Saturday, August 27, 2016

A Very Brief History of Private Disaster Relief in America

Pete Earle, writing at FEE.
"Again, two weeks ago – as when Hurricane Katrina struck eleven years back – with the waters of the Amite, Comte, and other rivers rising rapidly, for many the first rescuers came not uniformed, nor in taxpayer-funded boats or helicopters, but in craft ranging from canoes and flatboats to fishing boats and crawfish skiffs.

Once again, citizen-sailors, this time dubbed the "Cajun Navy," saved the day as government responders (also again) were found overwhelmed, undersupplied, and without crucial pieces of critical local information.

The reaction of several local politicians, in the immediate aftermath, was not gratitude but a more classic rejoinder: an initiative to politically regulate civilian flood responders.

State Incompetence Is a Feature, Not a Bug

Skepticism of governmental rescue efforts springs from more than natural cynicism. For perfectly intuitive reasons, state authorities have rarely been first to respond to disasters, and often get in the way when they finally arrive. It stands to simple reason: major incidents typically occur with alarming suddenness, too quickly and messily for lumbering bureaucracies to gather information and organize an effective response. Only local individuals and small, flexible groups are suited for decisive reactions employing proximally-relevant information.

Of course, this is merely a specific application of Hayek’s “Use of Knowledge in Society” arguments against central planning: vast bureaucracies – typically political assemblages – are unable to deal with rapidly changing, local information as effectively and efficiently as locally-operating agents. When information must percolate through myriad layers of remote decision makers (who, it bears mentioning, are typically elevated by political appointment rather than demonstrated competence), outcomes are rarely timely and characteristically tend toward subpar outcomes.

Indeed, this is not a recent development; history readily shows that private individuals, whether acting alone or through social, charitable, or business organizations, are the first to react to crises and to make a difference, only afterwards calling for (and at times enduring) state aid. Several examples follow.

The Great Chicago Fire, 1871

During the early hours of the Great Chicago Fire in October 1871, firefighters were ineffective owing to having fought several serious fires the day before; thus many volunteers – home and business owners – made up the first line of defense between property and the racing flames. Order was initially kept by citizens, with the private Pinkerton Agency later taking over. 

The military arrived two days after the fire started and immediately imposed martial law – against the wishes of both the local population and mayor.

Johnstown Flood, 1889

The South Fork Dam burst in May 1889, and within minutes, quick-thinking residents abandoned their homes and businesses, mounted horses, and raced along the path of the flood to warn residents in imminent danger. The manager of the Western Union office in Johnstown, a certain Mrs. Ogle, stayed at her post to relay warnings down the valley despite entreaties to leave. By the time she had advised the final station of the impending cataclysm, she added, “This is my last message,” and was shortly thereafter overtaken and killed by the massive flood.

The Red Cross and the Army took several days to arrive, with one onlooker noting that the military arrived turned out in their finest dress uniforms.

Galveston Hurricane, 1900

In September 1900, a massive hurricane more devastating in terms of dollar equivalent damage than 2005’s Katrina, struck Galveston, Texas. On the evening that the storm struck, even as the scope of the damage was unclear and destruction ongoing, survivors gathered at the privately-owned Tremont Hotel to organize immediate rescue and relief efforts. For several days they dealt with the calamity locally, single-handedly.

San Francisco Earthquake, 1907

As often occurs after an earthquake, shaken but courageous survivors and pedestrians were the first to extricate victims from collapsed buildings. And when fires broke out shortly after the ‘quake, volunteers ran just ahead of the rapidly advancing flames, yelling into buildings and hammering on doors to alert residents. All over San Francisco, thousands fought fires and dynamited precariously teetering structures when firemen were too few, too late, or too exhausted to continue. Banker Amadeo Giannini first safeguarded depositors’ funds in his house, and then set up a desk in the street – a plank across two barrels. From there, he continued to not only take deposits, but make handshake-secured loans throughout the exigency, many of which jump-started the rebuilding of the city.

Accounts documenting the behavior of military personnel in post-earthquake San Francisco are mostly forgotten but bear repeating. One officer directed troops to shoot three citizens stranded on a rooftop who couldn’t be rescued. Another San Franciscan recalled seeing a soldier murder a policeman during an argument over disposing of bodies, and a banker was shot and killed searching the ruins of a bank he owned. A number of citizens, in fact, were shot for alleged looting while searching the ruins of their own homes.

Easter Tornado Outbreak, 1913

On Easter weekend, 1913, tornadoes wreaked havoc across major portions of the Great Plains and Midwest. In Omaha, Nebraska, the local, private telephone exchange served as the nerve center for the rescue efforts, with operators courageously staying at their posts before, throughout, and after tornadoes ripped through the town. Immediately after the destructive torrent subsided, hundreds of citizens gathered together, offering their homes, provisions, and money to care for the newly homeless, destitute, and injured. 

During the tornado outbreak in flash-flood ravaged Dayton, an otherwise unknown citizen named John H. Patterson hastily gathered 150 carpenters from the National Cash Register Co. and oversaw a boat-building frenzy which saved numerous lives. And, when troops arrived, their first act was to put the area under martial law.

Examples abound in the modern day as well. During the LA riots in 1992, after the terror attacks of September 11th, 2001, and in countless other earthquakes, storms, floods, fires, blizzards, building collapses, mine cave-ins, crashes, and freak accidents of every variety, the most critical, earliest lifesaving and recovery efforts were administered not by tax-financed, uniformed agencies, but by the people who were closest, whether they stood ready or not.  

And let’s not forget other peripheral, but no less important private actors: disasterpreneurs, who are so instrumental in keeping the price system working when natural (i.e., geographic dislocation) or artificial measures (i.e., rationing) suppress it; store owners who offer deeply discounted or free products to the afflicted; and the uncountable who invite displaced neighbors or strangers to stay in their homes until insurance payments come through or desperately needed repairs are made. 

More of the Same

The very same dynamics are, at this writing, at work in South Bend, Indiana, where record floods breeched government-maintained dams last week: with government incompetence on unobstructed display, thousands of affected residents are now also being threatened with fines if they don’t procure permits before starting to repair their damaged and destroyed homes and businesses. 

States are far better at creating chaos than responding to it; more equipped to hinder solutions than disinter them. Louisiana politicians would do well to step aside, put the safety of their respective constituencies ahead of their natural instinct to tax, regulate, and otherwise suppress local, nongovernmental initiative, and let the Cajun Navy sail – unencumbered."

Pete Earle is an economist and financial markets professional. He has spent two decades trading in and studying global equity, derivative, commodity, and currency markets, and regularly provides consulting services for trading, cryptocurrency, and online/mobile gaming firms.

Pete has published numerous articles on economic history, spontaneous order, and liberty and in 2014 published A Century of Anarchy: Neutral Moresnet through the Revisionist Lens. He resides in the Greater New York City area.

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