The Disaster Profiteers: How Natural Disasters Make the Rich Richer and the Poor Even Poorer

by John C. Mutter

  The death toll from the 1906 San Francisco earthquake and fire is still debated. William Bronson, in The Earth Shook, the Sky Burned, tells us that the initial death toll was reported to be 375 because no count was made in Chinatown: residents there were not citizens and didn’t belong in the official count.26 Major General Adolphus Greely, who commanded US relief operations in the city, put the number at 664 and included the Chinese victims. I have not been able to access this report, but I suspect it is a straightforward count of actual bodies recovered, in the style of Meigs. A 1972 study by NOAA put the figure at 700 to 800,27 but the highest figure of all, about 3,000, comes from Gladys Hansen and Emmel Condon’s provocatively titled 1989 book, Denial of Disaster: The Untold Story and Photographs of the San Francisco Earthquake and Fire of 1906.28 Hansen, a retired librarian, has made it her life’s work to search out documents and account for all those who died in the earthquake and fire, and she might well have the most accurate number.

  In addition to governments reducing disaster death counts for political reasons, it is also widely believed, though difficult to document, that they may exaggerate deaths too. Countries hoping for contributions might exaggerate deaths because history shows that donors are more motivated by deaths than by damage, even though contributions are used to tend to the living and to repair damage. High mortality implies a huge number of survivors in great need. The Haitian government is thought to have greatly exaggerated the death toll from the 2010 earthquake, but most NGOs did not question those numbers.

  For example, about ten years ago, I was in Taiwan with a group from Columbia University to discuss how climate forecasts could be used to mitigate damage done by extreme weather. Taiwan experiences many typhoon strikes, and they typically bring biblical rainfall. The intense rain causes landslides and flash floods that sweep away whole villages and take the lives of countless people living on denuded steep slopes near the cities where they work, similar to the barrios around Rio and other Latin American cities. As recently as 2009, Typhoon Morakot took more than 500 lives in Taiwan.

  The representatives of the Taiwanese meteorological service viewed these high figures with vexation and a distinct sense of embarrassment. On one hand, they were very proud of the rapid economic progress their country had made, but as one government scientist told me, when Taiwan experiences a typhoon, the high death toll “makes us look like we are still a third-world country.” They wanted accurate forecast information so they could evacuate people from dangerous areas like the informal housing on the steep slopes of denuded hillsides. I believe they reported death tolls accurately, but they didn’t want disasters to make their forward-looking country seem backward.

  Deaths are hard to estimate for a number of completely apolitical reasons as well. Just who gets included in the victim list? Many children and adults who died from the effects of the Children’s Blizzard of 1888 actually survived the awful night of exposure; they died many days or even weeks later of complications from that exposure or from misguided treatment by doctors and others trying to nurse them back to health. Like the wounded in wars of the past, many of whom survived a battle but died days later from infections in their wounds, people often survive a disaster only to die days or weeks later. When should we stop including a death as disaster related?

  Sometimes we see the terms direct and indirect used to qualify deaths. Direct deaths are fairly obvious: they require that the individual died unequivocally from causes like drowning in a flood or being crushed in collapsed building. But people often die in other circumstances, such as from falling while clearing tree branches from their roofs after a hurricane. People died during Superstorm Sandy and in the days after because they operated gasoline-powered backup generators indoors and were asphyxiated by poisoned air despite usually very clear signage on those generators against such use.

  Many people, especially the elderly, have pre-existing heart or respiratory conditions, and they die from the traumatic exacerbation of those maladies. Should they be counted in the disaster death toll? Are they direct or indirect deaths? Perhaps they would have died anyway, maybe only a few days or weeks later. The disarming medical term for this is harvesting; the disaster just chopped them down a short while before they would have fallen on their own. Do you count someone who died in a car accident while trying to escape an oncoming tornado? Or someone who fell from a roof while trying to secure windows as a hurricane approached?

  The bottom line is this: There are no uniform international standards in mortality reporting for natural disasters. No one really knows how many people die in natural disasters who would not have died otherwise. In the United States, the Centers for Disease Control and Prevention has a set of strict criteria that it uses for all disasters and disease outbreaks, but the criteria are very conservative and typically give minimum estimates.

  It might make more sense to estimate injuries rather than deaths. After all, the injured are the ones who need attention. In road accidents and train crashes, many people suffer injuries but relatively few die. In almost all disasters, the number of people injured considerably exceeds the number who die.

  It’s not hard to understand why. In earthquakes, with furniture falling and glass shattering, it is easy to be struck by a crumbling wall or ceiling. Often people are pinned under fallen structures. In Haiti, many of the injuries caused that way required amputations. (By injuries we mean those treated for injuries by aid agencies that keep records, such as the Red Cross and Doctors Without Borders.) Only 63 people died in the Loma Prieta earthquake in San Francisco in 1989, but the number of injured recorded was almost 4,000, a ratio of about 60 to 1. Presumably everyone who suffered even minor injuries was treated.

