How Economic Freedom Helps Chile Withstand Earthquakes and Tsunamis

By: Andrea Kohen - 

Chile is a country that shakes every day, so it does not seem to be an ideal place to live. However, its immigration rates tell another story.
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A few days ago, a 7.7 earthquake shook the south of Chile. Its epicenter was 67 kilometers northwest of Melinka, in Aysén, and generated a tsunami alert in certain coastal sectors of Los Lagos. It was felt in five regions of the country, but it was the southern area of Chiloé was the most affected.
In the end, there were no victims. Only a couple of very old houses were destroyed, and a highway near the area was damaged as well.
An earthquake of this magnitude would cause total destruction in other areas of the world that are not prepared. A 7.0 earthquake was enough to wipe out 90 percent of Haiti’s infrastructure back in 2010.
Chile is a special country. It is long and narrow, with more than 4,000 kilometers of coastline. It has a mountain range that separates it from the continent, pushing it toward the sea.



The nation is located at the junction of three tectonic plates (South American, Nazca and part of Antarctica). It has more than 3,000 volcanoes throughout the country, and several of these are active — there have already been incidents of serious eruptions.
Additionally, Chile is also located at the end of the so-called “Ring of Fire,” a seismic cord that begins in Australia. Given that the South American country has so much coastline, each earthquake implies a serious risk of tsunami.
Chile is a country that trembles every day, so it does not seem to be an ideal place to live. However, its immigration rates seem to tell another story.
Despite the natural risks, why is it a good decision to immigrate to Chile? The answer is simple.
Social and economic advantages are powerful factors in making immigration decisions. In addition, it is already evident that unless there is an earthquake of apocalyptic nature, which could cause a cataclysmic tsunami (as happened in 2010), Chile is likely to suffer only minor setbacks that can be resolved in the short-term.
Economic freedom has allowed people to choose high-quality, anti-seismic properties that move with the land during the quakes, so that they do not fall. They suffer only minor damages during disasters that could destroy infrastructure.
Free competition has allowed investment to flow into the country, and create jobs that help people to buy goods. Moreover, it has caused the prices of those goods to be accessible without sacrificing their quality.
People that aim to start businesses in Chile tend to have few obstacles, and many incentives to create wealth. In this process, they improved the infrastructure around them, allowing the beautification of the country. Order and cleanliness became the norm, leaving less and less poverty — reducing it much more than any other country in Latin America (11 percent).
Institutions focused on providing the foundations to development, and this brought order to the country. Today, however, they create obstacles to entrepreneurship, and that has had negative effects on the economy.
It is no longer the mercantilism of the sixteenth century at play here, in which some sought to accumulate wealth at the expense of others. This is about investing and helping all those involved in growth, creating goods and services, improving ideas that made people’s quality of life better.
In 1939, an earthquake of similar characteristics destroyed the whole city of Chillan, causing thousands and thousands of deaths. The story repeated itself in 1960, with the total destruction of Valdivia.
Today, we can say that the earthquake of 2010 (8.8 on the Richter scale), though it caused very serious damage, did not have a massive effect on human losses. Rather, what devastated the country was the tsunami, since there is no architecture able to resist it yet. Reconstruction was quite fast and organized, to the point that today there are no traces of a tsunami ever having damaged them.
We can also say that our economic boom has allowed the country’s institutions to prepare themselves, and to create an infrastructure that can withstand significant earthquakes with almost no material or human loss.
The system is not perfect because there is still too much state control, which makes it susceptible to collusion and undue associations. Nonetheless, it also produces virtuous partnerships that save lives and create progress.
Can a statist system create anti-seismic infrastructure? Of course, but always at the cost of freedom.
Definitively, the statist, anti-capitalist, anti-system and anti-inequality progressive movement has not understood yet that freedom is, ultimately, life.