Wednesday, 23 February 2011

TANSTAAFL [update 2]

TANSTAAFL: There ain’t no such thing as a free lunch.

You wouldn’t have thought a tragedy like Canterbury’s to be a time for politicking. But then you wouldn’t have been thinking about Chris Trotter or Catherine Delahunty.

Delahunty tweeted last night (Tuesday night) on the events of the day:

_Quote_Idiot A grim day with the horror earthquake and
welfare report came out worse than I ever imagined

Thank goodness the sour old witch was restricted to just 140 characters since, as Liberty Scott points out, it takes a special kind of person to equate the government's welfare report as being equivalent to an earthquake that killed scores of people and left thousands more homeless.

Then there was dear old Chris Trotter, who burst into print less than two hours after the earthquake to inform readers:

_Quote_IdiotThe implications for the New Zealand economy are daunting. [Ya think, Chris?]
    Rebuilding Christchurch cannot now be left to the Market’s invisible hand. It will take all our hands, working through the public instruments of our common purpose, to make good this tragedy.

Let me re-read that for you.  “Rebuilding Christchurch cannot now be left to the Market’s invisible hand. It will take all our hands, working through the public instruments of our common purpose…” The “public instruments of our common purpose” being of course Chris’s beloved State, the very visible mailed fist of threats and pocket-picking, which would (if the delightful Mr Trotter had his way) choose “our” purpose for us all.

All Hail the State. (And don’t miss a chance to worship it.)

“The implications for the New Zealand economy are daunting.” They sure are. There ain’t no such thing as a free lunch. Those who perished in this disaster will never and can never be replaced. But there’s a bill of around $16 billion or so to be picked up by someone if Christchurch itself is to fully rebuild. 

If it is.

If people want it to.

If EQC and private insurance is sufficient, and individual savers and investors and wager-earners value its rebuilding enough to want to put their savings and resources towards it.

Because, let’s note, these “public instruments” Mr Trotter wishes so blithely to redistribute are not un-owned, or just lying around waiting to be tapped. They are people’s private property, some of which is already winging its way to Christchurch through the wires of NZ’s private banks; more of which will heading that way in coming days; and much more of which will be heading that way in the longer term voluntarily if Mr Trotter and people like him don’t poison the well.

The “invisible hand” of Mr Trotter’s  nightmares is simply a metaphor for people voluntarily buying and selling, in which process is discovered who values what the most—who is prepared to put their money where their values are, and how much that makes resources worth. 

And contra Trotter, that is the only real place and process in which to discover exactly how much (or maybe how little) the rebuilding of Christchurch is worth to those whose resources he would have taken by force to rebuild it.

Because in the end, it properly comes down not to “common purpose,” but to the same sort of individual choices that built Christchurch in the first place.

How many home-owners will want to use their insurance cheque to fully rebuild?

How many commercial property-owners?

What will the owners of damaged buildings do with their cheques? Will they see reinvestment in the Christchurch CBD as a good proposition for them?

What will those who chose to be uninsured do without theirs—will they see using their savings to reinvest in Christchurch as a good proposition for them?

And based on choices like these, which then is the most important infrastructure to begin building or rebuilding with the insurance cheques incoming to pay for this? 

And which regulations that stop or stall recovery should be relaxed? (This is a National Emergency; if homeless home-owners can’t have regulations relaxed now that make home-building so expensive, then when can they?)

The knee-jerk reflex to look to the State in times like this is not going to pull people through. Looking instead to what people really do value (especially at a time of diminished resources) and allowing those choices to happen just might.

In his piece sent to me for his regular weekly column (with which I conclude) Dr Richard McGrath writes:

It is perhaps timely to remind readers that although it is almost a reflex action to expect assistance from the state when a natural disaster occurs, the proper role of constitutionally limited government is to maintain the rule of law and thus allow agencies trying to assist the displaced and distressed victims of disaster to do their work with minimum interference.
    It is not appropriate for a government to use coercive force in transferring wealth from taxpayers to victims of the earthquake. On the other hand, it is appropriate for people to act out of concern for others to pitch in with their time and money, to whatever degree they wish, to help those affected by yesterday’s earthquake.
    Here is a link to an interesting webpage called ‘
Natural Disasters – Destructive Statism Versus the Heroic Free Market.’
    It explores the possibility that:

  1. Statism (i.e. government intervention) perpetuates poverty, stifles progress
        and creates
    unintended consequences);
  2. Theft is always wrong, even if it under the pretense of government “aid”;
  3. Free market capitalism creates the means and the ability to help others.

