the Asian tsunami

Each day I plan to look at the main headline on either the BBC or CNN. This morning, the BBC's main headline is "tsunami, 6 months on." As with all so-called natural disasters, the real issue is financial, and the problem could be prevented - or solved - by accepting a rational definition of property.

1. Warnings: The only people who knew about the quake were scientists in Hawaii. Why Hawaii? Because these are Americans, so they have more money, so they have better equipment. But they were thousands of miles away, so did not work out the possible danger until much later. Imagine if scientists had enjoyed their kind of equipment near Sumatra. The scale and danger would have been obvious, and warnings would have been much earlier and much stronger.

2. Destruction: Grass huts are easily destroyed, so tens of thousands were killed, and many more left homeless. Compare this to what happens in America (hurricanes, earthquakes, Mount St Helens, etc.). People either have stronger houses or cars to escape, or good insurance. Result: a far smaller tragedy. It's a financial issue.

3. Poverty. OK, so things would be better if they had a lot more money. So how do we make them wealthy? Let's look at how the repairs have gone, to get some clues from the BBC report:

"Reconstruction work got off to a slow start. A senior official said in May he was shocked at how little had been done. Hold-ups in approval for projects and funds have been blamed." ... "much of the international aid donated after the tragedy was distributed among wealthy landowners instead of to those worst hit."

Another issue is that some of the money went to the Tamil Tigers. Was this right or wrong? A rational definition of property would have answered this question by creating a transparent system of lucrative incentives and crushing costs for incompetence.

4. Wealth creation - how a rational definition of property creates vast wealth: If an official (or anyone else, anywhere in the world) finds a way to do something better, they can create wealth - so it is their property. If you stop them, you are destroying wealth. The potential gains are vast - it is like offering everyone a high chance to win the lottery.

• How do we know who the good guys are? Same principle applies here - property. A society which makes cause and effect easier to see, encourages wealth creation, In other words, a property of that society is easier wealth creation. So that society owns a proportion of that new wealth.
• How do we measure the correct percentage? The same principle applies again. A university (or think tank or individual) that finds a good way to measure effectiveness will encourage wealth creation. That newly created wealth (the percentage created by the university) is the property of the university.
• But how do we stop the university from cheating? Same principle applies. A society that ensures competition, creates wealth.
• How do we minimize bureaucracy? Same principle. Same answer.
• How do we stop some smart western company from fixing the beaches and claiming all the wealth? Same principle. The smart entrepreneur relies on society, so society has created (and owns) part of that wealth.
• This leads to a number of other questions: what specific actions should be taken? What about hard-to-measure forms of wealth? What about welfare systems? What about borders? What about countries that won't make these changes? What about powerful opposition? All these questions are answered by a rational definition of property. See future posts for examples!

5. Concrete proposals: So far I've talked general principles. Here are two concrete proposals for any society that wants to increase its wealth.

1. Write it into law that anyone who can increase wealth in a particular area must be allowed to do so, and keep the results of their unique actions. (At this simple first stage, the courts must decide what constitutes wealth in each case, and how much difference each person makes, and the likelihood that a person can do what he claims, and the wider implications of any action. The courts are not the best way - long term, we need ways to let the market decide, but that is a topic for another day.)
2. Increase transparency in the system at every level, so that courts have an easier time of deciding who is right and wrong.

These two suggestions raise many other issues. The main issues are covered in the website. Other issues will be covered in the weeks and months to follow, using examples from the news headlines.

6. The current system: Our current economic and political systems have evolved from generations of politicians trying to maximize their personal power. Often they mean well, but the pressures are real. It is time to cut away the nonsense and take a rational approach to property. The longer we wait, the more people will die.