The COVID Shock: Disaster Capitalism, Blockchain, and the Emerging Global Culture BountyBase Follow Apr 26 · 7 min read

From Naomi Klein’s “Shock Doctrine”

COVID-19’s pandemic shock has reverberated throughout the world’s crowded hospitals, emptied April streets, and student-less classrooms. It has reverberated in bank accounts, wedding ceremonies, and real-life relationships. From Spain to South America, COVID-19 has directly or indirectly affected every part of every culture on the face of the earth.

In addition to the grave physical toll that COVID-19 has inflicted on our world’s healthcare systems, COVID-19’s economic blow serves as part of a pattern of Disaster Capitalism, a system that has risen alongside Friedmanian economics across both western and eastern civilizations in the later half of the 20th century until the present time.

What is Disaster Capitalism?

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In a recent Vice interview, author Naomi Klein described Disaster Capitalism as the way that private industries profit from large-scale crises. The term, which she discusses at length in her book “Shock Doctrine: Rise of Disaster Capitalism” (2007) describes the flow of post-crisis economies.

Klein argues that for every shock or crisis, there is a solution known as the “Shock Therapy” (as shown in the overly-simplified graphic above).

Klein articulates her point by discussing the private ed contractors that fled to New Orlean public asset auctions following Hurricane Katrina. Another example of the Disaster Capitalism cycle is war privatization in Iraq and Iran initiated by military contractors a la Blackwater (now Academi) and Haliburton following 9/11.

Post-Katrina Education System Land Grab

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What has been referred to as one of the “fastest educational land grabs” in history took place in post-Hurricane Katrina New Orleans. Milton Friedman wrote his final economic policy recommendation ever on this topic. During Post-Hurricane Katrina, school vouchers (see charter schools) became a heuristic compass for the next two decades of federal education reform. In 2004, eight months before Hurricane Katrina, two years before his death, Friedman postulated in his final essay:

“If, by a political miracle, Louisiana could overcome the opposition of the unions and enact universal vouchers, it would not only serve itself, it would also render a service to the rest of the country by providing a large scale example of what the market can do for education when permitted to operate.” (“The Promise of Vouchers” by Milton Friedman, Wall Street Journal, 5 December 2005).

In the nineteen months following Hurricane Katrina, the New Orleans public school system went from being almost entirely government-owned, to almost entirely private. Compared that to the “glacial pace at which labs were repaired or electricity grids were brought back online…” (Klein, “Shock Doctrine” 2007). Yes, within those nineteen months, the city of New Orleans School Board went from running 123 public schools, to running 4 public schools. FOUR. The teachers union was thereby disbanded and its contracts shredded for all 4,700 members. Meanwhile, the entire time, the most impoverished and marginalized populations of Louisianians lived in exile.

There is the Shock, then there is the Shock Therapy.

COVID-19 and the economic response to it has followed this cycle, too. Look at the race to the first round of Small Business Administration funding. One one hand, you have the Tillman Ferietta’s of the world that monopolize steakhouse markets in first-tier American cities, the type of people who donate to every cross-party political campaign possible within the jurisdictions through which they maliciously gain competitive advantage in (and who’s to blame them?), the type of person who had said, and I quote, “what’s $20M-$30M dollars in 10 or 20 years…” when asked why he overpaid for the Houston Rockets by hundreds of millions of dollars. You have that type of person who lives in the same world as the Shake Shack stakeholder who was offered $10M and turned it down.

“….we’re already seeing disaster capitalism play out on the national stage: In response to the coronavirus, Trump has proposed a $700 billion stimulus package that would include cuts to payroll taxes (which would devastate Social Security) and provide assistance to industries that will lose business as a result of the pandemic.” (Vice Interview with Naomi Klein, April 2020).

