Urbanism without government

Asking, “But who will build the roads?” is a cliched response to proposals for a more libertarian political system. However, it leads to the interesting historical question of “Who has built the roads in anarchic societies?” Colonial America provides a few examples that answer this question. Perhaps the best known example of anarchism in American history was in Rhode Island, or “Rogue’s Island,” founded by Baptists fleeing Massachusetts. The stateless Baptists founded the cities of Portsmouth and Warwick.

Unlike the Baptists, William Penn didn’t intend to create an anarchic colony, but Pennsylvania was, in fact, without a government from 1684 to 1691 as evidenced by Penn’s failure to successfully levy any taxes during that time. It’s difficult to know much about street building from this time period in part because of how much time has passed and in part because, as Murray Rothbard writes, “The lack of recordkeeping in stateless societies — since only government officials seem to have the time, energy, and resources to devote to such activities — produce a tendency toward a governmental bias in the working methods of historians.” However, we do know that Philadelphia’s neighborhoods near the Delaware River were growing during this time.

One of the country’s oldest continually occupied streets is Philadelphia’s Elfreth’s Alley. It was dedicated in 1702, shortly after this period of complete anarchy and served  as a route to connect local merchants’ property with the already thriving Second Street. As the society dedicated to the alley’s preservation writes:

Elfreth’s Alley — popularly known as “Our nation’s oldest residential street” – dates back to the first days of the eighteenth century. Twenty years after William Penn founded Pennsylvania and established Philadelphia as its capital, the town had grown into a thriving, prosperous mercantile center on the banks of the Delaware River.

Philadelphians had abandoned Penn’s plan for a “greene countrie towne” and instead created a cityscape similar to what they remembered in England. Wharves stretched out into the river, welcoming ships from around the world. Shops, taverns, and homes crowded the area along the river. Philadelphians made and sold items essential to life in the New World and to the trade that was a part of their daily lives.

Two of these colonial craftsmen, blacksmiths John Gilbert and Arthur Wells, owned the land where Elfreth’s Alley now sits. In 1702, each man gave up a portion of his land to create an alleyway along their property line that connected their smithies near the river with Second Street, one block away. By that date, Second was a major north-south road, connecting Philadelphia with towns north and west of the city and the frontier beyond.

Photo by C. Ridgeway

Photo by C. Ridgeway

Gilbert and Wells donated their land both to benefit their businesses and to improve the city’s transportation network in keeping with the Quaker tradition of voluntarism. Their actions demonstrate the power of cooperation for mutual gain, but it’s also notable that streets built with donated land are likely to be narrow, as Elfreth’s Alley is. As the article explains that William Penn envisioned Pennsylvania as a “countrie towne,” but without the ability to raise any taxes needed to enforce his vision, he couldn’t prevent Pennsylvania residents from developing the sort of dense and mixed-use development that supported their growing industries in Philadelphia.

Victorian England provides another example of rapid urban growth under very limited government. Decades after the construction of Elfreth’s Alley, urban development absent any city planning, government infrastructure, or building codes swept across London and other English cities. Neighborhoods including the West End and Nottingham were developed during this period of hands-off government policy, relying on the private sector for providing all infrastructure, from streets to streetlights to drainage.

In both cases of laissez- faire urban development, we see very narrow streets, as landowners are making the trade between providing easements for accessibility and developing land for profit. Unlike colonial Philadelphia’s period of total anarchy, London had a system of Private Acts, which required developers to seek permission from Parliament to implement any significant land use changes. After development was in place, some neighborhoods used covenants to enforce upkeep of common goods such as lighting and even to enforce design standards for builders. In his chapter in The Voluntary CityStephen Davies explains that landowners did not place covenants on all land and that the stringency of covenants varied widely. Because covenants tended to increase both the quality and price of housing, this variation allowed builders to serve both low- and middle-income residents, depending on where they built:

Developers were able to tailor the extent of their providing “public goods” via covenant to the nature and scope of local demand, as well as account for other factors such as land and building costs. This is in marked contrast to the rigidity and fixity of state attempts to supply these goods through public planning, zoning laws, and the like. The flexibility also extended to the enforcement of covenants. Landlords and developers would often not enforce the building clause in a lease when demand for land was slack, as long as the rent was paid.

While colonial Philadelphia and Victorian London saw road building under different legal institutions, both cases demonstrate that urban infrastructure can be provided without government. Perhaps the free market would never create the interstate highway system, but it’s proven itself capable of facilitating the creation of charming, functional streets that endure centuries.





