How Should We Prepare For Emergencies?

Should everyone take on the personal responsibility for being prepared for emergencies?  Libertarians, various conservatives, people like Ron Paul, make that argument.  I would say that the answer, especially put this way, has to be yes, but, to use a tiresome phrase, let us drill down into the matter.

Taking responsibility for emergencies can mean that each individual prepares to handle directly, with their own skills and resources, the emergencies most likely to affect them.  At the opposite extreme it can mean that everyone gets together to produce a plan to handle emergencies that affect communities and individuals with common action.  It seems, at first blush, that some potential emergencies might best be handled with the first and others might best be handle with the second.  It also should be noted that the types of preparation and the mind set for the two approaches are very different.

There are two sources of information and idea that need to be, at least, briefly explored as context and possibility: the history of how people have dealt with emergency and the measurements and limits that actually confront our actions.

Historically, people have not ‘gone it on their own.’  In the nearly 200,000 year history of our present species and the millions of years of history of the primates and then hominids, the vast majority of emergencies have been taken on by the community; even individual illness and injury have been organized into community response, and the group actions in response to external threats are obviously collectively organized behaviors.  Almost always the first thought when experiencing any kind of trouble is to “get help.”

The most strict libertarian view is that these millions of years of evolutionary habit are incorrect; people should take individual responsibility for emergencies (failures) and for successes.  It is not my intention to argue this fully here, just consider such a view in light of the reality of the interrelatedness of all of our actions – even more today than in times past – and the foolishness, danger and madness of such ideas begins to materialize.

But, even if we are not to consider ourselves completely isolated units with total responsibility for all of life’s outcomes, there are still responsibilities that fall on us individually.  And if this was the basic notion that was being championed by conservatives, then I would be right there with them, but right-wing conservative/libertarian policies are deeper than that and have to do with power, domination and control more than the details of how we should live with each other: what leads to their power is valued, what does not is demonized; these things change with circumstances and so are difficult to argue.

My focus here is how do we best prepare for emergencies: public emergencies like weather, geological and industrial events and “private” emergencies like medical, accident and social/relationship events.  The libertarian answer is notable for its simplicity: you are on your own; if you have prepared, you will get your reward, and if you have not, your “punishment” is deserved.  No one “owes” you any concern.  The age-old primate/hominid response is that there are no truly private emergencies since all members of the community are the community and cannot be abstracted from it: That is the judgment of history.

What about the numbers and possibility? It is here that we must go in today’s world of fast approaching limits (in fact, the libertarian position is really a small-minded, mean spirited response to those approaching limits).  What I prepared is an arithmetic presentation of two extreme positions, one in which everyone is expected to prepare for emergencies on their own and one in which the whole population acts in concert to provide a response to the call for “get help.”

There are several variables to consider: they are primarily income, income distribution, emergency cost, emergency frequency and environmental cost (ecological footprint) of the wealth used for general living and for emergency preparation.

I have simplified the models to the bare essentials.  Such things as administrative costs that have been left out, but these are small in government run programs.  If such a plan were to be put into effect many details would require evaluation, but I believe that the overall view would remain the same.

I am assuming a population of 310 million with a average per capita income of $40,000.  This will make for easy and direct comparison with our present situation.  I am also using a simplified income distribution for 2008 as a reasonable facsimile of present distributions.  I have not made distinction among the young, the old or the infirm, using only the average figures for income and costs; this should make no difference in the functioning of the models.  Some of the numbers are estimates, and some of the estimates could honestly be called guesses; but, as you will see those numbers can be changed greatly while producing the same general outcome.

Emergency Preparation costs for a whole community insurance model:

The basics: if the total population had a 7% major emergency rate with an average cost per emergency of $50,000, the total cost would be one trillion dollars a year.  The per capita cost if this was spread evenly over the population would be $3500 per person, 9% of per capita income.  The ecological cost (at $5000 per global hectare) would be 217 million hectares of the approximately 2.5 billion hectares used to produce the whole US economy.

It is clear that an emergency tax could be more equitably spread with progressive taxation, and that a well designed system could handle, within both our economic and ecological means, the emergency needs of the population within a reasonably broad range of change in these figures.

