Disaster capitalism rages in Puerto Rico

By Keith Leslie - Socialist Action, October 26, 2017

“The only thing we need now is a hurricane.” These were the words of a financial advisor in Puerto Rico this summer, anticipating the business opportunities the devastation of a hurricane would produce.

This framework—which understands disaster as an opportunity for profit—is not unusual. As Naomi Klein showed in her famous book, “The Shock Doctrine,” capitalism exploits both natural and manmade disasters as a chance to tear down social reforms, privatize public services, and implement neoliberal economic policies.

From the Pinochet dictatorship in Chile to post-Katrina New Orleans, we have seen the program and tactics of disaster capitalism persist and expand. Today, we can see the same forces seeking to bring disaster capitalism to Puerto Rico in the aftermath of Hurricanes Irma and Maria.

The most immediate disaster capitalist proposals for privatization came after Hurricane Irma. The storm did not hit Puerto Rico directly, but knocked out power to more than a million people. The executive leadership of the Puerto Rico Electric Power Authority, PREPA, warned that the island might face power outages for six months or more. This immediately prompted calls for the privatization of PREPA on the grounds that it was inefficient and incompetent. In fact, PREPA was able to restore power for most of its customers within a few weeks.

PREPA’s current executive leadership was installed through an agreement with its creditors after the previous, anti-privatization administration was ousted. Four of the board’s seven members had signed a letter in June calling for PREPA’s privatization. The Electrical Industry and Irrigation Workers Union, which represents PREPA’s workers, accused the leadership of exaggerating its estimates and delaying the deployment of available workers to promote the prospects of privatization.

Hurricane Maria, with a far more devastating impact on Puerto Rico, has likewise intensified the disaster capitalist pressure. The calls for PREPA’s privatization have intensified. They have also been joined by the likes of Elon Musk, the CEO of Tesla, who has attempted to put a green veneer on this push by proposing to build a renewable grid in Puerto Rico—but on a privatized basis.

One of the key objectives of advocates of PREPA privatization is the breaking of the electrical workers’ union. Musk has a history of opposing union drives at Tesla and elsewhere. The fiscal control board installed in Puerto Rico by Washington has invoked a legal provision that would allow it to approve public-private partnerships with almost no public or environmental review.

Of course, Hurricanes Irma and Maria were not the start of austerity and privatization programs in Puerto Rico. Even before the hurricanes, Puerto Rico faced a debt of $74 billion—more than 70% of its GDP—as well as nearly $50 billion in unfunded pension liabilities.

In 2016, the U.S. Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA. PROMESA established a fiscal control board with broad authority over Puerto Rican finances and over its elected government.

The main causes of this debt crisis include massive tax breaks for corporations and wealthy individuals in Puerto Rico. Restrictions on the Puerto Rican government and economy due to its status as a U.S. colony have also contributed. This includes the Jones Act, which restricts non-U.S.-flagged ships’ ability to ship goods to Puerto Rico but also extends beyond it: when Puerto Rico attempted to raise taxes on large corporations that imported goods, Walmart successfully sued to block the tax in a U.S. federal court on the basis of federal law.

Nonetheless, the austerity program in Puerto Rico has fallen squarely on the poorest and most vulnerable: the fiscal control board has cut public health spending by a third, lowered the minimum wage for workers below the age of 24 to $4.25 an hour, raised utility bills, cut the public pension system, and closed public schools.

The hurricanes, however, have enabled the intensification of this ruling-class offensive. Demands for the cancellation of Puerto Rico’s debt by the U.S. Congress have been bluntly rejected. In fact, the majority of the disaster relief allocated to Puerto Rico by the House is in additional loans of more than $5 billion, rather than grants, as is typical for disaster relief to U.S. states. In the same bill, the House cancelled $16 billion in loans for the National Flood Insurance Program—but not a dollar of Puerto Rico’s debt. Such “disaster aid” will only indebt Puerto Rico further and expand the austerity demands from the fiscal control board.

The U.S. government and the disaster capitalists will not concede anything without a fight. We are not helpless in the face of this offensive, however. By building a mass movement of workers and students, we can win. We’ve already seen a small taste of that when the Trump administration was forced by public pressure to issue a temporary waiver for the Jones Act to aid disaster relief.

Without a mass movement that can educate people about these struggles and keep the pressure up, however, such victories will be transient. Ten days after issuing the temporary waiver, the Trump administration declared that it would not renew it.

There are millions of Puerto Ricans living in the continental United States—more than live on Puerto Rico. This diaspora can form the core of a movement and build connections to the labor movement and other oppressed peoples; it has done so in the past. The struggles to close the U.S. Naval base at Vieques and to free Oscar López Rivera could not have been won without mass movements centered on the diaspora. The mass strikes of Puerto Rican students against austerity can also serve as a template for building resistance to austerity and disaster capitalism.

As Puerto Rico struggles to recover from the devastation wrought by the hurricanes, it is imperative that the disaster capitalist offensive following in their wake, and the austerity and privatization campaign it forms a key element of, are met and defeated. Puerto Rico’s electricity infrastructure must be rebuilt, on the basis of solar, wind, and other renewable sources, and maintained under public ownership.

Puerto Rico must be freed from the undemocratic fiscal control board installed by the U.S. government. And the onerous debt burden, imposed on Puerto Rico in no small part through U.S. colonialism and corporate handouts, must be cancelled. The austerity drive that is devastating workers, students, and vulnerable people across Puerto Rico must end.

The capitalist class hopes to use the hurricanes as a cover to expand their profits at the expense of Puerto Ricans, and should they succeed, the model created will undoubtedly be adapted elsewhere at the expense of working people across the U.S. and around the world. We must show them that we will not accept disaster capitalism—in Puerto Rico or anywhere else.

We must also remember that, while all of these immediate goals are necessary, they are not sufficient. The debt crisis in Puerto Rico and the general impoverishment of Puerto Rican workers are not accidents that can be resolved merely by clearing away some of their accumulated damage. They are constructions of the twin systems that bind Puerto Rico—capitalism and colonialism. Left alone, they will continue to reproduce poverty, fiscal dependency, and vulnerability. The only way out is to shatter the twin shackles and build a socialist Puerto Rico run by and for workers rather than Wall Street.

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.