>From: "Ben Berry" <[EMAIL PROTECTED]> >Reply-To: [EMAIL PROTECTED] >To: <[EMAIL PROTECTED]> >Subject: the justification for urban planning >Date: Thu, 25 Oct 2001 21:18:23 -0700 > > >Markets do very well at allocating goods like coffee or gasoline or clothes >in the short term because of their flexibility in response to short term >preferences. They don't do well in things like supplying housing in proper >configurations and locations because housing is a durable good that once >sold is relatively permanent (30-100 years or more). He had some statistics >to argue that only a very small number of people purchase new homes and >apartments. These people have strong preference for living in only *new* >residences. Since they won't be living in the places more than 5 or 10 >years >they don't care if the place is ugly to most people or shoddily >constructed.
As von Mises might say, here's a case where interpretation of the data has failed the data. In other words, just because he gives you a table that says "only a very small number of people purchase new homes and apartments" does not NECESSARILY mean "they don't care if the place is ugly to most people or shoddily constructed." In point of fact, I see nothing in the one that would imply the other. Did he have some other data that might illuminate that? >This leaves the rest of the population with only ugly and shoddy houses to >choose from when they eventually need to move. Thus planners are needed to >insure pretty neighborhoods, adequate transportation resources, etc. This point hinges on the point above - as yet unproven, as I said. >Related to this is the famous prisoner's dilemma. Consider the landlords of >a declining neighborhood who must decide whether they will improve their >property or invest their money elsewhere. If one landlord improves her >property and none of the others do, the others reap short term windfall >gains when rents uptick slightly and then go back into decline. But she >could also free ride and let everyone else invest and reap the benefits. In >reality, nobody invests and the neighborhood continues its downward spiral. Inferring conclusions about reality from the Prisoner's Dilemma has gotten people in trouble in the past. I've seen arguments which lay out (with 100% accuracy) that one can either vote to change government for the better, or not vote and free ride off of those who do. Using the Prisoner's Dilemma matrix as a framework, then, no one will ever vote. And yet voter turnouts, while rarely high, are not exactly 0. (Come to think of it, I saw that argument on Bryan Caplan's anarchy FAQ. Here's a plug for the moderator. ;) ) >So how can markets deal with the problem with infrastructure like housing, >roads, etc. that respond to demand over decades rather than months or days? >Is infrastructure doomed to be chronically underinvested in (a Marxist >[ugh!] criticism of free markets, I think)? Or is this a problem like >Landsburg says of not enough markets? Could a market be set up where >lovers >of well-built housing "with character" could pay the lovers of cheap, >shoddy >housing to spend a little extra for nice neighborhoods? I'll leave this to sharper minds. -JP _________________________________________________________________ Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp
