The terrible earthquake disaster in Haiti is resulting in the start of a huge government and private relief effort.
But there are already voices like former president Bill Clinton’s who are calling for a longer-term recovery plan for the Haitian economy through government-business-private “partnerships.” Unfortunately for the people of Haiti this is likely to generate more of the same that has kept them in poverty, rather than the more market-oriented path that other poor countries have been following, and which has been lifting them out of poverty.
I discuss this wrong-headed approach to more of the same type of intervention policy that will prevent Haiti from finally escaping from poverty in a new piece I’ve written on, “Real Economic Reform for a Hurting Haiti.”
The people of Haiti do not need a continuation of government regulation, control, and coerced redistribution. They need what Adam Smith called a “system of natural liberty” in his book, The Wealth of Nations. They need individual liberty, private property rights, impartial rule of law, open, competitive markets, limited government, low taxes, free trade, a non-inflationary monetary system, and a political and economic environment friendly to entrepreneurship and capital formation.
That is the road to real economic recovery to left Haiti out of poverty in the aftermath of this terrible human tragedy.
Richard Ebeling
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No, has Haiti has plenty of those things already, what Haiti needs is no more natural disasters. It’s kinda hard for the free market to work if a hurricane (in this case, earthquake) keeps depriving people of their “private property rights”.
Haiti has none of those things and we are having fewer and fewer of them ourselves.
Alex- American cities have been hit by quakes and have rebuilt quite quickly. Do you know how Haiti looked before the quake? Not all that different.
Capitalism could have provided Haiti with the wealth to build houses and buildings that can withstand quakes and hurricanes. Its the only system that can.
Ah, I see, Alex. So, if we moved the people of Haiti to a place that never sees floods, winds, abnormal rainfall, tornadoes, hurricanes, fires, hail, snow, ice, drought, mudslides, earthquakes, tsunamis, blizzards, lightning, storms, etc. then they will be prosperous and happy? Good idea!
I think we should send them to the Moon.
In cases like Haiti, it’s important to discern the difference between underlying structural foundations and even triggers. In this case, no one will deny that the death and destruction we see are the immediate aftermath of a massive earthquake. However, the event trigger’s effects would be far less severe in a healthy economy, which would allow for the purchasing of basic goods and services, as well as the costs of medical care and rebuilding. A bad economy always intensifies the effects of natural disasters.
unfortunately, this article, while commendable in spirit, suffers from a lacuna common in libertarian writing – how to right a latifundia system without falling into the usual marxian redistribution traps.
haiti has to somehow devise a way of allowing and encouraging the myriad small landholders to consolidate land holdings and start to capitalize these larger plots; merely expropriating the existing latifundistas at gunpoint won’t do.
it’s easy to point out what other nations should do when you have an american perspective, where the lockean model of original appropriation really did get put into practice (leaving aside the indigenous peoples).
haiti needs land reform, and this requires a detailed explanation of why the existing regime has frozen the property distribution practically as it was in colonial times.
“this requires a detailed explanation of why the existing regime has frozen the property distribution practically as it was in colonial times.”
Easy to explain. Freezing this system in place makes the country as a whole very poor, but because of that poverty the governments of other countries provide cold, hard cash directly to (you guessed it) the elites who maintain the impoverishing status quo. Why? Because getting free cash for doing nothing is a lot easier than having to save, invest and work for it.
This is the essential fact of welfare: there is a strong incentive for the people who administer the welfare programs and who collect large amounts of money in the form of salaries, contracts, bribes, kickbacks, patronage appointments, etc. not to fix the underlying problem, but to maintain the problems and even to make them worse.
The first step towards fixing Haiti is for foreigners to stop giving money to the Haitian government. The next steps are up to the Haitians.
Prof Ebeling,
Great post. You said it all!
This is a blessing in disguise; not only will they be able to stimulate their economy with the rebuilding efforts, but now they’ll have massive support from the US Empire and pressure to implement regulatory industries whose absence is the reason for the massive amounts of casualties. Donations from the US’ government to theirs can be used to put cash in the pockets of those favored by their government. This was also a convenient form of population control.
-Sarcasm aside, this was a terrible tragedy; unfortunately, it will lead to another tragedy proliferated under the disguise of “aid” from our government.
A US aircraft carrier group has been sent to Haiti. Everything will be fine, now.
Hi Richard,
I produced a “Brief History of Haiti” at my blog, Degrees of Freedom, where I made much the same point you did:
http://n-k-1.blogspot.com/2010/01/brief-history-of-haiti.html
For those unfamiliar with the history of poverty in Haiti, and it’s highly interventionist roots, you may want to drop by the link and educate yourselves.
Better than U.S. aid at the moment would be private donations to reportedly the only functional hospital there right now – Hospital Albert Schweitzer Haiti.
Haiti Will Spread Its Poverty To Its Keynesian Big Brother.
Time and place.
First, place – it is unfortunate that Haiti is so close to the U.S. It is within easy reach and it is so close that our bankruptcy would be so overwhelmingly obvious to the world if we did nothing or even if we did something less than a complete takeover. How would that look – ‘the greatest nation on the earth’ is too broke to help its neighbor, perhaps the poorest nation?
Which brings us to the time – Without this natural disaster the U.S. would have had to do something drastic to try to rally support for the withering leviathan. Uncontrollably this was the time to divert attention and shock the patriotism out of people.
The irony is that people can only take so much shock, before recoiling. This external shock dissipates the energy into oblivion instead of towards obedience to a fascist/socialistic creed passed off as American.
Now is the time and America is the place where the economic collapse of Keynesianism makes a big bang.
to taylor:
i liked your post, but it fails to mention the marxist mindset of aristide (whose idea of land reform was similar to that of allende, ortega, and sundry other socialist “reformers” in latin america).
what sort of process can right the wrongs of the past without itself becoming a device of enslavement and expropriation, only with different victims?
Hey, good one, keep em coming :
Hey, good one, keep the info coming :
Good one.
Translated in italian on Svolte Epocali.
An earth has just occurred in Chile, a relatively free-market economy. I remembered this entry. I am watching the news closely to know how would Chile fair compared to Haiti.
Don’t get me wrong. I am not really thrilled with the lost lives in both incidents. I just want to see if the free market really spells the difference whether a country recovers fast from a disaster or not.
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