Rothbard The Urbanist Part 6: Traffic Control

Maybe the delay in posts led you to believe the Rothbard Series was complete.  The good news is that there are a few more posts to go, and the ones coming up next should be the most interesting to urbanists. 

If you haven’t kept up with our discussion, Murray Rothbard’s classic For A New Liberty can be downloaded free from Mises.org as pdf, web page, and audio book read by Jeff Riggenbach, and you can read the first five posts:

Rothbard the Urbanist Part 1: Public Education’s Role in Sprawl and Exclusion
Rothbard the Urbanist Part 2: Safe Streets
Rothbard the Urbanist Part 3: Prevention of Blockades
Rothbard the Urbanist Part 4: Policing

Rothbard the Urbanist Part 5: Diversity and Discrimination 

Not long ago, I posted a video from a friend showing one traffic intersection in Cambodia that appears to function well without any signaling.  Here are some other resources on the emergent order of traffic without signals:

I caught some flak from a commenter who considered it “disingenuous” to present the video of the intersection as evidence “of a workable intersection.”  Of course I had to remind the commenter that I don’t consider these types of intersection something that I advocate as a “free market” solution: 

Don’t mistake me as an advocate of a world without traffic signals. I am quite certain that some sort of traffic signaling would likely emerge from a free-market street system. But, my bigger point is that when information is dispersed widely among decision-makers without government monopoly, sustainable solutions emerge from the uncoerced behavior of individual agents over time.

This is a case where governance is needed, but not necessarily provided by government.  Some sort of cooperation would emerge among road operators, just like with technologies such as USB, DVD, or plain old electrical outlets and light bulbs.  A coercive government authority is not needed to dictate to manufacturers to use certain standards, manufacturers choose to produce industry-standardized equipment simply because it is what the customer desires.  If a lighting manufacturer decided to make a bulb that did not fit into standard sockets, who would buy it?  Probably nobody. 

I see roads as no different.  Road customers will likely choose to avoid intersections as nerve-wracking as the one in the Cambodia video if they have a more stress-free option.  Thus road operators will work to optimize flow through their intersections while minimizing unpleasantly stressful situations. 

Of course, Professor Rothbard communicates this more elegantly. I find the railroad example particularly interesting:

The principle that property is administered by its owners also provides the rebuttal to a standard argument for government intervention in the economy. The argument holds that "after all, the government sets down traffic rules — red and green lights, driving on the right-hand side, maximum speed limits, etc. Surely everyone must admit that traffic would degenerate into chaos if not for such rules. Therefore, why should government not intervene in the rest of the economy as well?" The fallacy here is not that traffic should be regulated; of course such rules are necessary. But the crucial point is that such rules will always be laid down by whoever owns and therefore administers the roads. Government has been laying down traffic rules because it is the government that has always owned and therefore run the streets and roads; in a libertarian society of private ownership the private owners would lay down the rules for the use of their roads.

However, might not the traffic rules be "chaotic" in a purely free society? Wouldn’t some owners designate red for "stop," others green or blue, etc.? Wouldn’t some roads be used on the right-hand side and others on the left? Such questions are absurd. Obviously, it would be [p. 208] to the interest of all road owners to have uniform rules in these matters, so that road traffic could mesh smoothly and without difficulty. Any maverick road owner who insisted on a left-hand drive or green for "stop" instead of "go" would soon find himself with numerous accidents, and the disappearance of customers and users. The private railroads in nineteenth-century America faced similar problems and solved them harmoniously and without difficulty. Railroads allowed each other’s cars on their tracks; they inter-connected with each other for mutual benefit; the gauges of the different railroads were adjusted to be uniform; and uniform regional freight classifications were worked out for 6,000 items. Furthermore, it was the railroads and not government that took the initiative to consolidate the unruly and chaotic patchwork of time zones that had existed previously. In order to have accurate scheduling and timetables, the railroads had to consolidate; and in 1883 they agreed to consolidate the existing fifty-four time zones across the country into the four which we have today. The New York financial paper, the Commercial and Financial Chronicle, exclaimed that "the laws of trade and the instinct for self-preservation effect reforms and improvements that all the legislative bodies combined could not accomplish."3

3. See Edward C. Kirkland, Industry Comes of Age: Business, Labor, and Public Policy, 1860-1897 (New York: Holt, Rinehart, and Winston, 1961), pp. 48-50.

