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Source link: http://archive.mises.org/12735/my-week-in-haiti/

My Week in Haiti

May 18, 2010 by

It’s more expensive to construct a building that can withstand an intense earthquake. Imposing US building codes in Haiti wouldn’t have saved hundreds of thousands of people; it would simply have made them homeless all these years. FULL ARTICLE by Robert P. Murphy

{ 24 comments }

Joy D. Brower May 18, 2010 at 11:13 am

Great observations from a “free market” economics point of view!! Everyone else reporting from Haiti obviously/usually focuses on the poverty/physical destruction situation, but your putting all this through the lens of “Austrian” economics is MOST interesting and revealing – and, sadly, revealing of a very non-free ecoonomic point of view that seems to pervade that island nation. We can see just how destructive this attitude can be – and with that prevailing attitude, it’s no wonder that these people seemed destined to remain less advanced than other nations where the market place has more respect and is better understood. Thanks again for the intriguing read! Joy D. Brower

Rick May 18, 2010 at 11:21 am

Great post.

If this is the predominant mindset, how could anyone start a successful business? I would imagine the jealousy and gossip of his neighbours would be unbearable.

This reminded me of when I even dared discuss starting a business of my own in a nice CA town some years ago. The suspicion, jealousy, and gossip of neighbours and so-called friends was unbearable.

Not because they were afraid I was going to “get paid” or “pay others” for jobs they thought they had some inherited right too – although I suppose that could have been the case for some – but mostly because I didn’t see myself as a permanent member of the co-dependent employee class like they were.

Now in post credit bubble CA, successful older folks still can afford to live there but many younger people have left because being a Californian who depends on employment but looks down upon entrepreneurship and thinks NIMBY doesn’t pay like it used to.

If ideas matter, then there also has to be a culture that is receptive to those ideas. I’m glad Murphy brought that up.

Zach Bibeault May 18, 2010 at 1:16 pm

Great piece Robert. Very illuminating.

Ted Stein May 18, 2010 at 1:39 pm

Mr. Murphy,

I always enjoy your “thinking-out-of-the-box” that exemplifies you and the Austrian School, but I fear you’ve missed the point. A real Haitian entrepreneur would have figured out how to harness the energy from the earthquake providing electricity to the island that is so desperately in need.

Consider another “out-of-the-box” idea, an Austrian School. The administration, staff and professors, not to mention the jobs assosciated with designing and building the campus, would put Haiti on the map, in a good way. Attracting folks from all over the world to attend degree and non-degree programs would significantly enhance tourism even after the relief volunteers are but a memory.

Finally, they could encourage experienced high yield farmers to help them turn their land into fertile soil for growing coffee and other renewable products. I’m not qualified to say what crops are best suited for the island, but creating and sustaining jobs is what they need now, whether they’re derived from Austrian Economic theory or capitalism.

What I do agree with is your belief that little will change after the relief period. Even with your laudable visit and subsequent writings about your epiphany aside, things will return to normal. And what a pity that will be.

Mr. Murphy, I gave you the barter for health care idea. How’d that work out? I’d like you to take at least one of these ideas and run with it. I recommend the farming idea. We don’t want some crack-pot politician espousing the energy idea, if you know what I mean.

Ted Stein

Seattle May 18, 2010 at 3:30 pm

A real Haitian entrepreneur would have figured out how to harness the energy from the earthquake providing electricity to the island that is so desperately in need.

…what?

Bill May 18, 2010 at 7:34 pm

Two words for you: Regime uncertainty.

Tom Franc May 18, 2010 at 1:54 pm

Thank you for a very interesting article. If I went to Haiti as you have done, I would have been evaluating things in my mind just as you were.

Haiti is a unique place. With all their poverty and backwardness for so many years, there is a place right next to them (Dominican Republic) which fairs so much better. Much of their problems (Haiti’s) must ultimately be related to their cultural, religious, and ethical beliefs.

“What really struck me was how fearless some of these young people were.” – Author

As far as the “fearlessness” of the young people, I must admit to not having much fear in my youth, which oftentimes could have gotten me killed. That’s also why young people fight wars – they just don’t have much fear. But then there’s the saying, “Fools rush in, where angels fear to tread.” There is a WHOLE LOT of wisdom in that saying!

