Wealth, Poverty, and Natural Disasters
Prosperity saves lives.
The earthquake in Haiti was a magnitude of 7.0. According to Wikipedia, the 1989 Loma Prieta quake in San Francisco was either 7.0 or 6.9 depending on which scale is used. In other words, the intensities were fairly similar. Haiti is devastated. If the New York Times is correct, the death toll could be in the tens of thousands. The death toll in the 1989 quake was 63, if you include indirect deaths due the quake.
The difference is wealth. San Francisco is one of the wealthiest areas in our part of the world, while Haiti is the poorest. Poverty makes natural disasters worse. Wealth mitigates natural disasters. You would think that those who worry about the poor of the world would promote policies that increase wealth. Instead, they push policies that restrain wealth creation, and they do it intentionally and knowing it will restrain wealth creation.
The Heinrich Böll Foundation, an affiliate of the German Green Party, issued a report that referred to wealth areas, like San Francisco, as being populated by “over-consumers.” On the other hand, poor areas like Haiti were called “under-consumers.” But that is a misnomer since the report writers also make clear that in their ideal centrally planned paradise the “under-consumers are not to catch up with the over-consumers.” They indicate that in the name of equality the over-consumers must have their wealth taken from them. They very explicitly attack those who would try to help develop the poor nations of the world because such people “work at lifting the threshold—rather than lowering or modifying the roof…. Poverty alleviation, in other words, cannot be separated from wealth alleviation.”
The truth is that wealthy people can bear the burdens of the worst Mother Nature throws at us. I know the Greens want us all to live in tune with nature, but Mother Nature has no feelings, no compassion, and is quite happy to turn you into fertilizer. Condemn materialism and wealth all you want, but it saves lives. Sure, if you hate humans, then you won’t care. But whatever problems wealth creation is claimed to cause, they pale in comparison to the problems that accompany poverty.
The quake in Haiti inflicted massive death because poverty magnifies the evil that comes with natural disasters. The San Francisco quake led to few deaths, even with a similar magnitude, because the area is productive and wealthy. And, many of the deaths that did happen were because of failed government policies. For instance, the collapse of the Cypress Freeway, which killed 42, was built by the state on a landfill that tends to liquefy during an earthquake. That liquefaction, combined with the state’s failure to reinforce known flaws in the highway, directly led to the collapse and the deaths.
Similarly, the other major concentration of destruction was in San Francisco’s Marina District. The Marina District was the site of the 1915 Panama-Pacific International Exposition, which was built by the city on mud flats and wetlands. After the Exposition ended the city then sold the property to developers for housing. It was here that seven buildings collapsed and 63 more were damaged so severely that they had to be torn down. Four died in the Marina District.
The disaster in New Orleans was a similar example. When the government-maintained dikes failed during hurricane Katrina, the city was flooded. The people who suffered were the poor, especially the poor who relied on government mass transit to evacuate them. The better-off fled in their cars. But a huge percentage of citizens didn’t own cars. Randal O’Toole wrote:
“We have heard that 60 percent of New Orleans residents are black, but it has been little noted that a third of those black families do not own a car — nor do 15 percent of white families. It is these people who were left behind when those with cars evacuated.”
O’Toole notes that in previous years, when wealth was lower in the country, death rates from hurricanes were higher. When Galveston was hit by a hurricane in 1900, people couldn’t escape in time because autos didn’t exist. Now major cities can evacuate before a hurricane arrives because people have cars. Even mass transit works better to evacuate people when more people own cars since it is used to evacuate far more manageable numbers.
Policies that destroy wealth creation today mean a poorer world tomorrow, and poverty — not wealth — exacerbates disaster.
Comment by Panagiotis Peter Manousakos on 18 January 2010:
Understood Mr. Peron,
It would be nice if you ended your article with a hyperlink to http://www.redcross.org or any other organization you deem fit. Yes, much of the aid will not go through as a consequence of disorganization, paranoia and corruption but we can precict rather confidently that for every bit we give, something will filter down to those in need.
Respectfully, I am sick and tired of my fellow ‘free market ideologues’ talking about what exacerbates these terrible events when they should instead be teaching and providing ‘enterprise skills’ to expatriate Haitians while providing every bit of financial support possible.
