Photo credit: CityofStPete via Flickr, CC BY-ND 2.0

How Capitalism and Innovation Saved Lives During Hurricane Irma


As Americans begin the unenviable task of trying to rebuild from the recent hurricanes, a silver-lining to these tragic events can still be uncovered under close examination: As devastating as the recent storms were, American capitalism and innovation prevented an enormous amount of suffering and untimely deaths.

While any lives lost are too many, The Washington Post explained how human innovation is constantly driving us towards a world of greater disaster preparedness:

Five deaths related to Hurricane Irma have now been confirmed in Florida…it’s remarkable the extent to which the human cost of a storm as destructive and powerful as this one — which will cause untold billions in property damage — can be mitigated.

Forecasting has improved dramatically over the past century, as has the quality of construction. We have a much better idea of who should leave when a massive storm is coming, and they have more time to get out. Government officials of both parties are also more willing to order mandatory evacuations. Finally, better roads and equipment make it easier to extract people in harm’s way.

For context, at least 6,000 died when a Category 4 hurricane unexpectedly made landfall in Galveston, Tex., on Sept. 8, 1900.

As this example shows, a fortunate byproduct of American free-market prosperity is our ability to invest in life-saving infrastructure, innovative weather tracking systems, and sophisticated rescue operations.

And America is not the only country showcasing the success of free-market capitalism in mitigating disaster. In 2010, Time Magazine published an article entitled “Chile and Haiti: A Tale of Two Earthquakes” which exposed the stark contrast in how free-market nations are better equipped to handle disasters:

The 8.8-magnitude earthquake that hit Chile early on Feb. 27 was 500 times stronger than the 7.0 quake that killed an estimated 200,000 Haitians last month. And yet the number of casualties in Chile appears to be exponentially smaller, with the official death toll still in the hundreds. Far fewer people were rendered homeless than in Haiti, and much of the telephone service in Santiago and parts of central Chile had been restored within five hours.

Chile is more developed because it’s doing things right. The same goes for Brazil, Uruguay, Costa Rica and a handful of other Latin American and Caribbean nations that have decided in the 21st century to stop running their societies like medieval fiefdoms. They’ve conceded that niceties like rule of law, accountability, education, entrepreneurial opportunity and administrative efficiency actually have merit.

However, one thing that Time Magazine neglected to mention was that Chile’s disaster preparedness is also owed, in large part, to legendary American economist Milton Friedman. As Bret Stephens for the Hoover Institute wrote:

Not by chance were Chileans living in houses of brick—and Haitians in houses of straw—when the wolf arrived to try to blow them down.


What Chile did have was intellectual capital, thanks to an exchange program between its Catholic University and the economics department of the University of Chicago, then Friedman’s academic home. Even before the 1973 coup, several of Chile’s “Chicago boys” had drafted a set of policy proposals that amounted to an off-the-shelf recipe for economic liberalization: sharp reductions to government spending and the money supply; privatization of state-owned companies; the elimination of obstacles to free enterprise and foreign investment, and so on.


[Chilean dictator] Pinochet appointed a succession of Chicago boys to senior economic posts. By 1990, the year he ceded power, per capita GDP had risen by 40 percent (in 2005 dollars) even as Peru and Argentina stagnated. Pinochet’s democratic successors—all of them nominally left-of-center—only deepened the liberalization drive. The result is that Chileans have become South America’s richest people. They have the continent’s lowest level of corruption, the lowest infant-mortality rate, and the lowest number of people living below the poverty line.

Chile also has some of the world’s strictest building codes, a sensible precaution for a country that straddles two tectonic plates. But having codes is one thing and enforcing them is another. The quality and consistency of enforcement is typically correlated to the wealth of nations. The poorer the country, the likelier people are to scrimp on rebar, or use poor-quality concrete, or lie about compliance.

Although it can be difficult to look on the bright side amidst the destruction of the recent hurricanes, perhaps we can take some comfort in knowing that capitalism and innovation saved countless lives this week, and will save even more lives and property in the future.

Photo credit: CityofStPete via Flickr, CC BY-ND 2.0

Jonathan Decker

Jonathan Decker is the Chief Economic Correspondent for

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