Does the Past Have a Useful Economics? Natural Disaster Edition

|Peter Boettke|

We are all still watching the events unfolding in Japan.  What does past efforts to deal with natural disasters tell us about how economies recover and societies bounce back from just tragic circumstances?

In the wake of Hurricane Katrina in 2005, I led a research effort in the Gulf Coast for the Mercatus Center.  I believe our various studies show that the past does indeed have a useful economics for such situations.  I do hope the research conducted will be consulted and will give pause to some of the well intentioned but counter-productive policy efforts policy makers often pursue in the immediate aftermath of such tragic human suffering.  But as I have argued throughout the research effort, we must not compound the fury of nature with the folly of politics.

Comments

[Richard Ebeling]

In looking for undeerstandings from the past for solutions to social problems and disasters, may I recommend a piece from the past?

Simon Newcomb, "The Let-Alone Principle," in the "North American Review" (1870).

Newcomb, if known at all today, is recalled as a a formulator of the equation of exchange before Irving Fisher.

But he was also a strong proponent of the free market economy against the heavy, busy-bodie hand of government, including people being able to find solutions to their own problems, including social disasters.

So his reference to a "let-alone" policy in the title of this piece is not meant to be a "put-down," as would tend to occur today.

He was advocating this as a "positive" theory of social problems.

Richard Ebeling

[Peter Boettke]

See the discussion by Will and Tyler ... http://marginalrevolution.com/marginalrevolution/2011/03/the-economics-of-recovery-from-natural-disasters.html

However, I fear that Will is picking up Mill's point about the rapid recovery of countries in the wake of natural disasters. The empirics are getting picked up, but without an explanation of why!