I'm entertaining a train of thought that has its origins in some local developments but that has definite national implications.
Longtime LITD readers know that one of my gigs is covering local government for a local news organization. In that capacity, I've been reporting on the evolution of a plan to repurpose a moribund mall property on our city's near-northside.
Some background: The mall was emblematic of the dying-mall phenomenon seen around the country. By five years ago, it had considerably more shuttered storefronts than operating businesses. So the city, the city's parks department (which, yes, is a part of the city, but was here operating as an autonomous entity) and the local hospital (or regional-health organization, as it brands itself) "partnered" to form a corporation and buy it.
They heard presentations from several competing design-consultant firms and selected one. That firm has held a series of public-input meetings at each phase of its involvement. Last night, it presented its conceptual master plan.
It's about what I expected: a grand entrance, lots of green space and courtyards, everything from little kitchen areas for nutrition classes to a big fieldhouse for playing all kinds of sports, to some retail space for wellness-related businesses to meeting rooms. The parks department would likely put its administrative offices there.
The plan also calls for prettying-up nearby thoroughfares: bike lanes, decorative fixtures, etc.
The corporation's president gave some opening remarks in which he cautioned the public that it would probably be 2021 before any ground was broken on any part of the project. He'd said the corporation would have to "figure out what should happen when, and with a limited budget."
He said the corporation wants to make sure that in 30 years, citizens say that the people involved had the foresight to create something of lasting value.
And therein lies what I wonder about. American society is going to change so rapidly over the next 30 years that no one now involved can say whether any of these facilities will be relevant then.
What we've done is put government in the role of discerning trends and trying to stay on top of them. The Madisonian, the free-market purist, in me sees this as giving government a role way beyond what it should have.
The rejoinder, of course, is that no one knows how long this 36-acre behemoth would have sat idle until a private investor bought it, and then no one knows whether said investor's idea of what to do with it would result in a community gem or some kind of eyesore. Such an argument gets closed by pointing out that our city has to think always in terms of economic development, as it is in competition with every other municipality in our state, and, really, the nation.
Now, let's go a little further down my train of thought about all this. At what point did this business of communities having to compete with each other become the all-consuming paradigm?
Pick some year - say, 1870, 1890, or even 1910 - and look at how municipalities, from small towns to metropolises, existed. At that time, they were all, for all intents and purposes still growing. And they all had distinct identities based on their organic growth. Particular industries sprang up within them, due to factors such as geography or the particular entrepreneurial minds that called them home. Chicago became known as the world's meat-packer. Nashville became the country-music capital. Detroit, the car capital. Battle Creek, Michigan, the breakfast-cereal capital. Oregon a logging state. Key West became known as a tourist destination. And so on.
But at some point, cities felt the need to look beyond themselves, to attract activity from anywhere they could. As a result, they forfeited a great deal of their unique identities. A tangible example of the result is the interchangeable nature of the "doorways" these towns and cities have just off their interstate exchanges. They all have the same box stores, chain restaurants, car dealerships and hotels.
And they all have economic development organizations that go on junkets to the Pacific rim to court Asian companies to come build facilities on land that they annex.
As with so much that comes down our sociocultural pike, I don't know that there could be a tidy way back to the old model. Inventors and tinkerers seldom start empires from their garages anymore. Civic life generally has taken a hit. That's what Robert Putnam's 2002 book Bowling Alone was all about.
Still, there's such a whiff of central planning to the way it's done now, that I can't help but ask if there isn't something kind of strange about asking an outside consulting firm to come in and show us how to get that cozy community feel going again, especially since it's all in the name of making us more like all the communities we feel we need to compete against.
I think I'll ask Clyde (my libertarian podcast co-host) if this isn't something we should kick around in this weekend's installment.
Is this way of doing things all upside? I just don't think so.
There's more than just a whiff of central planning. It's conclusive proof that nobody on the "economic development" scene has read Hayek-- or that they just think they are smarter.
ReplyDeleteThere are two economic realities, and they are intertwined: the price system, and human perceptions. The latter part is the fundamental flaw in traditional economics-- the assumption of the rational human, homo economicus. Rational humans buy low and sell high. The stock market refutes conclusively the assumption of rational actors. Rising prices often stimulate qty demanded, not suppress it. Those neat demand curves and such? They are baloney as anything other than theoretical constructs. People are not rational, which is why bubbles occur. We’ve known this since the Dutch tulip bulb craze. But it took Gary Becker’s pioneering work on behavioral economics and studying cab drivers and such to provide the most significant economic insight since Friedman’s monetarism.
The price system might indicate that a particular area is a very low-cost place for a business to locate. But the low price alone tells you nothing about the value of locating there, because the value depends on *perceptions* of why the price is low and *expectations* of whether it will further decline or increase. If the perception is that the price is low because it’s an undiscovered gem, then the value is likely high. But if the price is low because the area is run down and neglected, crime is high, then it’s likely the low price is not a good value.
What does this mean for local economic development? Unfortunately, it means that there is an element of validity to assumptions that underlie their socialist central-planner desires: expectations beget expectations. Good schools attract better student and become better schools. Rich areas get richer and more exclusive. Development breeds development. And blight breeds blight.
ReplyDeleteUntil it doesn’t. Just as there are poor areas being revitalized, there are also rich areas that are rich no longer. And formerly great schools that aren’t. How do we know whether today’s development will stimulate tomorrow’s development or whether it will sow the seeds of tomorrow’s blight?
We can’t, with certainty. But we can know some things. Attracting younger beats attracting older, for example. Attracting richer beats attracting poorer. Yet look at how much “economic development” in Columbus has been building future slums of subsidized elderly housing? New apartments that are for rent-control?
Not all “growth” is progress. If you have a certain median income in town and you add only low-wage jobs, then you’ve (by definition) lowered your median income. If you’re building only low-cost housing, then you’re lowering the median home value. This is very simple math.
ReplyDeleteBut there are people in Columbus who would gladly bring in 1000 minimum wage jobs in the name of “job creation” not recognizing that quality of life comes from the overall—the average or the median. The *kind* of development matters more than whether or not the development occurs. MANY forms of development end up pyrrhic victories: building tons of new infrastructure you can’t afford to keep up; throwing million of tax incentives at a project that ends up incomplete; luring a major employer only to see the costs outweigh the benefits.
Those towns that court the Casinos end up learning the lesson all too often. A casino comes to town, lured by large tax incentives to create a bunch of low wage service jobs. And what does it do? It creates “growth” based on gambling, drinking, and entertainment—which means you end up with worse traffic, higher crime rates, more demand for social services (low wage jobs are performed by a labor pool overrepresented by consumers of welfare and other social services). You end up having to spend more on police, fire, water, and critical infrastructure.
The net effect is that some wealthy casino owner/builder gets richer, the poor people stay poor, and the middle-class people in the area have higher water bills, higher taxes, and worse traffic. All due to “economic development”