Archive for the 'Jane Jacobs' Category

Paul Krugman on Tricky Urban Economics

Paul Krugman has a post about a New Yorker piece by Tim Wu discussing the surprising and disturbing increase in vacant storefronts in the very prosperous and desirable West Village in Lower Manhattan. I agree with most of what Krugman has to say, but I was struck by what seemed to me to be a misplaced emphasis in his post. My comment is not meant so much as a criticism, as an observation on the complexity of the forces that affect life in the city, which makes it tricky to offer any sort of general ideological prescriptions for policy. Krugman warns against adopting a free-market ideological stance – which is fine – but fails to observe that statist interventionism has had far more devastating effects on urban life. We should be wary of both extremes.

Krugman starts off his discussion with the following statement, with which, in principle, I don’t take issue, but is made so emphatically that it suggests the opposite mistake of the one that Krugman warns against.

First, when it comes to things that make urban life better or worse, there is absolutely no reason to have faith in the invisible hand of the market. External economies are everywhere in an urban environment. After all, external economies — the perceived payoff to being near other people engaged in activities that generate positive spillovers — is the reason cities exist in the first place. And this in turn means that market values can very easily produce destructive incentives. When, say, a bank branch takes over the space formerly occupied by a beloved neighborhood shop, everyone may be maximizing returns, yet the disappearance of that shop may lead to a decline in foot traffic, contribute to the exodus of a few families and their replacement by young bankers who are never home, and so on in a way that reduces the whole neighborhood’s attractiveness.

The basic point is surely correct; urban environments are highly susceptible, owing to their high population density, to both congestion and pollution, on the one hand, and to positive spillovers, on the other, and cities require a host of public services and amenities provided, more or less indiscriminately, to large numbers of people. Market incentives, to the exclusion of various kinds of collective action, cannot be relied upon to cope with congestion and pollution or to provide public services and amenities. But it is equally true that cities cannot function well without ample scope for private initiative and market exchange. The challenge for any city is to find a reasonable balance between allowing individuals to organize their lives, and pursue their own interests, as they see fit, and providing an adequate supply of public services and amenities, while limiting the harmful effects that individuals living in close proximity inevitably have on each other. It is certainly fair to point out that unfettered market forces alone can’t produce good outcomes in dense urban environments, and understandable that Krugman, a leading opponent of free-market dogmatism, would say so, but he curiously misses an opportunity, two paragraphs down, to make an equally cogent point about the dangers of going too far in the other direction.

Curiously, the missed opportunity arises just when, in the spirit of even-handedness and objectivity, Krugman acknowledges that increasing income equality does not necessarily enhance the quality of urban life.

Politically, I’d like to say that inequality is bad for urbanism. That’s far from obvious, however. Jane Jacobs wrote The Death and Life of Great American Cities right in the middle of the great postwar expansion, an era of widely shared economic growth, relatively equal income distribution, empowered labor — and collapsing urban life, as white families fled the cities and a combination of highway building and urban renewal destroyed many neighborhoods.

This just seems strange to me. Krugman focuses on declining income equality, as if that was what was driving the collapse in urban life, while simultaneously seeming to recognize, though with remarkable understatement, that the collapse coincided with white families fleeing cities and neighborhoods being destroyed by highway building and urban renewal, as if the highway building and the urban renewal were exogenous accidents that just then happened to be wreaking havoc on American urban centers. But urban renewal was a deliberate policy adopted by the federal government with the explicit aim of improving urban life, and Jane Jacobs wrote The Death and Life of Great American Cities precisely to show that large-scale redevelopment plans adopted to “renew” urban centers were actually devastating them. And the highway building that Krugman mentions was an integral part of a larger national plan to build the interstate highway system, a system that, to this day, is regarded as one of the great accomplishments of the federal government in the twentieth century, a system that subsidized the flight of white people to the suburbs facilitated the white flight lamented by Krugman. The collapse of urban life did not just happen; it was the direct result of policies adopted by the federal government.