Rothbard the Urbanist Part 5: Diversity and Discrimination

This 5th installment of the Rothbard Series dovetails well with the most recent post on segregation by guest blogger, Stephen Smith, as well as a post back in July over at Austin Contrarian

If you haven’t kept up with our discussion, Murray Rothbard’s classic For A New Liberty can be downloaded free from Mises.org as pdf, web page, and audio book, and you can read the first four parts:

Rothbard the Urbanist Part 1: Public Education’s Role in Sprawl and Exclusion
Rothbard the Urbanist Part 2: Safe Streets
Rothbard the Urbanist Part 3: Prevention of Blockades
Rothbard the Urbanist Part 4: Policing

In the comments of the first post of this series on public education’s roll in segregation, the discussion delved into the topic of discrimination.  Bill Nelson and I shared our thoughts on discrimination by co-op boards, while another guest inquired about my statement, “elitist institutions often exclude others to their own detriment”  (Rothbard’s words further below make a similar case)  I also referred the guest to a great article on the economics of discrimination and a snippet from an article discussing how private streetcar companies fought discrimination:

The Market Resists Discrimination

The resistance of southern streetcar companies to ordinances requiring them to segregate black passengers vividly illustrates how the market motivates businesses to avoid unfair discrimination. Before the segregation laws were enacted, most streetcar companies voluntarily segregated tobacco users, not black people. Nonsmokers of either race were free to ride where they wished, but smokers were relegated to the rear of the car or to the outside platform. The revenue gains from pleased nonsmokers apparently outweighed any losses from disgruntled smokers.

Streetcar companies refused, however, to discriminate against black people because separate cars would have reduced their profits. They resisted even after the passage of turn-of-the-century laws requiring the segregation of black people. One railroad manager complained that racial discrimination increased costs because it required the company to “haul around a good deal of empty space that is assigned to the colored people and not available to both races.” Racial discrimination also upset some paying customers. Black customers boycotted the streetcar lines and formed competing hack (horsedrawn carriage) companies, and many white customers refused to move to the white section.

In Augusta, Savannah, Atlanta, Mobile, and Jacksonville, streetcar companies responded by refusing to enforce segregation laws for as long as fifteen years after their passage. The Memphis Street Railway “contested bitterly,” and the Houston Electric Railway petitioned the Houston City Council for repeal. A black attorney leading a court battle against the laws provided an ironic measure of the strength of the streetcar companies’ resistance by publicly denying that his group “was in cahoots with the railroad lines in Jacksonville.” As pressure from the government grew, however, the cost of defiance began to outweigh the market penalty on profits. One by one, the streetcar companies succumbed, and the United States stumbled further into the infamous morass of racial segregation.

From Jennifer Roback, “The Political Economy of Segregation: The Case of Segregated Streetcars.” Journal of Economic History 56, no. 4 (December 1986): 893–917.

So, now we get to hear what Professor Rothbard had to say about discrimination:

Street Rules

One of the undoubted consequences of all land areas in the country being owned by private individuals and companies would be a greater richness and diversity of American neighborhoods. The character of the police protection and the rules applied by the private police would depend on the wishes of the landowners or street owners, the owners of the given area. Thus, suspicious residential neighborhoods would insist that any people or cars entering the area have a prior appointment with a resident, or else be approved by a resident with a phone call from the gate. In short, the same rules for street property would be applied as are now often applied in private apartment buildings or family estates. In other, more raffish areas, everyone would be permitted to enter at will, and there might be varying degrees of surveillance in between. Most probably commercial areas, anxious not to rebuff customers, would be open to all. All this would give full scope to the desires and values of the residents and owners of all the numerous areas in the country.

It might be charged that all this will allow freedom "to discriminate" in housing or use of the streets. There is no question about that. Fundamental to the libertarian creed is every man’s right to choose who shall enter or use his own property, provided of course that the other person is willing.

"Discrimination," in the sense of choosing favorably or unfavorably in accordance with whatever criteria a person may employ, is an integral part of freedom of choice, and hence of a free society. But of course in the free market any such discrimination is costly, and will have to be paid for by the property owner concerned.