Yes, I understand that even these aid organizations have inefficiencies among them but name one enterprise, including private, that doesn’t. Sir, I encourage you and your readers to not treat horrible crises as an opportunity to communicate ideology. I find it disingenuous and not at all constructive. This is a time to focus on ‘free market’ solutions to ‘give’, NOT PREACH!!!
I hope all of you give what you can and postpone your analyses for at least a month.
Pingback by Wealth, Poverty, and Natural Disasters « thak’s cool links on 18 January 2010:
[...] The Freeman | Ideas On Liberty » Wealth, Poverty, and Natural Disasters. Some interesting thoughts. [...]
Comment by Bill Reed on 18 January 2010:
By all means, Mr. Peron. How dare you highlight the actual cause of the excessive devastation that grips Haiti! You are causing discomfort to the forces of statism who prefer the comfort of their denial of responsibility for the EXCESSIVE death and destruction we are forced to witness. Don’t dare point out the negligence and absence of humility that have brought such suffering to the people of Haiti.
Opponents of liberty wish you to remain silent in the presence of such an egregious objective example of the actual consequences of statism, regardless of its form. It doesn’t matter whether it’s communism, Islamism, socialism, or whatever. If it isn’t free markets, private property, and liberty, it produces the kind of relentless, abject poverty and infantilism of the populace that characterized Haiti before this horror was visited upon them, and the inevitable vulnerability of such poverty-stricken societies to the vicissitudes of nature.
This may fall upon deaf ears, but we must have the courage, in honor of the unnecessary and wasteful sacrifice of so many potential benefactors of their communities to the conceit of the anointed.
Comment by Panagiotis Peter Manousakos on 18 January 2010:
Mr. Reed,
‘Forces of statism?” Honestly sir, I’m making a rather simple point. When someone is buried under rubble, you dig them out, not lecture them on their bad luck for living in a country that is corrupt and incompetent.
I have already stated my agreement with Mr. Peron’s insights, what I take issue with is the fact that the Libertarian movement is not winning points by writing such material. The timing of such a piece would be less poorly conceived if some humanity was included like a donation to a relief mission.
Like you sir, I believe the Libertarian path is mankind’s only solution to a sustainable future. It cultivates proper behavior in markets, communities, families and countries – especially as it concerns relations with other nations.
What has infuriated me over the past few days is the lack of empathy. Remember that the people on the ground are not ideologues, they are innocent people who are bleeding on the rubble of yes, a country that was broken long ago – but I find it disheartening that the movement’s first instinct isn’t to ‘heal first’ and teach later.
It is this mentality that led to the disorganized pseudo-privatization of the former Soviet Union. FIFTY YEARS of Western scholarship went into bashing and demonizing the Soviet Union and hardly any material came out to give these misdirected fools a path to privatization.
With respect sir, as someone whom I no doubt share many views as it pertains to free market thinking and practice – is it not better to show the people of Haiti the power of a free and wealthy society’s ability to bounce back from catastrophe?
Also, is it not better to wean many immigrants off of the U.S. welfare apparatus and teach them the value of productive work and apply it to their home countries and teach their own?
There is no denial here, only the conscious and rational choice to channel my energies toward healing, not preaching, and to use an economics term, apply time preference toward immediate, concrete actions.
I think our movement is strong enough for this and I suspect you do as well if you really think about it.
Comment by Douglass Holmes on 18 January 2010:
Amen to your sermon, Mr. Peron. People need to be reminded that poverty kills and free markets are the best way to spread the wealth. The 1976 earthquake in China was a 7.8 and it killed 240,000. Thirty years later, in May 2008 an earthquake in China of similar magnitude left 4.8 Million homeless but only killed 69,000. The difference? Thanks to freer markets, China in 2008 was a much more wealthy nation than it was in 1976. Even though China is run by the Communist Party, the Index of Economic Freedom ranks China as more free than Haiti.
http://www.heritage.org/index/Ranking.aspx
Comment by Daniel Ferris on 18 January 2010:
Mr. Manousakos, you miss the point of this website. We’re not lecturing the Haitian people, and I’m sure many of the site’s readers have given generously to the Haitian earthquake victims.