Thanks again for sharing these thoughts on your experience in Haiti.

Joe May 18, 2010 at 2:19 pm

Thanks for a great read. It is sad that this country will go back to what it was before the earthquake. As much as we want to help and see the people of this country rise out of the poverty and ignorance we cannot. Who knows they might have a James Madison or Alexander Hamilton among them. There are merchants, like Joe, that have a inate sense of Capitalism. Why can’t the rest of the populus see the same? They want to continually vote in dictators and socialists. They need more Joes’ and I don’t mean Joseph Stalin.

Abhilash Nambiar May 18, 2010 at 4:04 pm

There are habits set over generations. People being risk averse, prefer sorrows that come from ways that they are used to. It is the devil you know while that which replaces it belongs to the unknown.

There is a line that reflects this sentiment in the Declaration of Independence:

.. all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.

Haitians being already familiar with socialists and dictators would most probably prefer to empower a less ideal socialist or a less brutal dictator rather than try something completely different that they have no experience of what so ever. It would open the space for some new ideas but will not suddenly and utterly transform the nation for the better (or worse).

pbergn May 18, 2010 at 4:36 pm

Joe probably had some connection or relatives in the government or law inforcement…

I bet he was payinga good buck to higher-ups as well…

Patrick Barron May 18, 2010 at 5:43 pm

Very interesting article. Many thanks. As for the Haitians sitting around (90% unemployment) with lots of work to do, I think the answer may be lack of property rights. Hernando de Soto’s wonderful book, The Mystery of Capital, explains that much poverty in the third world can be attributed to the fact that a huge percentage of real property doesn not have perfected (legally enforceable) ownership. If a Haitian owned a business or the land and his home, even if mortgaged, wouldn’t he clean the rubble away himself and even employ others to speed up the process? But imagine that you live in a “squatters” shack, as many do, according to de Soto. An earthquake destroys your shack. How quickly will you rush to make it habitable again? Would you “volunteer” to clean up the rubble anywhere else? I doubt it but maybe. But if there is absolutely NO benefit to doing so, I imagine that you would sit around and conclude that the foreigners were being paid somehow. In a way, I think they were–in psychic benefits, but these benefits accrue only to rich foreigners.

Abhilash Nambiar May 19, 2010 at 8:57 am

I have read De Soto’s book. He goes into great details with pictures of how the land for the shanty towns are homesteaded (it is unused land supposedly owned by government), how people set up home-businesses, how they accumulate savings, buy cement and brick and slowly but surely convert their area of residence from a shack first made of cloth, then tin, then to a sturdy building of brick and cement using their accumulated savings over the course of decades. I did not know it at that time, but what he is explaining was capital accumulation and savings. Basically people improving their quality of life through their own efforts.

So the people of Latin America (is Haiti part of Latin America?) are very capitalistic in their actions, but their mindset is still stuck in the socialist paradigm. So they empower socialist dictators time and again, precisely the kind of people who undermine their efforts. In fact if not for De Soto, this whole process would not even have been recognized for what it was.

Franklin May 18, 2010 at 8:12 pm

Why chip at the symptomatic edges, like a fearful batter fighting off hard sliders?
Instead Patrick Barron hits it out of the park.
“….the answer may be lack of property rights.”
Root cause, end of story, whether Haiti or Honduras, Burma or Bangladesh.

simik May 19, 2010 at 1:02 am

Well, property rights are not some kind of natural resource that you either have in your country, or you have not. Property rights are all in your head, so it is indeed a matter of culture and traditions.

Patrick Barron May 19, 2010 at 11:45 am

I politely take issue with the phrase “property rights are all in your head”. We depend upon honest government to protect our property rights. If the fruits of my labor can be taken away, because I really do not own the land on which my humble abode sits, then I am very unlikely to spend much time and/or money improving it. De Soto explained that most of the poor’s homes rest on property for which no one had ownership. Their claim was recognized by the local neighborhood, but nowhere else. Now, we Austrians would recognize homesteading of such land and grant the squatters their legal right to own that with which they “mixed their labor”. But, more likely, as soon as people build something that is worth anything, a dictator and/or his associates will confiscate it and the squatter has no legal recourse. Therefore, there can be no large capital development where land ownership is unperfected.

