Monday, December 08, 2014

Light touch?

The Economist of Dec 6 features "A planet of suburbs". They editorialize about "A suburban world." Yes, the world is becoming suburban. This is why it is useless to generalize about so large a space (so large a population) via a single moniker. One upon a time, city vs suburbs worked. But no longer.  Many suburbs now include "sub-centers" significant enough to rival many downtowns.

The coverage also suffers from the usual cliches about "sprawl". "Suburban sprawl imposes costs on everyone." The Economist has seemingly accepted that central planning has had its failures but its writers still look for the central planning of cities to somehow fix the many "market failures" of sprawl.

Getting this wrong is no small thing. Growth is the biggest economic challenge. Cities are "the engines of growth."  But we have to grasp how and why. I have often mentioned that the economy that serves us is one where supply chains are formed and managed via the interactions of large numbers of strangers. Many of us ask our students to read and ponder I, Pencil.

Many of the supply chains that serve us occur in cities. Parts of chains may be best under one roof (industrial organization) or within one city (spatial organization). Which parts? Getting each kind of organization right requires entrepreneurial trial-and-error. That means significant freedom. Top-down planning ought to be minimal and with a light touch.


Some ideas on growth -- for anyone who has not already seen this collection.