Hurricane Sandy and capitalism

By Gene Clancy

December 6, 2012

Like a giant magnifying glass, a natural disaster reveals in startling detail the dimensions of the social disaster that lie beneath.

A month after Hurricane Sandy decimated neighborhoods along the U.S. Eastern shore, 1,000 Staten Island residents still lack electricity. To get it back, residents must hire licensed contractors to make repairs because the damage is inside their property. Many criticize insurance companies and the Federal Emergency Management Agency, which have refused payments. They can’t afford the fixes themselves.

At a Staten Island town-hall-style meeting attended by 700 people on Nov. 29, many of those who had lost everything expressed outrage at the lack of assistance from FEMA or other government agencies.

Eddie Saman lost all his possessions — twice. He had been living without heat or electricity in his gutted New Dorp Beach bungalow since the storm hit. On Nov. 25, hours after a volunteer EMT brought him blankets and clothes, a wood-burning oven, his heat source, sparked a fire that sent those meager donations up in flames.

While there is no denying that Hurricane Sandy was very destructive, it occurred in the world’s most technologically advanced country. High-tech resources got Wall Street and Atlantic City casinos up and running within 48 hours, while poor and working people in New York City’s hard-hit areas had to fend for themselves.

Since federal, state, city and mainstream relief efforts have been woefully inadequate, it would seem that offers of assistance from all sources would be welcome. However, this assumption fails to take into account a disaster’s political ramifications.

The Occupy Sandy movement and other progressive organizations across the city have offered fast, efficient relief with no questions asked. On Nov. 30, Occupy Sandy issued this appeal at the Occupy Wall Street blog: “The community-run network of support for food, volunteering, supplies, clothing, and human services is an essential part of the [NYC] recovery efforts. … [T]he mayor’s office wants to shut it down … [and is] … calling upon local police forces to ‘clear all outdoor sites’ [in Staten Island] effective immediately.”

Occupy Sandy calls on “all New Yorkers to advocate on behalf of these community-run hubs that provide essential services to those whom the city and the federal government, and support agencies, have under-served, neglected, or abandoned.”

Mayor Michael Bloomberg’s pronouncements seem incomprehensible. That is, until you realize that capitalism is designed to maximize the profits of a few, not provide for the needs of the many.

Why capitalists like natural disasters

Natural disasters bring suffering to millions of people worldwide. They expect their catastrophic effects to be mitigated or prevented using whatever science and social organization are available. Incredibly, many capitalist economists claim that natural disasters are “good” for the economy.

At the Progressive Economics ­Forum on Oct. 30, Jim Stanford explained in “Why Natural Disasters Are Good for Capitalism”: “[N]atural disasters usually lead to a subsequent improvement in the real economy. Stuff gets destroyed, and then stuff gets rebuilt. “[R]ebuilding sparks investment, construction, and employment, [generating] subsequent downstream spending. “Assuming that insurance companies pay out what they’re supposed to, individual households have some resources to fall back on, and U.S. governments step in with some assistance. “Hurricane Sandy will certainly produce a measurable boost in economic activity next year all along the devastated U.S. eastern seaboard.”

The superstorm has revealed that most of these assumptions are not true. Insurance companies do not pay out what they’re supposed to, most households have few resources to fall back on, and capitalist governmental assistance is woefully inadequate.

Yet, many capitalists see opportunities to make short-term profits in a natural disaster, especially during an economic crisis, when, as Karl Marx explained, capital is destroyed.

This is why some capitalists long for a “silver bullet’ that will save them, at least in the short run. They describe as “creative destruction” the devastation to lives and property, as they seek to invest in rebuilding. By using cheap labor, seizing upon wasteful but profitable contracts for rebuilding, and gentrification schemes, the capitalists hope that what is devastation for everyone else will be a godsend for them.

However, this hope is illusory. Those who couldn’t afford to buy the products of capitalist overproduction before a disaster are even less able to purchase them afterwards.

This is why the billionaire mayor is so hostile to Occupy Sandy’s efforts. Not only do these volunteer efforts diminish the chances for profits, they pose a frightening alternative — to the capitalists — and their callous, calculating way of dealing with disasters.

The humanitarian approach is to mobilize people, calling upon their social instinct to relieve suffering, which surfaces during an emergency. This offers a far better alternative to the capitalists’ profit-driven methods.