Wednesday, August 31, 2005

Katrina on Aid

One more comment. Hayek views natural events as morally equivalent to market events. He argues that neither natural events (like Katrina) nor market events (like oil prices rising) are the result of human intention, though the latter are the result of human action. Yet by revealed preference, most people don't see the two as morally equivalent. For example, everyone* agrees that we should give aid to people made homeless by Katrina. But consider a company that moves a factory from a small town in Ohio to China. Then in practice, there is little government assistance to those left jobless even though the effects are similar to a natural disaster.

If, as Hayek argues, the two are morally equivalent, then why don't we have significant (lump-sum) adjustment assistance for those negatively affected by free trade and technological progress?

*Except for a few who blame those who decided to live below sea level.

1 Comments:

Blogger Isaac said...

Interesting. That's sort of the issue in my post above: why this outpouring for a vaguely predictable event...

11:56 PM  

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