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You may have
wondered why I have been spending so much time talking about City Design.
What does this have to do with economics?
Actually, the city is what the economy is. It is the economy's
physical aspect, in the same way that the body is the physical aspect of the
person.
This might seem like a stretch at first, because we are taught that an
"economy" is a bunch of government statistics, like consumer
confidence and the purchasing managers' index. Not at all. I've said that
economics is the study of how people make a living. You can study the
"economy" of a hunting and gathering tribe in the Amazon
rainforest, for example. How to they create food, shelter, clothing? The
industrial economy is how we -- Western industrialized people -- create food,
shelter and clothing.
August 5, 2006: What is Economics About?
More broadly, we create "goods and services." What goods, exactly?
For some reason, we think of shampoo and DVD players. But, if you want to
think of what goods are being produced, just think about what you spend your
money on. How much of your total expenditure goes to shelter: mortgage, rent,
maintenance, property taxes, insurance and so forth? A lot, right? How about
home furnishings? Furniture, kitchenware, home electronics, bathroom
remodels, carpet, artwork, landscaping, and other home decor stuff? A lot
more, right? Now, think about all the commercial real estate out there.
Offices, retail, restaurants and so forth. Most of the "goods" of
the economy are buildings, building maintenance, and building furnishings.
The other big nexus of "goods" is transportation. How much of your
income goes to transportation? I'm talking about the car, maintenance,
insurance, etc. Also, things like a garage or parking lot. Plus, all the
transportation that are a "service" to you but involve a company
buying "goods." Like airplanes, trains, rental cars. Then, there's
all the government-provided transportation-related infrastructure. Roads,
bridges, public transport, streetlights. Paid for with your taxes. And, all
the related services: all the auto body shops, quickie lube joints, traffic police,
parking at commercial locations, Green Space, etc. etc. Think about what
percentage of the "goods" you buy in a store are actually
real-estate and transport related. When you go to Starbucks, for example, you
are not only paying for a cup of coffee, you are paying for the Starbucks
store itself, and the parking lot outside the store.
Just look out your window. What do you see? Buildings, roadways, cars, and
parking lots mostly, and the services to maintain it all.
May 5, 2008: What Is the U.S. Economy?
We can see that buildings and transportation occupy an enormous amount of the
economy. Plus, almost all of the services take place within the urban
environment. If you visit the herbalist or the gym, for example, that takes
place within the urban environment. (The Big Two when it comes to services is
education and health care.)
Jim Kunstler likes to say sometimes that the U.S. economy consists of making
Suburbia, and that is quite close to the literal truth. The U.S. economy
consists of making Suburbia, and living in it.
After a while, it became clear to me that there were a great many problems
that couldn't be solved with either "fiscal policy" or
"monetary policy." Many people today are aware that
"growth" -- doing what we're doing today, just more of it -- is not
really going to get us anywhere. Indeed, I think that there is an
undercurrent of resistance to "growth" that makes people shy away
from "pro-growth" approaches. Let's just say that we could ramp up
the U.S. economy and produce 10% growth rates for the next twenty years.
Would that be a good thing? I can't really say that it would. You might call
it "digging our hole even deeper." Even if you forget about the
environmental consequences, the fact of the matter is that living in Suburban
Hell is kind of a drag.
June 15, 2009: Bashing "Supply Side
Economics" 2: Maybe We Don't Want Growth?
June 5, 2009: Bashing
"Supply Side Economics"
What is so good about "growth"? Depending on whether you talk to a
Democrat or Republican, the answer usually is: 1) less unemployment, or 2)
more profits. You can see we aren't going to solve any problems that way.
I like to say things like: "Living in Suburban Hell is kind of a
drag." Most people under the age of 30 know exactly what I'm
talking about. It makes older people fidgety. Funny how a 30-year mortgage
does that to people. Actually, I expected more of a negative reaction than
I've had. Many of the readers of this site tend to be affluent Republican
types, while these concerns tend to be associated with young stupid lefties
under the age of 25. Affluent Republican types have mostly grown out of the
stupid lefty ideas they had in their youth. However, they are still aware of
the problems, and it is fun to think about different solutions than the same
old stupid lefty ideas we've been hearing about for forty years ("Live
on teeny farms! Use less toilet paper!").
April 19, 2009: Let's Kick Around the
"Sustainability" Types
Let's list some of these problems with the contemporary way of making a
living, especially in the U.S.:
1) It is bad for
the environment.
2) It looks like hell. Suburban Hell.
3) It isn't actually that much fun. You can't hide behind your hi-def
TV. I know that you spend your day driving around the parking lots and Green
Space of Suburban Hell, week after week, year after year, with a week off in
Jamaica. Everybody does. We try to have as much fun as we can.
4) It is too expensive for most people. See Elizabeth Warren's work.
Americans can't afford the American lifestyle. Plus, it kinda stinks anyway.
But it seems so hard to find an alternative.