Yes, the first round of SBA loans were distributed to what Marc Andreesen of A16Z may probably refer to as the “ossified oligopolies” that have their Kleinian corporate wish lists ready for the politicians they’ve supported for quite some time now. Crony capitalism at its finest. Klein argues that these wishlists more or less take form as HOV lanes, essentially fast passes that are handed quid pro quo political favor or donation. Friedmanian capitalists have been waiting for this very moment with anticipation quite similar to that leading up to Hurricane Katrina in New Orleans or privatized war in the Middle East. Yes, now they are ready, wish lists in hand. However, to what extent will the corporate wishes get granted? Who’s wishes are they, even?

Down an Irreversible Path

Yes, the consistency of this pattern begs the question whether Disaster Capitalism is 40 years of isolated events within the rise of Friedmanian economics, or if it is part of a larger pendulum that moves back and forth every few years, reaching homeostasis before swinging itself further into a dystopian state devoid of personal liberty.

According to Klein:

“For more than 40 years… Shock tactics follow a clear pattern: wait for a crisis (or even, in some instances, as in Chile or Russia, help foment one), declare a moment of what is sometimes called “extraordinary politics”, suspend some or all democratic norms — and then ram the corporate wishlist through as quickly as possible.” (Guardian, 2017).

Similar to 9/11, or the fallout shelters during the Cold War, COVID-19 will lead to infrastructural changes that will forever change our culture and world in the likes of hospitals, entertainment epicenters, or even event safety protocols. COVID-19 will lead to infrastructural changes that will lead our culture further down this irreversible path for the sake of safety.

What will be the new inevitables that we’ll grow to live with?

Our economy is currently in a shocked, war-like state. In healthcare, which is currently the main driver of the global economy due to COVID-19, you have private contractors selling medical supplies at their discretion to private and public healthcare institutions. You have the corporate demand lists. You have governments with limitless but somehow limited spending supplies (see SBA.gov). How will this all impact the way we live our lives in 2–5 years from now? Will it mean that everyday we assess some color-coded viral threat level?

Disaster Capital Needs Disaster Relief

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In a recent Google Hangout, Blockchain Education Network’s Executive Vice President, Mel Vera, spoke to BountyBasse from South America where she has been helping local communities battle the pandemic.

Vera called out the negligent profiteering of Disaster Capitalism and the need for an inclusive solution.

“It’s like you’re profiting off of people’s misery. We have to focus on a way to make resources accessible to everyone. There is always a red zone or green zone solution. One thing we’re seeing now is the growing importance of at-home test kits — there have been so many fraudulent sales. Italy, the UK, and Turkey bought a bunch of test kits from China, all fraud, hundreds of thousands, even millions. When people start leaving their homes, everyone will be scared because the disease can be asymptotic, so we need to ensure these kits are working properly.” (Interview b/w Blockchain Education Network’s Mel Vera & BountyBase, April 2020 via Google Hangouts).

Vera serves as the Executive VP for the Blockchain Education Network (BEN), a non-profit with the largest network of blockchain students, alumni, and professors in the world. Vera organized the BEN Speaker Series. Each Friday, BEN hosts industry leaders to discuss their experience through anecdotes from the field. Educational resources like the BEN Speaker Series are essential during this time because they give people access to important information. BEN’s first speaker choice for the Speaker Series was Gotcoin who helped the non-profit with COVID19 grants and hackathons. Wibson, was chosen as another participant in the BEN Speake Series, a decision Vera made given Wibson’s mission alignment with the current pandemic.

“Test kit fraudulence and community-based disaster relief were large reasons why BEN chose Wibson to be part of the speaker series. They have a COVID-solution where you measure risk based on areas a person has been too. They are allowing people to opt-in to see where they’ve traveled to. Then you can upload the information to a blockchain in a secure way, with the risk being displayed on the map.”

Blockchain has the opportunity to drive a community-first approach to disaster economics. With disaster relief at center focus, the world needs to limit the ossified oligopolies and crony capitalists that use crises to further the wealth gap. Even though it cannot eradicate, blockchain’s systematic accountability can alleviate the malicious behavior of bad actors.

Part 1/3 — From “The COVID Shock: A Three-Part Series on Disaster Capitalism, Blockchain’s Future, & the Emerging Global Culture”