Saturday, January 16, 2010

Earthquake 1: EQs and Economic Freedom

Earthquakes, volcanic eruptions, and other natural geological and meteorological phenomena will be with us. They are part of nature, part of the dynamism of the planet. What we humans can do is to adapt to them as it is impossible to “conquer” them.

Worldwide, within one week alone, from January 8 to 14, 41 earthquakes that were of magnitude 5.0 or stronger occurred,

In the Philippines, in December 2009 alone, 9 earthquakes that were of magnitude 5.0 or stronger occurred,

And in the first two weeks of this year, 8 earthquakes with intensity 2.1 to 5.3 already occurred in the Philippines,

The intensity 7.0 earthquake that hit Haiti was indeed terrible. Estimates of the casualty are still wide, between 50,000 to 500,000. Even the low-end figure is still terrible.

Maybe Haitians are not so prepared with earthquakes compared to Filipinos, Indonesians, Japanese, and others living on both sides of the Pacific Ocean. In the Philippines for instance, all medium to high-rise buildings consider the occurrence of a strong earthquake to hit the country anytime.

The Earth is a dynamic planet. Below the surface (mantle, core, etc.), perhaps hundreds of earthquake belts are moving everyday. And there are volcanic formations somewhere, especially under the ocean, like the Pacific ocean. In the Philippines, we have 200+ volcanoes, about 21 are "active", meaning they've exploded over the past 600 years. Where there is an active volcano, there is an active earthquake belt below or near it.

On "Tens of thousands feared dead" in Haiti, Dr. Donald Boudreaux, Professor of Economics, George Mason University in Fairfax, Virginia, made this observation: “The ultimate tragedy in Haiti isn't the earthquake; it's that country's lack of economic freedom. The earthquake simply but catastrophically revealed the inhuman consequences of this fact.

“Registering 7.0 on the Richter scale, the Haitian earthquake killed tens of thousands of people. But the quake that hit California's Bay Area in 1989 was also of magnitude 7.0. It, though, killed only 63 people.

“This difference is due chiefly to Americans' greater wealth. With one of the freest economies in the world, Americans build stronger homes and buildings, and have better health-care and better search and rescue equipment. In contrast, burdened by one of the world's least-free economies, Haitians cannot afford to build sturdy structures.”

Indeed, economic freedom is the best defense against strong earthquakes, volcanic eruptions, global cooling or warming, etc.

The strongest earthquake to hit the Philippines happened in July 1990. It was intensity 7.8, much stronger than that in Haiti. It was so strong, covered about 20,000 sq. kms., created a 125-km long rapture, and affected many cities and provinces north of Manila like Cabanatuan, Dagupan, and Baguio cities.

Despite such a strong earthquake, only 1,620 Filipinos died. Not tens of thousands as projected in Haiti.

This is not to say that the Philippines has high economic freedom compared to most countries. In the Economic Freedom of the World (EFW) 2009 report, the Philippines ranked #69 out of 141 countries surveyed, Haiti was no. 87, in between India 86th, and Turkey 88th,

What makes the Filipinos more adapted and more prepared to earthquakes with intensity 7.0 or stronger, is that such tremble is always in the minds of people when they construct a building or a house. We have experienced magnitude 7.8 just 20 years ago, so all building developers assume that such magnitude can occur anytime. So they are building structures that can withstand intensity 8.0 or stronger.

Politicians and governments can say, "We don't regulate earthquakes, and we help earthquake victims". Right. But if politicians and governments do not confiscate 1/4, 1/3 or 1/2 of people's monthly income in the form of mandatory and confiscatory income taxes, people would have more money to build stronger houses and stronger buildings. They can say, "Let intensity 7.0 earthquakes or stronger come in. Our building can withstand them.” The people's freedom to build stronger houses and buildings is crippled by one tax alone, income tax. And there are dozens of other taxes and fees that citizens have to contend with, depending on which country they live and work.

And it should be pointed also, that the bulk of voluntary assistance to get to earthquake victims or tsunami victims are from private individuals, private corporations and groups.

Earthquakes, both natural and political, are generally destructive. It is important that individuals should assert their economic and individual freedom against heavy politics and political intervention and taxation in their lives, so that they can adapt better to natural earthquakes.

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