Redistribution (a follow up)

I threw up Friday’s Redistribution post somewhat hastily during my break, but there isn’t much more that I haven’t said before.  As a follow-up, I’d like to tie it in with some other interesting reads.

Ryan Avent at The Bellows agreed with Yglesias’ post and added:

Anyway, I saw in Google reader that libertarian intellectual Will Wilkinson had shared Matt’s post, presumably because he agreed with it. And indeed, this is one of those times when libertarians and liberals can find common cause. On the other hand, most of Cato’s planner types vigorously defend suburban sprawl and highway construction, and vigorously oppose smart growth and transit construction, despite the obvious point that it takes an immense web of regulations and subsidies to support rapid suburban and exurban growth.

Over here! Ryan, Will! We’re over here!…

Definitely check out The Bellows post. Will Wilkinson stopped in to comment, too.

I think the “common cause” concept was conveyed well in Ed Glaeser’s recent NY Times piece, called The Case for Small-Government Egalitarianism. Harvard’s Glaeser reaches out for “common cause” between libertarians and progressives – kinda like the links between Free-Markets and Urbanism:

Libertarian progressivism distrusts big increases in government spending because that spending is likely to favor the privileged. Was the Interstate Highway System such a boon for the urban poor? Has rebuilding New Orleans done much for the displaced and disadvantaged of that city? Small-government egalitarianism suggests that direct transfers of federal money to the less fortunate offer a surer path toward a fairer America.

and

Many of my favorite causes, like fighting land use regulations that make it hard to build affordable housing, aid the poor by reducing the size of government. In the wake of Hurricane Katrina, I also argued that it would be far better to give generous checks to the poor hurt by the storm than to spend billions rebuilding the city, because those rebuilding efforts would inevitably help connected contractors more than ordinary people.

Urbanism is an area where free-market folks and progressive city dwellers can work together and share knowledge on so many concepts – I think we’ll find we have more in common than what’s on the surface.  As Noah Millman puts it:

But forgive me if I question the proposition that any political group is actually purely rational, and actually acting entirely out of concern for the common good. People who are, fundamentally, more distrustful of big government because they are convinced it will inevitably become the tool of special interests against the common good will be more alive to the kinds of things that can go wrong with big-government solutions than will other kinds of liberals who lack that basic distrust. By the same token, libertarians might be more likely to be won over to liberal perspectives if liberals can articulate arguments that libertarians would respect about how their policy proposals will actually limit government capture by special interests.

Uncomfortable truths about the progressive legacy

by Stephen Smith

Yesterday I was listening to the pre-inaugural concert at the Lincoln Memorial on the radio, and one of the speakers said something that struck me as emblematic of the challenges that Barack Obama faces, though I doubt she realized the ironic significance. She was praising Theodore Roosevelt’s conservationist legacy as a model for Obama, with some quotes from him at the Grand Canyon or Yosemite or some other celebrated national park, though she only touched on a small sliver of Roosevelt’s environmental legacy. He definitely did cherish the environment; a timeline of his life shows that in early April 1903 he “commune[d] with deer while writing letters in Yellowstone, WY.” He was indeed a conservationist, as were many progressives at the time.

But the progressives were also something else – something that today’s progressives would do well to remember: ardent planners whose plans often had grave unforeseen consequences. Just after his time communing with the deer at Yellowstone, Roosevelt traveled to St. Louis to address the 1903 Good Roads Convention. The “good roads” movement dated back to before the automobile rose to prominence, and was formed to agitate for improved roads for bicyclists and farmers. But around the time of Roosevelt’s speech, the movement was hijacked by the budding auto-industrial complex. Unwilling or unable to compete on their own against mass transit, the automakers, highway engineers, and road contractors sought for the state to both acquire the rights of way necessary for the roads, and to pay for them to be paved – an advantage the streetcars and railroads did not generally have. Not wanting to appear to be too blatant in their rent seeking, these interests lobbied the government indirectly, giving organizations like the AAA money in exchange for influence and seats on their boards.

