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12.August 2022

Bitcoin Is Venice: An Immense Laboratory Of Trial And Error

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The problems with modern housing and urban planning are symptomatic of the high-time preference age in which we live.

“If you say: ‘Well, look, you’re a feeling type, and I’m a thinking type, so let’s not discuss that because we are always going to be on different sides,’ then it removes from this discussion what I feel to be the absolute heart and soul of the matter when it comes to buildings. Now I don’t want to deny at all what you are saying about personalities. But I really cannot conceive of a properly formed attitude towards buildings, as an artist or a builder, or in any way, if it doesn’t ultimately confront the fact that buildings work in the realm of feeling. So when you say, ‘Look you’re that type, and I’m this type, and let’s agree not to talk with one another about that fact,’ what’s the implication? Is the implication that you think that feeling is not related to buildings?”

The individual, thought to be driven by a selfish profit motive, was to give way to the enlightened central planner thought to be motivated only selflessly to maximize welfare. Private property rights were relegated to a second-tier concern. By centralizing power, the U.K. government also invited lobbying both from corporations which could mold rules to their advantage and individuals who could impinge on other’s rights with not in my backyard (NIMBY) campaigns to stop, for example, farmers from properly developing their land.

The shift to architectural central planning (among many other equally awful varieties) after the second world war was precipitated by three major developments: the spread of mass manufacturing, the rise of the automobile and the success of exactly this mode of planning during the war.[i] Taken together, these forces remolded man’s relationship with urban space. The automobile blurred the landscape into a green haze onto which we did not mind imposing industrial-scale monotony. Developments became grand affairs that fit in an even grander vision. The aesthetic dreams of intellectuals replaced the varied tastes of people.

The issue with modern housing isn’t necessarily that it is built by corporations. After all, so are our phones and cars. The issue is that alignment is poor. Of course, perfect alignment of interest between companies and their customers never exists, no matter how free or how regulated a given market is. But we would argue some social structures and institutions certainly create more or less alignment.[ii] One might think that a real estate agent is aligned with the seller. They are paid on commission and benefit from a higher price.

But we’re forgetting one thing: time. Waiting another week for an offer $10,000 higher would only get the agent a few hundred dollars more. This is time that could be better spent on another sale. For the agent, each sale is a flow from which they receive a cut. For the seller, the sale is the liquidation of a stock the value of which they would ideally maximize. These are propositions that put very different values on time. The entity focused on flow is looking at immediate profit. The owner of a stock puts a high value on the future.

Similarly, when individuals build homes, they build a stock that they will likely hold for decades. Developers have an entirely different perspective. If something breaks when the home is 20 years old and the warranty is long expired, that is not their problem.

“Imagining scenarios or stories and not actually acting on them is a significant attribute of the human narrative capacity. The term for this behavior is ‘decoupling’ or ‘the separation of mental action from physical action.’ Biologists once again consider it highly advantageous. Decoupling allows us to imagine multiple narratives without ‘engaging the motor apparatus’; its existence has a huge role in allowing us to lead rich and diverse lives. Decoupling permits the creation of imaginative work which makes possible the foundation for the arts.

“Why does this matter for architecture or planning? It suggests one more way people consistently look for orientation and connections to their environment. Much as we seek out faces from infancy on, we look for ways to make attachments and derive meaning from our physical surroundings. Every plan and urban design has the potential to acknowledge and respond to this trait in some way or another, or as is frequently the case in built environments today, ignore it. One could make the argument that it is the inherent lack of a narrative quality in many of the post-war American suburbs, (as opposed to the earlier nineteenth century street-car versions) that gives these areas their feelings of placelessness and anomie.”

As captured by Sussman and Hollander, the history of the built environment in the 20th century mirrors the path of money. Politicians want to keep housing “affordable,” like central bankers want to keep prices “stable.” Supply of both housing and money are centrally dictated as exemplified by the U.K. government’s annual housing construction targets (i.e., a flow).[iv] And naturally the whole affair is subsidized by self-referentially mispriced toxic loans, courtesy of commercial fractional reserve banks “guaranteed” by a central bank.

“When we ponder the layout of ancient cities, we must acknowledge that they are the byproduct of thousands of years of human tinkering. People came together in villages and tried different living arrangements. What worked, they copied and expanded. What didn’t work, they discarded. That is, if those experiments hadn’t already killed or disbanded them.

“The traditional way of building — the way they would have all intuitively understood as the only proper way to do things — used individual action to maximize the collective value of the place.”