December 6, 2009: In the Long Run, We Are
All Dead
5) It is unsustainable. This means it can't go on forever, so you're
going to have to change it anyway whether you want to or not. It might be
unsustainable because people can't afford it, or because they are just sick
of it, or because the oil will run out, or a dozen different reasons. Can you
really imagine your suburb continuing as it has for a thousand years?
"A thousand years! That's ridiculous!" That's what
"sustainable" means. China has been inhabited for six thousand
years.
If these are our problems, then the solution must be:
1) Good for the
environment: we should be able to live alongside the natural world
in its full splendor, as it existed in the year 1000 AD for example.
2) It should look fantastic. Because we have to live there. So why not
make it look good? Humans have generally had appealing living spaces. Only in
the last hundred years or so have we been failing at this.
3) It should be a lot of fun.
4) It should be easily affordable. Being a debt slave is no fun. See
#3.
5) It should be sustainable for a thousand years. By
"sustainable" I don't mean merely that the pace of deterioration
has slowed enough that it hasn't gone extinct yet. After a thousand years,
things should be much, much better than we began. The environment should be
much healthier. The cities should be more beautiful, or at least more
interesting, the culture more refined and detailed and enjoyable. Because,
when you work on something for a thousand years, and iron out the kinks, and
make improvements, and build upon past successes, it should be better right?
We should be able to look back at the present era as a sort of Dark Age. Ugh!
January 27, 2008: Crisis Management
As it turns out there is one and only one solution to all these
problems: the Traditional City. I say "only one" because I
don't think you can solve them without the Traditional City. You aren't going
to get there with battery-powered cars, or bicycles, or locally-grown organic
tomatoes, or little teeny farms, or solar power, or algal biofuels, or
nanotechnology, or an iPad, or a space station, or social networking, or a
gold standard or lower taxes. You can have all these things, but if you have
them in the context of Suburban Hell (or some even more horrible future
mutation) the eventual result will be a failure.
However, we are now in a good position, because we know the solution to our
problems, and also because the solution is relatively easy to implement. We
have many, many examples of really excellent Traditional Cities (or parts of
cities) throughout Europe and Asia. The Traditional City is actually easier
to make and maintain than Suburban Hell. People were making very nice
Traditional Cities 500 or even 2500 years ago, with their bare hands. With
today's industrial capability, it should be a piffle.
Let's look at these in a little more detail:
Good for the environment. This whole series on City Design started in
2006 with an item called The Eco-Metropolis. That item is a bit of a mess,
actually. It became clear to me that we were going to have to deal with this
subject in greater detail. Four years later ... we are finally starting to
pull the pieces together. The idea of an "Eco-Metropolis" is counter
to almost everything you hear from the greenie/sustainability types these
days, who all want to graze goats and grow tomatoes in their backyard. The
few recent attempts to create a "green city" have mostly been
abject failures -- either Suburban Hell or the 20th Century Hypertrophic City
with solar panels and better insulation, none of which really accomplishes
much. However, urban living in a Traditional City is actually the most
ecologically sound lifestyle there is. Just think about how little material
the typical urban resident consumes. They use almost no land. Their living
spaces are modest in size, although often quite opulent in their decor (the
less space you have, the more attention and effort you can pour into
decorating it). They don't own a car, but either walk or ride trains instead.
They don't buy a lot of junk, because they don't have anywhere to put it.
There are no excessive roadways, parking lots and green space splattered all
over the countryside. The fact that all humans not directly involved in
agriculture have lived in Traditional Cities -- for 5000 years, until the
19th century -- might give you a little hint about their sustainability. Just
think what could be achieved if you took a Traditional City and added in some
of the recent advances: solar or wind power, composting toilets (maybe),
superinsulation, energy-saving devices like compact fluorescent light bulbs
and so forth. Even today, the typical New York City resident uses only 28% as
much energy than the typical suburban American. If you added in all these
additional advances, and used a Traditional City format instead of a 19th
Century Hypertrophic City format (more walkable), where would you be? You
could probably cut your energy use by another 65%, to 10% of today's U.S.
average. This wouldn't take any penny-pinching or belt-tightening. It would
be inherent. When you install better insulation, or a high-efficiency
refrigerator, you don't have to think about it anymore. If the average
American used 10% of the energy they use today, the entirety of the economy
could be powered by the non-fossil-fuel energy sources that already exist
today.
I'll revisit the Eco-Metropolis in the future.
May 3, 2009: A Bazillion Windmills
March 26, 2006: The Eco-Metropolis
Look Fantastic: Traditional Cities just plain look good, when they're
done right. We've looked at hundreds of photographs. Here are a few more:
Another one of these spectacular Alsatian villages.
With people walking in the middle of the street and no cars. Of course.
Alsatian village.
Add some trains, solar panels and windmills and you are done!
Alsace, France.
Chinese village. These are "townhouses," which is to say,
single-family residences.
No Hypertrophic stairways sticking out eight feet here!
Village in China.
Quite impressive. China.
It's nice to have an example with wooden buildings, instead of the relentless
stone buildings of many European villages.
Chinese residential street.
Another "townhouse" residence. Chinese village.