  Tropical cyclones have injury-to-fatality ratios similar to earthquakes, but floods don’t injure people in the same numbers: You either drown or you don’t. People are beaten around by floodwaters, they survive and require treatment for injuries, but in nothing like the numbers or the severity of injuries seen in earthquakes, for instance. Famines can cause hundreds of thousands to suffer, and vast numbers of people have perished in famines. Like floods, droughts don’t really injure people per se, but they can result in huge numbers of people needing medical attention for malnourishment. People weakened by hunger become susceptible to a wide variety of diseases. Many famine deaths are not the result of starvation but of disease.

  There is always an issue after disaster events with people who go missing and are unaccounted for. Even in very wealthy countries with very good census surveys, it can be hard to determine the exact number of people who go missing. Making such determinations in poorer countries where governments hardly know how many people live in any given region at any time can be almost impossible. Conducting a census is expensive. The last census in the United States cost taxpayers $13 billion, or about $42 per person counted.

  Some of those who go missing after disasters are surely dead and their bodies are never found. People get washed out to sea by storm surges in cyclones and tsunamis. In some cultures, the dead are buried very quickly, usually due to the unwarranted fear of disease transmission. The corpses of people who die of transmittable diseases, such as Ebola, are sources of contagion, but the corpses of people who die disease free are not. The fear that arises in some cultures is based on the sad fact that, in many parts of the world, so many people die of untreated diseases. After the earthquake in Haiti, thousands were buried in mass graves; most were not identified.

  Typically, searches for survivors and victims’ remains end after several days. Just how long searches continue is based on some guess that anyone not found by a certain time must surely be dead. Cadaver dogs may then be used to systematically scan disaster scenes for bodies. In earthquakes, searches are terminated after a week or so, based on the assumption that anyone still buried in the rubble will have died. It is a gruesome thought, but the fact that some people are pulled from the rubble more than a week after a
n earthquake implies that others must take many days to die, from starvation or dehydration, in the ruins of the homes, schools, and stores that once seemed safe.

  Anyone still unaccounted for in the collapse of the Rana Plaza garment sweatshop in Bangladesh was almost certainly dead. Those unaccounted for after a major tsunami are almost certainly dead also. For weeks after the 9/11 attacks on the World Trade Center, many people remained unaccounted for. Stories of traumatized survivors who wandered around for days before they were found gave false hope to those with missing family members or friends. The death toll in the 9/11 attacks is probably the most accurately estimated of all disasters in which more than a few died. Huge efforts were made to account for everyone. The total figure is 2,726, including those in the airplanes and 13 people who died after September 11.29

  The Times-Picayune in New Orleans published the names of Katrina victims, a practice that has a long history worldwide. Survivors who have family members or someone they know unaccounted for search these lists with a conflicted mixture of hope and trepidation—hoping not to see their loved ones’ names but wanting to know their fate. And after some time, most people come to accept that missing loved ones must indeed be dead and just hope that their remains will be found and given a proper burial. Having someone go missing, never to be heard from again, is simply dreadful.

  Many people missing after natural disasters are thought to have left the area as the cyclone or floodwaters approached or because their crops failed in a drought and there was no food. Some are forced to leave because an earthquake destroyed their homes and workplaces. If they are displaced to refugee camps, like the tent cities that housed earthquake survivors in Port-au-Prince, Haiti, they can be counted fairly accurately and their names recorded.

  But a lot of people, especially in poorer places, move away and don’t return. They stay with relatives, find jobs in other places, and send their children to other schools, and they don’t always report in. In Haiti, it would have been hard for displaced people to know to whom to report. And to what purpose? In rich countries, people report in and have every reason to expect their government to help; they are vocal in their criticism if they feel they are not being adequately assisted.

  Droughts displace many more people for greater distances and for longer periods of time than do most other disasters. Often after a drought there is nothing to go back to but parched land. There may be nowhere nearby to shelter from a drought, which may affect a vast area, typically much larger than a flood. If adequately warned, you can get out of the way of a flood, then wait until the water subsides and return home. Often you don’t have to go too far or stay away for long, and in farming areas, people want to get back quickly and replant if possible to ensure a crop to replace the one lost. Droughts operate over much longer periods and over greater areas than floods.

  There is a silver lining for some people who actually benefit from being displaced to a location where the residents are generally better off, much the way poor migrants benefit from entering richer host countries. This can be especially true for children who are displaced into areas with better schools and health-care systems. They may acquire better skills than they would have and are around others of their age for whom completing high school and going on to college is a normal expectation, not an impossible dream.