In arguing for his fiscal stimulus package, Barack Obama, who ought to have known better, invoked the memory of the bipartisan consensus supporting the Interstate Highway Act. May God protect us from another such bipartisan consensus. I found the following excerpt from a book by Eric Avila The Folklore of the Freeway: Race and Revolt in the Modernist City, which is worth sharing:

In this age of divided government, we look to the 1950s as a golden age of bipartisan unity. President Barack Obama, a Democrat, often invokes the landmark passage of the 1956 Federal Aid Highway Act to remind the nation that Republicans and Democrats can unite under a shared sense of common purpose. Introduced by President Dwight Eisenhower, a Republican, the Federal Aid Highway Act, originally titled the National Interstate and Defense Highway Act, won unanimous support from Democrats and Republicans alike, uniting the two parties in a shared commitment to building a national highway infrastructure. This was big government at its biggest, the single largest federal expenditure in American history before the advent of the Great Society.

Yet although Congress unified around the construction of a national highway system, the American people did not. Contemporary nostalgia for bipartisan support around the Interstate Highway Act ignores the deep fissures that it inflicted on the American city after World War II: literally, by cleaving the urban built environment into isolated parcels of race and class, and figuratively, by sparking civic wars over the freeway’s threat to specific neighborhoods and communities. This book explores the conflicted legacy of that megaproject: even as the interstate highway program unified a nation around a 42,800-mile highway network, it divided the American people, as it divided their cities, fueling new social tensions that flared during the tumultuous 1960s.

Talk of a “freeway revolt” permeates the annals of American urban history. During the late 1960s and early 1970s, a generation of scholars and journalists introduced this term to describe the groundswell of grassroots opposition to urban highway construction. Their account saluted the urban women and men who stood up to state bulldozers, forging new civic strategies to rally against the highway-building juggernaut and to defeat the powerful interests it represented. It recounted these episodic victories with flair and conviction, doused with righteous invocations of “power to the people.” In the afterglow of the sixties, a narrative of the freeway revolt emerged: a grass- roots uprising of civic-minded people, often neighbors, banding together to defeat the technocrats, the oil companies, the car manufacturers, and ultimately the state itself, saving the city from the onslaught of automobiles, expressways, gas stations, parking lots, and other civic detriments. This story has entered the lore of the sixties, a mythic “shout in the street” that proclaimed the death of the modernist city and its master plans.

By and large, however, the dominant narrative of the freeway revolt is a racialized story, describing the victories of white middle-class or affluent communities that mustered the resources and connections to force concessions from the state. If we look closely at where the freeway revolt found its greatest success—Cambridge, Massachusetts; Lower Manhattan; the French Quarter in New Orleans; Georgetown in Washington D.C.; Beverly Hills, California; Princeton, New Jersey; Fells Point in Baltimore—we discover what this movement was really about and whose interests it served. As bourgeois counterparts to the inner-city uprising, the disparate victories of the freeway revolt illustrate how racial and class privilege structure the metropolitan built environment, demonstrating the skewed geography of power in the postwar American city.

One of my colleagues once told me a joke: if future anthropologists want to find the remains of people of color in a postapocalypse America, they will simply have to find the ruins of the nearest freeway. Yet such collegial jocularity contained a sobering reminder that the victories associated with the freeway revolt usually did not extend to urban communities of color, where highway construction often took a disastrous toll. To greater and lesser degrees, race—racial identity and racial ideology—shaped the geography of highway construction in urban America, fueling new patterns of racial inequality that exacerbated an unfolding “urban crisis” in postwar America. In many southern cities, local city planners took advantage of federal moneys to target black communities point-blank; in other parts of the nation, highway planners found the paths of least resistance, wiping out black commer- cial districts, Mexican barrios, and Chinatowns and desecrating land sacred to indigenous peoples. The bodies and spaces of people of color, historically coded as “blight” in planning discourse, provided an easy target for a federal highway program that usually coordinated its work with private redevelop- ment schemes and public policies like redlining, urban renewal, and slum clearance.

