To Larry Gross:
You often make observations or ask questions that raise important issues so I try to respond to them when I have the opportunity. (See Postscript) In the comments following “Freight Rail: The Robust Transport Mode” you commented:
“I have to admit that what I get out of EMR’s logic seems to be that we should not be buying light bulbs from China but instead (from) a local industry…
and that world trade of goods is inherently wasteful and the correct answer is to produce goods locally [NB: “local” and thus “locally” is a Core Confusing Word – produce goods (and services) Regionally] instead of importing them from afar…
If so.. it’s a pretty provocative concept and like Peter … I’d be bamfoozled…. so.. either I don’t understand or EMR’s ideas about land-use extend to commerce/trade/economics, etc.”
Larry, I am sorry to bamfoozle you! Here is a simple answer:
If all the location-variable costs were fairly allocated and citizens were really serious about maintaining (?recreating? / ?really creating for the first time?) a democracy with a market economy, then it would be less expensive and serve the overarching goal of a sustainable trajectory for contemporary civilization to buy the light bulbs made in the Region, rather than the ones made in China.
There is a relatively simple reason for this:
Trade vs Import Replacement.
In a nutshell Trade benefits those at the top of the economic food chain while Import Replacement benefits everyone in the “place” where commerce is focused. At this point we call this “place” a “Region.”
Benefiting the majority of those in any Region is a prerequisite for commerce in creating and sustaining a democracy with a market economy.
Since most economists are supported directly or indirectly by the denizens and agents of Trade, you have to dig a bit to understand the importance of this distinction.
A good place to start is Jane Jacobs’ book The Economy of Cities (1969 ). Since the book was not written by a card-carrying economist it is not often cited. (Planners do not often cite her Life and Death of Great American Cities either :>)
As we point out in The Shape of the Future Chapter 19 Box 2 – “Evolution of the Marketplace” – Jacobs’ book establishes a framework for considering Trade vs Import Replacement. (As we also point out in Chapter 3 Box 3, our only problem with her book is the use of “cities” in the title. Think how much more useful her book had been if it were titled “The Economy of Regions.”)
What one calls a “place” is very important. Over the past 8,000 years the “place” that has benefited from Trade has morphed from:
The compound of the chief / trader in a trading Village; to
The favored sector of the earliest “cities” (Ur, Choga Mami, Tell Brak, Hama, et. al.); to
The well-to-do quarter of the capital of the trading empire; to
The Zentrum of the most successful trading city-state; to
The financial districts in the urban agglomerations of the nation states with the large economies and / or control of scarce resources.
A pattern of Trade and Import Replacement can be seen in:
The earliest Neolithic Trading Villages
Pre Classical (Bronze Age) Mediterranean commerce Ugarit, Ulu Burum, Kommos, et. al.
Classical commerce of Greeks, Phoenicians and Romans
Mediaeval commerce between 400 and 1400
Colonial commerce between 1400 and 1950
Nation-state commerce between 1750 and 2000
Global and multi-national trading bloc commerce between 1960 and present
Over this period Trade primarily benefited those who controlled Trade.
However, in these same time frames the citizens who benefited the most were those who live and work in and / or were served by “places” that worked to focus economic activity on Import Replacement.
We will not bore you with the details but I am convinced that the same pattern could be found in the emerging cultures in Mesoamerica, the Pacific Coast of South America, Africa and elsewhere (including the “Mound Builders” of the Mississippi / Missouri River Valley and the Southeast) if their cultures had not been wiped out by guns, germs and steel. Hat tip to Jared Diamond. (I too went to Jared’s.)
Urban economic activity starts with Trade but must transition to Import Replacement to be sustainable. That is especially true as humans begin to push the limits of the exploitable resources (the price of oil continues up) and the reality that finite resources can be exhausted becomes apparent. See Jim Bacon’s post on “The End of Cheap Gasoline” of 19 November 2007.
The US of A fought a Revolutionary War and a Civil War over aspects of Trade vs Income Replacement. The causes of the two World Wars and the Cold War can be traced to resource allocation and control of commerce.
As the World becomes more “Flat” and civilization becomes more urban, the importance of the “place” and location grows and so does the pattern of human settlement.
The fundamental building block of contemporary civilization is the New Urban Region. The New Urban Region and the urban agglomerations in Urban Support Regions must move to transition from Trade to Income Replacement.
Cost of communication and information transfer and storage are going down and the real cost of Mobility and Access – if all the location-variable costs are fairly allocated – is going up at an accelerating rate.
In this context, Democracy and a market economy depend on Income Replacement.
This is why it is so important to understand the roles of the four Estates – The Agency Estate, the Enterprise Estate, The Institution Estate and the Citizen / Household Estate. This is the topic of our most recent Backgrounder which is being presented in four PARTs in the last two and next two columns.
POSTSCRIPT
We has originally intended to post this material as a comment on the “Freight Rail: The Robust Transportation Mode” of 10 December. The comment by EMR to which Larry Gross responded to was in that string.
However, upon further review…
EMR’s original comment was prompted by the facts that:
We believe that it is wildly premature to write off interRegional Passenger Rail for reasons stated in our previously comments in the original string.
We believe it is unwise to promote the views of a denizen of the Enterprise Estate as the view that should guide the Agency, Institution and Citizen / Household Estates. What is good for General Motors is not necessarily good for the US of A and that goes for Norfolk Southern as well for reasons we have noted in our response to Peter Galuszka. We hope Peter has the time to read these comments with care.
As happened with the comments that followed the “End of Cheap Gasoline” post the comments moved from a discussion of transportation alternatives to speculation about settlement pattern alternatives. Many of these comments are driven by three Myths we will be exploring in a future column.
For all these reasons (and the fact if buried at the end of 60 plus comments Larry would not see an answer) it seemed best to start over with an answer to Larry.
By the way Larry, I will get to your TAZ questions in due course. We will admit to being a bit put off by your asking if we had ever heard of TAZs :>) We just addressed the NUR / USR question.
EMR