Floods, Cyclones, Earthquakes and Avalanches
I have been in Australia and New Zealand for the past two weeks – I am in Sydney right now. The first week was a workshop at Gold Coast in Australia. This workshop was to have been held in Brisbane, but floods reached the second floor of the hotel where the workshop was to be held. Consequently, the meeting was relocated to Gold Coast. However, a Level 5 Cyclone also threatened this location shortly after the flood. Fortunately, the cyclone passed through much farther north and additional changes were not needed.
After the workshop, my long-time friend Ken and I headed to New Zealand for a week of hiking and sightseeing. We spent February 19-20 in Christchurch and then headed west to Mt. Cook and the Tasman Glacier. On February 22 we arrived in Cromwell to learn that there had been a 6.3 earthquake in Christchurch at roughly 1:00PM that day. The next day we learned that there had been an avalanche on the Tasman Glacier, less than 24 hours after we had been there. It was attributed to the earthquake.
This sequence of natural events in Australia and New Zealand show how change can be forced by nature rather than markets, politics and so on. Brisbane and Christchurch will need to do much rebuilding. There will be new buildings and infrastructure. This will require money, of course, but will also create opportunity. This is not the type of “creative destruction” that Schumpeter had in mind, but it will prompt construction that is more resistant to floods and earthquakes.
There is, however, another type of legacy. The mood in New Zealand is quite somber. Two earthquakes in six months have many people thinking about whether they want to rebuild their lives, not just their homes, in Christchurch. In Wellington yesterday, I heard of many people migrating to the North Island, saying they could not bring themselves to stay in Christchurch. Thus, the near-term impacts of change can be quite negative despite the prospects of long-term benefits from successfully addressing the change. This pattern is quite common.