Thursday, July 3rd, 2014
My latest column is online in the July issue of Governing Magazine. It’s called “Do Cities Really Want Economic Development? My conclusion is that in all too many places, the answer is No. The status quo is actually preferred, no matter what people might say.
All we have to do see this is to apply Occam’s Razor to the condition of our cities. What’s the simplest explanation that explains the facts? In any number of places, if you just assume that civic leaders and maybe the broader community itself actually want the place to go down the tubes or at least stay the same, everything else falls into place.
Now it may be that this is really an emergent property of the social system rather than intentional. What’s that saying? “The system is producing precisely the results it is designed to produce.” Maybe Abilene Paradox style, no one really wants the city to fail but collectively everyone ends up choosing decline. But then you see so many examples of crookedness, cronyism, criminality, and self-dealing that pop through into the public view, and the benefit of the doubt starts to crumble.
In any case, here’s an excerpt:
Economist David Friedman once told this joke: “Two economists walk past a Porsche showroom. One of them points at a shiny car in the window and says, ‘I want that.’ ‘Obviously not,’ the other replies.” That is, if the first economist had really wanted the Porsche, he would have bought it. Our choices tell us more than our words about what it is we really want.
Problems are problems, but they are also sometimes solutions to certain sets of questions. One of these is how to mobilize, allocate, and deploy community resources and power. Fighting decline has become the central organizing principle in many places.
Jane Jacobs took it even further. As she noted in The Economy of Cities, “Economic development, whenever and wherever it occurs, is profoundly subversive of the status quo.” And it isn’t hard to figure out that even in cities and states with serious problems, many people inside the system are benefiting from the status quo.
They have political power, an inside track on government contracts, a nice gig at a civic organization or nonprofit, and so on. All of these people, who are disproportionately in the power broker class of most places, potentially stand to lose if economic decline is reversed. That’s not to say they are evil, but they all have an interest to protect.
Consider one simple thought experiment: If a struggling community starts booming, that would eliminate a big part of the rationale for subsidized real estate development, which constitutes the principal form of economic development in all too many places, and which benefits a clear interest group. It might also attract highly motivated, aggressive people from out of town, folks who are highly likely to agitate for better than the current inbred ways of doing business. This would inherently dilute the positions of the current powers that be.
Read the whole thing.