Abhilash Nambiar May 19, 2010 at 4:16 pm

Property rights is not an outcome of culture or tradition; recognition of property rights is most probably the outcome of culture and tradition.

Christopher May 19, 2010 at 9:03 am

Property rights? Maybe. But could the root cause be money itself?

“In other words, the Haitians — where unemployment is apparently 90 percent — thought they should be getting paid to remove the rubble from their collapsed homes.”

The introduction of fiat money distorts reality and alters the ability to make rational and useful decisions (casino chips?).

I’ve been thinking about this a lot lately and maybe someone can direct me to some scholarship on this in the Mises literature…

It seems that if a medium of exchange does not come about “organically” and is forced on people it alters their ability to make good decisions as Mr. Murphy has found out.

Abhilash Nambiar May 19, 2010 at 9:22 am

Christopher, 90% unemployment may not be what it seems. In places like that, where it is difficult to do anything legal, there is a huge informal (technically illegal) economy may be much bigger than the formal economy that is readily visible to outsiders. Numbers about the informal economy rarely make it into any official statistics.

The reason that Haitians do not live a higher quality life is because informal economies tend not to operate according to any government agendas and are thus suppressed by them. Foreign governments and corporations work with the formal agencies that have relatively smaller foot-prints in those regions. Consequently their understanding of Haitian life is stunted. Private firms in the West are not going to make many inroads there unless they bypass formal channels.

Christopher May 19, 2010 at 9:35 am

That makes sense Abhilash but it doesn’t address what I am saying about money.

These people want money before they are willing to help themselves or their neighbors. This sort of behavior is not isolated to Haiti – it’s a direct reflection of how the introduction of money influences and changes human behavior.

I can’t be the first person in the Mises community to take this line of thought so I’m wondering what literature has been written about it so I don’t try to reinvent the wheel.

Abhilash Nambiar May 19, 2010 at 4:12 pm

You must mean the change in behavior resulting from the introduction of fiat money. Try Doug French’s Early Speculative Bubbles & Increases in the Money Supply. I am sure they have it online for free. If you want to know about modern informal economies, the Mystery of Capital by Hernando De Soto is the best work.

Jeff R May 19, 2010 at 1:04 pm

Robert, Do you know why HODR didn’t use local labor? There is a concern in the humanitarian response community that by bringing in volunteers from an outside area (to work for free) the local people are denied an oppurtunity for employment. Jeff

Haitian Hollywood May 27, 2010 at 11:43 pm

An honest opinion finally, but the Haitian people are strong, whey will rebuild again.

John R Peacher June 26, 2010 at 5:51 pm

Haiti thoughts-
I enjoyed reading your article on your trip to Haiti. Your conclusions brought back memories of my travels in the hills of Jamacia and several countries in Africa. I do not know if it is the extreme poverty and hopelessness that has given the populace the mindset they have or if they were so mistreated by foreigners over the past 200 years that it is an ingrained feeling and response to those who are just trying to help. I remember taking several pairs of jeans to a market in a nation in Africa, I think it was in Kenya, and giving them to a small boy to whom it looked as if they would fit him. He grabbed the jeans out of my hands and took off like a bullet! I thought, that was not much gratitude…a few seconds later a crowd of older boys were chasing him, dead on his heals, to rob him of the jeans. Is this mindset much different in the inner city, poverty stricken areas of the United States?

Someone July 21, 2011 at 1:11 pm

The problem has been partially identified, but what hasnt been touched upon is the Franco-American colonialist attitude of the past 200 years. France and the US have robbed and raped Haiti for literally two centuries and seven years now. They have put onerous restrictions on the export market for Haiti, and flooded the Haitian markets with cheap, subsidized farm products (which incidentally hurt the original economies). The UN and aid organizations make things worse. Haitians, as Murphy points out, WANT to work to rebuild (or perhaps build) their land, but they never get the contracts for anything. The solution really would be to completely withdraw everything from Haiti that isnt capitalist and let the market run its course for once in 200 years. Haitians have the ability like all of us to get what they need. Andtheir mindset will change easily once they see that a new one works better.

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