Suppose, for example, that someone in a free society is a landlord of a house or a block of houses. He could simply charge the free market rent and let it go at that. But then there are risks; he may choose to discriminate against renting to couples with young children, figuring that there is substantial risk of defacing his property. On the other hand, he may well choose to charge extra rent to compensate for the higher risk, so that the free-market rent for such families will tend to be higher than otherwise. This, in fact, will happen in most cases on the free market. But what of personal, rather than strictly economic, "discrimination" by the landlord? Suppose, for example, that the landlord is a great admirer of six-foot Swedish-Americans, and decides to rent his apartments only to families of such a group. In the free society it would be fully in his right to do so, but he would clearly suffer a [p. 207] large monetary loss as a result. For this means that he would have to turn away tenant after tenant in an endless quest for very tall Swedish-Americans. While this may be considered an extreme example, the effect is exactly the same, though differing in degree, for any sort of personal discrimination in the marketplace. If, for example, the landlord dislikes redheads and determines not to rent his apartments to them, he will suffer losses, although not as severely as in the first example.

In any case, anytime anyone practices such "discrimination" in the free market, he must bear the costs, either of losing profits or of losing services as a consumer. If a consumer decides to boycott goods sold by people he does not like, whether the dislike is justified or not, he then will go without goods or services which he otherwise would have purchased.

All property owners, then, in a free society, would set down the rules for use of, or admission to, their property. The more rigorous the rules the fewer the people who will engage in such use, and the property owner will then have to balance rigor of admission as against loss of income. A landlord might "discriminate," for example, by insisting, as George Pullman did in his "company town" in Illinois in the late nineteenth century, that all his tenants appear at all times dressed in jacket and tie; he might do so, but it is doubtful that many tenants would elect to move into or remain in such a building or development and the landlord would suffer severe losses.

While Rothbard had some good things to say on how the free market enables diversity in terms of racial discrimination and diversity among and within districts, he missed the opportunity to specifically address ideas relating to Jane Jacobs’ generators of diversity within urban districts other than stating, “commercial areas, anxious not to rebuff customers, would be open to all.”  Jacobs generators of diversity:

  1. The district, and indeed as many of its internal parts as possible, must serve more than one primary function; preferably more than two.  These must insure the presence of people who go outdoors on different schedules and are in the place for different purposes, but who are able to use many facilities in common.
  2. Most blocks must be short; that is, streets and opportunities to turn corners must be frequent.
  3. The district must mingle buildings that vary in age and condition, including  a good proportion of old ones so that they vary in the economic yield they must produce.  This mingling must be fairly close-grained.
  4. There must be a sufficiently dense concentration of people, for whatever purposes they may be there.  This includes dense concentration in the case of people who are there because of residence.

Obviously, Jacobs wasn’t referring to racial diversity, and I’m glad she wasn’t because the abuse of the concept has gotten tiresome to me.  She was referring to the types of diversity in the built environment that are necessary to make a urban places vibrant. Nonetheless, Rothbard’s analysis of racial discrimination and diversity could be applied to the built environment, because a landlord would have market incentives to provide as much space as is economically optimal to as many potential tenants as possible, likely forgoing personal preferences and prejudices. Thus, mixing of uses is likely to occur when a landlord is unlikely to discriminate one use over another or give undeserved preference to one type of tenant over another.

I can see a system of fully private ownership emerging into two very distinct patterns: – aglomerative consolidations and bottom-up dispersion of ownership, each existing in certain circumstances.

  • One could argue that Jacobs’ generators of diversity would likely exist within large privately-owned districts, but a landowner would likely need to consolidate a significantly-sized district in order to properly capture the positive externalities associated with diversely mixed uses.  At the same time, large, privately-owned gated communities would likely exist in less centralized locations where private space and separation could meet the desires of those who are willing to pay a premium for the extra space.
  • In other locations it would be optimal for land to be owned by smaller dispersed entities.  In this case, diversity would simply emerge bottom-up through the free-market process, as it had prior to zoning.  I could imagine that, left unhampered by government coercion, diverse patterns that meet people’s specific needs and natural pursuit of interaction would inevitably emerge through dispersed and competitive ownership of smaller parcels.  (See Mathieu Helie’s Emergent Urbanism)

I would think the larger-scale commercial activity and gated communities will occur in the former, and just about everything else, the later. 

Rothbard the Urbanist Part 4: Policing

I apologize for the extended delay between posts.  Personal (newborn) and professional priorities have prevented me from having the free time I once had. Unfortunately posts will probably continue to be sporadic until things settle down a little.

