Socialism and the Chinese Earthquake

by Llewellyn H. Rockwell, Jr.
by Llewellyn H. Rockwell, Jr.

When buildings collapse following an earthquake anywhere in the world, the first instinct is to presume Mother Nature is at fault. The second is to wonder why the buildings weren’t built to account for the risk of earthquakes. The third step is where people go really wrong. They blame the builders for failing to observe building codes and the government for failing to enforce them.

This is the state of commentary on the hellish situation in Dujiangyan, China, where tens of thousands of people died – including thousands of children in as many as 7,000 schoolrooms.

A particular focus of much coverage has been the Xianjian Primary School, where hundreds of kids died. A parent of one of the children told the New York Times: "This is not a natural disaster. This is not good steel. It doesn't meet standards. They stole our children."

Now people are demanding that the local government be held accountable.

The problem is that these buildings were not up to standards, but the more fundamental question is why they were not. It is not merely a matter of obedience. It is a matter of economics. The people who build buildings need to be held liable for the structural integrity of the buildings. But of course a lack of accountability is a famed feature of all governments everywhere, in contrast with private enterprise.

China has undergone a private-enterprise revolution in the last decade and a half, one that has transformed the country and dramatically raised the living standards of the population. But the system that built the schools that collapsed is as stuck in the past as the system of Chinese communism itself. The government orders schools to be built and they must be built, period.

What if the resources aren't available? What if the workers lack the skill to accomplish the task? What if the machines that are to build them do not work properly and lack replacement parts? What if resource supply should be allocated differently according to the needs of the people? Under socialism, economics is beside the point. The schools must appear. This is the way the system works.

Consider the four-story Xinjian school. The building smashed to the ground, even as a nearby 10-story hotel was completely undisturbed by the earthquake. What are the details behind the construction of Xinjian?

As quoted from the Times:

When Xinjian was built in 1992, many parents worked for the Dongfeng Cement Factory. Company bosses donated 40 tons of cement. But that was not enough. "Everybody knew they didn’t have enough cement," said Dai Chuanbin, an older man familiar with the project. "So they used a lot of sand."

Parents say the township government cut costs further by hiring farmers to do the work instead of trained construction crews. One former school official recalled that workers poured the foundation during such heavy rains that it collapsed. Another foundation had to be poured.

The school opened in 1993 and would quickly be overrun with students. The detached annex was rebuilt in 1998 after inspectors deemed it substandard. Ms. Deng, the former principal, recalled that nearby construction work in May 2006 caused the flooring in the main school building to shake violently. But she said she never had reason to believe the building was structurally unsound and never filed any written complaints with higher officials.

Many people in fact complained and suspected grave trouble. But so far as the government knew, the plan had been fulfilled. The school existed and that's all that mattered.

Another problem was introduced by the lack of steel rod reinforcement for the concrete. It was added according to plan, but the rod was way too thin relative to the thickness of the walls themselves. When they came under pressure, they bent like paperclips and the concrete crumbled all around.

Looking at the pictures taken by photographers at the Times, one wonders how the building was able to stay up at all.

Conservation isn't always a good thing, now is it? But where to use resources and where and how to conserve them? This is the essential economic problem that socialism cannot solve. And why? Because, as Mises explained in 1920, the key to rational economic planning is the price. And not just any price but a true price brought about via trading under private property. The price of capital goods like concrete and steel is the tool by which these resources are apportioned. It is not enough to merely wish something into being. The project in question must be economically viable, which means that it must be profitable or least paid for in some way.

When the dictates of government officials replace the price system, the result can appear to be passably presentable. The schools existed. The teachers taught. The buildings stood. But the earthquake came, and the illusion was revealed at the expense of so many lives. These are lives stolen by socialist central planning.

We have public schools in the U.S., so why don't we face the same problems? One reason has to do with the relative scarcity of materials and skill. Public buildings in this country are islands of socialism in a sea of free enterprise, so the materials and workers are there. The plans of central bureaucrats are more realizable simply because there are vast capital reserves on hand, though we should remember that when the politicians speak of our "crumbling" schools and infrastructure that it is the politicians themselves are responsible. The public sector ordered them built and built them.

And what about building codes and their enforcement? It is a great myth that these are somehow responsible for the soundness of our buildings. Private enterprise meets the demand for safety as well as it meets any consumer demand. Your house doesn't fall in because of building codes but because the builders are liable for mistakes and because there is competition among them to build better buildings. What's more, private enterprise regulates itself, with a vast array of regulatory codes that are self-enforcing (Underwriters Laboratory, for example, is entirely private). So why do the government codes exist? Mostly they are used by large companies to erect barriers to entry by smaller firms.

But let us not get too far afield from the core point. The remnants of socialist central planning killed the kids. Yes, the government is to blame. The survivors and their families are right about that. But they have another enemy as well. It is the deadly ideology that set out to put government in charge of economic life, which includes building structures to house children for educational purposes. They can add the tragedy of the Xianjian Primary School to the list of deaths caused by socialism.

May 27, 2008

Llewellyn H. Rockwell, Jr. [send him mail] is founder and president of the Ludwig von Mises Institute in Auburn, Alabama, editor of LewRockwell.com, and author of Speaking of Liberty.

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