🚀 go-pugleaf

I give a few remarks on the earthquake that hit Kobe on January 17th.  My
analysis is mostly based on microeconomics.  The views and rhetoric
contained in this essay may offend some readers; reader discretion is
advised.


1. "Altruism"?

I received a mail from Japan saying, "So far, no stealing nor robbery is
reported.  On the contrary, people are helping each other.  So many
altruistic stories have been reported, that is a good side of this bad
incident."

Well, what's in the name?---if you want to call it "altruism," I don't have
any objection.  But, naming aside, I want to know what's happening here.

I guess what's happening is that in the present situation, in which people
there are  (maybe) relieved from their everyday work, the opportunity cost
of giving help to others is very low (provided that they do not attempt
anything very risky).  You don't have to go to work, which means you have
time.  What do you do with the plenty of time?  No much fun out there (of
ordinary sort).  So get some water for yourself?  Go shopping for your
family?  Well, that means standing in a long line.  Kind of boring, isn't
it?  So, here comes a real attractive option---helping others.  (One reason
that helping is attractive is that it has a direct and visible effect,
unlike many paper works that most office workers are used to.)

The earthquake turns out to be one of the most exciting event of the
century.  I guess that even people outside of Kobe want to participate in
this historical event, which could not be made by human.  They are willing
to pay an "admission fee" to participate in the event (if they are like
me).  However, perhaps due to transportation problems and due to lack of
any useful expertise like medicine, those people willing to pay cannot get
into the damaged area.  On the other hand, lucky are the people in the
damaged area (provided that they are in a good physical and mental
condition (one necessary condition is being alive))---the are already
inside the arena, no need to pay an admission fee.

Remark.  Welfare economists and public economists are trying to design
mechanisms in which public goods are provided by private contributions.  It
turns out we don't have a very beautiful solution to this problem yet,
provided that rationality of individuals are assumed.  Of course, if we
relax the rationality assumption and introduce altruism, difficulties are
resolved.  However, we don't generally regard such a resolution
theoretically very attractive.  Yet, after some thought, I thought maybe it
is not totally bad news that rationality of individuals alone alone do not
solve every problem.  For that means there is a still room in the world for
altruism.  Isn't that beautiful?

2.  Policy implication.

I heard on TV that the building code in Japan is very strict.  For the
purpose of argument I suppose that this information is true.  I felt that
it is likely that regulation of building (building codes) is going to be
even  stricter.  That's not good news.

a. Since a building code is an interference in private properties, making
it stricter is bad from the viewpoint of individual freedom.  You noticed
that people there simply "accepted" what had happened.  Why did they accept
the tragedy?  Of course, one reason is that it was nature that hit the
city, not a human.  They can't really blame anyone.  But even if nature is
a problem, they could do something about their properties (including their
bodies).  They could build their new houses; they could buy some
insurances.  Perhaps people living in old houses do not feel like buying an
insurance.  It is cheaper just to wait till some disaster destroys the
houses and rebuild them (or go elsewhere) only after the
disaster---provided they are (somehow unluckily especially if they are old
and poor) still alive.  In any case, they made choices.  Don't tell me that
the Japanese do not take into consideration of future earthquakes when they
make this sort of choice.  They do.  Even if they live in places like Kobe
where quakes are relatively rare, they do.  So, when a quake comes, they
can't but accept it since it was their choices.

b. Of course, resorting to individual freedom is not so fashionable in
contemporary economics, whose main philosophy is utilitarian.  So I give
another argument: Making building codes stricter is bad since it leads to
more people living in unsafe conditions.  (Yes, this is a usual economic
argument, you know.)  As I said above, people make choices.  Strict
building codes make old and dangerous houses economically more attractive
(since old houses are either exempt from the regulation or it is virtually
impossible to apply new codes to old houses).  What results is that more
people simply choosing to stay in their old houses.  (I suspect that this
analysis might explain the tragedy of this time, too.)

3. Final comment: Japanese technology.

This time, not only old wooden houses but some relatively new buildings
that was supposed to endure even stronger quakes were destroyed. 
Admittedly, as a Japanese "scientist," I was shocked.  I imagine that the
_jishin_ (i.e., confidence) that engineers and scientists had about their
technology has been considerably shattered by the _jishin_ (earthquake). 
To me, Japanese engineering has begun to sound only as good as Keynesian
economics.

Reiju
-- 
\\                                          //
  H. Reiju Mihara (miha0008@gold.tc.umn.edu) 
  is a name    of some sort 
                               of individual
//                                          \\