The power of wealth — to do good
Published by Yazad Jal January 9th, 2004 in EconomicsThomas Sowell hits home with a strong defense of the power of wealth to do good.
Within a week of each other, two earthquakes struck on opposite sides of the world — an earthquake measuring 6.5 on the Richter scale in California and a 6.6 earthquake in Iran. But, however similar the earthquakes, the human costs were enormously different.The deaths in Iran have been counted in the tens of thousands. In California, the deaths did not reach double digits. Why the difference? In one word, wealth.
Wealth enables homes, buildings and other structures to be built to withstand greater stresses. Wealth permits the creation of modern transportation that can quickly carry people to medical facilities. It enables those facilities to be equipped with more advanced medical apparatus and supplies, and amply staffed with highly trained doctors and support staff.
Those who disdain wealth as crass materialism need to understand that wealth is one of the biggest life-saving factors in the world. As an economist in India has pointed out, “95 percent of deaths from natural hazards occur in poor countries.”
Link courtesy: Adam Smith Blog
7 Responses to “The power of wealth — to do good”
- 1 Trackback on Jan 12th, 2004 at 10:46 pm
- 2 Trackback on Jun 1st, 2005 at 11:24 pm
Another small but significant factor is population density which isn’t dependent only on wealth but the size of a nation. Damages/deaths due to earthquakes are also caused due to the cascading effect in dense countries.
But yeah, the rest of the assessment is quite true in terms of the services wealth provides.
Who is that Indian economist? Is it Amartya Sen? Didnt his study of famine lead him to a somewhat similar conclusion - about distribution system etc?
Even poor countries can have systems that can prevent such mass deaths. Imagine if India had a free housing insurance industry since 50 years. Where building regulations didn’t ensure compliant building processes thanks to currpotion, simply mandating an insurance cover for all houses would have ensured that the builders have most incentive to build earthquake resistant houses in prone areas. I admit many people are too poor to afford the inurance premium and would rather take the risk of perishing in an earthquake than paying the premium. But I think the scale of deaths would have been much lower.
Though Thomas Sowell compared the recent earthquakes in California and in Iran, it seems that the California earthquake and the 2001 earthquake in Gujarat could be compared in much the same way. (All were 6.5-6.9 on the Richter scale)
Hi Manan,
True. You can switch Iran and Gujarat, and the comparison would still be valid. Sowell compared Iran and California because the earhtquakes happened at the same time.