We are now at Part 4 in the multi-part series delving into the urbanist-friendly ideas in Murray Rothbard’s classic For a New Liberty.   (available free from Mises.org as pdf, web page, and audio book)  In case you missed them, here are the first three parts:

Rothbard the Urbanist Part 1: Public Education’s Role in Sprawl and Exclusion

Rothbard the Urbanist Part 2: Safe Streets

Rothbard the Urbanist Part 3: Prevention of Blockades

As we continue through Chapter 11 of For A New Liberty, Rothbard continues to make valid points regarding safety and policing in a fully private-landowner system.  This passage is notably interesting in its discussion of the successes of private railroads.  Whether competition in the private street market would create a vibrant marketplace similar to the early days of the railroad is an interesting topic for discussion.  I’d tend to agree with Rothbard, but of course some imagination is required to envision such a radically different society:

There is of course nothing new or startling in the principle of this envisioned libertarian society. We are already familiar with the energizing effects of inter-location and inter-transportation competition. For example, when the private railroads were being built throughout the nation in the nineteenth century, the railroads and their competition provided a remarkable energizing force for developing their respective areas. Each railroad tried its best to induce immigration and economic development in its area in order to increase its profits, land values, and value of its capital; and each hastened to do so, lest people and markets leave their area and move to the ports, cities, and lands served by competing railroads. The same principle would be at work if all streets and roads were private as well. Similarly, we are already familiar with police protection provided by private merchants and organizations. Within their property, stores provide guards and watchmen; banks provide guards; factories employ watchmen; shopping centers retain guards, etc. The libertarian society would simply extend this healthy and functioning system to the streets as well. It is scarcely accidental that there are far more assaults and muggings on the streets outside stores than in the stores themselves; this is because the stores are supplied with watchful private guards while on the streets we must all rely on the “anarchy” of government police protection. Indeed, in various blocks of New York City there has already arisen in recent years, in response to the galloping crime problem, the hiring of private guards to patrol the blocks by voluntary contributions of the landlords and homeowners on that block. Crime on these blocks has already been substantially reduced. The problem is that these efforts have been halting and inefficient because those streets are not owned by the residents, and hence there is no effective mechanism for gathering the capital to provide efficient protection on a permanent basis. Furthermore, the patrolling street guards cannot legally be armed because they are not on their owners’ property, and they cannot, as store or other property owners can, challenge anyone acting in a suspicious but not yet criminal manner. They cannot, in short, do the things, financially or administratively, that owners can do with their property.

Furthermore, police paid for by the landowners and residents of a [p. 205] block or neighborhood would not only end police brutality against customers; this system would end the current spectacle of police being considered by many communities as alien “imperial” colonizers, there not to serve but to oppress the community. In America today, for example, we have the general rule in our cities of black areas patrolled by police hired by central urban governments, governments that are perceived to be alien to the black communities. Police supplied, controlled, and paid for by the residents and landowners of the communities themselves would be a completely different story; they would be supplying, and perceived to be supplying, services to their customers rather than coercing them on behalf of an alien authority.

A dramatic contrast of the merits of public vs. private protection is provided by one block in Harlem. On West 135th Street between Seventh and Eighth Avenues is the station house of the 82nd Precinct of the New York City Police Department. Yet the august presence of the station house did not prevent a rash of night robberies of various stores on the block. Finally, in the winter of 1966, fifteen merchants on the block banded together to hire a guard to walk the block all night; the guard was hired from the Leroy V. George protection company to provide the police protection not forthcoming from their property taxes.1

The most successful and best organized private police forces in American history have been the railway police, maintained by many railroads to prevent injury or theft to passengers or freight. The modern railway police were founded at the end of World War I by the Protection Section of the American Railway Association. So well did they function that by 1929 freight claim payments for robberies had declined by 93%. Arrests by the railway police, who at the time of the major study of their activities in the early 1930s totaled 10,000 men, resulted in a far higher percentage of convictions than earned by police departments, ranging from 83% to 97%. Railway police were armed, could make normal arrests, and were portrayed by an unsympathetic criminologist as having a widespread reputation for good character and ability.2 [p. 206]

Of course, those who embrace a government monopoly on policing would proclaim privatization would result in some kind of privately-run police-state, but let’s examine a few examples in today’s society.  In the comments of a recent post, Benjamin Hemric and I discussed some examples of privately-run pedestrian environments.  Here’s what we came up with:

So, private streets wouldn’t result in tolls of valuable sidewalk space every 10 feet?  No, I think that’s an Urban[ism] Legend just waiting to be debunked.

