Russ Roberts

Boettke on Katrina and the Economics of Disaster

EconTalk Episode with Pete Boettke
Hosted by Russ Roberts
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Pete Boettke of George Mason University talks about the role of government and voluntary efforts in relieving suffering during and after a crisis such as Katrina. Drawing on field research he is directing into the aftermath of Hurricane Katrina, Boettke highlights the role of what he calls "civil society"--the informal, voluntary associations we make as individuals with each other to create community.

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Readings and Links related to this podcast

Podcast Readings
HIDE READINGS
  • Pete Boettke's Home Page
  • The Austrian Economists Blog: Pete Boettke, Chris Coyne, Peter T. Leeson and Frederic Sautet.
  • Mercatus Center Katrina Research Project
  • More Mercatus field studies
  • "Disaster and Recovery" by Jack Hirshleifer in the Concise Encyclopedia of Economics
  • A Petition by Frederic Bastiat. Petition of the Candle-Makers
  • Munger on Price Gouging Related podcast with Mike Munger on Hurricane Fran
  • Highlights

    Time
    Podcast Highlights
    HIDE HIGHLIGHTS
    1:25What is an Austrian economist? Definitions of methodological individualism and market process.
    5:08Biology vs. physics. Complex, evolving-systems approach
    7:36Main line vs. mainstream. Self-correcting properties of the market
    10:26Katrina Project at Mercatus Center: J. S. Mill remarked: it's amazing how speedily countries recover. What conditions contribute to a speedy recovery after a crisis? Free flow of labor and goods. Three aspects like legs of a stool: How robust in the face of disaster are
      1. the political and legal structures;
      2. the social and cultural structures;
      3. the economic and financial structures?
    15:08Civil society resiliancy: First effective responders to Katrina were churches, not government. Coping phase. FEMA, local gov't. responses vs. Home Depot, Wal-Mart. Decentralization vs. centralization. Role of knowledge: Hayek, Gettysburg and Robert E. Lee. Wagner, Amtrak v. Edsel. Virginia Hurricane example.
    29:51Social capitalism, Emily Chamlee-Wright. Putnam. Role of community. Civil society. Voluntary vs. coerced interactions. Hume. Technology, markets evolve.
    36:47"If gov't doesn't do it, it won't get done" is a whole way of thinking. Imperfect alternatives, but which generate better results? Intentions inferred from outcomes. Polanyi, chess example. Adjustments necessary. Creativity within discipline. Grover Cleveland example; if government steps in, private institutions disappear. Government behemoth vs. knowledge of time and place. Russ Sobel.
    46:01Does pushing decision-making to state and local level work? New Orleans example--bad public policies. Hirshleifer.
    48:02Rebuilding phase after disaster: Does government do better then? Contradictory incentives laid out by government. J. B. Say. Bastiat's Petition by the candle-makers. Individuals who bucked the government have achieved most: school example. Vietnamese community in east New Orleans. Moral hazard. Flood plain: why were those regions developed? Subsidies. Regime uncertainty, conflicting policy.
    56:47Rich-poor distinction. Did rich neighborhoods get around regulations better than poor neighborhoods and thus rebuild faster? No. Rich neighborhoods had people with other assets, not just their homes. Flood maps, insurance, out-of-state contractor licensing restrictions.
    1:01:44Eastern Europe. Does moving too quickly to markets fail? Regime uncertainty, incentive-incompatibility. Bucharest anecdote: markets were not allowed to function. Russian ruble exchange example: claimed to be monetarism, but in fact was hyperinflationary, opposite of monetarism's implications. Rhetoric of radical reforms didn't reflect the actual implementations. Fodorov price liberalization suggestion vs. next day conflict from other politicians. Black markets are a consequence of prohibited markets. Russia vs. China.

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    COMMENTS (7 to date)
    Tim writes:

    Another thought provoking and great podcast. Professor Boettke mentioned a book on economic thinking he was involved with, could you post it's name? Also he mentioned (recommended) a book by Richard Posner where he discusses "low hanging fruit". Any clue as to it's name. Prof Posner has a lot of books and my budget is of church mousely proportions. :)

    Russ Roberts writes:

    The Boettke book is The Economic Way of Thinking. You can find it on the web. New, it's very expensive but you can find a used copy or an older edition on the web as well. I'm not sure about the Posner book. I'll find out.

    Tim writes:

    Thanks. I was able to order an older edition (10th edition) second hand for only a few dollars. Thanks Russ and thanks Amazon!

    Russ Roberts writes:

    I think the other book you're thinking of is by Epstein (not Posner.) Pete says it's called "Free Markets Under Siege."

    Tim writes:

    Thanks Russ. That book doesn't seem to be available via Amazon, but it is available on-line in PDF format from the Hoover Institution here.

    Zhu Benben writes:

    Thank you Tim for the link! :)

    And thank you Prof. Roberts and Prof. Boettke for this podcast. The discussion about Eastern Europe transition is very interesting. I hope you could have more in-depth discussion about it.

    mesothelioma writes:

    Another excellent show. I liked the discussion of evolving systems and their complexity.

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