The point remains that governments restrict liberty, kill people and keep them poor better than they do just about anything else.
Also, you are dead wrong about the Soviet Union and the scholarship that preceded its collapse. I don’t know what country you’re from, but in the U.S., much more scholarship went into praising the Soviet Union prior to its collapse than went into criticizing it. In fact, in most colleges, you simply weren’t allowed to criticize it, because all the professors were so utterly convinced it was the way of future (never having been burdened by the inconvenience of seeing whole towns on drinking binges and rusted out tanks decaying by the side of the road while Olympic athletes and ballerinas lived well and others starved). I criticized the Soviet Union in every class I had, every time it came up, and on every occasion, not only did every professor defend the Soviet Union in particular and communism in general, but the overwhelming majority of my classmates did as well. American classrooms are horrible places to look for criticism of communism.
Comment by Bill Reed on 18 January 2010:
“Lack of empathy”? What have you been watching or reading? I’ve never seen a more heartfelt outpouring of empathy and compassion than I’ve witnessed over the last several days. Nowhere does Mr. Peron or I exhibit anything that could be interpreted as a “lack of empathy” except by someone who sees himself as superior, or one of the anointed who reflexively appoint themselves the judges of their fellows. I have indeed made my contributions to put the band-aid on the hemorrhaging wounds inflicted by statism upon the people of Haiti. Mr. Peron’s point is still well-taken. The absence of liberty that caused the poverty, which in turn multiplied the horrible destruction on that island, must be addressed!
Nowhere do I or Mr. Peron advocate liberty INSTEAD OF compassion. In fact, compassion obliges liberty. They are not mutually exclusive propositions. What we feel compelled to do is to make the case for liberty in these most distressing and horrifying circumstances, because it’s unlikely that many others will. We who know better have a responsibility to make known our frustration and anger at yet another example of the state making things far worse than a free people deserve.
What you apparently fail to appreciate is the depth of anger that people like myself feel when I am forced to witness yet another predictable man-made (more accurately, government-made) disaster. The earthquake itself was unpredictable but folks like Mr. Peron and I see the inevitability of these horrific results, based on observations of past calamities. You have no idea how incensed I become when I look at what statist central planning of one kind or another visits upon their captive populations.
If it is too impolitic to point this out when such an egregious example presents itself, then when would be better? When it vanishes from the front pages and our complaints can be safely buried in the sports section? (If they are noted at all)
Such devastation is inevitable when government runs rampant over liberty, private property, and free exchange of goods between consenting adults. Those of us who see what few others see, must make our case whenever these things happen. The dead cry out for it. Self-congratulatory lecturing is selfish. We all see how caring you are. It is you who apparently don’t recognize our compassion. It is my compassion that fuels my anger and frustration at yet another unnecessary tally of death and suffering.
Comment by Ken Schoolland on 18 January 2010:
Bravo, Jim, for highlighting the importance of wealth creation and free societies for weathering disasters. From Greg Rehmke in his recent lecture tour: “The question isn’t ‘What causes poverty?’. The real question is ‘What causes wealth?’ Poverty is the natural state of the world. Wealth isn’t.”
I’m reminded of the recent acclaim that Father Damien received for his suffering while serving the lepers of Hawaii. He received great recognition world wide for his immediate help to the poor of his day. Yet so little notice was given to the little known scientists who actually cured the disease so that tens of thousands thereafter never again had to experience the disease at all.
The seen vs. the unseen.
Comment by George Schwappach on 18 January 2010:
Very well spoken Mr Peron (as well as your defense of him Mr. Reed). I am a lifelong (32 years now) libertarian who went to Inagua to rebuild roofs after the ’08 hurricane. If I felt I could do any good, I would go to Haiti. My experience, when working in these impoverished communities, is that the locals want freedom, and they understand its benefits. No need to preach to them. It’s the bureaucrats, both foreign and domestic, that need to understand that their programs cause these deaths. And it is the job of FEE to set these bureaucrats straight (at least, that’s why I support FEE).
Thank you for saying what needs to be said during this terrible ‘anthropogenic’ disaster.
