When I posted Ruthless Resilience two weeks ago, I had suspected (or maybe hoped) some of you would take issue with my thesis that markets take care of themselves and in doing so exhibit more resilience than almost any other human system. Of course, my thesis relied upon the assumption that the economy, like the planet, will survive the calamities confronting us in some form even if it is not one we find particularly satisfactory.
That this can be said of the macroeconomy also says an awful lot about the sorts of microeconomic choices that confront market participants after disaster strikes. Economies rise and fall on their ability to help us meet our wants and needs. In fact, it is the difficulty the market has with making a distinction between the two (our wants and our needs), or perhaps more accurately the ease with which it utterly ignores the very existence of any meaningful distinction between the two conditions that causes much of the concern about the economic effects of disasters.
As New Zealand and Japan face the daunting tasks of reconstructing their communities, the economic effects of their respective disasters has received considerable attention. But that attention has shed very little light on the values informing market participants’ decisions about their present situations.
Economists like to assume that rational people act in their own self-interest. As such, they would have us believe that people left to their own and confronted with competing choices, will choose the option that yields the most utility. In this sense, utility is best understood as the ability of the chosen option to satisfy one’s notion of his or her interests or expectations. Although these considerations leave plenty of room for people to choose things that make them feel good by appealing to altruism or compassion rather than one’s own temporal concerns with safety and security, such choices afford them little immediate advantage and almost always leave economists puzzled.
We have many examples of economic transactions in which people behave in ways that leave them less well off and others better off without any tangible evidence that those giving receive anything in return but the warm feeling of having done something nice for someone else. Perhaps the most common and tangible example is the tendency to tip service workers even when we have no reasonable expectation of ever seeing or interacting with them again. We have already benefited from their services and have nothing to more to gain by being generous rather than stingy. But we still choose to follow conventions that reward those who serve us knowing that it is the right or just thing to do.
Maybe this sentiment helps explain why the leading suggestions for how to rebuild Christchurch’s shattered central city precincts emphasize principles of sustainable design. The leading citizen-submitted suggestions for the future of Christchurch rated by visitors to the Re-imagine Christchurch website recommend steps to make the resurrected city the best example of sustainable urban design on the planet.
Such sentiments are not without precedent. After the devastating 1931 Hawke’s Bay Earthquake, the residents of Napier rebuilt that city in a way that has made it one of the best examples of Art Deco design in the world.
Christchurch’s residents seem inclined to leverage the city’s pre-quake identity as the Garden City to green their community even further. Some even seem willing to relegate cars to the dust-bin of history and rebuild in ways that make the relatively flat cityscape even easier to transit by walking, biking or riding buses, trains or other modes of mass transit than it already is.
This would be interesting enough even if it were not accompanied by some suggestions that emphasize efforts to retain some slightly quirky urban design characteristics, like those one contributor refers to as “secret spaces.”
Economists might have us believe that such suggestions reflect the interests of Christchurch’s residents in encouraging tourism, which does constitute a significant portion of the local export economy. But I would like to believe that the aspirations reflected in these suggestions indicate a higher sense of value and a commitment to future generations’ enjoyment of a place that has inspired and sustained many generations already.
In the end, those making the decisions about how to rebuild may neither have much to gain from these choices nor much more to lose than that which has already been sacrificed. If economists’ efforts to work out the puzzling ways in which our values influence our decisions are right in assuming that we value present losses more highly than future gains, then there has never been a better to time act selflessly than right now.