The Washington Post has been covering 2006 Mardi Gras in New Orleans (see here).
As mentioned before, I am now heading up a research project on the rebuilding efforts along the Gulf Coast. The study will consist of three major components: a series of studies focusing on social capital and civil society; studies focusing on basic economics and political economy; and studies focused on entrepreneurship and commerce led development of cities.
The study as a whole is a certain fundamental sense addressing a proposition of John Stuart Mill, who in The Principles of Political Economy (1848, 82-83) wrote about the reasons behind “the great rapidity with which countries recover from a state of devastation … done by earthquakes, floods, hurricanes, and the ravages of war.” If the disaster did not eliminate the population, Mill reasoned, the stock of knowledge and skill that produced the pre-disaster level of output will soon produce that level of output again.
In theory there is little to object to in Mill’s account, but in the application of this theory to the real-world of public policy there are impediments to quick recovery besides depopulation. In fact, the existing stock of social capital at the time of the disaster may be a significant impediment. But government policies which turn the post-disaster situation into a political game in which rent-seeking as opposed to value creation determines the pattern of resource allocation can also impose significant obstacles to sensible and quick recovery. The vibrancy of commercial urban life, on the other hand, offers an alternative model for recovery.
During our initial stages of study we have seen signs of both—civil society and commercial life returning vibrancy to the area, but also there are plenty of examples of where impediments have been placed in the way. Regulations, licensing requirements, moral hazards and flood planes, distorted and noisy signals, and rent seeking at the local and federal government.
Katrina does not just reveal the fury of nature, but the tragic nature of man-made catastrophes. If we learn the right lessons, then Mill's proposition about recovery will be upheld as civil society and the commercial sector respond to bring recovery and new hope to the region. But if we don't learn those lessons, then nature's fury will only be continually reinforced by the hubris of man to wreck havoc on the people of this region.
People did not leave Chicago after its great fire, nor S Francisco after the quake, nor so many other places throughout history.
Pompey being an exception, and for obvious reasons.
Methinks guaranteering people a meal and a roof away from their former place of habitation probably leads to a slower or a stillborn recovery.
And I'm 100% it leads to higher taxes for us all and moral hazards for unsafe places down the road.
Posted by: El-Visitador | March 04, 2006 at 11:44 PM
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Posted by: CADENZA EP2000W | September 05, 2006 at 07:16 AM