George Schwappach
Comment by pearl on 18 January 2010:
Mr. Manousakos,
You clearly didn’t get the message about what this article means. Permit me to enlighten you. The FACT that wealth is good and poverty is evil needs to be acknowledged by those who wish to impoverish the world in the name of social justice. And, no, there shouldn’t be a link to any of the fraudulent “charities” who now have their hands out looking for a payday. The reason people give is to help the needy – not to enrich NGO’s. As it is more than clear that the Powers that be have no intention of mitigating the suffering in Haiti, it leaves compassionate people with few options to actually help those in need. In my opinion, those who would like to help should volunteer or give at their local shelter and let the Haitians sort this out. Tossing ever more money into this black hole of corruption will benefit no one.
Comment by Flavio Ortigao on 18 January 2010:
The article makes some good point. I would though, say that wealthy and poverty are not the causes, but the consequences of freedom, private property, and the rule of law, or the lack thereof. Corruption is the main cause of bad government, and that leads to poverty and the disregard to conducts like construction codes, bad housing infrastructure, and disaster relief readiness. Wealthy is though a good indicator of how a society is.
Comment by Larry Ruane on 18 January 2010:
“Sir, I encourage you and your readers to not treat horrible crises as an opportunity to communicate ideology.” This sounds like we (who agree with James Peron’s article) are just looking for an excuse to promote the free market, as if we have some kind of irrational devotion to it. No — we promote the free market BECAUSE its lack leads to this and many other kinds of disasters. Ideology has real consequences!
Comment by TokyoTom on 19 January 2010:
James, you`ve simply pointed out the obvious (and thrown in a gratuitious anti-enviro slam) without troubling yourself to do any heavy lifting in actually explaining why Haiti is poor.
This might help:
http://mises.org/Community/blogs/tokyotom/archive/2010/01/19/some-food-for-thought-on-who-us-un-others-haitians-and-what-is-responsible-for-making-and-keeping-haiti-poor.aspx
Comment by James Peron on 19 January 2010:
TokyoTom: The purpose of this article was not to explain the reasons for the lack of development in Haiti. That is a different article. I am not sure why some people always seem to think that the best way to write an article is to write the article they would want instead. I would note that your self-promoting link to you blog doesn’t link to any “heavy lifting” you have done, but merely links from there to other articles by other people. It seems you could have simply linked to those articles, if you felt them worthy, without diverting people to your page to increase traffic there.
The point of my article was to compare two incidents, one of which I lived through. It wasn’t meant to be a history of Haiti versus a history of San Francisco. It was meant to make one point only. If that isn’t the article you would write then I am sure our friends at FEE would consider one that you would like to write. But I am unsure why I should write the article you want instead of you doing so.
Comment by Panagiotis Peter Manousakos on 19 January 2010:
Mr. Perron,
As I stated in my first post regarding your article, I am in full agreement wit you over what exasperates disasters in poor countries. But I will concede that you are correct in that I unintentionally reflected how I would want to write the article.
But given the responses since yesterday and the few people who decided to lecture me on the effective rationale of free markets – let me say that I thank them for pointing out the obvious but after reading scores of blogs I wanted to stress the importance of ‘exhibiting’ compassion as well as analysis.
I am not accusing you of insensitivity, infact, you are probably more connected to these victims than any of us who never felt so much as a tremor in their lives.
It just would have been nice if the majority of what I’ve read came with a link to an aid organization. The previous comment that they are all defunct, incompetent is cynical and untrue. Do they have inefficiencies? Yes. Is there room for improvement? No doubt an infinite degree? But are people being helped right now? Yes.
I wish you well.
Comment by Jonathan Finegold Catalán on 19 January 2010:
I largely agree with the conclusions made in this article. I came to similar conclusions in a piece of my own ( http://www.economicthought.net/2010/01/haiti-two-hundred-tragic-years/ ), although I focus mostly on the role of capital accumulation, private property and liberty.
Comment by TokyoTom on 22 January 2010:
James, sorry, but my aim was not to self-promote but to conveniently offer further links. I tried to post them directly, but the commenting software here strips out links, so I gave up on that.
