The recent historic flooding in Kerala killed hundreds of people and damaged billions of rupees worth of property while displacing more than million people. Keralites are going to need some time to get out of this shock.
This flood once again raised many important questions like who is responsible for this flood? Is this a natural or a man-made disaster? Why so many lives were lost? Why the danger was not averted? etc. Some people will say that this is a natural disaster where heavy rains resulted in flooding. Some will blame man-made climate change for this deluge. Some will say the mad rush of government for so-called “development” is responsible because in the name of development the state is destroying our ecology. There is a grain of truth in all these. It is a matter of fact that the government made a mistake of not releasing water from more than 30 dam earlier in phase manner when they knew water level will rise in future due to heavy rain forecasts. And the crazy drive for development is surely destroying our ecology.
In this article however I want to focus on the question of providing protection, rescue and relief to the victims of this, and other such, disaster.
Who should provide protection, rescue and relief?
Just like any other goods, protection, rescue and relief are also goods that humans need. They are basic necessities. Because these are goods, the question of who will produce them arises immediately. The mainstream economics view is that because these are public goods they should be provided by the state (aka government). Only private goods (scarce goods) should be provided by the free market capitalist system. On the grounds of theory and evidence, I will question this very premise in this article. Are protection, rescue and relief public goods? Let us see.
In economic literature, public good is defined by two distinct characteristics. One, non-exclusion and second, non-rivalrousness. Non-exclusion means the use of that good cannot be denied to anyone, and non-rivalrousness means the use of that good by one person will not preclude others from using it. Using these distinct criteria we can clearly see that protection, rescue and relief are not public goods. For example, let us take the case of Kerala flood. Government services were not enough to provide rescue and relief work to everyone. Due to scarcity of its resources, helicopters, life boats etc., if it went to rescue one part of the state, it denied that service to other parts. Many people were effectively excluded from the use of the state rescue and relief services. Use of rescue and relief resources like helicopters by one locality, precluded its use by other localities making those goods rivalrous.
In fact, it were the local ordinary people, especially the boatmen, who provided this life saving rescue and relief services to the people of Kerala during this troubled time. No state really came to help people.
More than a dozen rescue officials, flood victims and others who spoke to Reuters said the unsung heroes of the massive relief operation were fishermen and other local people with boats, who volunteered to help rescue tens of thousands of stranded people, often long before official rescue teams could arrive.
Dency says there were no army, navy, or NDRF teams at the location when they arrived.
Instead of providing help when it was needed the most, the helicopters of NDRF (National Disaster Response Force) stopped operating after sundown because they feared for their own safety! The news reports this fact,
… while NDRF teams had to halt their own rescue missions at sundown for safety reasons, local fishermen worked into the night with headlamps and rudimentary tools.
Not only the Indian state didn’t really help the flood victims, but, in the aftermath, now it is actively denying them the aid that is coming from outside India. Indian government has denied accepting rupees 700 crore aid from the UAE government, and it has told other governments that they don’t need any aid! The reason being cited by officials for this grotesque decision is that, New Delhi wants to convey that the country is capable of handling the flood situation on its own both, financially and logistically. As usual, the state is only interested in protecting and glorifying itself while ignoring the plight of the people.
The Kerala flood, for one more time, proves that protection, rescue and relief goods are not public but scarce private goods. And because they are private goods, they must be produced privately in the free market capitalist system. It will be not possible to analyze the precise nature of this market here, but we can discuss few generalizations looking at how the free market system actually works.
Firstly, because the protection, rescue and relief are scarce goods, they will carry a price in the market. Having a price is necessary for their efficient allocation. We have to understand that these goods are not free of cost even today when the state produces them. The price that we pay in the form of taxes is way higher than what it will be in the pure market system. This is because in the market the tendency of the prices is to fall over a period of time, and quality of goods to improve, due to increased competition between entrepreneurs to serve their consumers in the best possible way of providing best quality goods at the lowest possible prices. Competition will push entrepreneurs to continuously invent and innovate. This process will give birth to new protection, rescue and relief technologies. Technological innovation will make rescue and relief work possible even after sundown and even in all kinds of life threatening impossible looking situations. For profit entrepreneurs will push the limits of their capacities and imaginations and find novel ways to serve their customers.
Secondly, various private companies will provide all kinds of protection, rescue and relief products to the prospective buyers. The more varied the demand for such goods will be, the more varied the products will be offered in the market. Supply will match every types of demand. The most likely candidates to provide such products are today’s insurance companies. Insurance companies have huge financial resources to carry out these activities. Because they are already in the business of insuring peoples’ properties, they will also have all kinds of incentives to provide protection of these properties, and in case of disaster provide rescue and relief goods too. The quality of their services will be world-class because of the competition. Free market competitive forces will make sure that only best companies survive in the market. Those firms that will fail in doing their jobs properly will either go out of business or be taken over by other better performing firms.
In this way, everyone who needs protection, rescue and relief will get it on time and at a reasonable price. Most such disasters will be averted. Few people will die and less properties will be damaged. We will be better prepared to face such disasters.
In the aftermath of what unfolded during the Kerala flood, it is high time that we seriously rethink our premise that only state (aka government) can provide protection, rescue and relief goods. We cannot allow people to die and their properties be damaged every time. Every such disaster hinders our progress towards a better life. If the state is not interested and if it cannot provide these goods then it is necessary that we replace it by far better private alternatives. For how long we will continue to believe that some day in future the state will do its basic job of protecting life, liberty and property of people? What if this belief itself is wrong? What if the state doesn’t exist to protect us, but exists to parasitically survive at our cost only? What if its very existence depends on our exploitation? Every sane Indian must seriously ponder over these important questions and finally take a position if they want to see their country progress.