Beyond the aesthetic concerns, Marohn also explains that planners, unlike individual builders, cannot make financially viable cities. Large developments come with complex economic interdependencies that no simple model can capture. Just as planned economies suffer from an inability to tap into distributed knowledge, planned cities ignore the reality on the ground. Political expediency also biases planners towards “growth” at all cost (i.e., not real growth but mere increase). Marohn said:

“Each iteration of new growth creates enormous future liabilities for local communities, a promise that the quickly denuding tax base is unable to meet. Not only did these new areas need police and fire protection, street lights, libraries, and parks, but all those miles of roads, streets, sidewalks, curbs, and pipe; all those pipes, pumps, valves, meters, culvert, and bridges would eventually need to be fixed and replaced. At the local level, we traded our long-term stability for near-term growth.”

“While many New Towns have been economically successful, most now are experiencing major problems. Their design is inappropriate to the 21st Century. Their infrastructure is ageing at the same rate and many have social and economic problems. Many are small local authorities which do not have the capacity to resolve their problems.”

The first sentence of the quote above is pure gold. Nevermind their objective failure in every other respect, they have been economically successful! There was “growth”! Look at all these people. Unfortunately, the towns are financially unviable. They are ugly and they were narrowly designed with the car in mind. Unplanned towns centuries older are proving more resilient and adaptable.

Under a social system respecting bottom-up organization, the easiest things to build are the smallest, such as a family home. They require little money, time or coordination. Such structures receive instant feedback. There is no bailout. Large communal projects, on the other hand, are much more difficult endeavors to see through as they require political support. We might think to characterize the support as flowing from the governance principles of the common pool resource of the social capital of those affected — and even the cultural and aesthetic capital they may wish to preserve. Individuals, mindful of their strong property rights, will need to come to consensus. The need to sacrifice and compromise will be greater all around.

In a top-down system, the opposite is true. Building a home on a plot of land you own becomes more complicated than a developer building 500 “units” on a field or the government expropriating land to make room for a highway. Meanwhile, the central authority is shielded from knowing whether or not any given experiment has worked, for two reasons.

“Believing that his revolutionary urban planning expressed universal scientific truths, Le Corbusier naturally assumed that the public, once they understood this logic, would embrace his plan. The original manifesto of CIAM[iv] called for primary school students to be taught the elementary principles of scientific housing: the importance of sunlight and fresh air to health; the rudiments of electricity, heat, lighting, and sound; the right principles of furniture design; and so on. These were matters of science, not of taste; instruction would create, in time, a clientele worthy of the scientific architect. Whereas the scientific forester could, as it were, go right to work on the forest and shape it to his plan, the scientific architect was obliged to first train a new clientele that would ‘freely’ choose the urban life that Le Corbusier had planned for them.

“Any architect, I imagine, supposes that the dwellings she designs will contribute to her clients’ happiness rather than to their misery. The difference lies in how the architect understands happiness. For Le Corbusier, ‘human happiness already exists expressed in terms of numbers, of mathematics, of properly calculated designs, plans in which the cities can already be seen.’ He was certain, at least rhetorically, that since his city was the rational expression of a machine-age consciousness, modern man would embrace it whole-heartedly.”

Scott’s critique of this flavor of high-modernism as applied specifically to urban planning leans heavily on the life and work of Jane Jacobs. Scott praises Jacobs’s far superior attentiveness to precisely the agency Le Corbusier anti-humanly denies and rejects, as revealed in her appreciation of different forms of order, writing:

“A fundamental mistake that urban planners made, Jacobs claims, was to infer functional order from the duplication and regimentation of building forms: that is, from purely visual order. Most complex systems, on the contrary, do not. Display a surface regularity; their order must be sought at a deeper level…

At this level one could say that Jacobs was a ‘functionalist,’ a word whose use was banned in Le Corbusier’s studio. She asked, ‘What function does this structure serve, and how well does it serve it?’ The ‘order’ of a thing is determined by the purpose it serves, not by a purely aesthetic view of its surface order. Le Corbusier, by contrast, seemed to have firmly believed that the most efficient forms would always have a classical clarity and order. The physical environments Le Corbusier designed and built had, as did Brasília, an overall harmony and simplicity of form. For the most part, however, they failed in important ways as places where people would want to live and work.”

Opposite Jacobs, Moses was almost a caricature of centralized, coercive and unaccountable power. He was a New York City public official, never elected, wielding enough power through the government departments he controlled to worry mayors and even the President of the United States of America. His departments could raise their own funds, giving Moses the ability to ignore criticism and, crucially, to deny the possibility of feedback. He planned, and decreed, from his ivory tower on Randall’s Island between Manhattan and Long Island, because he knew best. As Caro recalled in “The Power Broker”:

“Moses said that he was the antithesis of the politician. He never let political considerations influence any aspect of his projects — not the location of a highway or housing project nor the award of a contract or an insurance commission, he said. He would never compromise, he said. He never had and he never would.

