TCS Daily

Trojan Disasters

By Pejman Yousefzadeh - September 8, 2005 12:00 AM

In the wake of the awful calamity wrought by Hurricane Katrina in both New Orleans and Mississippi, pundits have begun to put forth calls for bigger government to address future catastrophes -- whether natural or man made. Thus, E.J. Dionne argues that "Government is the enemy until you need a friend," and David Brooks wonders whether "there will be a progressive resurgence" in store thanks to the aftermath of Katrina and other stories. But the reliance on larger government as some kind of national panacea to problems real and perceived is just as wrongheaded as it was before Hurricane Katrina wreaked its havoc.

For starters, it is not as if government has been shrinking in the past few years. Far from it. We have, in fact, seen a dramatic expansion of the regulatory state, and the federal government has demonstrated little willingness to restrain spending.

One reason placing faith in larger government is misguided is explained by libertarian law professor Randy Barnett, who reminds us that any failure on the part of government "at all levels" in responding to Katrina's wrath should come as no surprise:

        . . . Governments are comprised of ordinary human beings with the same 
        limitations of vision and self-interests as those in the private sector (and 
        often, but not always, with far worse incentives) -- that is, these human beings 
        confront pervasive problems of knowledge, interest, and power. I have the 
        same reaction every time there are calls for increased government 
        oversight in the aftermath of some failure in the private sector. What gives 
        anyone confidence that government institutions will act with any more prescience? 
        Moreover, it seems often the case that the core functions that are most often 
        used to justify the existence of governments -- such as public safety, national 
        defense, and public infrastructure -- are often the very tasks that are given 
        short shrift by real world politicians in search of more "elevated," seemingly less 
        pedestrian goals than these. This seems especially the case when the 
        failure to provide these "essential social services" can so often be obscured 
        from public view or, when revealed, responsibility for failure can be shifted 
        to others.

Of course, libertarians and small-government conservatives may potentially be forgiven for thinking that Katrina is being used as some kind of Trojan horse catastrophe for the introduction of greater government in our lives. But even if the arguments in favor of larger government are entirely sincere, they don't necessarily persuade. As libertarian writer Julian Sanchez puts it, "By all means, let's hold officials at all levels accountable for how this has gone down, but spare us the pretended insights into the merits of mohair subsidies we're supposed to draw from all this."

If anything, the argument can be made -- as Daniel Henninger has -- that the response to Hurricane Katrina shows that the government is inherently ill-equipped to handle a great deal of the responsibilities that come with disaster relief and that many of those responsibilities should be outsourced to the private sector. Commenting on Henninger's article, law professor Stephen Bainbridge aptly sums up the quite cogent rationale behind such a move:

        The capital, product, and labor markets give corporate managers and directors 
        incentives to produce goods and services efficiently. What defenders of 
        government regulation often overlook is that regulators are also actors with 
        their own self-interested motivations. The trouble is that the incentives to 
        which regulators and legislators respond are often contrary to the public 
        interest. The incentives of legislators and regulators are driven by rent-seeking 
        and interest group politics, which have no necessary correlation to corporate 
        profit-maximization. Accordingly, government preparation for and response to 
        disasters is likely to be driven by the political concerns of the governmental 
        actors rather than the public good.

In sum, it may be time to try Adam Smith's invisible hand by outsourcing disaster relief.

There is a great deal to be learned about how best to respond to a natural disaster -- or, for that matter, to a terrorist attack. In the aftermath of Hurricane Katrina, we are sure to have investigations and public hearings into how best to calibrate our national response to lessen the loss of life and to recover from natural or man-made disasters as soon as possible. It is to be expected that during the course of this debate, those who view government as having an all-purpose capacity to solve problems will step forward and argue that the time for shrinking government -- if ever such a shrinking actually occurred -- is long since past. But just because the argument is being made -- and being made loudly and insistently, to boot -- doesn't make it correct.

The author is a lawyer and TCS contributor.

To see more of the extensive coverage of Hurricane Katrina from TCS, click here.


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