[Many readers will not be familiar with this method of reckoning economic activity, so a short primer: the earth has only so much productive capacity – that it renews every year through biophysical cycles driven by solar input.  This productive capacity has been measured in global hectares (one hectare equals about 2.5 acres): the surface area that produces the energy, material, food, water, sequestration services and other uses upon which living things depend.  There is only so much productive capacity per year as you would expect. (search “Ecological Footprint Atlas” for a range of informational listings)

Global biocapacity is about 13 billion global hectares.  This means, quite simply, that if the total bioeconomy (all living things) of the earth uses the production of 13 billion hectares per year, the system can go on “forever.”  If it uses less than that, living things will soon find a way to increase to that use rate; and if it uses more, then the total biocapacity will decrease year by year until the squeeze is on living things to reduce that amount of use of productive capacity.  Human activity has increased the total use rate to about 18 billion hectares per year.  The observation that a 5 billion hectare yearly deficit will not sustain would be correct. (This doesn’t mean that we only have 3 years to live.  The overshoot gradually degrades the capacity to recover each year.  If you use all of your energy in one day and are completely exhausted, you don’t wake up in the morning dead.  But if you do this day in and day you will significantly shorten your life.)]

Go it alone emergency preparation:

The basic principle is that each person (or family) save up enough money and acquire sufficient skills to handle likely emergencies; people who are profligate and do not prepare for emergencies deserve what they get.  This sounds, albeit a bit mean, pretty reasonable.  People should prepare for reasonably possible adversity.  The question is: should this be done individually, rejecting community help and obligation, or should it done within community structure?  The numbers are unequivocal.

What amount of liquid savings would be required to individually handle the likely, to possible, emergencies of life? Doing this individually requires a different calculation, not what are the likely emergencies, but what are the possible emergencies that would destroy me (and family) if they occur? 

After listing various emergencies and their costs I came up with the figure $300,000 as the minimum amount that someone should have saved away.  Others have thought $500,000 a more realistic number, but as an average across the population $300,000 would certainly go a long way toward making each person individually self-sufficient in this way.  There are, however, two powerful impediments: economic and ecological reality.

The incomes in America occur in a distribution with some people making a great deal and some not so much.  There is no alternative to a distribution of income, it can be taken as a law of nature.  The basic model distribution by which other distributions are evaluated is the normal distribution, a bell shaped curve created by random or uncaused events.  When we see that distribution the first assumption is that this is the random natural state.  When there are deviations from it, we look for causes.  Distributions of incomes always resemble the normal bell curve distribution, but with a fixed floor, an open ended ceiling, but still the most in the middle where one would expect.

If we look at the distribution of incomes in the US for 2008, we see:

average	percent of
income	pop.
100,000	7%
85,000	6%
60,000	16%
40,000	36%
15,000	35%

Assuming that each income level did their very best to save up the emergency cushion, I calculate the $100,000 income level would on average require about 5 years (some would already be there and some would have to start from scratch).  The $85,000 income level would require about 10 years; the $60,000 income level would require 25 years; we don’t need to look lower in the distribution.  Requiring 25 years, if starting with no liquid savings, serves no useful purpose in this model, therefore, 87% of the population would be economically closed out from being individually prepared for emergency.

One might argue that the time lines are too long since money could be invested at a percentage return and thus shorten the times, but the very idea of emergency money is money that is safe, liquid and only protected, if protected at all, against inflation loss of value.

From the ecological reality: if it were possible for the population of the US to save up $300,000 each for emergencies, the ecological footprint cost would exceed the total use of the earth’s productive capacity used by all of the earth’s living things: 18.6 billion global hectares.  Money wealth, to have any meaning at all, has to be a call against the earth’s productive capacity.  93 trillion dollars is a call against that value of the earth’s resources; that is just more resources than the earth has.

This is no trivial matter just because economists and others are not using these measures.  That the earth is round is not a trivial matter for ocean travel even though when travel beyond coastal sightings began the common “wisdom” was that the earth was flat.

There are only two reasons for pressing for ‘go it alone’ emergency preparation: ignorance or avarice.  For some it is the special ignorance of ideology, but what makes all of this especially problematic is that there are pirates in these waters who are not concerned with the needs of individuals (other than themselves) or communities to prepare for emergencies.  They are drawn to concentrations of money or to “machinery” that will concentrate it for them.

A great pile of money for emergency protection protected by the government of the people is the greatest nightmare of the pirate – and has been since the beginning of the welfare state.  There is little opportunity to steal from the people since they are not holding significant amounts and the government often has well-watched and honest gatekeepers that make it hard to pull off more than the small theft.  


If the people feel secure from the dangers of common and likely emergencies they are more able to individually prepare for more personal emergencies, they are more difficult to cheat and they are more likely to recognize and organize against the pirates.  Altogether the pirate’s life becomes more difficult and not as rewarding. And we can expect them to fight back like pirates.