company. You see the hypocrisy most shamelessly in the mega-contracts handed out so private companies can help the Bush administration read our emails and data-mine our lives. It's a kind of triple whammy of hypocrisy: these are people who purportedly believe in restrained government spending, individual liberties, and getting government off our backs, yet without hesitation they will expand the reach of the state, gobble up public money, and violate individual privacy, so long as there is profit in it. Calling the Bush gang "ideologues" gives them way too much credit.

Cusack: You've said that in the future the ultimate luxury will be your own you really think this is where we're headed?

Klein: Well, the disaster bubble is going to burst, like all bubbles do. And when it does, firms like Bechtel, Fluor and Blackwater are going to lose much of their primary revenue stream. They will still have all the high-tech gear and equipment bought at taxpayer expense, but they will need to find a new business model, a new way to cover their high costs. The next phase of the disaster capitalism complex is staring us in the face: with the state in decay, the parallel corporate state will rent back its disaster infrastructure to whoever can afford it, at whatever price the market will bear.

So imagine that after the next hurricane, Blackwater might not just be working for FEMA, as it was after Katrina -- it could sell its security and evacuation capacity to other corporations, or directly to the public, the very same public that funded its entire start-up phase. Want a helicopter ride off a roof? A bed in a shelter? Bottled water? We'll bill you later. Meanwhile, everyone who can't pay will be out of luck, since evacuation is no longer a "core competency" of the state, and besides, the state shouldn't interfere with the free market. The people who can't pay will either be abandoned -- like the people left on their roofs in New Orleans -- or sucked into the privatized prison surveillance apparatus, to be profited from in another way.

Companies like Blackwater and Halliburton are already roaming the world looking for new markets in other frail states - new governments to guard, new war zones to privatize.

Cusack: Here's what I'm thinking. If these people want to create their own privatized countries, they should practice what they preach, and "take their chances on the open market." Secede from the union and stop bankrolling the whole thing with our tax dollars. I'd love to hear someone make a legal argument that the constitution allows for corporations to build private armies at taxpayer expense. I mean, publicly funded mercenaries are totally outside the boundaries of any conceivably acceptable legal version of the constitutional checks and balances we all learned in civics class. But Blackwater is a symptom of a larger problem which is also more terrifying: basically what the Bush administration has done is use its time in office to fund and create a dangerous counter-power to the very government it is leading.

Klein: That's exactly right. And once you understand this - that a parallel, privatized state has been built for the elites with public money -- it makes Bush's so-called bungling look a lot more sinister. Maybe the construction of this parallel state, and the starving of the public one, is the real "mission accomplished." When the Blackwaters and the Halliburtons and the Lockheeds are looked at as a whole, what you see is a fully articulated state-within-a-state that is as muscular and capable as the actual state is frail and feeble. And of course, as creatures of the new economy, these companies are weightless and stateless. If Blackwater wanted to make like Halliburton and move to Dubai, there would be nothing to stop it.

We need to understand that what we glimpse in these contractor scandals goes well beyond corruption. It's another model of government. War and disasters are being used to advance a radical agenda of corporate rule where the idea of universally accessible public services goes extinct. That's why I wrote The Shock Doctrine -- this thing is way bigger than Bush. Bush isn't an aberration, he's the natural culmination of a 25-year campaign to hollow out and privatize the state. He is the perfect mascot of this movement: if government is unnecessary as anything other than an ATM, who better than Bush to lead it? What is more fitting than having a hollow president to head a hollowed-out state?

Cusack: Yeah -- he's the perfect president to have opened this latest frontier for modern pillage. And we sat by while this lawless corporate frontier was opened up. Maybe because we are still in the cultural thrall of the frontiersman/cowboy -- the far right sample John Wayne on a daily basis. And this has been a huge part of Bush's success. He has been consciously drawing on the Wayne iconography for his whole career; it's what allows him to barrel ahead despite his plummeting popularity. Like Wayne's cowboy, they define themselves through the prism of their will. We make our own way through this Darwinist world. The benevolence and altruism of their spirit and will is a given, a reality not to be debated by facts...

