Hurricane Katrina as a Natural Experiment of 'Creative Destruction'
Ronald E. Cossman, Mississippi State University
Hurricane Katrina was both a natural disaster and a natural experiment of Joseph Schumpeter’s ‘creative destruction.’ The water and winds destroyed existing geographically-anchored capital in the form of homes and businesses. However, the forces that are shaping the new Gulf Coast are governmental regulations and insurance policies. The newly available shore line is now transforming into an economically higher and better use in the form of McMansions, high rise condominiums and casino-hotels. Meanwhile the working class, who provide the labor to the hotel, casinos and condos, are being forced to occupy the interior hinterlands due to the newly revised economic cost of living on the Gulf Coast. The outcome is a measurable economic gradient from the Gulf Coast inland. This socioeconomic gradient will have fundamental implications for the demographic composition of communities, voting patterns, school enrollment, community involvement and transportation for decades to come.
Presented in Session 67: Social Inequality and Disasters