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Free Market Reforms Saved Chile from Greater Earthquake Devastation

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Chile's 8.8-magnitude earthquake on Saturday did fearsome damage, with 708 dead and more to come as collapsed buildings and roads are excavated.  Yet for a quake that was the fifth biggest ever measured, and several hundred times larger than the one that killed more than 220,000 in Haiti, the destruction could have been much worse.  It's worth asking why it wasn't, says the Wall Street Journal. 

One reason is luck, as the quake hit offshore and away from populated areas, save for the city of Concepción.  But even in that city of one million, the death toll might have been worse.  That it wasn't is due in part to Chile's stricter building codes, which have been developed over long experience with quakes along the Eastern Pacific fault line.  Chileans have prepared well for the big one, says the Journal. 

But such preparation is also the luxury of a prosperous country, in contrast to destitute and ill-governed Haiti: 

  • Chile has benefited enormously in recent decades from the free-market reforms it passed in the 1970s under dictator Augusto Pinochet.
  • While Chileans still disagree about Pinochet's political actions, they have not repealed most of that era's economic opening to the world.
  • In the 2010 Index of Economic Freedom, compiled by the Heritage Foundation and the Wall Street Journal, Chile is the world's 10th freest economy; Haiti ranks 141st. 

Those reforms have allowed Chile to prosper, while many other Latin nations -- like once-wealthy Argentina -- have stagnated under the burden of Peronism.  Wealthy nations have the resources to invest in safer buildings, modern health care, telecommunications and search-and-rescue capability, says the Journal. 

The political and moral necessity of economic growth ought to be a commonplace observation, yet it is too commonly forgotten by those who have only known its benefits.  That includes many in America who want government to impose limits on growth because growth often brings with it the tumult of disruptive change.  They think prosperity is guaranteed, when in fact it must be earned every day and can vanish over time under the wrong policies and corrupt governance, says the Journal. 

Source: Observers, "A Tale of Two Quakes," Wall Street Journal, February 28, 2010. 

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