The nascent auto industry was not the only booster of subsidized roads – even the private railroads were not immune to the siren song of the great new progressive future. They joined the cause in the 1890s with the idea that improved roads would mean more business for railroads, unaware of the threat that the long-haul trucking industry would come to pose to their business. This new semi-public, semi-private corporatist transportation model suited the progressives as well, who believed in a statist future where “private” enterprise was directed and controlled, though not outright owned, by the government.

In the years since the 1903 Good Roads Convention, the idea that government ought to be providing “good roads” has fundamentally altered the landscape of the country in ways that Theodore Roosevelt never could have imagined. The highway lobby gathered strength throughout the first half of the 20th century, eventually culminating in the Interstate Highway System, the widespread suburbanization of America, and the destruction of American cities. Urban planners like Robert Moses razed neighborhoods and blighted the remaining barren landscapes with highways that have become increasingly congested ever since. In order to stave off this inevitable overuse, planners flattened America with zoning laws and parking regulations that forced Americans to sprawl away from city centers, to areas reachable only by cars and trucks. A century later it’s hard to imagine it happening any other way, and it’s often forgotten that there was a workable free market urbanism before there was unsustainable sprawl.

Especially in recent decades, the system has acquired the façade of self-sufficiency and thus the illusion of being a market institution, because of the Highway Trust Fund and separate gas taxes and user fees levied specifically on motorists. But some of the most significant costs – the acquisition of land for rights-of-way – were paid for earlier in the century, when the government’s power of eminent domain was near absolute. Furthermore, roads are asked only to recoup their capital and operating costs (well, most of them anyway), though every freshman in Econ 101 ought to know that a profit-seeking entrepreneur seeks to recoup his opportunity costs rather than just his accounting costs. In other words, not only does he try to make a profit, but the underlying land shouldn’t earn him any more money were it put to some other use – a test no roads are subject to. To add insult to injury, the nature of roads and private cars is such that they work best in low density environments, but cannot scale upwards without becoming prohibitively expensive due to the cost of ever-widening roads. Mass transit is precisely the opposite – it handles high densities well, and is utterly unprofitable at lower ones. Predictably, America’s zoning rules and parking regulations are overwhelmingly oriented towards densities lower than what the market would demand in their absence.

Theodore Roosevelt might be more commonly remembered for his conservationist work, but it’s important for people today to remember the unforeseen consequences of the his other grand plans. The “good roads” path that he helped put America on has shown itself to be an enabler of global climate change, encouraging Americans to live farther apart, travel farther each day, have bigger houses, and fill those houses with more things. The common telling of the roading of America is that it oiled the gears of commerce and is an integral part of the “American dream,” but it’s impossible to know what sort of advances in mass transit technology would have come about and how we’d be living had the government not favored the automobile and the truck over the streetcar and the train. Theodore Roosevelt’s conservationist efforts are indeed praiseworthy, but might both the environment and the economy be in better shape today had the progressives not interrupted the rail-based urbanization of turn-of-the-century America and put us on the car-based sprawling sub- and exurbanization that characterizes America today?

In calling for the government to fund more mass transit and urban projects, Barack Obama has shown that he sees the problems in America’s land use configuration. But in doing so, he’s shown himself to be ignorant of the root causes of the crisis: government meddling in the transportation and land use industries. Just as the progressives and futurists failed to use the government to design a more efficient transportation scheme, Obama will likely fail in using the government to fix America’s energy problems. Unless he renounces the legacy of the progressives and admits to America that it needs to return to its market-based roots – at least with respect to transportation and land use policy – his campaign promises of reversing our unsustainable ways will go unfulfilled.

This post was written by Stephen Smith, who writes for his own blog called Rationalitate.

Urban[ism] Legend: Creating Jobs With Infrastructure

This post is part of an ongoing series featured on Market Urbanism called Urbanism Legends. The Urbanism Legends series is intended to expose many of the myths about development and Urban Economics. (it’s a play on the term: “Urban Legends” in case you didn’t catch that)

Last week President-elect Obama announced some details of his economic stimulus package:

Second, we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We’ll invest your precious tax dollars in new and smarter ways

This further taxpayer subsidization, beyond currently insufficient highway revenue sources, of sprawl and auto-dependency seems to contradict Obama’s promise of “green jobs”. As Tyler Cowen remarks, “for better or worse you can consider the opposite of a carbon tax.” Furthermore, the Obama plan intends to fund the stimulus directly to states, as opposed to metro areas, which have historically received almost two-thirds of the funds directly.

