Severe power outages; clean water shortages; dozens of deaths; still nothing resembling an adequate response. Texas is suffering the end result of a system that’s proven itself unfit for purpose in every way that matters; a multi-lane pileup of institutional failure that turned a serious but manageable weather event into a natural disaster that never had to happen. How this situation came about is well-documented enough that there’s no point repeating it here — the litany of organizational mismanagement and corner-cutting that laid the groundwork for catastrophe; how it was compounded by private-sector decision-making that lit and heated empty luxury hotels while leaving ordinary families freezing in the dark. A longer-term lesson it presents, though, is how our current economic system will respond to the increasing prevalence of large-scale systemic disruption ahead. And it’s not a promising picture.
Texas is a showroom demonstration for an economic model that’s increasingly retooling to monetize its own collapse. Faced with the dawning of an era of permanent crisis driven by climate change and the grinding collapse of an unsustainable socioeconomic framework, the dominant system pretends to bury its head in the sand while in reality calculating how to find advantage in the chaos. Climate change denial, and its softer and more pervasive cousin stance that acknowledges the problem but bogs down any practical solutions with endless equivocation over costs and projected targets for action always ten or twenty years into the future, are for external consumption only. Behind the endless churn of disinformation and foot-dragging, the authors of disaster are already entirely aware that their status quo is past any hope of sustaining — and they already have secondary options primed for an effortless transition. One of the most dangerous myths about climate change is that our current system can’t — or refuses to — adapt in response to the threat it poses. In reality it’s already got a roadmap laid out, it’s just that its interests are very different to those of the public good.
Looking at how the situation unfolded, it becomes quickly apparent that the human cost was not only avoidable but to all intents and purposes manufactured. The years of cost-cutting and mismanagement that left the Texas power grid unprepared for the stresses of a freak winter storm created failures, but even then still ones that could have been mitigated if the public interest had taken the reins and put an effective response into play. The true disaster was created after the fact by how utility companies responded. Many people found they still had power, but couldn’t afford energy bills that had been jacked up to obscene levels to take advantage of increased need.
Meanwhile, executives and investors boasted of the killing they’d just made from the spike in natural gas prices. In conventional socioeconomic terms, the system had utterly failed. In terms of its own internal priorities, that failure was a resounding success. Price-gouging on this scale isn’t a flaw of the system but an integral part of how it creates profit — and now it’s increasingly mutating into a new system in its own right. What Texas has just experienced is an inevitable next step in the same current of disaster profiteering that’s already seen a decade-plus of economic crisis radically redistribute wealth to the top, and the COVID-19 pandemic resulting in the world’s ten richest people alone increasing their wealth by a collective four hundred billion dollars just by the end of 2020. What’s now becoming unavoidably apparent is that four decades of neoliberal ideology hasn’t just failed to produce a fair or sustainable economy — it has resulted in an economy that increasingly no longer functions as one at all.
To the neoliberal imagination, the economy exists as a machine for the generation of wealth; in the neoliberal reality it’s become nothing but a stratum of wealth to be extracted and removed with ever-increasing speed and efficiency.
To the neoliberal imagination, the economy exists as a machine for the generation of wealth; in the neoliberal reality it’s become nothing but a stratum of wealth to be extracted and removed with ever-increasing speed and efficiency. That this model would begin to cannibalize its own foundations was always inevitable. Eventually wealth creation could no longer keep up with wealth sequestration; the promised rising tide that lifts all boats outstripped by the rate at which the water was being drained. For the truly wealthy, conventional entrepreneurship is no longer their business model and hasn’t been for a generation. Rentier capitalism has become the dominant order of the day; the universal landlord model of extracting wealth by merely squatting on resources people have no choice but to shell out for and profiting off the license to gouge that comes with it. But even rentier capitalism needs a functioning economy to extract rent from. The top of the food chain has evolved this model into something that no longer even needs that — and in fact mines entire new strata of super-profits from its absence.
The strategies developed by the hyper-wealthy for gaming the system have created a system built around the game. The future direction of neoliberal capitalism in its terminal form is increasingly based not on generating wealth through conventional business but through speculation on commodity values — and speculation actively thrives on disruption. In this model, economic failure becomes highly profitable in itself, because failure creates scarcity in key commodities and scarcity drives up asset prices. As our unsustainable system breaks down, the speculator model grows in power and profitability. Not in the long term, of course — but who needs the long term when you can make more money than God in a month. How that money’s supposed to mean anything if planet and the economy with it completely burns to the ground in a few decades’ time is another matter, but nobody said these people were good at thinking through the consequences. This is a model designed to prioritize short-term profits, not long-term functionality, and in that blinkered goal it’s functioning at peak efficiency. After this the plans of the wealth-extractor aristocracy get shakier and more fanciful; bunker complexes in New Zealand defended by private armies or colonies on Mars populated by indentured serfs. None of it’s going to work — but at the end of the day that isn’t important because none of it works for the rest of us anyway. Wealth that vanishes into an offshore bank account, into a billionaire’s vanity bunker, or that just becomes valueless as the whole basis of the system that gave it value crashes and burns is all the same to someone who’s sitting in the dark and the cold in a home they can’t afford to light or heat — or who’s left out on the street as housing too becomes another speculation asset whose market value no longer depends on anyone actually using it.
Texas’ energy market was a test-bed for the brave new world of radical deregulation; it’s now, ahead of time, become the same for the coming wave of speculator profiteering. To the structures that ultimately caused the disaster so many Texans are living through right now, the failures that led the situation to this point aren’t even failures but new opportunities. The situation has shown not just how easily the free-market model produces inadequately robust systems that crumble under any significant stress, but how easily it adapts to find more profit in that failure than it did in its business-as-usual operation. We’ve been given an early preview of how the current system is already primed to adapt to the years of crisis escalation ahead, and it’s proven that, instead of trusting in that adaptation to produce a better outcome even as it increasingly proves its intent to only offer worse, we need to find a replacement model entirely.