There are links to several articles on various websites that discuss the U.S. government’s response to Hurricane Katrina and the tsunami in Asia a few years back. And if you thought John Lott was only interested in guns, he has written a piece on why the free market should be allowed to work even – and especially – in times of disaster, so that limited resources can be allocated to those who need them the most.
To all those involved in the rescue efforts in Christchurch, thank you for the tremendous work you are doing.

"The only freedom deserving the name, is that of pursuing our own good
in our own way, so long as we do not attempt to deprive others of theirs,
or impede their efforts to obtain it." 
- John Stuart Mill

UPDATE 1: Sadly, Mr John Key is already floating the idea of raising taxes to stifle recovery  make the rebuild too expensive  make taxpayers stump up yet again.  And some people say it’s too early to start shooting down balloons like this.

UPDATE 2: And more nasty politicking in the Trotter/Delahunty vein, this time at The Sub-Standard.


  1. Agree absolutely with your first sentiment, ie 'you wouldn’t have thought a tragedy like Canterbury’s to be a time for politicking'.

    You then proceed to lose it big time by proceeding into your own politicking. Lets let the dust subside and affected families deal with this a bit before we charge in with the pointscoring and ideological lecturing?


    (PS - A Greens supporter, and utterly sickened by Delahunty's tweet. Enough to personally contact her and the party about it.)

  2. You would argue for a relaxation of building regulations after an event like this... seriously!?

    I guess it is all about the principle than actual real, life-saving pragmatics for you then...

  3. @Sam: I would argue that building standards be set and administered by those with the expertise to do that, and the acumen and capital to handle the risks involved, i.e., sructural engineers and insurance companies. (Read, for example, 'Owning the Act of Building.')

    As it happens, the process for commercial buildings mostly does involve sructural engineers anjd insurance companies selecting structural systems and managing risk--which is what they do best--except that meddling by councils especially muddies the waters, confuses the chain of responsibility, puts ratepayers on the hook for risks they haven't assumed, and allows insurance companies to wriggle off the hook.

    As for residential buildings, when you examine the huge recent price rises in building materials and consider the thousands of new houses needed at affordable prices, it should be apparent that New Zealand (and Christchurch) won't see affordable housing again until the business model for speculative housing is profitable again. And that won't happen unless builders and insurers are allowed to own the Act of Building.

  4. @Den: I don't see it as politicking in the face of the event. I was answering Trotter's response to the disaster that he posted two hours after with a response to him two days after.

    And these are the sorts of questions people are starting to ask now around pubs and clubs: When you look at the pictures of widespread damage right across the city and virtually everything in it, you have to wonder: "How the hell is NZ's second-largest city ever going to be rebuilt?"

    I'm sorry if you think it too soon to start answering those sorts of questions, and I do appreciate many people are still too bruised to consider them, but people are already asking them.

    Answers are going to have to come, and for thousands of people they will have to come soon.

  5. Trotter disgusts me. I wonder if the guys pulling people out from under buildings would be willing to stuff a few people in on their way?!

    Last night, people were moaning about shops in St. Albans "price gouging". Ignorance of economics is going to kill people this week.

  6. One of our customers Christchurch branch has been destroyed and they don't feel it's worth it to rebuild it, and will probably move to somewhere like Timaru. I wonder how many other businesses will think the same?

  7. the drunken watchman24 Feb 2011, 17:00:00

    .. or how about this post title, from the ghoul at Hot Topic

    "Shaken and Stirred - Christchurch Earthquake ..."

  8. point scoring and ideological lecturing?

    the ideological discussion is necessary and is one we can't avoid. The suffering of the families ,while sad, does not alter the need for such a discussion and as PC said is already underway.

    I guess it is all about the principle than actual real, life-saving pragmatics for you then.

    that's right. All principles are in direct contradiction to all actual real lives. Isn't that the whole bloody point of principles--to be useless things that contradict real life--but one can use to blame anyone at any time for hypocrisy?

  9. Dont you just want to poke a stick up Trotters arse?

  10. Dont you just want to poke a stick up Trotters arse?

  11. Has Delahunty, weird witch that it is, ever made sense? Isn't she the nutjob who claimed to be married to a mountain? How does a mountain get a divorce?

    Chris R


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