You may have noticed that while some of these are examples of environments where exclusivity is maintained by the owner, most are examples of privately secured pedestrian environments that are accessible to anyone, without charge.  Private operators are keenly interested in maintaining the safety of the streets for their customers or tenants.  No mall owner would stay in business too long if its mall earned a reputation of muggings. Had Rothbard written a later edition, he may had mentioned shopping malls.  As I mentioned in a previous post, it seems clear that dense, vibrant, mixed-use places are very well equipped to police themselves at little cost to the residents and business owners.  Thus, wouldn’t a private society tend towards vibrant urbanity?

I think it would be interesting to discuss other examples of privately policed environments.  What examples can you think of?

At the same time, it seems that the most unsafe places I can think of are publicly maintained. Am I missing something, or does it seem obvious once we take the time to think it over?

1. See William C Wooldridge, Uncle Sam the Monopoly Man (New Rochelle, N Y Arlington House, 1970), pp 111ff.

2. See Wooldridge, op. cit., pp 115-17. The criminological study was made by Jeremiah P Shalloo, Private Police (Philadelphia Annals of the American Academy of Political and Social Science, 1933). Wooldridge comments that Shalloo’s reference to the good reputation of the railway police “contrasts with the present status of many big-city public forces, sanctions against misconduct are so ineffective or roundabout that they may as well not exist, however rhetorically comforting the forces’ status as servants of the people may be.” Wooldridge, op. cit., p 117.

Rothbard the Urbanist Part 3: Prevention of Blockades

In the last post, we discussed the first paragraphs of chapter 11 of Murray Rothbard’s For A New Liberty. (available free from Mises.org as pdf, web page, and audio book) Those paragraphs discussed the private ownership of all land, including streets and roads. Rothbard clearly and concisely argues that private ownership of streets would result in safer public spaces.

Discussions I have had with people often lead to the topic of forestalling, in which a sinister land owner decides to completely surround a neighbor’s property, preventing him from using it. This valid concern can be eased through a principled analysis of such a situation:

At this point in the discussion, someone is bound to raise the question: If streets are owned by street companies, and granting that they generally would aim to please their customers with maximum efficiency, what if some kooky or tyrannical street owner should suddenly decide to block access to his street to an adjoining homeowner? How could the latter get in or out? Could he be blocked permanently, or be charged an enormous amount to be allowed entrance or exit? The answer to this question is the same as to a similar problem about land-ownership: Suppose that everyone owning homes surrounding someone’s property would suddenly not allow him to go in or out? The answer is that [p. 204] everyone, in purchasing homes or street service in a libertarian society, would make sure that the purchase or lease contract provides full access for whatever term of years is specified. With this sort of “easement” provided in advance by contract, no such sudden blockade would be allowed, since it would be an invasion of the property right of the landowner.

A likely solution to this issue of forestalling, would be the emergence of “access insurance”. This would be similar to title insurance, which is a system that emerged as a result of the United States system of document recording “in which no governmental official makes any determination of who owns the title or whether the instruments transferring it are valid.” The US system seems anarchic, but the Title Insurance system emerged through the marketplace.

Such a system of “access insurance” would likely emerge to become as universal as the title insurance system, and likely be required by lenders. A buyer of a property would purchase insurance to ensure that access to the property would not be denied by any parties. If some neighbor decides to invade the property rights of the insured by blockading him in, the “access insurance” company would have to compensate the policy holder for the full value of the property (or other amount insured). Thus, the heavily capitalized insurance company has every incentive to use its vast resources to prevent such an event from occurring to defend the property from blockades.

Rothbard the Urbanist Part 2: Safe Streets

The recent post, Public Education’s Role in Sprawl and Exclusion generated some interest and fantastic comments.   I recommend reading Murray Rothbard’s For a New Liberty in its entirety.  It is elegant in its consistently radical application of principles.  It is available for free from the Mises Institute as a pdf, and webpage.  I listened to the audio book version superbly read by Jeff Riggenbach.

It turns out the entire Chapter 11  called “The Public Sector, II: Streets and Roads” is actually a chapter on Market Urbanism. Bryan Caplan considers this chapter “the least convincing chapter in the book”, but as a Market Urbanist, I strongly disagree.  I do admit that his discussion of safety and policing of private local streets involves a great deal of speculation and reliance on faith in the action of individual agents, but the insights into road subsidization and land-use patterns was decades ahead of its time.  These insights may not seem so radical now, but imagine the resistance to these ideas in the days before urbanism gained much credibility.

