Backgrounder: Hurricanes, Property and Haiti

November 22, 2016

by T. Norman Van Cott, Ph.D.

Some years ago, I saw television advertisements by the lumber and wood products firm Weyerhaeuser Corporation. The ads began by showing Weyerhaeuser employees having just finished clear-cutting a mountainside in the Pacific Northwest. The next portion of the ad showed other Weyerhaeuser employees tromping up and down the clear-cut mountainside planting tree seedlings. The final portion showed Weyerhaeuser aircraft flying over the mountainside fertilizing the seedlings.

Before you start extolling Weyerhaeuser‘s commitment to socially responsible forestry, let me remind you that Weyerhaeuser stockholders currently own 13,000,000 acres of U.S. forest lands. That means Weyerhaeuser employees, responsible to these stockholders, determine when to harvest a forest based on such things as the current and expected future prices of lumber and wood products, the costs of harvesting, expected rate of tree growth, and the interest rate. Likewise, stockholders have an incentive to replant the clearcut mountainsides because owning the land assures them, and no one else, of being able to harvest the trees. Ditto for the fertilizing decision. The stockholders get to enjoy the return on the fertilizer.

Against this backdrop, consider what happened in Haiti following Hurricane Matthew. It didn’t take long for the world’s emotional members to begin lamenting how Haiti gets the raw end of natural disasters. There were the reports of cholera bacteria being washed down mountains devoid of forests. Water supplies were being infected by cholera. Many lives were threatened. Did the lamenters ask why the Haitian mountains were devoid of trees and undergrowth? Did anyone ask why the land had not been replanted and tended? No. Rather, calls for compassionate aid to Haitians went out, and discussion stopped there.

The same story applies to the hurricane’s destruction of shoddily built housing. While the damage and loss of life here were not as extensive as what occurred in Haiti’s 2010 earthquake, calls for compassion by governmental and non-governmental organizations arose. Again, discussion stopped there.

While some raised misgivings about aid being dispensed by the wrong organizations; others took exception about the immediate recipients of the aid, and still others questioned whether Haiti had received so much aid since the earthquake that a welfare ethos was being built into Haitians. However, no one has been willing to think seriously about Haiti’s travail beyond its supposed victimhood status. In particular, why are the Haitian mountains devoid of trees and foliage enabling cholera bacteria to wash down into water supplies? Likewise, why is so much housing shoddily constructed?

The Heritage Foundation in Washington, D.C. publishes an “Index of Economic Freedom” each year for countries around the world. Haiti’s current ranking is 150 out of 178 countries. The Heritage Foundation notes that the security of property rights in Haiti is a matter of concern. When the 2010 earthquake occurred, Haiti was ranked 141 out of 179 countries. So Haiti actually regressed relative to other countries.

Is it any surprise Haitians practiced a “cut and get out” policy with respect to their forests? Economist Hernando de Soto’s celebrated book, The Mystery of Capital, gives some specifics about the pathetic state of private property rights in Haiti. For Haitians to settle legally on government land, they must first lease it from the government for five years. Finalizing a lease requires 65 bureaucratic steps, taking two years on average. Then things get worse. Subsequent purchase requires another 111 bureaucratic steps, taking 12 more years – 19 years of red tape in a country where, to compound the problem, illiteracy is pervasive. He estimates that 68 percent of Haitian city dwellers and 97 percent of their rural counterparts live in housing for which no one has a clear legal title.

Is it any surprise Haitians practiced a “cut and get out” policy with respect to formerly forested Haitian hills and mountains? Not at all. Likewise, if you were building a house for which you had no legal title, how interested would you be in building a more durable structure? Not very, I submit. Indeed, you’re unsure about whether someone can come along and take away “your” house, and you’re unsure about your ability to sell the house in the future. The resulting deforested hills and mountains and shabby construction don’t cause hurricanes, but they’ll make hurricane-related damage more extensive – even fatal.

The reporting on Hurricane Matthew’s destruction in Haiti was similar to the reporting on the 2010 earthquake there and the decade after decade of failed harvests caused by “bad weather” in the former Soviet Union— to wit, never, never, ever, ever mention the role that private property rights play.

Absent this lesson, however, Haitians are doomed to repeat its most recent disaster.

T. Norman Van Cott, professor of economics, an adjunct scholar of the Indiana Policy Review Foundation, formerly chairman of the economics department at Ball State University, is an expert on the economics of constitutions. A version of this essay originally was published by the Foundation for Economic Education.



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