Hurricane Katrina and the Perversity Thesis

In Albert O. Hirschman’s brilliant analysis of conservative responses to progressive social programs entitled The Rhetoric of Reaction, he identifies and critiques three reactionary narratives that conservatives use to critique governmental programs -- the futility thesis; the jeopardy thesis; and the perversity thesis.

The futility thesis posits that governmental attempts to cure social ills or to correct alleged market imperfections are doomed to fail because the government cannot possibly identify the problem with sufficient clarity, predict the future with sufficient accuracy, and devote resources sufficient to “make a dent” in the problem.

The jeopardy thesis argues that “the cost of the proposed change or reform is too high as it endangers some previous, precious accomplishment.” The jeopardy thesis thus subjects governmental interventions to a cost-benefit analysis and finds them wanting because the gains to the beneficiaries never exceed the costs to society of putting existing social arrangements at risk.

According to the perversity thesis, “any purposive action to improve some feature of the political, social, or economic order only serves to exacerbate the condition one wishes to remedy.”

The perversity thesis is pervasive in conservative critiques of government programs. On any given day, the reader of the Wall Street Journal’s editorial page is likely to find one or more applications of that thesis. Perhaps the most common target of the perversity thesis is the perennial call for an increase in the minimum wage. As the Journal’s editorial page told us on August 11 in an editorial entitled “Another Minimum Wage Backfire,” minimum wage increases inevitably harm the very low income workers that their supporters foolishly mean to help by providing an incentive to employers to replace low-wage employees with computers or machines.

Similarly, a Wall Street Journal editorial published on August 5 argues that the new Securities and Exchange Commission rule forcing public companies to calculate and disclose the ratio of the CEO’s pay to that of the median worker will harm the very investors that it is intended to help because the estimated $1 billion cost of implementing the rule will perversely “fall in part on the investors that the SEC’s disclosure regime is intended to serve.”

The perversity thesis is so common in conservative arguments against government programs because it has a unique power to persuade.

The futility thesis is plausible to pessimists and libertarians, but not people who benefit from the many successful governmental programs that are undeniably working today. The jeopardy thesis is not intuitively obvious, because the existing social arrangements that may become endangered are not inherently more valuable than the interests of the beneficiaries of the governmental intervention. And discussions about jeopardy quickly devolve into arguments about values and incommensurables that rarely produce answers that command a consensus.

Applying the perversity thesis to social problems, on the other hand, has the potential to persuade reasonable people that government action is unwarranted. A program that is bound to harm the purported beneficiaries more than it helps them is not much of a program from any perspective.

We should, however, be very cautious about accepting the perversity thesis because it is nearly always based on speculations about cause-effect relationships that have surface plausibility but rarely hold up under deeper scrutiny. The world is usually more complex than those who would apply the perversity thesis are willing to concede, and relationships between causes and effects are therefore more difficult to establish.

In the immediate aftermath of Hurricane Katrina, conservative commentators claimed that the cause of the disastrous breaches of the levees that were supposed to protect New Orleans was a lawsuit filed by a local environmental group called Save Our Wetlands that resulted in an injunction against a project by the U.S. Army Corps of Engineers to create huge gates to prevent surge waters in Lake Borgne and the Gulf of Mexico from entering Lake Pontchartrain. Conservatives argued that, had the project gone forward and had the gates become operational, New Orleans would have survived Hurricane Katrina. Therefore, the fishermen the lawsuit was designed to protect — because the project could have disrupted the Lake Pontchartrain fishery by cutting off access to the lake — were ultimately harmed by the Katrina flood.

Thus commentator R. Emmett Tyrell, Jr. concluded in a Washington Times op-ed on September 15, 2005, that “for too long, environmentalist fanatics with no sense of a broad-based commonweal have had a veto over government and private-sector projects essential to the health and well-being of millions of Americans.”

Tyrell’s comments and those of several other conservative bloggers inspired Professor Douglas Kysar and me to dig below the surface into the facts underlying the Save Our Wetlands litigation and the Katrina destruction. We published our preliminary findings in CPR’s Unnatural Disaster report and provided a much more detailed analysis in the Duke Law Journal. Our conclusion was that while it was always possible that massive closable gates at the Menteur and Rigolets passages between Lake Borgne and Lake Pontchartrain would have prevented some of the damage, it was highly unlikely that the gates would have prevented any of the harm, and they might in fact have exacerbated the damage to those living on the Lake Borgne side of the gates.

As time passed, many engineering studies identified several causes for the flooding that occurred in each of the four areas of the city protected by levees (called “polders”), none of which would have been affected in the least by the Menteur and Rigolets gates.

We concluded that: “many levees failed in many places for many different reasons. Some were overtopped by floodwaters that then scoured out the levee support from inside the protected area. Others could not withstand the direct pressure of the storm surge from outside the protected area because they were not imbedded sufficiently deeply in the underlying soils. Some floodwalls may have come apart during the storm surge because connections between individual wall sections failed.” Moreover, “the failure of the levee system protecting one polder did not necessarily contribute to the damage caused by the failure of the levee system protecting a different polder. Some areas of the city would not have flooded had one levee system held, even if the others had failed. Other areas of the city would not have flooded had two levee systems both held, but would have flooded if either of the two failed.”

The conservative commentators were, in short, far too simplistic in their application of the perversity thesis to the damage caused by Hurricane Katrina, and they were almost certainly wrong.

We should be on the lookout for other applications of the perversity thesis that offer plausible sounding, but highly simplistic explanations for why government programs designed to help the poor, protect workers, or preserve the environment are likely to harm the beneficiaries of those programs more than to help them.

At the very least, when conservative opponents of governmental programs trot out the perversity thesis, we should ask the beneficiaries what they think about the programs. They are, after all, closer than conservative pundits to the circumstances that give rise to the need for such programs and better able to assess how well they are working. If they are not persuaded that the programs are doing them more harm than good, then we might take the predictions of the pundits with more than a few grains of salt.

Watch CPRBlog for the rest of the week for Katrina+10 posts from several CPR Member Scholars. And catch a CPR Scholar Roundtable discussion on the topic featuring Tom McGarity, Alyson Flournoy, Robin Craig, Sheila Foster, Sid Shapiro, and Rob Verchick.