Book Review of Instant City: Life and Death in Karachi

I’m reviewing Instant City: Life and Death in Karachi by Steve Inskeep as part of a TLC Book Tour. Other bloggers are also reviewing the book throughout October, and you can find links to their reviews here. I received a complimentary copy of the book, and I’d like to send it to a reader if anyone who’d like to read it doesn’t mind a copy with some underlining and margin notes. If you’d like it, just comment saying so by Wednesday, November 2nd. If multiple readers would like it, I’ll pick one at random.

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In a manner that is rare for non fiction, Instant City is really a page turner. Inskeep takes us through the history of Karachi from Pakistan’s independence in 1947 through the present, stringing personal stories of social entrepreneurs, politicians, activists and real estate developers together to tell the city’s story. He revolves the historical accounts around a 2007 bombing, in which unknown perpetrators bombed a procession that was part of a Shia religious holiday. Following the bombing, rioters burned down blocks of wholesale retail buildings. Despite the arrests of four suspects, many of the city’s residents are so distrustful of the city’s MQM government that they believe that city officials caused the bombing and subsequent fires in order to clear out the neighborhood’s current tenants to make way for more glamorous businesses. While the city’s mayor passionately denies that city government had any involvement with burning its citizens’ property, that residents have so little faith in their government demonstrates how absent the rule of law is in Karachi regarding property rights to land.

In with the history of the city’s history, growth, and conflict, Inskeep covers land use in Karachi in considerable detail. To me, “Groundbreaking” is the most interesting chapter, where Inskeep details the experience of slum clearance in the city during the 1950s. Karachi had become home to millions of refugees, predominantly Muslims from India who moved there either by choice or by force, who had settled in camps downtown. City leaders wanted to move these refugees to the outside of the city and hired the Greek urban planner Constantinos Doxiadis to create a plan for relocating these people.

Doxiadis approached the problem through gathering as much local knowledge as possible. He designed the homes in a traditional South Asian style, taking advantage of shade and building homes so that breezes would help keep them cool without air conditioning. These homes would be occupied by low-income people as part of a rent-to-own program, so he designed them to be small and efficient, keeping the needs of the intended residents in mind. Throughout the process, however, Doxiadis realized that the plan had a major flaw. While these residents lived in informal settlements, they lacked adequate shelter, but they lived close to their jobs. By forcibly removing them to Levittown-style suburbs in North Karachi, well-meaning urban planners inadvertently made poorer the very group they were trying to help by saddling them with difficult and expensive commutes to job opportunities. For these people who were already living in poverty, this unintended consequence of urban planning could literally be the difference between life and death.

In one of the many incidences of violence detailed in the book, an activist who worked for an organization that seeks to protect Karachi’s open space was murdered the day after he called a press conference to explain that he felt city officials were encroaching on  a national park by building settlements. The park’s borders had been drawn and re-drawn over the years, so whether or not the settlements lay inside the park is a matter of ambiguity. Property rights are so uncertain that landowners and city planners must build projects as quickly as possible before others encroach on the land where they plan to develop, and open space stands a low chance of remaining undeveloped. While no conclusive evidence supports the conclusion that the MQM government arranged the activist’s murder, Inskeep writes:

Whatever legal cover the city council may have provided, the new construction led to an ethnic battle, which the MQM’s rivals also failed to restrain. Protests ended in gunfire, criminal charges were filed, an officer of the court was threatened at gunpoint, and activists were eventually killed…. Politicians pushed all the buttons of a volatile area, and the situation exploded. Absent more evidence, Karachi’s dominant political party could deny responsibility for the assassination of Nisar Baloch and his successor, Nader Baloch. But the MQM could not avoid responsibility for helping to create a deadly situation.

While the book focuses on Karachi, Inskeep uses it to analyze the trend of other instant cities, including Lagos along with Tokyo, Shanghai, Sao Paulo, and others. For me, the book provided a meaningful introduction to Pakistan’s history and development, a topic about which I’m not nearly as informed as I should be. As a journalist, Inskeep tells a fantastic story, and draws a compelling and, I believe, correct conclusion about urbanization around the world:

[Migrants from rural areas] represented the most powerful force in the instant city: the desire of millions of people–simple, quiet, humble, and relentless, no matter what the odds–to make their lives just a tiny bit better than they were.

