Economic Freedom has a story about the rebuilding of Joplin, Missouri after last year’s devastating tornado.
Daniel J. Smith, economics professor at Troy University, studied the rebuilding of Joplin, Missouri in the months following the tornado. The following video discusses how economic freedom can help areas recover from natural disasters. Says Smith:
I think one of the key factors in the recovery process in Joplin, from the tornado, is that the government officials allowed the community to start rebuilding itself. I think Joplin is a great example of the power of people — free people — coming together and both using profit motive, in the businesses, using religious reasons for faith-based organizations, and just concern for your fellow man, in the community-based organizations, to rebuild a disaster stricken community.
In the video, Smith explains that rising wages — sometimes increasing over 500 percent — were strong market signals that certain types of labor were needed in Joplin. If these prices for labor were controlled through government regulation, the price signals would not be heard by the needed laborers. Yes, governments and news media might let the country know that these types of workers are needed in Joplin. But unless workers can earn high wages in Joplin, what motive do they have to leave their current homes and travel to Joplin?
The price system — operating in markets free from government regulation — proves again to be the most efficient way to allocate resources to where they are most urgently needed and valued.