One of my favorite posts in the nearly four years that I’ve been blogging was one with a horrible title: “Intangible Infrastructural Capital.” My main point in that post was that the huge investment in building physical infrastructure during the years of urban renewal and highway building was associated with the mindless destruction of vastly more valuable intangible infrastructure: knowledge, expectations (in both the positive and normative senses of that term), webs of social relationships and hierarchies, authority structures and informal mechanisms of social control that held communities together. I am neither a sociologist nor a social psychologist, but I have no doubt that the tragic dispersal of all those communities took an enormous physical, economic, and psychological toll on the displaced, forced to find new places to live, new environments to adapt to, often in new brand-new dysfunctional communities bereft of the intangible infrastructure needed to preserve social order and peace. But don’t think that it was only cities that suffered. The horrific interstate highway system was also a (slow, but painful) death sentence for hundreds, if not thousands, of small towns, whose economic viability was undermined by the superhighways.

And what about all those vacant storefronts in the West Village? Tim Wu suggests that the owners are keeping the properties off the market in hopes of finding a really lucrative tenant, like maybe a bank branch. Maybe the city should tax properties kept vacant for more than two months by the owner after having terminated a tenant’s lease.

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Intangible Infrastructural Capital

By intangible infrastructural capital, I mean knowledge about other people acquired by individuals in the course of their daily lives when interacting with, and relating to, other people, even superficially, within the different sorts of communities to which they belong. The concept of intangible infrastructural capital could properly be expanded to include language and law and traditions of various kinds, but for purposes of this post, I prefer to focus chiefly on a narrow subset of the entire class of knowledge that might fit into the category. By knowledge, I don’t mean factual or scientific knowledge, I mean expectations about what people will do or how they will react under a variety of conditions or circumstances. I call this knowledge capital, because almost all knowledge has some value and usefulness, and this knowledge is acquired only through the expenditure of some effort, even when the knowledge is acquired more or less incidentally in the course of actions that people take or activities in which they engage that bring them into contact — regular contact — with other people. Thus, the assets are acquired and maintained only by way of some minimal investment of time and effort to form such relationships, however superficial. The assets are intangible, because the assets are almost never embodied in physical form, rather existing only in the minds and memories of individuals, available for use when particular circumstances make that knowledge useful. The assets are infrastructural, because, like physical infrastructure – roads, public utilities and the like — they create an environment in which people are able to pursue their own interests and formulate and execute their own plans to advance those interests. The individual pieces of knowledge are more meaningful and useful in the aggregate than they are considered as separate bits of information, because the aggregate of knowledge helps people coordinate expectations in a way that allows their lives to be conducted on the basis of shared mutually consistent expectations about how each other will behave.

The above, overly long, paragraph is probably written too abstractly for most readers who managed to slog through it to have gained a clear understanding of what I am talking about. So let me try to make my ideas more concrete (no pun intended) by quoting from Jane Jacobs’s extraordinary book The Death and Life of American Cities. (pp. 45-47)

A well-used city street is apt to be a safe street. A deserted city street is apt to be unsafe. But how does this work, really? And what makes a city street well used or shunned? . . .

A city street equipped to handle strangers, and to make a safety asset, in itself, out of the presence of strangers, as the streets of successful city neighborhoods always do, must have three main qualities:

First, there must be a clear demarcation between what is public space and what is private space. Public and private spaces cannot ooze into each other as they do typically in suburban setting or in projects.

Second, there must be eyes upon the street, eyes belonging to those we might call the natural proprietors of the street. The buildings on a street equipped to handle strangers and to insure the safety of both residents and strangers, must be oriented to the street. They cannot turn their backs or blank sides on it and leave it behind.

