Disaster Capitalism, and the Outsourcing of Violence in the UK
Corporations bleed what profits they can from disaster. Democracy is replaced by a business plan. An excerpt from Antony Loewenstein’s Disaster Capitalism: Making A Killing Out Of Catastrophe.
Disaster Capitalism, and the Outsourcing of Violence in the UK
By Antony Loewenstein / opendemocracy.net
  • “I am very passionate about our values and building this company not to make a profit. If profit is an immediate byproduct, then that’s wonderful. If you can make it have an impact on society, people’s lives and make it fun, crumbs, then we don’t have to worry about making this profit or that. It happens naturally.
  • Former Serco chief executive Christopher Hyman, 2006
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  • Chris Hyman, ex-boss SercoI was driven to a poor suburb to the north of Sheffield, in South Yorkshire. Children and parents played in the street. The houses looked shabby, some painted various shades of red, with boarded-up windows. I arrived with local activists at a nondescript property. Michael, who was from Cameroon, opened the door and welcomed us warmly in fluent English.
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  • The house was managed by British multinational G4S. It was a damp-smelling, three-storey building with steep stairs. Though the tenants received little money from the state and were not legally allowed to work, they had to buy cleaning products and other essentials for themselves. Clearly, this was not a priority. In the kitchen I saw the effect of leaking water, grimy around the sink. A mop stood in the corner. I was told the floor remained stained even after washing.
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  • The back garden was overgrown, with rubbish in the tall grass, and old cushions, a washing machine, and boxes were piled up in a small shed. The shower was covered with mold—there was usually hot water, but there had been a period in the winter when it ran cold for three months.

In the living room, a form bearing a G4S logo noted the times when a G4S Housing Officer had visited, together with the list of asylum-seeker tenants, who had originated from many nations. The Housing Officers visited once a month, and although Michael said they were often friendly, they rarely took action to remedy the property’s many problems.

Since he had been in the place for nine months, I asked Michael why he had not cleaned it up. He would have to buy gloves to do it, he said—another expense—and it was easier to ignore it. The carpet on the stairs was peeling, posing a danger to residents and visitors.

Most bedrooms were occupied by two people, each with a single bed. Every room had a lock on the door. Michael said he got along with his housemates—a small mercy in the cramped space available—and he was lucky to have the attic on his own, which afforded a view over the drab city. The room contained a Bible, a laptop—though no chair—coins, shoes, suitcases, soap, and shampoo. Water had leaked from the ceiling for months, and G4S had not fixed it. It was cold and depressing, though I was visiting in July, at the height of summer.

Back yard of a G4S house in Sheffield (John Grayson)

Michael was on a cocktail of drugs for anxiety and depression, awaiting a decision on his asylum claim after a re-application. He said he could not return to Cameroon as a result of political repression against his family. He did not want to speak on the record, and I understood why: he felt vulnerable. Nonetheless, Michael was articulate, bright, and despairing. The state of his housing and the limbo in which his asylum claim languished made him deeply unhappy—though he was one of the lucky ones, receiving state-provided weekly counseling.  Many others were left to fend for themselves, often ending up on the streets.

A cool breeze ran through the property. The heaters worked in the winter, but with leaking water, living with other migrants in a similar state of inertia and with no paid work, the situation was guaranteed to generate fluctuating moods—which was surely the point. Michael sometimes volunteered with a local NGO to talk to schoolchildren about asylum seekers, in order to occupy his mind.

This G4S house was a disgrace, but it was nothing out of the ordinary. Little money or care had been expended on it, or many others like it, because that would require funds whose use would damage the bottom line of a company whose sole aim was profit.

A 2013 Home Office committee, convened to investigate why G4S and Serco had not fulfilled their contract to provide decent housing, while allowing subcontractors to bully tenants, heard from James Thorburn, Serco’s managing director of home affairs, who explained: “We care for a lot of vulnerable people and we run two immigration centers, so we understand the immigration market.”

