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The purpose of this paper is to analyze the rebuilding of the Gulf coast post‐Hurricane Katrina.

The paper posits that though Frédéric Bastiat passed away in 1850, the beauty of his sound economic reasoning is that it does not change over time and that his essay, “That which is seen, and that which is not seen,” is especially insightful in analyzing the rebuilding of the Gulf coast. The paper first expounds his lesson and then applies it to the conflict between the private and public sectors in order to attack the fallacies of government spending and vindicate the free‐market approach to reconstruction.

The paper finds that the areas where the government has coercively arrogated to itself a monopoly – police and fire departments to protect lives and property, courts to punish rights violators, water and sewer systems to restore potable water to homes – are the areas …