Capitalism stance on natural disasters


This question is not really related to objectivism, but I am somewhat intersted in "What would Ayn Rand say?", with emphasis on her defense of capitalism rather than her general philosophy.

Accepting the premise that the sole role of the government is to protect us against violation of our human rights, what role should it take in the event of natural disasters, e.g. hurricanes or an epidemic.

My feeling is that by definition, human rights can only be violated by humans, thus it makes no sense to demand the government to protect us against such natural enemies. However, while I might sympathize with Rand's stance on government grants, I find it more difficult to disprove the necessity of government encouragement towards research in case of a dangerous epidemic, or help with restoring infrastructure after some natural disaster.

To sum up, I want to know what is the role of the government in such cases, in a complete laissez faire system. Does the responsibility fall to the relevant entities, e.g. owners of the land in case of hurricanes and self interest (and even altruism) to work towards a cure in the epidemic case, or does the criticality of the matter call for government interference. Global economic crisis should not be possible in laissez faire capitalism, but we can't prevent natural disasters.


Posted 2018-07-01T20:59:58.957

Reputation: 129

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– Philip Klöcking – 2018-07-03T11:20:51.987



Sometimes a disaster takes place that will make human life impossible in some particular limited context - Ayn Rand calls this an emergency:

In such circumstances it may be a good idea to help people caught up in that disaster. There is no particular reason to think that government must provide such help. Such help has been provided by private companies:

However, providing such help shouldn't be compulsory, i.e. - it shouldn't be provided by government. Nor is there any particular reason to expect the government to be good at providing such assistance. If there is an epidemic, then developing cures or treatments requires creating new scientific knowledge. If government provides the funding for such research then the funding isn't contingent on providing help that people are willing to pay for since the government gets its funds by taxation, which is taken from people without their consent. In addition, people who want to work under government compulsion may not be particularly good at creating knowledge. For an description of the issues involved see the State Science Institute in "Atlas Shrugged".


Posted 2018-07-01T20:59:58.957

Reputation: 6 821

Thank you for your answer. In Rand's words, the only goal of men in case of an emergency is to restore order, and this might allow us to temporarily follow a different mechanism. I liked the reference on private enterprises, but wouldn't we want to maximize our ability to restore order in case of an emergency? If we do allow government involvement in such cases, this can only mean that related taxes must be collected in order to construct an appropriate infastructure. – Ariel – 2018-07-02T09:36:55.633

There's no reason why government has to be involved in building infrastructure. See for example this explanation of why the government need not build roads

– alanf – 2018-07-02T11:32:44.677

I meant infastructure for disaster (emergency) handling. – Ariel – 2018-07-02T11:33:58.497

@Ariel, I guess, this applies to any infrastracture, that does not belong to government itself. – rus9384 – 2018-07-03T02:40:42.007

Surely you would allow the local governments to fund and operate fire departments? – Gordon – 2018-07-03T03:20:47.293

@Ariel There's no particular reason the government should have to provide disaster handling infrastructure AFAIK. – alanf – 2018-07-03T09:27:49.163

@Gordon I'm not in a position to stop local governments from doing anything. Governments, including local governments, get their money by taxation, which is taken without the taxpayer's consent. Do you know of any particular reason why the government has to run fire services? – alanf – 2018-07-03T09:49:46.097

@alanf I suppose an immediate answer is that it's the only way to make sure that fire services are (relatively) universally available, rather than only to those who can afford them. – Misha R – 2018-07-11T04:23:58.133

@MishaR The way to make things widely available is to make them cheap. If a service is provided by the government and it's not cheap then the government won't be able to provide it to everybody and so will decide have to who gets it. And they will decide according to who can get them votes or money. Nor will the government have any way to know what service people want and provide it since their income is independent of consumer satisfaction. – alanf – 2018-07-11T08:15:05.507

@alanf How do you make them cheap without regulation? A business isn't interested in making services cheap, it's interested in making them as expensive as it is able to. And when a service is essential, it can charge people through the nose if it so wishes. Competition can offset it, but only in cases where business do not form trusts or monopolies. Which, given the opportunity, they do. – Misha R – 2018-07-11T10:23:19.290

@MishaR If a business makes a service expensive when it can be provided more cheaply, it is possible for another business to get their customers by providing the service more cheaply. The more expensive business can lose its customers, the government can't. – alanf – 2018-07-11T10:27:21.160

