Wealth Equals Survival

What has happened in Pakistan and India is truly tragic. In terms of loss of human life, it dwarfs all the natural disasters our nation has suffered throughout the past century and beyond. The 2004 earthquake and subsequent tsunami in Asia were several times more disastrous than the current cataclysm. Together, these two catastrophes have claimed the lives of almost 300,000 people. This kind of thing never happens in the developed world. We've had earthquakes, we've had hurricanes, tornadoes, blizzards, floods and even terrorist attacks. The death tolls for these disasters rarely number more than a few hundred.

If you look at this list of the deadliest earthquakes on record, you'll notice that none of them happened in a country that at the time was economically developed. This by no means constitutes definitive empirical evidence, and it is probably true that there are more major earthquakes in the third world then in the developed world, but the correlation is still intriguing. We do have major disasters in developed nations. Looking at this list of the worst U.S. disasters we can see that only 5 topped 1,000 deaths and that all of these happened in the period between 1889 and 1928. So why do we see such high death tolls in poor regions while the same kinds of disasters in the developed world result in significant property damage but low numbers of fatalities?

We can call this luck, we can call it good planning, we may say that it is because we are smarter, more careful, or any number of other explanations. But the real reason for the enormous difference in the number of deaths that occur in American natural disasters and those happening in the developing world is wealth. It is no coincidence that as the world has grown wealthier the life expectancy of the average person has grown by leaps and bounds. This is a product of many factors, including increased quantity and quality of food, medical advances, technological innovation, and in general a better understanding of the physical laws that govern our world.

These advances were only possible because an increased capital stock has greatly enhanced worker productivity and allowed for time and resources to be devoted to fields and ideas, which before were ignored and passed over because they were not vital to immediate survival. If a man spends all his time tilling his fields, planting, caring for and harvesting his crops and feeding and protecting his livestock, he can hardly devote his time or resources to calculus, physics, microbiology, engineering pursuits or any other endeavors, which could in the long run provide him great benefit.

Only as machines, fertilizers, new techniques and other technologies reduce his costs and lower the time he must spend working the land can he start devoting time and resources to something other than mere subsistence. It is no wonder that the majority of art, literature, scientific and philosophical thought and technological advancement for most of human history has been the product of the leisure classes; the nobility and aristocracy. They had the time and resources necessary to devote to such pursuits because they lived mainly off the labor of others, while the common person had to constantly battle with the land and elements just to survive.

Aside from time and surplus resources, the other factor necessary for producing the high standard of living we enjoy today is the expectation that once produced, the producer will be able to enjoy the fruits of his labor. If he expects that the things he produces will be taken from him by others, he will not produce them. In other words, private property is absolutely necessary for wealth creation, capital accumulation and technological advancement. This is all basic economics and it may seem like common sense. Free markets, private property, and individual liberty are important not just because they are the most ethical and efficient way of organizing human interaction, but, as we have so painfully witnessed in the wake of this recent calamity, because of their power to save and prolong human life.

This power is two-fold. For one thing, they provide the proper incentives for each person to take responsibility for their own welfare rather than trusting in those who don't have their best interest in mind. But perhaps more importantly, markets and private property are capable of producing untold amounts of wealth, which we can use to protect ourselves from the ravages of both man and nature. Capitalism has replaced mud, wood, stones and clay with steel beams and reinforced concrete. It has given us the machines and tools to build magnificent, sturdy structures and the ability to repair them quickly when they are damaged. The tools and machines used to rescue the wounded, the vehicles used to transport them, the doctors, the medical supplies, the knowledge used to treat them; all these are, directly or indirectly, the products of free-enterprise.

The surplus time and money donated by private charities and individual volunteers in times of disaster are only possible on a significant scale because the division of labor and private property have made them so. Without these things we would all still be dying in our 30's from preventable and treatable diseases, or like those in Pakistan and India, we would be completely subject to the mercies of geological and meteorological forces which strike without warning, and from which we would have little ability to defend ourselves. As a species, our future survival and prosperity is dependent on whether or not we continue to implement and adhere to these principles. For those who value human life, economic growth in the real sense of the word (increased specialization, productivity and trade rather than the inflationary growth so often referred to today,) should be of the utmost importance.

This means that what developing countries need in order to stem the gross loss of life resulting from natural disasters is to actually develop their economies. I don't like the sound of the phrase "develop their economies," because it seems to imply that this is a conscious process that is carefully planned by domestic bureaucracies or international committees. What is needed instead is for government meddlers to get out of the way.

The developing world is poor because of government. In a world where technology abounds and where knowledge flows freely across boundaries, why hasn't the rest of the world been able to catch up economically to the West (and why is growth in Western countries stagnating and even falling for that matter)? What holds them back is ubiquitous government corruption, bungling bureaucratic busybodies, mountains of regulation and red tape, rapidly devaluating currencies, a morass of trade restrictions and a lack of well-defined and enforced property rights. Creating an unfriendly business environment and scaring away would-be investors is no way to increase your standard of living. But don't think that it is only domestic governments that are keeping their own countries from developing. The West has done more than its fair share to keep them poor as well.

Which is why if we really care about the lives and living standards of those in poorer regions of the world, then we should be in favor of free trade along with free movement of labor and capital. This is the best and fastest way to help them help themselves. Sending massive government aid during times of crisis (while it surely does help some people in need,) usually serves to further strengthen and entrench local tyrants and expand their bureaucracies, thus contributing to the overall problem. There is no need to do this. Allowing private charity to operate unrestrained and letting the market work its magic is the best way to respond to a crisis. Only as poor countries grow wealthy will we see the death tolls from these disasters decline.

Wealth cannot (at least not yet) control the weather or blunt the effects of seismic activity. We will continue to have earthquakes, hurricanes, tornadoes, tsunamis, drought and disease. We may even have some truly catastrophic events happen in the developed world that could claim the lives of hundreds of thousands. These things are uncertain and we cannot know the future. However, the point is that capitalism and the wealth it brings provide us with the flexibility and economic stability to deal with them in the best way possible.

It's time for the U.S. to start acting like the paragon of economic freedom it pretends to be. Get rid of the tariffs, drop the import quotas, cut taxes and allow trade to proceed unrestricted. The argument that free trade must be reciprocal or else it harms one of the parties is nonsense. Voluntary exchange by its very nature benefits both parties. I do not demand that my grocer or barber agree to buy something from me before I will do business with them. If they are selling something I want at a price I like, I buy it; period. The same concept works for nations. Even if a country allows no exports in, we should allow their imports to cross our borders freely. It benefits all involved. Although as a nation, the U.S. can't be the solution to tyranny and world poverty, we can at least stop being part of the problem. Rather than insisting on using our strength to develop and expand a worldwide military and economic empire, perhaps we should return to our roots and once again set the example of how a free, prosperous nation should conduct its affairs. Who knows, maybe the rest of the world would follow suit.