Making money from misery

Thorburn gave an almost identical statement in late 2014, when Serco won another contract to continue running the Yarl’s Wood detention center. Although the 2013 Home Office committee had elicited admissions from officials that it was not sensible to grant housing contracts to organizations with no experience running them, the contracts had already been signed, and G4S had no fear of losing them. As elsewhere, unaccountability functioned as a core value of disaster capitalism. It’s an ideology that thrives of making money from misery, in the West and the rest, from immigration to war and aid to mining.

G4S houses, SheffieldWe drove a short distance to another G4S property. It was a three-storey building with nine tenants, in better condition and tidier than the first. An Iranian man, Bozorg, said his housemate had cleaned the place for Ramadan. There was a G4S sign in the entrance hall that read: “This house has now been professionally cleaned: Please keep it clean and tidy at all times.” The G4S “House Rules” read like a prison manual for good behavior.

The company barely provided anything of use, and Bozorg said that nothing had been done about an infestation of mice. He had clashed with an African housemate, and did not feel secure. The back garden was overgrown and dirty, and G4S had not sent anybody to clear it up.

Bozorg had been in Britain for six years, and had not seen his wife and two children during that time. He broke down when recounting a conversation with his wife in which she had told him that his sons, twelve and eight, had been teased at school in Iran because he was in Britain and not around to support them. “What can I do?” he begged, seeking answers from me that I was unable to provide. I turned away, embarrassed. He was on heavy medication to manage the depression and anxiety. Because of a bad back, he was unable to sleep on a bed, so he lay on a mattress on the floor.

A local NGO requested that Bozorg be moved to another G4S property, because his physical condition meant that he could not climb the stairs in the middle of the night to relieve himself. He showed me the plastic bottle into which he urinated. He showered every three days, when he found the strength to pull himself up the stairs.

He had been waiting for years for a final resolution of his asylum claim, but his previous solicitor had not represented him properly. Bozorg was now filing a complaint against him. It was common for lawyers, paid badly by the state, simply to give up on cases, leaving their clients without representation. Successive governments have progressively cut legal aid, leaving thousands of asylum seekers with no real chance of success. The system is guaranteed to leave asylum seekers in limbo, while enriching the countless corporations that leech off it.

Bozorg was keen to tell me his story. He was a Christian and this caused him political problems in Iran. There was no way to verify his story or that of Michael before him. Robert, the local campaigner, knew both men and said it was likely that they would eventually both be granted asylum, though it might take some years. But there was no excuse to house people indefinitely in inadequate accommodation while they awaited resolution of their cases. This property was in far better shape than the one I had visited earlier; but with nine people living in a relatively small place, only two working burners on the stove, and not enough refrigerator space for everyone’s food, Bozorg was desperate to move.

Asylum Help was a service that advertised itself as helping refugees to understand the asylum process. I saw an A4 sheet of paper advertising it in the hallway. Anyone who called the number was put on hold for at least thirty minutes, and the services then offered were barely satisfactory. This situation was repeated across the country, with few of the asylum seekers having a chance to be heard. The media was largely uninterested, and the Home Office and charity bureaucracy resented having to talk to journalists and migrants at all. Activists and immigrants all told me that the system was close to useless.

Thriving profiteers

This reality of privatised housing for refugees was linked to the country’s housing crisis, both for asylum seekers and for the general population, but not for the reasons its defenders claimed. It had not brought greater freedom in the market; it had simply allowed profiteers to thrive, because the mantra of “self-reliance” for the poor — another term for hanging the underclass out to dry— had become official government policy. A select few companies — G4S, Taylor Wimpey, Barratt Homes, Persimmon, Bellway, Redrow, Bovis, Crest Nicholson — had captured the market.

John Grayson was a friendly and passionate sixty-nine-year-old activist. Over the years he had worked in adult education, as an independent researcher, teaching and researching on housing and social movements, and as a solidarity campaigner. He was now a member of Symaag, the South Yorkshire Migration Asylum Action Group. “Councils used to provide housing through public funds,” he told me. “Then this all went through privatization by Labour and the Tories, and Labour often pushed for more privatisation of asylum-seeker services. Now private contractors do the dirty work for the state, but it’s the outsourcing of violence. The state should have a monopoly on these tasks.”