I decided it would be valuable to share a thorough parsing of the chapter.  I checked with the Mises Institute, who informed me that I am welcome to quote large pieces of text directly from the book – so I will.  Over the next few weeks I’ll share parts of Chapter 11 for discussion.  Feel free to read ahead…

In response to the first Rothbard post, Bill Nelson commented:

That said, I think that Professor Rothbard unfortunately only sees what he wants to see through his “Austrian” lens, and is therefore missing other reasons why “poor” people are not welcome in the suburbs — or anywhere else. Specifically, most home owners are interested in keeping out not poor people — but instead people with sociopathic behavior — which is more common among people who are less well-off.

I responded that Rothbard has more to say on that topic.  In fact, as you’ll soon see, he has a lot to say on safety.  (Keep in mind that Rothbard wrote For A New Liberty back in the 1970s, prior to Times Square’s rejuvenation.  A lot has changed since then…)

Chapter 11: The Public Sector, II: Streets and Roads
Protecting the Streets

Abolition of the public sector means, of course, that all pieces of land, all land areas, including streets and roads, would be owned privately, by individuals, corporations, cooperatives, or any other voluntary groupings of individuals and capital. The fact that all streets and land areas would be private would by itself solve many of the seemingly insoluble problems of private operation. What we need to do is to reorient our thinking to consider a world in which all land areas are privately owned. Let us take, for example, police protection. How would police protection be furnished in a totally private economy? Part of the answer becomes evident if we consider a world of totally private land and street ownership. Consider the Times Square area of New York City, a notoriously crime-ridden area where there is little police protection furnished by the city authorities. Every New Yorker knows, in fact, that he lives and walks the streets, and not only Times Square, virtually in a state of “anarchy,” dependent solely on the normal peacefulness and good will of his fellow citizens. Police protection in New York is minimal, a fact dramatically revealed in a recent week-long police strike when, lo and behold!, crime in no way increased from its normal state when the police are supposedly alert and on the job. At any rate, suppose that the Times Square area, including the streets, was privately owned, [p. 202] say by the “Times Square Merchants Association.” The merchants would know full well, of course, that if crime was rampant in their area, if muggings and holdups abounded, then their customers would fade away and would patronize competing areas and neighborhoods. Hence, it would be to the economic interest of the merchants’ association to supply efficient and plentiful police protection, so that customers would be attracted to, rather than repelled from, their neighborhood. Private business, after all, is always trying to attract and keep its customers. But what good would be served by attractive store displays and packaging, pleasant lighting and courteous service, if the customers may be robbed or assaulted if they walk through the area?

The merchants’ association, furthermore, would be induced, by their drive for profits and for avoiding losses, to supply not only sufficient police protection but also courteous and pleasant protection. Governmental police have not only no incentive to be efficient or worry about their “customers'” needs; they also live with the ever-present temptation to wield their power of force in a brutal and coercive manner. “Police brutality” is a well-known feature of the police system, and it is held in check only by remote complaints of the harassed citizenry. But if the private merchants’ police should yield to the temptation of brutalizing the merchants’ customers, those customers will quickly disappear and go elsewhere. Hence, the merchants’ association will see to it that its police are courteous as well as plentiful.

Rothbard then goes on to describe two hypothetical ways private ownership would lead to safer streets – through joint ownership or management of city blocks, or ownership of the streets themselves by private operators:

Such efficient and high-quality police protection would prevail throughout the land, throughout all the private streets and land areas. Factories would guard their street areas, merchants their streets, and road companies would provide safe and efficient police protection for their toll roads and other privately owned roads. The same would be true for residential neighborhoods. We can envision two possible types of private street ownership in such neighborhoods. In one type, all the landowners in a certain block might become the joint owners of that block, let us say as the “85th St. Block Company.” This company would then provide police protection, the costs being paid either by the home-owners directly or out of tenants’ rent if the street includes rental apartments. Again, homeowners will of course have a direct interest in seeing that their block is safe, while landlords will try to attract tenants by supplying safe streets in addition to the more usual services such as heat, water, and janitorial service. To ask why landlords should provide safe streets in the libertarian, fully private society is just as silly as asking now why they should provide their tenants with heat or hot [p. 203] water. The force of competition and of consumer demand would make them supply such services. Furthermore, whether we are considering homeowners or rental housing, in either case the capital value of the land and the house will be a function of the safety of the street as well as of the other well-known characteristics of the house and the neighborhood. Safe and well-patrolled streets will raise the value of the landowners’ land and houses in the same way as well-tended houses do; crime-ridden streets will lower the value of the land and houses as surely as dilapidated housing itself does. Since landowners always prefer higher to lower market values for their property, there is a built-in incentive to provide efficient, well -paved, and safe streets.

