30/12/2004 5:59:03 pm
Don′t Make One Catastrophe into Two.
Sweden seems likely to be worst hit of all the European countries by the tsunami. Almost eveyone I talk to know someone who is still missing. This is of course due to the fact that Thailand has emerged as a very popular place for Swedish tourists. Many thousand Swedes were there when the wave struck and 2500 are still missing. We may have a tragedy just as big as when the ship Estonia sank in 1994 and some 850 Swedes died, a trauma which is still with us.
The handling by the Swedish government of the crisis has been slow and clumsy. Apparently, today the first planes to get the survivors home lifted off. Private Swedish companies and resorts, on the other hand, reacted within a day or two and did what they could. The government has sent the Foregin Minister there, a symbolic PR-gesture of no practical importance whatsoever. The bungling crisis management will be a heavy load on the image of their ability to govern in the years to come.
Apart from the human disaster, this event is now analysed from many aspects - also economic. Some claim that this will actually be good for the economy. They point out that new things have to be built to replace the old and that it will boost growth. A usual mistake, disproved by Bastiat in a classic example, and if that false economic analysis would get hold we would create another catastrophe out of the first. Of course resources now have to be directed towards rebuilding - but they would otherwise have been directed towards building new things that didn′t exist. This is not only a human loss, it is an economic one. Read more in the short piece from The Mises Institute below.
Read here - >