August 29, 2007
The Bayou Belles: They've got soul!

Now two years after Katrina, we have heard innumerable stories of government failure along the Gulf Coast (check out Leeson and Sobel's forthcoming paper, "Weathering Corruption"). Yet most "men on the street" probably think the government just isn't doing enough. Meanwhile, the federal government keeps touting its success (of course, measured in billions of dollars spent, see Leeson-Sobel corruption link above), and promises it's ready for the next disaster:

FEMA has dramatically increased its stockpiles of relief supplies, such as emergency meals and ice, and the ability to track them.

Aaaaack!!! Never mind FEMA wastes dollars on such stockpiles faster than ice melts in this age of global warming and C5 hurricanes! But still. Proponents of government planning can't be bothered with details of efficacy when they're tugging on heart strings to sell their ideas. Question: why do government critics seem to be outmatched by statists on the "sell"?

A few years ago James Buchanan wrote an article, "The Soul of Classical Liberlism," for The Independent Review. Buchanan essentially argues that science is only one component in the overall battle for ideas. The man on the street can't evaluate findings of statistical robustness, for example. But put a hungry baby or a homeless family or a wrecked business in front of him, and he understands. Buchanan chides classical liberals for spurning emotional appeals.

Science and self-interest, especially as combined, do indeed lend force to any argument. But a vision of an ideal, over and beyond science and self-interest, is necessary, and those who profess membership in the club of classical liberals have failed singularly in their neglect of this requirement.... Scientific evidence, on its own, cannot be made convincing; it must be supplemented by persuasive argument that comes from the genuine conviction that can be possessed only by those who do understand the soul of classical liberalism.

But what is the "soul of classical liberalism" and how does one know whether one understands it? One of my all-time favorite economists and personalities, Dwight Lee, wrote a comment on Buchanan's article and explains:

...[C]lassical liberals should articulate a vision of freedom and sponteneous order as emotionally animating as the vision proffered by the advocates of state intervention and social constructivism. Classical liberalism has a "comprehensive vision" of the ideal of social harmony and cooperation (its "soul," in Buchanan's account) that transcends the logic of how markets promote economic efficiency.... Buchanan is surely correct in arguing that the case for classical liberal principles will never be widely persuasive if made entirely in terms of economic science. To paraphrase Joseph Schumpeter, efficiency is a poor substitute for the Holy Grail.

In Dwight's considered opinion, libertarians need to infuse their arguments with more of the "human drama" whose salience can and should complement any scientific finding. Dwight even offers a recipe: tell stories of entrepreneurship! "Most of us," he says, "are touched emotionally by stories of struggles against obstacles, struggles that sometimes end in success but often in failure." Or ask Dierdre McCloskey, who'd say the "soul" of classical liberalism lies in the bourgeois virtues. Not only has capitalism given us longer, healther and happier lives, but we are better people for it! More ethical people!! Can such a claim possibly be true outside the lecture halls of the libertarian "clerisy"?

Meet the Bayou Belles, a living embodiment of Dierdre's virtues and Dwight's vision thing. What a story! The "Belles of Bayou Road," as they're officially known, are a group of women entrepreneurs in a gutted New Orleans neighborhood helping each other grow their businesses---restaurants, salons, a bookstore and a day care. One of the Belles explains,

"As entrepreneurs, we share everything: advice, services, customers, food, and even phone lines! Without governmental assistance, we have grown determined to help each other and help ourselves."
A Marketplace interview today elaborates:

Yashica Jordan: I'm Yashica Jordan, owner and director of Jordan's Learning Academy. I've been in child care 11 years but this is the first chance that I've had after Katrina to open my own business.

Jordan, and the three other Belles, have come to see Katrina as an opportunity, and not because of any help from the government.

Pam Thompson owns the Coco Hut Caribbean Restaurant next door. She says she applied for the Small Business Association's Disaster Loan Program when she was still sleeping on the floor of her flood-damaged restaurant.

Pam Thompson: But when I send my papers into them: nothing. I never hear from them as of this day almost two years now.

All of the Belles have had to dig into their personal savings to get their businesses off the ground. But Dwana Makeba, who opened a natural hair salon on the block, says it was their pooled efforts that paid off."

These ladies represent the entrepreneurship that will "rebuild" the Gulf Coast. These ladies are, in the words of the famously un-emotional von Mises, "filling the wants of the people in the best possible and cheapest way." But they're doing it with soul. Two classical liberal cheers for the Bayou Belles!!

Posted by Edward J. Lopez at 11:26 AM in Economics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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