Certainly, Obama’s plan is not an urbanism-friendly plan, yet I consistently hear urbanists subscribing to and spreading the myth that jobs can be created by spending on infrastructure, and that these jobs will lead to economic recovery. Even if the job creation myth were true, and could stimulate the economy immediately, you would think urbanists would not sacrifice urbanist ideals for the sake of short-term recovery through their commitment to so-called progressive ideology.

In his enduring 1961 classic, Economics in One Lesson, Henry Hazlitt addresses the long-standing myth about “creating jobs” through public works projects:

A bridge is built. If it is built to meet an insistent public demand, if it solves a traffic problem or a transportation problem otherwise insoluble, if, in short, it is even more necessary to the taxpayers collectively than the things for which they would have individually spent their money had it had not been taxed away from them, there can be no objection. But a bridge built primarily “to provide employment” is a different kind of bridge. When providing employment becomes the end, need becomes a subordinate consideration. “Projects” have to be invented. Instead of thinking only of where bridges must be built the government spenders begin to ask themselves where bridges can be built. Can they think of plausible reasons why an additional bridge should connect Easton and Weston? It soon becomes absolutely essential. Those who doubt the necessity are dismissed as obstructionists and reactionaries.

Two arguments are put forward for the bridge, one of which is mainly heard before it is built, the other of which is mainly heard after it has been completed. The first argument is that it will provide employment. It will provide, say, 500 jobs for a year. The implication is that these are jobs that would not otherwise have come into existence.

This is what is immediately seen. But if we have trained ourselves to look beyond immediate to secondary consequences, and beyond those who are directly benefited by a government project to others who are indirectly affected, a different picture presents itself. It is true that a particular group of bridgeworkers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $10 million the taxpayers will lose $10 million. They will have that much taken away from them which they would otherwise have spent on the things they needed most.

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.

But then we come to the second argument. The bridge exists. It is, let us suppose, a beautiful and not an ugly bridge. It has come into being through the magic of government spending. Where would it have been if the obstructionists and the reactionaries had had their way? There would have been no bridge. The country would have been just that much poorer. Here again the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their physical eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence. They can see the unbuilt homes, the unmade cars and washing machines, the unmade dresses and coats, perhaps the ungrown and unsold foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others.

Unfortunately, big spending on infrastructure projects are political chess pieces. As politicians align themselves for the handout, Governors are sure to push for spending that will allow them to funnel federal tax dollars into vanity projects that will do the most to boost visibility and popularity. I wouldn’t expect any wise long-term planning on the part of the spenders.

From an economic recovery point-of-view, it will be years before the money spent on infrastructure trickles back into the overall economy, and even longer for any productivity gains to be realized by the newly constructed infrastructure. This pervasive myth is a dangerous enabler of one of the least effective strategies for recovery (in the short-run), and a harmful disservice the the environment and living patterns (in the long-run).


To receive future Urbanism Legends posts, subscribe to the Market Urbanism feed by email or RSS reader here. If you come across an interesting Urbanism Legend, let me know by email or in the comments and I’ll make a post debunking the myth. Of course, I’ll give you credit for the tip and any contributions to the post you make…

“The answer: Freedom.”

I related to this particular post by Michael Lewyn at Planetizen, Why I fight:

Occasionally, someone familiar with my scholarship asks me: why do you care about walkability and sprawl and cities? Why is this cause more important to you than twenty other worthy causes you might be involved in?

The answer: Freedom.

Now, the article doesn’t discuss freedom from a property rights or free-market point of view, but from a mobility point of view. As a former “carless teenager” in suburbia (well, carless until 16), I can relate to that. I think my yearning for freedom is what sparked my interest in the city too.

Of course, some people equate driving to freedom. For some its walkability, transit, or silent star filled skies. Freedom means different things to everyone, and I found my freedom in the diverse experiences and opportunities only available in the city.

Cul-de-sacs – Privatize ‘em

Daniel Nairn at Discovering Urbanism brings up a great point about cul-de-sacs. Are they public goods, or truly unnecessary “socialism in its most extreme form”?