The rot deepened from 2012 onwards. Britain started privatising asylum housing, the Home Office giving most of the contracts to G4S and Serco. There was a plan to “nationalize providers,” and the country was divided into separate territories for the purpose—and Yorkshire was allocated to G4S. Asylum housing was only for those waiting for an outcome of their asylum claim, but many others were homeless. Grayson recalled a 2012 public meeting about the proposed plan at which a Zimbabwean man said: “I don’t want a prison guard as my landlord. I’ve seen G4S in South Africa.”

The G4S-run Angel Lodge in Wakefield, West Yorkshire, situated in the grounds of Wakefield prison, was dirty because the company would not pay for better services. The rooms were home to rats and cockroaches. Pregnant women were placed in poor housing with steep stairs. Food poisoning was common. Some private contractors did not pay council fees, and tenants quickly discovered that heating and electricity had been disconnected.

The British press rarely reported these conditions, instead high- lighting the “four-star” treatment given to migrants. The Daily Mail claimed in May 2014 that asylum seekers were being treated by G4S to luxury accommodation because the Angel Lodge “specialist hostel” was full. In truth, Angel Lodge was a grim facility that generated constant complaints from its residents. 

Bungling, overcharging. . .

G4S is a behemoth, operating in 125 countries with over 657,000 employees, whose work has included guarding prisoners in Israeli-run prisons in Palestine. In 2014 the company predicted huge growth in the Middle East, especially in Egypt and the Gulf states. In Britain alone, G4S controlled countless police tasks from 2012 onwards, in a partially privatized system whereby police officers continued to make arrests, but G4S staff processed suspects in their own “custody suites”.

In 2014, G4S won a $118 million contract to deliver “base operating services” at the US military base at Guantánamo Bay, in Cuba (though reportedly sold its share in a subsidiary company soon after). G4S ran countless private prisons across Britain, despite being routinely fined for failing to meet its agreed targets. Occasionally, mainstream politicians criticised Serco, G4S, and other providers, but they did little to enforce greater accountability.

Founded in 1929, Serco has been ubiquitous in British life, running ferries, London’s Docklands Light Railway, the National Physical Laboratory, prisons, defense contracts, education authorities, waste management, and a host of other operations. It has over 100,000 employees globally and controls prisons in Australia, New Zealand, and Germany. It operated with a $1.25 billion contract from the Obama administration to implement Obamacare, despite a Serco whistle-blower having alleged that its staff had “hardly any work to do” during a botched programme.

Both Serco and G4S were complicit in overcharging by tens of millions of pounds for the electronic tagging of prisoners — some of whom were found to have been dead at the time — from the 2000s onwards. The Serious Fraud Office was tasked in 2013 with investigating, and in late 2014 Serco was forced to reimburse the Ministry of Justice to the tune of £68.5 million.

The government’s solution to this fraud was not to address the reasons that privateers had been able to deceive them — loosely written contracts and little appetite for enforcement — but to hand over the contract to a Serco and G4S rival, Capita. This corporation, formed in 1994 with 64,000 staff, has become the largest beneficiary of outsourcing in Britain. By 2015, it ran all Cabinet Office civil-service training, as well as contracting with the Criminals Record Bureau to manage and maintain criminal records, plus many others. A “clean skin,” relatively speaking, Capita operated without the recent controversies surrounding Serco and G4S, and it appealed to governments craving commercial secrecy for services traditionally run by the state.

The Home Office dispensed with the services of the UK Border Agency in 2013 for failing to manage properly a huge backlog of asylum cases. It then appointed Capita, with a £40 million contract. The company bungled its delivery, sending hundreds of text messages to individuals who were in the country legally, reading: “Message from the UK Border Agency: You are required to leave the UK as you no longer have the right to remain.” Others who had chosen to leave Britain were sent messages by Capita wishing them a “pleasant journey”.

This callousness was highlighted again during a 2015 inquiry that showed Tascor’s medical staff, operated by Capita, ignoring health warnings about a Pakistani man, Tahir Mehmood, before he died at Manchester airport in 2013. Corporate delays and incompetence caused Mehmood’s death, because contracted employees did not see information about his ongoing chest pains.

War, who is it good for? 

Never miss a good opportunity to make money from disaster — this was theunofficial mantra of Capita boss Paul Pindar, when he told the Public Accounts Committee in 2013 that the reason army recruitment was down was the “disadvantage that we actually have no wars on.”