The push back on Eric Prince will fall safely inside the aesthetic...he's just a religious libertarian, etc etc... and so we ride on... This iconography may be the ultimate enabler of the disaster economy. We all know the drill.

We've had Poppa Wayne (Reagan) and Baby Wayne (Bush). Ronald Reagan was the old John Wayne...when kindness comes. But the key to the old Wayne is that he was once a killer; you can see it in his eyes... beneath the kindness lingers that hard truth: he was once a killer. He tames the natural world, but he does it with a veneer of benevolence.

Bush is the young John Wayne -- Ethan from The Searchers. Obsessive. Merciless. Ethan is a deranged person. He will fight the battle no one has the guts to whatever it takes...kill whoever violates the natural law of the frontier (jungle). This cowboy is the great righter of wrongs. He is wrath incarnate. Part of the mythology is that he's wrong a lot and pig headed and stubborn, it's part of the package. But he is a force of nature and you can argue about it all you want, but you must respect a force of nature.

The protector, the son of anger is coming, with god on his side, to protect the ones he has chosen to love. In Bush's case you can substitute the damsel being raped by natives with the US corporation denied 100 percent ownership of a privatized state company.

Klein: This is actually scarily true. Remember that the occupation took its bloodiest turn when U.S. forces laid siege to Fallujah for the first time, in April 2004. An estimated 900 people were killed, many of them civilians, and the country has been spiraling and disintegrating and surging ever since. That siege was in direct retaliation for the killing of the four Blackwater mercenaries who were strung up on that bridge in Fallujah. One of the code names for the siege was "Operation Angry Ghost". The U.S. army played the role of avenging angel for Blackwater... John Wayne in the desert.

Cusack: This mythology always provides cover for the ideology. The Disaster Capitalism complex was built in the realm of archetype, that frontier realm of the Wild West. Bush, being a terrific political operative knows all this is actual political currency in the modern world.

Now I fear we've entered the kamikaze cowboy phase. Though Bush is effectively already heading into the sunset, like Wayne's great Ethan he will see his battle through to the end no matter what. So maybe he will bomb Iran...

I believe that all the players and people involved in these scandals, armed robberies, murders and corruption should go to prison. But that's not going to happen, and even if it did, the ideology behind them would still be in place. As Milton Friedman said, "our basic function is to keep them [ideas] alive and available until the politically impossible becomes politically inevitable." And it's the ideology that is inherently unjust, corrupt and in general a global menace. We need an opposition movement willing and ready to stand on principal. And someone, a leader -- strong and committed, who will leave them choking on their own bile.

We need people to acknowledge and discuss this new Disaster Capitalism economy, Black water being a striking example of its mission. We need Democrats, Republicans, Independents, Libertarians, Greens and anyone else with a shred of meaningful patriotism in their bones band together to expose and disgrace and disengage from this apocalyptic ideology.

Klein: And we really don't need any more shocks to wake us up. In Iraq, New Orleans and the other disaster zones, we are getting a crystal clear vision of the world that will be created if they continue to get their way. It's a world of cowboys and robber barons. They showed their hand with Blackwater, now it's time for the rest of us to put forward a different vision of the world -- and we can't do it timidly or apologetically.

Cusack: Jimmy Breslin calls media enablers the "Pekingese of the press." I always thought that apt as you watch the latest PR rollout for Iran go unquestioned
by mainstream media.

And the Democrats just pretend to take action on civil liberties. After extending the domestic surveillance program, they complain in public about it, pretending to be, I guess, unaware that they extended a program that is defined as a federal crime under the laws that the Senate passed. I mean, these are not particularly subtle facts. Following the pattern, they are objecting to the latest secret memos supporting torture without mentioning that their own so-called torture bill approved tactics like water boarding.

In the meantime, the president keeps repeating the same mantra that "we don't torture" without mentioning that he defines torture as excluding anything short of death.

John Wayne was a towering figure -- a great film star. But the era of his exploitation has to end. The Democrats can't stand up to his iconography -- the Shadow Wayne that has been so co-opted. We need a new paradigm. How about Atticus Finch? Watch Jim Webb -- I think he may be able to lead us into an era of post-Wayne politics.

Read Part I of this conversation here.

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