Let me note that Richard Ebeling`s piece on the Jan. 19 Mises Daily page (“Real Economic Reform for a Hurting Haiti”) is worth a read: http://mises.org/daily/4035
Also, the additional resources I have pulled together in a further post help to more concretely address how can the tragedy of the commons be ended in Haiti: http://mises.org/Community/blogs/tokyotom/archive/2010/01/22/more-insights-on-what-s-wrong-with-haiti-and-how-it-can-be-fixed.aspx
As for the content of your post, by all means you get to write whatever you please. And readers like me get to find it rather cliched and uninformative when it comes to the real subject, which is neither SF nor New Orleans, but Haiti. It`s ironic that you then thought to suggest how I should rewrite my post, which was simply intended as a compendium of links.
If I may expand on one of my initial criticisms, your jousting at greens may have merit in some contexts, but is largely misplaced and irrelevant here: (1) it is not greens, but elites in Haiti (and the US and other foreign governments that provide them/contractors with taxpayer-funded “aid”) who bear responsibility for the mess that is Haiti, and (2) you overlook that greens may have legitimate concerns about the mismanagement of common resources/externalities.
Greens certainly do seem to miss the point that, along with a “tragedy of the commons” there is also a “tragedy of government as commons” which we must bear in mind when deciding how to address problems. But you likewise overlook this problem, preferring to attack greens` preferences, rather than their actual policy approaches. Your statement that “those who worry about the poor of the world … push policies that restrain wealth creation, and they do it intentionally and knowing it will restrain wealth creation” shows a personal animosity that both clouds your thinking and is of undemonstrated relevance regarding Haiti. Please show me the greens deliberately trying to make Haiti poor.
Comment by LiberatedMind.com on 22 January 2010:
Jim,
You’ve touched on the prevention effect that applies to many balances in life. NBC’s show “The Biggest Looser” takes people who are grossly overweight 300, 400, 500 pounds and gives them a reality check and a chance to turn their lives around. However, a healthy, active lifestyle is a much less dramatic, risky and difficult path than what the show’s obese have taken. Haiti is the southern hemisphere’s 600 pound man. They have done everything to set themselves up for failure (perhaps at no fault of their own). Prevention, preparation is the best way to make change. Effecting change when you are Haiti after the earthquake or if you are 600 pounds and dying of a plethora of ailments is much less effective than providing people with the ability to take care of themselves or in the case of obesity, simply educating one’s self about how to stay fit and eat healthy. Cheers!
LiberatedMind.com
Comment by Howard Freeman on 24 January 2010:
For my friends who are progressive or liberal–and often against free markets and often fellow WASPs like me–there is a deep-seated guilt they betray with their criticism. They oppose wealth creation in the U.S. because they claim that it makes the rich richer and the poor poorer. Their view of the world is of a pie, which requires us to negotiate the size of slice we each get. I think we’re a pie factory. My progressive friends, knowingly or unknowingly, deny others in Haiti and elsewhere, what they so prodigiously enjoy here as a result of wealth creation.
Also, working in the charitable giving world, I can say that conservatives are more generous in giving time and money than liberals. Wealth creation breeds generosity.
Comment by Panagiotis Peter Manousakos on 24 January 2010:
I could not agree more Mr. Freeman. I have to say that the first time I came across that conclusion I was very skeptical. When you really think about it though, as you clearly have, it makes perfect sense. Conservatives have a stronger sense of community and consequently, not the sort to wait around for the ‘state’ to rescue them. Funny how philanthropic rhetoric from most people on television news almost always leads to blaming government for not doing enough. Your statement should be a subject of academic study. Since you work in the charitable field, you may be in the unique situation of providing key data to support this conclusion. Thank you.
Comment by Sam Parhe on 1 February 2010:
The Marina is where fraternity boys and sorority girls live in a cluster so they can reinforce their sense of privilege together. The younger ones go to Chestnut Street, the next older ones (yuppies) to Union St and they move up the hill to Pacific Heights as they get old. When “they” say those areas are “really nice”, they mean that there is no cultural diversity and that everyone looks just like them with small sharp facial features and blonde or black hair. They have “business clubs” called which make sure that they only do business with each other and don’t mix races or non-frat-house people into business deals.