How Entrepreneurs Promote Post-Disaster Community Rebound

  • Virgil Henry Storr
  • Stefanie Haeffele-Balch
  • Laura E. Grube
Part of the Perspectives from Social Economics book series (PSE)


Although it is commonplace to describe the entrepreneur as fearless or daring or a maverick, Schumpeter ([1942] 1976: 127) has described life in advanced commercial society as essentially “anti-heroic.” As Schumpeter (ibid.: 128) explains, “success in industry and commerce requires stamina, yet industrial and commercial activity is essentially unheroic in the knight’s sense—no flourishing of swords about it, not much physical prowess, no charge to gallop the armored horse into the enemy.” Additionally, while it is easy to think of starting a charity as generous or noble, it is more difficult to think of starting a charity as being akin to leading soldiers against the battlements. Admittedly, depending on the environment, espousing certain beliefs could be quite dangerous, but many ideological entrepreneurs face, at most, social sanction for their preaching. Despite our efforts to analogize entrepreneurial activities to actions on the battlefield, there are obvious differences between the entrepreneur and the soldier.


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  1. 1.
    Schumpeter (Capitalism, Socialism and Democracy (London: George Allen & Unwin, [1942] 1976): 132) has compared his entrepreneur to the warrior classes of the past.Google Scholar
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    A similar version of this model appears in Chamlee-Wright and Storr (“Club Goods and Post-Disaster Community Return,” Rationality and Society 21, no. 4 (2009a): 429–458).CrossRefGoogle Scholar
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    See Chamlee-Wright (“The Long Road Back: Signal Noise in the Post-Katrina Context,” The Independent Review 12, no. 2 (2007): 235–259; “The Structure of Social Capital: An Austrian Perspective on Its Nature and Development,” Review of Political Economy 20, no. 1 (2008): 41–58) for a review of how regime uncertainty can distort the return calculus of displaced residents. Also see chapter 8.Google Scholar
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    See, for instance, Chamlee-Wright and Storr (“Expectations of Government’s Response to Disaster,” Public Choice 144, no. 1–2 (2010b): 253–274) for a discussion of disaster victims’ expectations of how government should, and will, respond after a disaster. It is worth noting that disaster victims did not always expect the government to provide extensive relief and recovery assistance. Skarbek (“The Chicago Fire of 1871: A Bottom-up Approach to Disaster Relief,” Public Choice 160, no. 1-2 (2014): 155–180), for instance, finds that victims of the Chicago Fire of 1871 did not expect, nor rely on, government assistance because, at the time, the role of the government was more limited and did not readily include disaster response. See, for instance, Beito (From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890–1967 (Chapel Hill, NC: University of North Carolina Press, 2002)) and Nelson (“The Chicago Relief and Aid Society 1850–1874,” Journal of the Illinois State Historical Society (1908–1984) 59, no. 1 (1966): 48–66) for an alternate view concerning the private-led response to the 1871 Chicago Fire.CrossRefGoogle Scholar
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    See Richter and Grasman (“The transmission of sustainable harvesting norms when agents are conditionally cooperative.” Ecological Economics 93 (2013): 202–209) for an interesting discussion of how norms structure social networks.CrossRefGoogle Scholar
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    There are, of course, several studies that point to some of the negative aspects of social capital. See, especially, Portes (“Social Capital: Its Origins and Applications in Modern Sociology,” Annual Review of Sociology 24 (1998): 1–24) and Putnam (“Bowling Alone: America’s Declining Social Capital,” Journal of Democracy 6, no. 1 (1995): 65–78) for an analysis of the negative consequences of social capital; and Wacquant (“Negative Social Capital: State Breakdown and Social Destitution in America’s Urban Core,” Netherlands Journal of Housing and the Built Environment 13, no. 1 (1998): 25–40) for a discussion of the erosion of “state social capital” as a cause of urban blight.CrossRefGoogle Scholar
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    See Chamlee-Wright and Storr (“Social Capital, Lobbying and Community-based Interest Groups,” Public Choice 149, no. 1–2 (2011a): 167–185) for a discussion of the potentially negative aspects of social capital that can emerge after a disaster. Specifically, they argue that during the recovery process community leaders and residents can become adept at petitioning for resources and navigating bureaucratic red tape during recovery, leading to an increasing investment in lobbying social capital. After recovery, lobbying social capital can be used to continue seeking government services and funds rather than fostering a robust community based on self-governance.CrossRefGoogle Scholar
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    Admittedly, there are limits to the capacity of bonding social capital to be a source of mutual assistance after a large-scale disaster because others in a disaster victim’s social network are likely to also be affected by the disaster. As Fussell (“Help from Family, Friends, and Strangers During Hurricane Katrina: Finding the Limits of Social Networks,” in Displaced: Life in the Katrina Diaspora, ed. L. Weber and L. Peek (Austin: University of Texas Press, 2012): 150–151) describes, “Faced with a disaster like Hurricane Katrina, people invariably turn to close family and friends to assist them in the evacuation and recovery … However, the geographic concentration of social networks within New Orleans, particularly those of low-income residents, led to a common problem: everyone in the network was affected by the disaster.”Google Scholar
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    As E. Ostrom (Governing the Commons: The Evolution of Institutions For Collective Action (Cambridge: Cambridge University Press, 1990): 30) explains, “The term ‘common-pool resource’ refers to a natural or man-made resource system that is sufficiently large as to make it costly (but not impossible) to exclude potential beneficiaries from obtaining benefits from use.”CrossRefGoogle Scholar
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    One way that communities do this is by creating environments where community members are incentivized to work together and where they see community rebound as being in their common interests (as we highlight in chapter 7, entrepreneurial action can act as a focal point for recovery that can inspire and encourage such activities). Seabright (“Managing Local Commons: Theoretical Issues in Incentive Design,” Journal of Economic Perspectives 7, no. 4 (1993): 113–134) has offered a useful framework for discussing the role of incentives in shaping the efforts of communities to solve coordination problems.CrossRefGoogle Scholar
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    Admittedly, Jacobs’ notion of what constitutes a successful city neighborhood is not so mono-faceted. After all, successful neighborhoods house a variety of activities. For instance, Jacobs (The Death and Life of Great American Cities (New York: Random House Inc., 1961)) emphasizes diversity as being a key characteristic of success. However, Weicher (“A Test of Jane Jacob’s Theory of Successful Neighborhoods,” Journal of Regional Science 13, no. 1 (1973): 29–40) and others find that there is little empirical support for Jacobs’ claims that diversity leads to successful neighborhoods in terms of crime, disease, and death.Google Scholar
  14. 27.
    Schelling (The Strategy of Conflict (Cambridge: Harvard University Press, 1960)) has noted that a player can benefit from making a strategic move when involved in an interactive game.Google Scholar

Copyright information

© Virgil Henry Storr, Stefanie Haeffele-Balch and Laura E. Grube 2015

Authors and Affiliations

  • Virgil Henry Storr
  • Stefanie Haeffele-Balch
  • Laura E. Grube

There are no affiliations available

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