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The argument made in Kevin Rozario’s “What Comes Down Must Go Up: Why Disasters have been Good for American Capitalism,” is extraordinarily informative and particularly relevant to the many of us who are American citizens, or who those of us who live in beds of economics growth. But in that relevance lies one of the shortcomings of Rozario’s argument; at many points he seems to attempt to extrapolate the lessons and evidence surrounding the disasters in economic hubs, such as San Francisco or New York City, into a broader understanding of the economic implications of disasters on the whole. I would argue that this evidence speaks less to the general nature of disasters and more towards the “creative destruction” facet of capitalism as it relates to areas of economic interest.
Eli’s blog post noted the parallels between disasters and capitalism present in this article; I found this parallel to be extremely interesting and would like to try to take it a step further by arguing that Rozario, while successful in pointing it out, errors in overemphasizing the parallels between all disasters and all capitalistic endeavors.
When describing the conditions during which New York experienced the New York Fire of 1835 Rozario notes that the City was still economically stimulated by the recent opening of the Erie Canal, that, as a financial center, New Yorkers enjoyed “singular access to international capital,” (79) and that there was abundant credit made available by the expansion of state and “wildcat” banks. All of these features created confidence in a swift recovery that led to little hesitance to rebuild. Similarly, when discussing San Francisco Rozario quotes a writer for the Times who noted that San Francisco’s natural advantages (its location as a hub of trade for the entire west coast) ensured its recover rather than an “artificial enhancement by investment.” Rozario’s evidence is centered on disasters in uniquely valuable locations.
Citing little other evidence he combines this analysis of the San Francisco Earthquake of 1906 and the New York Fire of 1835 with theoretical economic analysis from reputable thinkers such as Joseph Schumpeter, John Stuart Mills, and Karl Marx concerning the necessity of “creative destruction” (Shumpter) or the “enforced destruction of a mass of productive forces” (Marx). (80) His analysis, which often calls for logical jumps such as substitutions in Marx’s theory (changing “calamity” for “crisis), often stretches what seems to be the initial meaning of these economic theories. By this I mean that these theories seem to refer to destruction as a more controlled and thoughtful decision to replace low-productivity capital with high-productivity capital. Rozario then replaces these conscious decisions for unplanned disasters.
The danger of this sleight of hand in which he equates these unique disasters with all disasters and also replaces conscious destruction with unplanned disasters becomes clear when he argues that “one of the primary benefits of a calamity is that it destroys urban environments and thereby liberates and recycles capital.” It is only in these highly valuable urban spaces such as San Francisco or New York that this land in itself is capital that needs to be liberated. A counterexample is found in the Peshtigo Fire which, though causing up to 2500 deaths and creating a massive loss of capital, in no way “liberated” or “recycled” capital.