And third, the sidewalk must have users on it fairly continuously, both to add to the number of effective eyes on the street and to induce people in buildings along the street to watch the sidewalks in sufficient numbers. Nobody enjoys sitting on a stoop or looking out a window at an empty street. Almost nobody does such a thing. Large numbers of people entertain themselves, off and on, by watching street activity.

In settlements that are smaller and simpler than big cities, controls on acceptable public behavior, if not on crime, seem to operate with greater or lesser success through a web of reputation, gossip, approval, disapproval and sanctions, all of which are powerful if people know each other and word travels. But a city’s streets, which must control not only the behavior of the people of the city but also of visitors from suburbs and towns who want to have a big time away from the gossip and sanctions at home, have to operate by more direct straightforward methods. It is a wonder cities have solved such an inherently difficult problem at all. And yet in many streets they do it magnificently.

In the space of a few short paragraphs, Jacobs covers two different, but not unrelated, kinds of intangible infrastructural capital, the more comprehensive knowledge about the conduct of particular known individuals in smaller face-to-face communities, and the sketchy knowledge of the behavior of mostly unknown individuals in the big city. In both contexts, people feel a need for safety and an expectation that they will not be the victim of an attack on their person or property. In the small face-to-face community, people tend to know a lot about their neighbors; in the city they don’t know as much. An effective city street provides a feeling of safety by being occupied by a steady stream of foot traffic, a stream encouraged by having a mixture of businesses, stores, shops, restaurants, bars, and residences on the same street. People living and working on the street may not know very much about the people they see, but their personal stake in maintaining good order on the street encourages feelings of responsibility even to those passersby with whom they have no personal connection. Jacobs describes an incident in which people living or working on her street were moved almost instinctively to come to the aid of an unknown passerby who seemed to be in danger: (pp. 49-50)

The incident that attracted my attention was a suppressed struggle going on between a man and a little girl of eight or nine years old. The man seemed to be trying to get the girl to go with him. By turns he was directing a cajoling attention to her, and then assuming an air of nonchalance. The girl was making herself rigid, as children do when they resist, against the wall of one of the tenements across the street.

As I watched from our second-floor window, making up my mind how to intervene if it seemed advisable, I saw it was not going to be necessary. From the butcher shop beneath the tenements had emerged a woman who, with her husband, runs the shop; she was standing within earshot of the man, her arms folded and a look of determination on her face. Joe Corncchia, who with his sons-in-law keeps the delicatessen, emerged about the same moment and stood solidly to the other side. Several heads poked out of the tenement windows above, one was withdrawn quickly and its owner reappeared a moment later in the doorway behind the man. Two men from the bar next to the butcher shop came to the doorway and waited. On my side of the street, I saw that the locksmith, the fruit man and the laundry proprietor had all come out of their shops and that the scene was also being surveyed from a number of windows besides ours. That man did not know it, but he was surrounded. Nobody was going to allow a little girl to be dragged off, even if nobody knew who she was.

I am sorry – sorry purely for dramatic purposes – to have to report that the little girl turned out to be the man’s daughter.

For large collections of, mostly anonymous, individuals to interact with reasonable expectations of personal safety, those individuals must hold confident expectations of safety, expectations supported by the knowledge that they will be visible to others who could help them should they be endangered. That is why cities and urban neighborhoods thrive when there is a lot pedestrian traffic and decay when that traffic dwindles. People feel safe when they can walk in places where a lot of other people are walking or watching. Jacobs became the scourge of urban planners and advocates of urban renewals who wanted to create planned self-contained residential communities without that healthy organic mix of small business and shops and high density residences that draw people onto the streets, infusing those neighborhoods with an energy absent from monotonous planned single-use communities. High population density is an important condition that allows neighborhoods to achieve the vibrancy of diverse mutually supporting activities.