Take the standard cul-de-sac that serves a handful of households. The purpose of this design is to exclude the general public from passing through while serving the automotive needs of a small number of individuals. Does it pass our intuitive sense of fairness to declare that the entire public, say the local municipal citizenry, ought to foot the bill for what could essentially be considered a shared driveway? Perhaps a more important question: How does the government’s decision of where to draw the line between public and private encourage or discourage the connectivity of the road system?

image from Discovering Urbanism

image from Discovering Urbanism

Dan discusses that Virginia’s DOT is looking at shifting funding away from roads that don’t play a significant role in the transportation network, by using a very well defined metric:

The link-node ratio is calculated by dividing the number of links (street segments and stub streets) by the number of nodes (intersections or cul-de-sacs). A perfect grid of streets will have a link-node ratio around 2.5 and a network of complete cul-de-sac or dead end streets with only one way in and one way out will have a link-node ratio of 1.0. It is suggested that a ratio of 1.4 will provide adequate connectivity in many situations.

The link-to-node ratio seems like a very rational approach to determining public roadway funding, if one chooses to concede that roads are a public good.

Unfortunately, owners of homes on cul-de-sacs have grown acustomed using their publicly-funded, communal driveways, and would suffer from decreased funding for roads they are entirely dependent upon. A viable solution would be for the municipality to grant the cul-de-sac roadway and land to the owners of the homes. The home owners could then use the street land per its highest-and-best use, and maintain their private communal driveway at their own expense. Observing the rise or drop in the value of those homes, we’ll then see if cul-de-sacs add value to the community, or are just sinkholes for public funds that benefit only a few home owners.

Another On “Conservatives” and Urbanism

While I sympathize with the theme and agree with regards to roadway spending and “conservative” hypocrisy, a recent article in the progressive The American Prospect takes a narrow-minded view of politics and urbanism, while throwing around broad generalizations about evolution and global warming to support their assertions:

The Conservative Case for Urbanism

In fact, one doesn’t have to be concerned about climate change at all in order to support such policies; values of fiscal conservatism and localism, both key to Republican ideology, can be better realized through population-dense development than through sprawl.

Tom Darden, a developer of urban and close-in suburban properties, said Wednesday, “I’m a Republican and have been my whole life. I consider myself a very conservative person. But it never made sense to me why we would tax ordinary people in order to subsidize this form of development, sprawl.” Darden told the story of a road-paving project approved by North Carolina when he served on the state’s transportation board. A dirt road that handled just five trips per day was paved at taxpayer expense, with money that could have gone toward mass transit benefiting millions of people.

“Those were driveways, in my view, not roads,” Darden said.

I agree with Darden. However, so-called “progressives” fall into the same narrow minded trap when they support public transportation as a solution to global warming that “conservatives” fall into when they try to protect their auto-centric lifestyle. Many are really calling for more of the same top-down overspending on transportation infrastructure that will require a taxpayer bail out at some time in the distant future. Where is the rational voice trying to slow down overspending on all energy-reliant, sprawl-creating, redistribution of productive resources? While existing transit may be less bad environmentally in comparison to highways when looked at from a narrow point of view, it is a common mistake to assume that more spending on new infrastructure of any form will create denser living patterns. Yet we hear the top-down paternalistic rhetoric over and over:

“People don’t want to live 40 miles away from their workplaces,” Coleman said. “But we have to offer them options. If we can build a light rail line into the city of St. Paul and build the density of business around it that we are planning, we will be able to significantly alter people’s lifestyles.”

But in order to build public support for such policies, conservatives must join progressives in rethinking the United States’ geography. Density is cost effective, it fosters small business development at the local level, and it strengthens ties within communities. None of that should be anathema to either national party — unless they continue to put the interests of construction behemoths and automakers above the interests of ordinary Americans.

I would argue that “progressives” who wave the banner of environmentalism, while well-intentioned, are no friends to urbanism. I plan to dispel the myth that more spending on public transit will lead to denser living patterns in a future Urbanism Legends post. If these “progressives” really want denser living and a more environmentally friendly transportation network, they should rethink their love affair with top-down planning and spending, including on new transit. Afterall, progressivism brought us Euclidean Zoning in the first place.

