By Ryan McGreal
Published September 06, 2005
In our last issue, I mused on cities habitations growing around crossroads and functioning as the supporting infrastructure for markets. Since then, the destruction of diverse, eclectic New Orleans cast this in a particularly tragic light.
New Orleans was the archetypal market town, founded next to a Native American trade route and populated over the centuries by people from French, Spanish, African (via the slave trade), Caribbean, Irish, and other cultures. Nestled around the very mouth of the mighty Mississippi, New Orleans was the crossroads for all manner of agricultural and industrial products.
One of the world's busiest seaports, New Orleans moved some 130 million tonnes of cargo a year and was the main shipping port for imported petroleum, coffee, and cocoa, and exported Midwest farm produce and other goods. New Orleans was also the main route for goods coming from Latin America. Whatever else happens in the wake of Hurricane Katrina, something will be rebuilt at New Orleans. It's too important a crossroads to abandon.
But if the life of New Orleans exemplified the power of crossroads and markets, the death of New Orleans exemplifies the limits of markets. As progressive political science analyst Michael Parenti recently explained, "The free market played a crucial role in the destruction of New Orleans and the death of thousands of its residents."
Instead of establishing an emergency evacuation process for New Orleans, the government ordered people to leave by their own means. Those who could leave did so, and those who could not stayed to drown or slowly dehydrate. The result has been a clusterfuck in slow motion, a failed disaster response that would be an embarrassment in a Third World country, let alone the richest country in the world. It's the stuff of third-rate dystopian action flicks - Escape from New Orleans.
Earlier this summer, the government began to distribute DVDs to local churches and community centres, urging people to find a way out of the city in case of a hurricane. According to Rev. Marshall Truehill, a local pastor and volunteer with the Red Cross, "We're trying to say to people, you have to be responsible for yourself, your family and your neighbors." The DVD was set to play on local TV in September.
That is, the city's plan for evacuating its poorest residents was to explain to them that they have to find their own way out of the city in the case of a hurricane. Parenti contrasted poor, isolated Cuba.
When an especially powerful hurricane hit that island in 2004, the Castro government, abetted by neighborhood citizen committees and local Communist party cadres, evacuated 1.5 million people, more than 10 percent of the country’s population. The Cubans lost 20,000 homes to that hurricane - but not a single life was lost, a heartening feat that went largely unmentioned in the U.S. press.
To the American government's complete lack of an evacuation plan, we can add five years of budget cuts for flood-control efforts, canceled plans to shore up the levees, gutted Army Corps of Engineers budgets, diverting the National Guard to active duty overseas, redirecting FEMA into a sop for the "war on terror", and giving developers a free reign to build on the wetlands that might otherwise absorb the storm's fury (and then trying to block a plan to rebuild those wetlands).
There's plenty of blame to go around, from the federal government right on down. The Bush administration believes governments should not be in the business of helping people, evidenced by its massive tax cuts for the rich, the manufactured Social Security "crisis" and related attempts to destroy one of the only government programs that actually helps keep people out of poverty, and an ideological preference for market-based governance and private charity.
The result, of course, is a Red Cross program for pairing churches and offering food to those who can escape, but having no means to provide the escape that would get people to its shelters.
This market ideology fails to acknowledge that markets cannot produce the foundations on which markets operate. Call it Gödel's Theorem applied to economics. Markets exist because governments create the circumstances under which people can exchange goods and services for other goods and services. Rules underlie all market exchanges, and those rules, like all rules, are based on value judgments and enforced outside the market.
The "free market" doesn't really exist. In America, the "free market" contains all kinds of special protections for the already-wealthy, from ridiculous and innovation-stifling product patents (i.e. patenting a finished product and, by extension, every possible process for making that product) to massive, multi-billion dollar government subsidies for key industries to asset protection during bankruptcy.
The physical infrastructure on which commerce takes place - for example the publicly funded network of roads and highways - is another government value decision, since it encourages much more investment in private vehicles, sprawl architecture (houses over here, stores over there), and supporting industries (including oil production and refining) than would be the case if the government funded, say, rail networks instead.
What usually happens is that lavish, budget-busting programs are delivered to prop up the rich, while the poor have to suffer something much closer to a "free market", in which they cannot afford to pay for decent health care, decent nutrition, decent housing, or decent education, and are hence trapped in poverty - literally, in the case of those New Orleans residents without the financial means to take up the governor's call for a evacuation.
That's Parenti's point, of course. There's no economic incentive for investors to maintain the kind of disaster readiness that might have saved many lives and even preserved homes and properties.
Disaster relief systems - refugee centres, back-up power generators, emergency transportation networks, emergency supplies and delivery means, even National Guard contingents - are, like excess inventory sitting in the back room or spare capacity in an energy network, wasted economic potential. They cost money, generate no revenue, and drive down prices, so the market refuses to provide them.
The "free market" is swift and merciless toward those who would save for a rainy day. Tragically, sometimes, the rainy day is even swifter and more merciless.
One thing we can be sure of: since the market isn't willing to invest the capital funds, the federal government will now have an excuse to give billions of dollars in subsidies to Halliburton and other multinational oil services companies to rebuild America's already decrepit oil infrastructure.
That is, "free markets" are good enough for the poor, but no sensible government would dare expose the wealthy to those kinds of risks.