Jacobs justly became a famous, almost legendary, public figure through her epic battles with the ultra-powerful, seemingly invincible, urban planner and infrastructure builder, Robert Moses, who wanted to decimate Jacobs’s beloved Greenwich Village community, turning it into an urban renewal project while running a super highway through lower Manhattan. The magnitude of Jacobs’s achievement in standing up to, and ultimately thwarting, Moses’s designs on her neighborhood, stopping the juggernaut in its tracks, is memorably described in Robert Caro’s monumental, award-winning biography of Robert Moses, The Power Broker:  Robert Moses and the Fall of New York.

While the devastating implications of what Robert Moses wanted to do to lower Manhattan in 1960 are now widely acknowledged, it seems to me that we still have not arrived anywhere near a proper understanding of the scale of destruction inflicted on communities, both urban and rural, by the interstate-highway system, still widely regarded as one of the great achievements of the federal government in the second half of the twentieth century, perhaps the chief domestic achievement of Eisenhower administration, and often cited as a model by contemporary advocates of physical infrastructural investment. The massive interstate highways, cutting through every major urban center in the country, destroyed countless urban neighborhoods and communities, uprooting many hundreds of thousands of residents, and forcing thousands of small businesses out of existence. Beyond those direct effects, there were much wider indirect effects, the new highways not just destroying the structures in their direct paths, but interrupting and disrupting the previous patterns of pedestrian and vehicular traffic on the city streets they dismembered, thereby rendering nearby businesses and communities not directly swallowed up by the highways economically unsustainable. The destruction of those neighborhoods and communities, disproportionately occupied by minorities and low-income families, often herded into newly constructed, large-scale, utterly dysfunctional, urban-renewal projects, had devastating consequences on residents, contributing to and exacerbating the social pathologies associated with the breakdown of formerly stable communities. Even in the big cities, where the “web[s] of reputation, gossip, approval, disapproval and sanctions, all of which are powerful if people know each other and word travels” are less constricting than those in small towns, those informal social controls are not entirely absent or ineffective. The destruction of communities and neighborhoods by interstate highways cutting right through them meant the annihilation of the intangible infrastructural capital by which basic standards of acceptable conduct could be transmitted to, and enforced upon, young people, or at least some of them, some of the time. The collapse of communities meant a collapse of standards. The construction of new physical infrastructure led directly to the destruction of a much more valuable intangible infrastructure of social standards and restraints on anti-social conduct.

I also conjecture that the construction of interstate highways spelled doom for many rural communities dependent on traffic flows along, or connected to, the formerly well-traveled highways bypassed by the new interstates, contributing to and accelerating the migration of young people from rural areas and small towns to major metropolitan areas, again causing a breakdown in the restraints on anti-social conduct. It was also the interstate-highway system that enabled Walmart to achieve rapid growth in sales by locating its new stores very close to major interstates, which gave the new stores a huge advantage over their small local competitors off the interstate-highway system, competitors less accessible both to customers and to the large trucks delivering merchandise from wholesalers and manufacturers. Little by little the economic vitality of small communities off the interstate-highway system was drained out of them, causing many of those communities to wither and shrivel up. In the case of Walmart, at any rate, President Obama’s now infamous remark “you didn’t build that” was eminently justified. Of course, the irony and tragedy is that it actually was built.  Would that it weren’t!

This post is not meant to as an attack on investing in tangible infrastructure. I actually think that the return on many kinds of physical infrastructure is pretty high. But we ought to be more aware than we seem to be of the disastrous consequences that the construction of the interstate-highway system had on individuals, families, neighborhoods, communities, towns and cities, all across the country. And we should at least be somewhat mindful of the risks that future large-scale investments in physical infrastructure could have similarly unfortunate unintended consequences.


About Me

David Glasner
Washington, DC

I am an economist in the Washington DC area. My research and writing has been mostly on monetary economics and policy and the history of economics. In my book Free Banking and Monetary Reform, I argued for a non-Monetarist non-Keynesian approach to monetary policy, based on a theory of a competitive supply of money. Over the years, I have become increasingly impressed by the similarities between my approach and that of R. G. Hawtrey and hope to bring Hawtrey's unduly neglected contributions to the attention of a wider audience.

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