This week in Slate.com, Tyler Cowen, from Marginal Revolution, has a few reports on his visit to New Orleans.
Last month I spent a week in Louisiana studying economic development, or in this case redevelopment. The institutional roots of cultural success—whether it be Mozart, Michelangelo, or Louis Armstrong—are a long-standing research interest of mine, and I wanted to see how New Orleans might lay the groundwork for economic recovery and future cultural innovation. But in Louisiana I found that the various factions arguing about how to rebuild are too focused on finding “the right” master plan. A better approach is to support good institutions and freedom of contract so that many private plans can come to fruition.
Many economists have suggested it is not worth rebuilding New Orleans at all. But they belie their own discipline by not asking, “At what price?” Hurricanes or no hurricanes, the devastated areas in New Orleans remain more valuable than most parts of the world, if only because they lie in a famous U.S. city. At some price, people will want to work and live there. City planners simply need to acknowledge that this price is lower than it used to be.