These words were spoken before the battle against Islamic State militants had commenced. Capita was given the Ministry of Defence contract to manage advertising, marketing, and the processing of application forms for the army. Pindar’s brutally honest admission — that war was good for business — was refreshing. The fact that all of the conflicts Britain had engaged in since 9/11—including Iraq, Afghanistan, and Libya — had been catastrophic failures was not mentioned as a factor in Pindar’s skewed reasoning.

Paul Pindar, former chief executive, Capita

Britain’s immigration policy had played a key role in generating profits for privateers. Britain had had an Immigration Act since 1971 that allowed the incarceration of asylum seekers in detention facilities or jails, and by the 1990s there was public pressure to manage the growing number of arriving migrants more stringently.

The Murdoch press and Daily Mail convinced many citizens that a nation with a harmonious past was being swamped with criminals. Activists argued that it was wholly inappropriate for individuals fleeing repression to be held in prison-like conditions; punishment as a deterrent had been the default setting for years, and yet it had not stemmed the flow of people. Refugees continued to arrive because the global crises that were the cause of the influx persisted.

In October 2014, the House of Commons Public Accounts Committee detailedthe 11,000 asylum seekers waiting in Britain for at least seven years to hear if they would be allowed to stay; the further 29,000 migrants still awaiting official assessment of their applications; and the 50,000 immigrants who had had their claims rejected, then disappeared.

The mad rush to privatize seemingly everything had few limits in the minds of its advocates. Since 2000, there had been lucrative investments in residential homes for the needy and mentally disturbed. Utilities were routinely outsourced, and prices increased. “Welfare to Work” contractors were lining their pockets, with little evidence of success.

Despite public opposition, there were growing moves to privatize public libraries, schools, child protection services, and forests. University courses, the fight against climate change, and foreign aid were all endeavors that were routinely framed as having to serve commercial interests, rather than the common good.

Prime Minister David Cameron has outsourced hundreds of medical services during his time in power, including non-emergency ambulance services and community care. Robots were increasingly replacing nursing staff—a development welcomed by companies looking to cut costs. Reductions in government funding for public hospitals led to the chief executive of the NHS Confederation, Rob Webster, warning in 2014 that the NHS would have to start charging patients £75 per night for a bed—an unthinkable measure in a supposedly public system.

In 2015, Britain’s only privately run NHS hospital, Hinchingbrooke, dropped its contractor, Circle Holdings. This was unsurprising, because a 2014 report found that there had been little oversight of the facility, as well as “poor hygiene levels.” and major problems in the emergency department. Taxpayers were forced to shell out for yet another tendering process.

The prioritization of market competition over quality healthcare had become the default setting of forces pushing for the privatisation of the NHS itself, against the strong opposition of medical experts and the public. Even the US defense company Lockheed Martin was keen to bid on a £1 billion GP support service contract.

According to journalist John Pilger, what the country had witnessed was “the replacement of democracy by a business plan for every human activity, every dream, every decency, every hope, every child born.”


This is an edited extract from Antony Loewenstein’s book, Disaster Capitalism: Making A Killing Out of Catastrophe, published by Verso. Full references appear in the book. 

The book has received the following endorsements:

  • Noam Chomsky: “Chilling study, based on careful and courageous reporting, and illuminated with perceptive analysis, helps us understand all too well the saying that man is a wolf to man.”

  •  
  • John Pilger: “A journey into a world of mutated economics and corrupt politics that we ignore at our peril.”
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  • Naomi Klein: “The forces of disaster capitalism are increasingly on the defensive, but their attacks on the global commons have expanded in the years since I wrote The Shock Doctrine. I am very grateful that Antony Loewenstein has brought his meticulous reporting to this subject, and the result is a keenly observed and timely investigation into rampant resource plunder, privatized detention centers, and an array of other forms of corporate rapacity on four continents. This book will serve as a potent weapon for shock resistors around the world.”

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  • Jeremy Scahill: “A devastating, incisive follow-up to Naomi Klein’s The Shock Doctrine.”

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Disaster Capitalism, and the Outsourcing of Violence in the UK