Another type of private street-ownership in residential areas might be private street companies, which would own only the streets, not the houses or buildings on them. The street companies would then charge landowners for the service of maintaining, improving, and policing their streets. Once again, safe, well-lit, and well-paved streets will induce landowners and tenants to flock to those streets; unsafe, badly lit and badly maintained streets will drive those owners and users away. A happy and flourishing use of the streets by landlords and automobiles will raise the profits and stock values of the street companies; an unhappy and decaying regard for streets by their owners will drive the users away and lower the profits and the stock values of the private street companies. Hence, the street-owning companies will do their best to provide efficient street service, including police protection, to secure happy users; they will be driven to do this by their desire to make profits and to increase the value of their capital, and by their equally active desire not to suffer losses and erosion of their capital. It is infinitely better to rely on the pursuit of economic interest by landowners or street companies than to depend on the dubious “altruism” of bureaucrats and government officials.

I think it is easy to mistake Rothbard’s vision as some sort of privately-run pseudo-police state, clashing with Jane Jacobs’ vibrant public spaces.  Keep in mind that this was written in the 1970’s – when crime was at its peak in New York and many other cities.  But, as Jane Jacobs taught us, diverse, vibrant street life provides “eyes on the street” – a no-cost security measure.  As a commercial benefit, streets with high foot traffic also enable higher-rent ground-floor retail.  So, I think it’s important to add to Rothbard’s discussion of safety that a well-run block or street would be wise to encourage pedestrian-activated streets as both a cost reducing and revenue increasing measure.  Publicly-run streets lack this natural incentive.

Note: Rothbard does mention Jane Jacobs on page 247 in an unrelated chapter.

Stay tuned for more of this series. Feel free to read ahead or listen to the audio version of the chapter

Rothbard the Urbanist Part 1: Public Education’s Role in Sprawl and Exclusion

I’ve been meaning to address the public education system’s complex role in land use patterns, and found that Murray Rothbard does a better job in his 1973 manifesto, For a New Libertythan I ever could.  In summary, locally-funded public education is an engine of geographical segregation, which encourages flight from urban areas, and was a driving motivation for the popular acceptance of exclusionary zoning in newer suburbs.  As a result, wealth is consistently concentrated geographically, and housing affordability is at odds with these restrictions of supply intended to exclude poorer people from draining the property tax base.

Here’s a paragraph from the chapter on education:

The geographical nature of the public school system has also led to a coerced pattern of residential segregation, in income and consequently in race, throughout the country and particularly in the suburbs. As everyone knows, the United States since World War II has seen an expansion of population, not in the inner central cities, but in the surrounding suburban areas. As new and younger families have moved to the suburbs, by far the largest and growing burden of local budgets has been to pay for the public schools, which have to accommodate a young population with a relatively high proportion of children per capita. These schools invariably have been financed from growing property taxation, which largely falls on the suburban residences. This means that the wealthier the suburban family, and the more expensive its home, the greater will be its tax contribution for the local school. Hence, as [p. 133] the burden of school taxes increases steadily, the suburbanites try desperately to encourage an inflow of wealthy residents and expensive homes, and to discourage an inflow of poorer citizens. There is, in short, a breakeven point of the price of a house beyond which a new family in a new house will more than pay for its children’s education in its property taxes. Families in homes below that cost level will not pay enough in property taxes to finance their children’s education and hence will throw a greater tax burden on the existing population of the suburb. Realizing this, suburbs have generally adopted rigorous zoning laws which prohibit the erection of housing below a minimum cost level — and thereby freeze out any inflow of poorer citizens. Since the proportion of Negro poor is far greater than white poor, this effectively also bars Negroes from joining the move to the suburbs. And since in recent years there has been an increasing shift of jobs and industry from the central city to the suburbs as well, the result is an increasing pressure of unemployment on the Negroes — a pressure which is bound to intensify as the job shift accelerates. The abolition of the public schools, and therefore of the school burden-property tax linkage, would go a long way toward removing zoning restrictions and ending the suburb as an upper middle-class-white preserve.

Later chapters address other urbanism-related issues, and I’ll share those insights as I come across them.

For a New Libertyis available for free from the Mises Institute in full as an html page, a pdf, or audio book read by Jeffrey Riggenbach. (the audio version is how I am finding time to absorb it among the rigors of caring for the little guy)  Bryan Caplan also summarizes this chapter (and each chapter) as part of the Econlog Book Club.