“He was America’s greatest road builder, the influential single architect of the system over which rolled the wheels of America’s cars. And there was, in this fact, an irony. For, except for a few driving lessons he took in 1926, Robert Moses never drove a car in his life.”

Jacobs and Moses may be the single best anthropomorphized embodiment of the conceptual conflict in the characteristics of social processes to which we have been drawing attention throughout the entire series, respectively: bottom-up versus top-down, process versus equilibrium, organic versus synthetic, dynamic versus static, experimentation versus modeling, discovery versus decree, evolution versus design; even, if somewhat anachronistically, peer-to-peer versus client/server.

“Simple needs of automobiles are more easily understood and satisfied than the complex needs of cities, and a growing number of planners and designers have come to believe that if they can only solve the problems of traffic, they will thereby have solved the major problem of cities.”

Scott praises and elaborates on this tendency in Jacobs’s thought, arguing:

“Jacobs has a kind of informed respect for the novel forms of social order that emerge in many city neighborhoods. This respect is reflected in her attention to the mundane but meaningful human connections in a functioning neighborhood. While recognizing that no urban neighborhood can ever be, or should be, static, she stresses the minimal degree of continuity, social networks, and ‘street-terms’ acquaintanceship required to knit together an urban locality. ‘If self-government in the place is to work,’ she muses, ‘underlying any float of population must be a continuity of people who have forged neighborhood networks. These networks are a city’s irreplaceable social capital…’ It follows from this vantage point that even in the case of slums, Jacobs was implacably opposed to the wholesale slum-clearance projects that were so much in vogue when she was writing. The slum might not have much social capital, but what it did have was something to build on, not destroy. What keeps Jacobs from becoming a Burkean conservative, celebrating whatever history has thrown up, is her emphasis on change, renewal, and invention. To try to arrest this change (although one might try to modestly influence it) would be not only unwise but futile.

“He conceived of good planning as a series of static acts; in each case the plan must anticipate all that is needed and be protected, after it is built, against any but the most minor subsequent changes. He conceived of planning also as essentially paternalistic, if not authoritarian. He was uninterested in the aspects of the city which could not be abstracted to serve his utopia.”

As a kind of devil’s advocate in defense of planners, let us offer that it is true that valuable communal projects like highways or even parks will always face opposition. Some people will be negatively affected and will oppose any change. But we would argue that the reason people can block developments through NIMBY actions is because property rights were weakened and centralized in the first place. If a communal project would indeed add value to a community, that community would be in a position to offer to pay those affected so that they willingly cede their land for development.

“He had built more housing than any public official in history, but the city was starved for housing, more starved, if possible, than when he had started building, and the people who lived in that housing hated it — hated it, James Baldwin could write, ‘almost as much as the policemen, and this is saying a great deal.’ He had built great monuments and great parks, but people were afraid to travel to or walk around them.

“Robert Moses, the nearest thing to a dictator with which New York and New Jersey have ever been afflicted (so far), thought of himself as a master builder, and his much diminished corps of admirers still nostalgically recall him as that; but he was a master obliterator. If he had had his way, which he did not because of successful community opposition, one of Manhattan’s most vibrant, diverse, and economically productive neighbourhoods, SoHo, would have been sacrificed to an expressway.”

Accumulating capital of any variety is nigh impossible without small experiments feeding information back into an adaptable system. Jacobs appreciated the importance of the capital stock. She welcomed organic small-scale change but she rejected abrupt change imposed from outside.

[i] Scott touches on the fallacy of transferring this attitude, skillset, and approach too readily from one space to another, having merely — if accurately — witnessed its success in the first realm, but without proper consideration as to what about that realm made it successful. He writes in “Seeing Like A State”:

“When are high-modernist arrangements likely to work and when are they likely to fail? The abject performance of Soviet agriculture as an efficient producer of foodstuffs was, in retrospect, ‘overdetermined’ by many causes having little to do with high modernism per se; the radically mistaken biological theories of Trofim Lysenko, Stalin’s obsessions, conscription during World War II, and the weather. And it is apparent that centralized high-modernist solutions can be the most efficient, equitable, and satisfactory for many tasks. Space exploration, the planning of transportation networks, flood control, airplane manufacturing, and other endeavors may require huge organizations minutely coordinated by a few experts. The control of epidemics or of pollution requires a center staffed by experts receiving and digesting standard information from hundreds of reporting units.”

[iii] The subtitle of this book is far more telling of its message: “Designing For How We Respond To The Built Environment.”

[iv] Congrès Internationaux d’Architecture Moderne, or the International Congress of Modern Architecture, the organization founded by Le Corbusier in 1928 to promote his preferred style across the world. N.B. endnote ours, not Scott’s.

This is a guest post by Allen Farrington and Sacha Meyers. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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