One might assume that we can all agree that natural disasters are bad, but apparently we can’t. The Boston Globe has an article about how natural disasters are helpful. Yes, you read that right. The article is about how natural disasters are helpful.

Now, if you, like me, don’t believe that an earthquake which killed almost 70,000 people is helpful, then you may find yourself similarly disappointed that such an article could be published at a reputable paper. The concept is tortured logic at best. It goes something like this:

  1. A disaster occurs wiping out all sorts of things that are valuable like buildings, factories, vehicles, and infrastructure.
  2. At great financial cost, society re-builds all the things that were destroyed using the latest techniques.
  3. Measurements are taken of both before and after the disaster and someone concludes that those affected are better off because they have all new buildings, factories, vehicles and infrastructure.

Let’s think about some logical conclusions one might draw about this. If natural disaster is good because it forces us to rebuild, then wouldn’t man-made disaster be even better? I mean, we could pick the places where the disaster would occur and we would create jobs for the teams of people who could go around destroying things. Actually, that sounds a lot like war now. Heck, why don’t we just start wars all the time since the resulting disaster is so obviously good?

Doesn’t really make much sense, does it?

There are really only two salient points to be found in this article. First, the voice of reason:

To critics of this line of thinking, the problem is that it is, at best, a partial picture. It ignores, they argue, the fact that the money and labor that go into post-disaster rebuilding are simply being redirected from other productive uses.

“If you’re a carpenter, a trash remover, a physician, you may be made better off, but the things that those producers would have otherwise produced are not going to be produced,” says Donald Boudreaux, an economics professor at George Mason University. “Over any reasonably relevant period of time, society is not made wealthier by destroying resources,” he adds. If it were, “Beirut should be one of the wealthiest places in the world.”

Huh, who would have thought that disasters were actually bad? Of course, we have known this for a long time.

Second, the conclusion, which is surprisingly good given how horrible the rest of it was:

It may be, then, that disaster economics works best as a guide in those times when we don’t have disasters to contend with. Investing in human capital, replacing outdated plants and infrastructure - the things that Kunreuther and Skidmore argue disasters drive us to do - are also, it turns out, good ideas even in the absence of a crippling catastrophe. If the disaster economists are right, calamities are simply pushing societies to make the sort of sound economic decisions that inertia or fear or bureaucratic sclerosis prevents them from otherwise making. Governments and businesses might do well to adopt some of the urgency and innovation of a post-disaster mind-set even in more clement times.

Imagine that. If you invest in your business rather than limp along with outdated facilities and inefficient equipment, then your business will operate more efficiently.

War is bad. Disasters are bad. The end.