November 22, 2009: What Comes After
Heroic Materialism?
October 18, 2009: Let's Take Another Trip
to Venice
September 28, 2009: Let's Take a Trip to
Barcelona
March 3, 2009: Let's Visit Some More
Villages
February 15, 2009: Let's Take a Trip to
the French Village
February 1, 2009: Let's Take a Trip to
the English Village
December 2, 2007: Let's Take a Trip to
Tokyo
October 7, 2007: Let's Take a Trip to
Venice
June 17, 2007: Recipe for Florence
A lot of fun: It's always more fun to be in a place that looks good.
The Traditional City is also a place where there is a lot more interaction
with other people, which is always fun. People tend to spend a lot more time
outside their residence, at places like cafes and restaurants, theaters,
galleries, clubs and what have you. Why stay at home alone?
January 10, 2010: We Could All Be Wizards
December 13, 2009: Life Without Cars:
2009 Edition
December 21, 2008: Life Without Cars
Easily affordable: You can think of this just in material terms. If
you use much less land, and don't need a car, and have a much smaller living
space, which has a lot less junk in it, and you don't require Hypertrophic
transportation infrastructure like huge roadways, parking lots, green space
and so forth, then you are consuming a whole lot less material. U.S. cities seem
to be expensive but that is often not really the case. What actually
happens is that only 10% or so of the city is deemed to be tolerably
pleasant, so everyone tries to live there. You don't notice the crappy
sections. The average rent of a New York City apartment, of any size, is
about $800 a month. Many of these are in slummy neighborhoods in Queens or
the Bronx. But, they don't have to be slummy. Tokyo has basically no slummy
neighborhoods -- they are all good neighborhoods. Our apartment, in one of
the most fashionable neighborhoods -- we would see TV actors and models on
the streets -- was about $650 a month. It makes sense: why should a little
apartment be expensive? When your rent is $650 (or $400 in a cheaper city)
and you don't have a car, your utilities are minimal, the schools are good
and there's a decent public healthcare system, life becomes very affordable.
That's why Chinese people can save 50% of their income, even though their
incomes are not very high.
September 20, 2009: The Problem of
Scarcity 2: It's All In Your Head
September 13, 2009: The
Problem of Scarcity
Sustainable: When you have little in the way of material needs --
because you live in a Traditional City -- your demands upon the environment
are minimal. Thus, you can maintain or improve upon this arrangement
indefinitely.
December 27, 2009: What a Real Train
System Looks Like
November 8, 2009: The Future Stinks
May 3, 2009: A Bazillion Windmills
April 19, 2009: Let's
Kick Around the "Sustainability" Types
July 9, 2007: No Growth Economics
Makes sense, don't you think?
* * *
Here's a guy who took his 175 sf New York apartment and went nuts on interior
design. Which is fun with a 175 sf apartment, because you can really go nuts
on it, and pay attention to every detail, as opposed to a 2500 sf apartment,
where the sheer size and scale of the project will be overwhelming.
New York Times spread on 175 sf apartment
Personally, I would do things a little differently here. I think he's trying
to do a little too much with the space he has. I'd dump the sofa and all the
chairs (seating for six in a 175sf apartment?), and just sit on the floor.
The coffee table becomes a multipurpose table, for dining and whatnot. The
"decorative" stacks of magazines go to Goodwill. These are all
themes from much larger living spaces. Small spaces need their own themes.
Still, not a bad way to live, right? For a single guy, of course. For
couples, more like 300-500sf is good, and for a family of four, maybe 800 sf.
Eight hundred square feet sounds pretty big now, doesn't it?
Here's a nice three-bedroom apartment. The total area is 822 square feet.
Two bedroom apartment, 522 square feet. Note that all of these have a proper
Asian-style bathroom, with three separate rooms for sink, toilet, and bath.
Enough for two to four (family with two kids same gender) people.
One bedroom
apartment. Good for a couple. 427 square feet. Nice balcony. Note once again
the three-part bathroom. Civilized.
The best thing about these little apartments is what you don't see. It's all
the burdens you can cast off. No big mortgage. No car. No shopping for
furnishings. Virtually no maintenance. Housekeeping is practically instant.
No spending every Saturday mowing the lawn. And, of course, the really fun
Traditional City that lies just outside your door.
Dieppe, Germany.
Shanghai, China.
Taipei, Taiwan
Shimo Kitazawa, Tokyo, Japan
Nathan
Lewis
Nathan
Lewis was formerly the chief international economist of a leading economic
forecasting firm. He now works in asset management. Lewis has written for the
Financial Times, the Wall Street Journal Asia, the Japan Times, Pravda, and
other publications. He has appeared on financial television in the United
States, Japan, and the Middle East. About the Book: Gold: The Once and Future
Money (Wiley, 2007, ISBN: 978-0-470-04766-8, $27.95) is available at
bookstores nationwide, from all major online booksellers, and direct from the
publisher at www.wileyfinance.com or 800-225-5945. In Canada, call
800-567-4797.
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