@alanf Like I said, this is only true as long as businesses do not form monopolies or trusts in order to bypass the issue of price competition. Which they do. There is a reason the US established antitrust laws. – Misha R – 2018-07-11T10:46:04.807

@MishaR Antitrust law was established for a reason: to allow the government to shake down business on behalf of their competitors

– alanf – 2018-07-11T11:02:31.880

@alanf All you're doing is pointing to a site with a mixed factual reporting grade that points to a book. Come on now :)

– Misha R – 2018-07-11T12:05:47.153

@MishaR I'm pointing to a specific book on that site. As for the mixed factual reporting record, no specific examples of flaws are given. I could give a specific list of examples of specific flaws in some of their factual, philosophical and political claims, unlike the site you cited. I use explanations to judge what material to read and endorse, not vague smears. You should also use explanations and your own judgement rather than taking the word of some group of people who can't be bothered to document actual flaws in the material they condemn. – alanf – 2018-07-11T12:56:06.673

@alanf I use explanations to judge what material to read and endorse, not vague smears. - You haven't done this. Your answer provides a vague claim, and then a specific story of a bad government response (under an administration that was closely aligned with your own views, as it happens). Then, in your comment, you link to a site with a poor factual reporting rating and a high bias level, linking to a book that, itself, advertises the book as the only book in print on antitrust and the Microsoft case that calls for the repeal of all antitrust. Your work is still ahead of you. – Misha R – 2018-07-11T14:58:08.463

@MishaR You say I made a vague claim but you don't say which claim was vague. I linked you to a book calling for the abolition of antitrust law. Your reply is that an administration that undertook an antitrust prosecution is somehow aligned with my views. You also seem to think that the number of books making a claim is somehow relevant to the correctness of the claim, which is silly. I think our disagreements are too extensive to discuss in these comments. You can read the book, or not, as you see fit. If you want to discuss more you can email me at – alanf – 2018-07-11T15:49:54.357


Providing resources for rebuilding private infrastructure would not be considered a role of government under the Objectivist conception of capitalism. People do not have a “right” to be free from the effects of natural disasters, and property that is damaged or destroyed by a natural disaster would not fall in the scope of protection of rights. This role would fall to private insurers, according to insurance policies on the properties in question. Since governments own some facilities themselves, they would need to make a decision as to whether to insure these facilities on the private insurance market, or self-insure (i.e., pay the costs of rebuilding their own facilities in the event of loss), or some combination of these two options.

Capitalism allows for a free market for insurance contracts, whereby private insurance companies form to “pool risks” across multiple customers. In exchange for regular insurance premiums, the insurer agrees to compensate for damage due to accidents and disasters within the scope of their policies (usually with an “excess” payable by the customer to incentivise proper protection of the property). The scope of available insurance depends on the willingness of businesses to pool risk for large disasters, and to have confidence in their ability to price such contracts accurately. (Insurance for large events is sometimes pooled across multiple large companies to spread the risk.) In the absence of a market for this insurance, this would mean that people are unwilling to pool risk for these events at a price acceptable to would-be buyers in the market.

Epidemics are a little different to natural disasters, insofar as the movement of people forms part of the risk, and allowing people freedom of movement lets the disease spread. A diseased person coming into contact with another person in an epidemic can be considered a rights-breach (aggression against the latter), and so Rand regarded it as legitimate for governments to quarantine diseased people during an epidemic (see her answer in a Q&A on this topic). As to the role of researching cures to diseases, this would fall within the scope of the medical profession and the pharmaceutical industry, which would not be government controlled under free-market capitalism. Successful cures would be monetised through patents and copyrights on drugs, etc., and related forms of intellectual property.


Posted 2018-07-01T20:59:58.957

Reputation: 1 508

"People to not have a “right” to be free from the effects of natural disasters". Yet, they can have right to be free from life threat and well-being threat caused by them. – rus9384 – 2018-07-03T02:44:20.097

Thank you for your answer. You seem to imply that there isn't anything special in these events (hence there is no need for special treatment), however it seems that even Rand had some exceptions in mind (emergencies). – Ariel – 2018-07-03T19:31:04.903

1@Ariel: Rand's discussions of emergencies and "lifeboat situations" pertained to the moral rules that apply to people during an emergency, where the ordinary rules of survival are altered. This discussion did not pertain to the act of rebuilding lost capital after an emergency. – Ben – 2018-07-04T00:14:25.413