Does Capitalism Save Lives?

I was watching CNBC and happened to see this panel about how the number of Americans killed by natural disasters has declined over time. It was also noted that, in early 2010, fewer people died in Chile’s earthquake than in Haiti’s earthquake.

The discussion quite reasonably outlined how improvements in emergency preparedness, building codes, and infrastructure help to protect people from natural disasters. But two minutes into the segment, anchor Michelle Caruso-Cabrera declared, “The lesson is that capitalism actually saves lives.”

Really? Until then, it sounded like government regulation and public infrastructure save lives. It’s also true that economic development saves lives, and capitalism is one potential route to economic development. But that does not mean that capitalism, in and of itself, saves lives.

Haiti is a capitalist economy. That has been ensured by plenty of “structural adjustment” from international financial institutions. Yet it remains woefully underdeveloped.

I also checked out the op-ed that inspired the panel. It notes that the average annual US death toll from disasters was significantly lower in 1980-2009 than in 1940-1979, and would have been even lower except for Hurricane Katrina. However, Katrina was so deadly not due to a lack of capitalism on the Gulf Coast, but due to under-investment in critical public infrastructure.

The real story is that well-regulated economic development with investment in public infrastructure saves lives. Put that on a bumper sticker!

11 comments

  • andrew jackson

    I was at a presentation yesterday where a senior World Bank official threw up a slide showing a big increase in all kinds of “natural” disasters over the recent past – drought, famine etc etc. Arguably all the product of too much capitalism – or lack of effective balance between economy and environmental goals – rather than too little. The developing world seems to have become much more disaster prone as it has become more capitalist.

  • Droughts and famines would fall outside of professor Boudreaux’s definition of “violent weather.” I think his op-ed is off base in implying that the main challenge in adapting to climate change will be to protect people from “tornadoes, floods and hurricanes.” Drought does seem like a far greater challenge.

  • Thomas Bergbusch

    I really like Erin’s last sentence “The real story is that well-regulated economic development with investment in public infrastructure saves lives”. But I would caution against making too many claims either for or against the role of capitalism in disaster outcomes.

    The whole world has become more disaster prone, as disasters have become more frequent decade by decade since the 1970s. There is no doubt that, in a significant measure, capitalism has contributed to the severity of many disasters, for instance to the extent that it has encouraged unsustainable settlement and real estate development in riparian and coastal areas. Yet, the Soviet Block countries’ role in releasing GHGs continues to affect us today. Social democracies tend to come out well, but that is in part because of their reliance on the market. Capitalist systems often accommodate (notice I do not say promote) the individual agency and self-reliance on which effective disaster preparedness depends. On the other hand, both Cuba and Vietnam, despite long histories of “command and control” responses to hurricane/typhoon disasters, are very effective at co-ordinating responses to water disasters. I could go on.

    It is important not just to think about infrastructure (physical disaster mitigation) but also about social disaster mitigation, and the relation between the two. Based on the work of far better disaster managers, such as Vlasta Molak, Terry Lustig and Marshall Silver, I touched on this question a few years ago in a submission to the Canadian Environmental Assessment Agency. For the uninitiated, it may be a useful piece. See http://www.ceaa.gc.ca/013/001/0002/0004/0001/bergbusch_e.htm

  • John Loukidelis

    “The real story is that well-regulated economic development with investment in public infrastructure saves lives.” Yes, just like the investment in public infrastructure at Chernobyl!

  • @John
    Or the private investment in Fukushima? Got a real point to make? Just trolling?

  • Denise Freedman

    I must say the notion that Capitalism saves lives seems to me somewhat off the mark.

    My understanding of the history of Haiti is one of special subjugation to Capitalism, including the requirement that it take out loans to pay its exploiters for the benefit of that. These loans, taken out in the early 1800’s were paid off, finally, about 1945.

    Thank goodness for compound interest!

    One of the notions of Capitalism I particularly appreciate is that, in Louisiana, the building of levees, required to permit the development of productive activities, actually lead to excessive flooding in New Orleans, because there was significantly LESS ability of swamps, and MORE concentration of water in the river than in the past.

    Ready to burst out and shock.

    And there is the more generalized effect of climate change; recently we heard that carbon production and diffusion into the atmosphere hardly took a breath in the Great Recession, and may well have accelerated far beyond expectation–as bad as that was.

    Naomi Klein has written that environmental disasters are expected to increase as an expected consequence of the tendency of Capitalism not only to impoverish people but to despoil the planet. This shock provides the opportunity for precisely the privatization that happened in New Orleans.

  • Thomas Bergbusch

    Hi Denise — it was great getting to know you at the PEF summer school. Where disasters are concerned, I think it might be more accurate to talk of the ill effects of plutonomy or plutocracy (in the broad technical sense, not the fascist/anti-semitic use of the term of an earlier era).

  • John Loukidelis

    @Travis Fast
    “Trolling”? I thought my point was rather obvious. Am I disturbing the echo in this chamber too much?

    Anyway, arguably, Fukushima was possible only because of government regulation. Without the special protections and subsidies enjoyed by nuclear power, it wouldn’t exist in the first place. Or so the green argument goes.

  • How about Cuba, where they’ve been hit by more Force 5 hurricanes than anyone else in the last decade, yet hardly anyone ever dies thanks to public infrastructure and very strong public organization. How distinct from capitalist New Orleans, where thousands died — let alone Dominican Republic, Haiti, etc. I’d say the argument should be that socialism saves lives.

  • @John
    @Travis Fast
    “Trolling”? I thought my point was rather obvious. Am I disturbing the echo in this chamber too much?

    No you are master-bating in public. Pun intended.

  • if there were profits involved in saving lives, not as many would die. However lets not kid ourselves even with those efficiency forces that profit may motivate, many still would die due to the inherent inefficiencies in the the design of the system under profits.

    Just look at the food system. The world could eliminate hunger and starvation, but because of the demand side issues, we see millions starve or die from malnutrition every year. As capitalism has become the dominant force within the global economy, it is clear that , instead of feeding people it is more profitable to fuel up the machine instead. These are huge forces that could be contained and transformed to save lives, just with some changes to the ideal. No grand leaps in tech or wars to pull power from corrupt political dictators, except the corporate variety.

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