Update:
rationalitate hits the nail one the head in response to the American Prospect article, and hits on some other points I didn’t get into:

But what it doesn’t mention is that the sort of sprawl that dots America’s (mostly suburban) landscape is enabled by zoning and minimum parking regulations, and that the suburbs might be a lot denser if people were allowed more complete property rights. I don’t know if it’s because the Republican party has strayed so far away from its limited government roots that this no longer qualifies as a “conservative” issue, or if the author mistakenly equates municipal government with individual choice, or if the author is just plain ignorant as to the root causes of sprawl. But in any case, she took what could have been an insightful topic, stripped away any persuasive arguments, and left readers with the impression that urbanism simply isn’t compatible with American conservatism. And that’s a shame.

I’ll go with: “the author is just plain ignorant as to the root causes of sprawl.”

[HT: The Bellows]

Weekend Reading: Jane Jacobs, Agglomeration, Farms, NIMBY Songs

During my early college studies in Architecture and Urban Design, I became loosely familiar with the ideas of Jane Jacobs, one of the most celebrated urbanist intellectuals. Sanford Ikeda’s FEE lectures [mp3] have inspired me to learn more about Jane Jacobs from a Free Market Urbanism point of view. Here’s an article by Professors Ikeda and Gene Callahan I added to the links page: Jane Jacobs, The Anti-Planner

Jane Jacobs is one of those intellectuals who seem ever on the periphery of the libertarian movement. Her book, The Death and Life of Great American Cities, can be found on the shelves of many a libertarian, though often unread. Perhaps this is because her name tends to be associated with leftish intellectuals who decry the rise of the suburbs and the decline of the downtowns, even though Jacobs strongly resists being labeled by any ideological movement, left, right, or other.

What is not commonly known, however, is that her works are full of arguments and insights on the economic nature of communities, on central planning, and on ethics that libertarians would find original and enlightening.

In the works of Jacobs, the order present in a well-functioning urban area emerges as the result of human action but not human design. It arises from a myriad of individuals each pursuing their own interest and carrying out their own plans, within a framework of rules that encourages peaceful cooperation over violent aggression.

I have added Jacobs’ The Death and Life of Great American Cities
to my list of books to read. In fact, I bumped it to next in line. Hopefully her ideas will inspire a series of fresh blog posts.
——

Mathew Kahn tipped us off to proceedings from a conference on The Economics of Agglomeration edited by Harvard Urban Economist Ed Glaeser.
——

Economist – An Arable Parable: Is Farmland Undervalued?

With many financial assets in the doldrums and markets spooked by the twin spectres of economic weakness and rising inflation, is it time to head for the hills? Barton Biggs, an investment guru, famously suggested that those wishing to preserve their wealth in times of turmoil should consider buying an “unostentatious farm”. And rural land has long been seen as a good inflation hedge.

But now may not be the most opportune time for investors to swap their wingtips for wellies. After more than two decades in the mire, the value of farmland has soared over the past few years on the back of strong prices for agricultural commodities, low interest rates and urban sprawl. It has become so fashionable that some wonder if it is a bubble waiting to burst.

—–

Brian J. Phillips – NIMBY Songs

The real issue is how to resolve such issues. More and more often, the home owners run to government and seek some law that will prohibit the proposed project. They reject the concept of property rights and seek to impose their values upon the rightful property owner. They reject voluntary, consensual interactions between individuals and seek to substitute the coercive power of government.

Links and Weekend Listening

I’ve been swamped in my day job, but want to share the following:

The blog, Agents of Urbanism recently gave praise to Market Urbanism. Thanks Matthew! Please check out Agents of Urbanism and Life Without Buildings, who followed up on Agent of Urbanism’s praise. I enjoy both blogs.

Carl Close wrote How “Urban Renewal” Destroyed San Francisco’s Fillmore District for The Independent Institute’s blog, The Beacon.

And finally, I came across some fantastic lectures at the Foundation for Economic Education, by Sandy Ikeda. I highly recommend listening to the MP3s during your free time this weekend. He discusses Jane Jacobs, urbanism, history, sprawl, economics, and most things of interest to readers of Market Urbanism:
Urban Planning
Private Cities