  Even more uncertain but often reported are the number of people “affected” by disasters. That figure can be extremely high, as it was in 2012 for Superstorm Sandy, a storm of huge dimensions that hit a very densely populated area of the northeastern United States. Tens of millions of people were affected by Sandy in some way, even if they just lost power and shivered for a while. After many disasters, the total number of those affected is often a pure guess. Although the number of people who lose power in a storm in the United States can be determined with accuracy, can the same be said for the Philippines? Most people who make comparative studies of disaster consequences cannot use data on populations affected by disaster events (which CRED faithfully maintains as best as it can) because the data are far too unreliable.

  When we ask what social harm disasters do, one thing is certain: they take many lives and cause countless injuries and massive displacement, and they do so much more in poor countries than in rich ones. But what this discussion has made clear is that these numbers are not well known. Death tolls, at least, should be simple, but they are not. If an independent agency was tasked with counting body bags, we could have reasonable figures, but the counts are done by local governments with highly variable capacities and motivations for correct reporting. When three people die, you can be fairly sure the number really is three, but when 30,000 die, the number can be higher or lower for good reasons or political ones. After any disaster, we can never state very accurately how many people died, how many were injured, and how many moved away to better lives or worse lives. What we know from directly counting bodies are minimum death tolls.

  Most people assume there really is an agency or a Meigs-like person whose task it is to get the numbers right, but there rarely is. Mostly, it seems to me, we don’t really want to know. Hardly anyone remembers death tolls. Most people asked to remember how many died in 9/11 cite a figure that is much too high. I have asked the question in classes of graduate and undergraduate students and of colleagues; no one has come close to the correct number. In fact, some people overestimate by a full order of magnitude. Responses to a similar question about Hurricane Katrina yield similar inaccurate results.

  After talking about deaths, and sometimes even before, the media will cite “economic” losses resulting from the disaster, often without providing a source. This happens most in the United States, where death tolls are typically small, and it’s one of the most common ways rankings get made—the top ten costliest. We forget the deaths fairly quickly. But there are many problems with estimating economic losses, more even than accounting for deaths and injuries. In the US media, first you hear about deaths; soon after “economic” losses are tallied. Technical Appendixes I and II explain some special issues involved in the basic economics of natural disasters.

  I used quotation marks around the word economic because what are so often referred to as economic losses are not that at all; rather, they are losses of capital stocks, mostly manufactured or built capital. Natural capital—forests or beaches, for example—can be damaged, too, but generally those costs are not cited in disaster economic losses unless restoration costs are included. But a stock, like the type of stock lost in a natural (or even industrial) disaster, is not in itself an economic loss. This is not splitting hairs, just as the difference between a hazard and a disaster is not trivial. The economy of a country, a city, or a home includes stocks and flows. The economy is the function of, for instance, the rate at which production of goods and services takes place, not just the capital stock produced. It reflects how much people are regularly paid for the work they do, not just the accumulation of physical assets that they surround themselves with. Your house can be thought of as an important capital stock: it has come to you from a flow of income. If your income goes away, having a house isn’t much help unless you sell it.

  Not all capital is productive capital. Your home is not really productive capital unless you have a home business, something that happens a lot in poor places and rather less in wealthy places. This sounds harsh, but the things we cherish might not matter very much to the performance of an economy.

  The first accounting of so-called economic losses from disasters often comes from insurance and reinsurance companies that cover all manner of capital, including home exercise equipment, which is of no consequence to the economy at all. In fact, losing your flat-screen TV might be good all around: If it is insured, you’ll get a newer version with higher definition, and the electronics company will make a sale. Roughly about half of all disaster capital losses are private property losses that are more likely to spur economic growth than detract from it.r />
  Uncomfortable as this fact may make us feel, there is very little relationship between human losses and economic ones. It sounds callous to say it, but the people most likely to be killed in a disaster—the very old and infirm, the very young, and the very poor—don’t much influence the performance of the aggregate macroeconomy because economically they are not very productive individuals. Most of the victims of the Chicago heat wave that Klinenberg described were elderly people living on their own and isolated on the upper floors of walk-up apartment buildings. So, too, were the great majority of victims of the western European heat wave of 2003, which killed more than 14,000 people in France alone. Overwhelmingly, those who died in Hurricane Katrina were elderly and alone.

  These deaths matter for other, more important, noneconomic humanitarian reasons. But all forms of reporting on disasters equate large death tolls with large economic impacts when in fact the reverse may even be true: if most of those who died were living on welfare, their deaths actually may represent a savings to government coffers.

  Capital losses from disasters are increasing, but that’s just what you would expect as the world economy as a whole grows richer. The cost of capital losses per disaster will increase as the amount and value of the capital increases. It is like the poverty effect on deaths but in reverse. Wealth leads to fewer deaths but greater capital losses. Whether global capital losses are increasing at a rate faster than that of the global economy is an open question. Part of the problem is the metric we use to count.