Sometimes the most discussed aspects of instant cities include violence, crime, disease, and squalor, which of course are horrible realities that  Karachi’s social entrepreneurs and businessmen alike seek to improve. But the unseen side of instant cities is what drives people to move from subsistence lifestyles to cities where they and, perhaps more importantly, their children will have opportunities for a higher standard of living. Cities are growing because many different types of research have demonstrated what new city residents already know: dense urban cities allow for people to do better for themselves (and others in the process) compared to the relative isolation of small towns or rural areas.

All in all, Inskeep has succeeded with a gripping book that helps convey the importance of urbanization for the global community. I appreciated that he identified many of the problems that come from government failure in Karachi from the perspective of many different types of citizens and provided so much information about the city’s past and present in a fascinating and accessible work. Inskeep makes just one major point that I disagree with. He suggests that a stronger metropolitan planning authority is what Karachi needs to allow for more stable land use policy. I tend to think that instead, a legal system that supports the rule of law and protects property rights is what would help the city’s development rather than a master plan to enforce permissible land uses.

Cities and the Market Process: Part 1

In a post about the tendency for emergent urbanists to promote the idea of cities having a single equilibrium, Alon Levy recently wrote that collective choice is the best manner for determining urban form. Many urbanists accept that some of the top-down regulations that limit density or use are detrimental to cities, but they often stop short of suggesting that land use regulation should be abolished and transportation privatized, which I will support here with arguments based in Austrian economics. This post does not get to a critique of the collective choice that Alon supports; later entries in this market process series will address both the problems of creating urban policy through collective choice, and some of the institutions that have emerged within civil society that are essential to cities and their residents.

The cohort of economists and urbanists who support the elimination of land use regulation is small because cities present all of the problems that neoclassical and Keynesian economists describe as market failures, including externalities, high transaction costs involved in Coasean bargaining, non-excludable goods, etc. However, I believe that emergent solutions solve these problems more effectively than either central planning or collective decision making that becomes law, and the failed and inefficient government projects that urbanist bloggers write about everyday suggest that government failure is no trivial concern.

The first reason that regulation is a poor tool to for determining urban form comes from Friedrich Hayek. He clearly identified the calculation problem inherent in central planning: the information necessary to coordinate markets (including land use markets) is held by individuals with “particular knowledge of time and place.” Even assuming that urban planners are benevolent and seek to provide the best outcomes for their communities, they could never compile the knowledge necessary to determine what those outcomes are. Jane Jacobs identified the same problem in city planning that Hayek found in market planning because cities and markets are both emergent systems that coordinate human activity. She even coined the term “locality knowledge,” seemingly unaware of his writings on “local knowledge.” Of course urban development involves intense planning, but it should be done by entrepreneurs and consumers, who have the information necessary to make these decisions rather than bureaucrats. For anyone who hasn’t read Hayek previously, his essay “The Use of Knowledge in Society” provides a concise look at some of his most important insights.

Aside from the knowledge problem facing land use planners, another major reason not to forsake the free market for the planning commission is that planners do not have access to the feedback mechanism of profits and losses. Israel Kirzner, a scholar of Ludwig von Mises details the theory of market process most clearly in Competition and Entrepreneurship. He explains that unlike government entities, entrepreneurs get quick and accurate feedback on their products. If, for example, high-density apartments in a mixed-use neighborhood with good access to transit are renting well (as urbanists across the political spectrum tend to think they will) other entrepreneurs will see these profits and provide more of them to take advantage of this profit opportunity. If on the other hand, a certain style of housing in another part of town is not selling well and the entrepreneur is making losses, this development will not be systematically repeated as it might be under central planning (see: parking mandates that are higher than the free-market level, poorly designed public parks, public housing projects surrounded by open space).

Critics of free market urban development may argue that this system will produce less-than-perfect cities, so city planners should step in to make improvements. The Austrian response is that of course the free market cannot produce utopian cities, but no other system could do better. Believing that a regulated city would be superior to the market outcome is succumbing to the Nirvana fallacy. Markets aren’t perfect, but they’re the best we’ve got.

A blog post is clearly insufficient for explaining the knowledge problem and the market process that it took Austrian economists Mises, Hayek, and Kirzner many years and thousands of pages to work out, but I hope to expand and clarify on this subject of why regulators do not have access to the tools that are necessary to design cities. For a more detailed look at some of the areas where private cities would likely fare better than our current system, see Adam’s series on Rothbard the Urbanist.