Transcript The Best of Times or the Worst of Times? Part I: Peter Gordon, USC Part II: Harry W.

The Best of Times or the Worst
of Times?
Part I: Peter Gordon, USC
Part II: Harry W. Richardson, USC
American Dream Coalition
Seattle, April 17-19, 2009
I. Would you rather be alive today or 100 years
ago? Spontaneous orders and virtuous
cycles
II. Spontaneous orders in cities
III. Bad policies bring bad times and bad times
prompt bad policies. This vicious cycle
challenges the virtuous cycle
Is it the best of times or the worst of times?
2% average annual real growth for over 100 years is
not bad
“I have now reached the point where I may
indicate what to me constitutes the essence
of the crisis of our time … The economic
anarchy of a capitalist society as it exists
today is, in my opinion., the real source of
the evil … Clarity about the aims and
problems of socialism is of the greatest
significance in our age of transition.”
…A. Einstein, Monthly Review, 1949
“The 20th century’s oscillation between perfect market
theory and market failure theory, both of which take as the
terms of the debate the formal model of generally
competitive equilibrium, will inevitably be won by the
theorists of market failure. It is obvious that the economic
world is not perfectly competitive … Hence the triumph of
the interventionism Hayek forecast – not because
economic theory has been rejected but because it has
been misconceived … Since Hayek’s argument did not
depend on the achievement of static equilibrium, the
deviations of real market forces from the model did not
constitute rebuttals to him. Indeed, deviations from the
model were Hayek’s starting point.”
… P. Boettke, Critical Issues, Winter, 1997
World History of GDP/Capita Trends
Year
Population
in millions
GDP per person in
year-2000 dollars
5000 BC
5
130
1000 BC
50
160
1AD
170
135
1000AD
265
165
1500 AD
425
175
1800 AD
900
250
1900 AD
1625
850
1950 AD
2515
2030
1975 AD
4080
4640
2000 AD
6120
8175
Source: Brad DeLong
The most auspicious economic development in modern history
is the stunning improvement in the material condition of
humanity – trend from 200-300 years ago – finally proving
Malthus no longer relevant.
Humans had lived at subsistence levels for 99.5% of 50,000
years.
Economic Development
Political Institutions vs. Economic Development
11
10
y = 1.0107x + 1.5923
9
R2 = 0.6524
8
7
6
5
4
3
2
2
3
4
5
6
7
8
9
Political Institutions
Economic freedom and economic
development
Two amazing facts:
(i) World’s population between 1800 and 2000 grew by a factor of 6; and
(ii) Goods and services consumed by the average person have not fallen, but are
mostly up.
Find a 25-year old mail-order catalog, correct (roughly triple) prices -- and compare to what
we routinely expect today. Look at a 2001 electronics catalog.
Compare medical treatments and capabilities (W.M. Cox and R. Alm).
Perennial Doomsday forecasts look silly (J. Simon).
“The theory of property rights offers the following fundamental threepart proposition:
“Subject to the costs of transacting, individuals will organize and
allocate their rights to maximize their joint wealth.
“The level of wealth is enhanced when economic rights are allocated
such that individuals bear more of the effects of their actions; that is,
they reap higher rewards from inducing gains for others – and
conversely suffer heavier penalties from inducing losses.
“Because the costs of transacting are positive, the Pareto
conditions are never met.
This theory is also operational, capable of yielding
predictions about circumstances under which particular
wealth-enhancing arrangements will be used.”
… Y. Barzel, Foreword to Property Rights, Planning and
Markets, Webster and Lai, 2003
“How we feel about the evolving future tells us who we are as
individuals and as a civilization: Do we search for statis – a
regulated, engineered world? Or do we embrace dynamism –
a world of constant creation discovery and competition? Do
we value stability and control or evolution and learning? Do
we think that progress requires a central blueprint, or do we
see it as a decentralized, evolutionary process. Do we
consider mistakes permanent disasters, or correctable byproduct of experimentation? Do we crave predictability, or
relish surprise? These two poles, stasis and dynamism,
increasingly define our political and intellectual and cultural
landscape The central question of our time is what to do
about the future. And that question creates a deep divide.”
…Virginia Postrel, The Future and Its Enemies, 1998
“I have never before written a fan letter to a
professional colleague, but to discover that you
have … provided the empirical evidence for
what with me is the result of a lifetime of
theoretical speculation, is too exciting an
experience not to share it with you.”
… F.A. Hayek in a letter to Julian Simon.
“If we didn’t keep finding new ideas, there really
would be limits to growth. It’s ideas – the
whole process of discovery – that cause
growth.”
… Paul Romer, interviewed in Forbes, June 5,
1995
“… [e]ven with conservative assumptions about
future growth, someone born in 1995 can expect
to enjoy four times the lifetime income of
someone born in 1970. The fact of the matter is
that the record of the last quarter century
demonstrates two points: Aggregate economic
growth benefits most of the people most of the
time; and its is usually associated with progress in
other, social dimensions of development.”
…Joseph E. Stiglitz and Lyn Squire Foreign
Policy, Spring, 1998
“It is remarkable that the fall in the proportion of
people starving in the world should have come at
the same time as the population of developing
countries doubled. What is more astounding is that
the actual number of people starving in the Third
World has fallen. While in 1971 almost 920 million
people were starving, the total fell below 792 million
in 1997 ... In 2010 it is expected to fall to 680
million.”
… Bjorn Lomborg, The Skeptical Environmentalist
Cambridge University Press, 2001
“… The greatest achievement of the twentieth
century is that the majority of the poor people
of the world have shared in the improvements
in well being made possible by the
advancement of knowledge.”
… D. Gale Johnson, Journal of Asian
Economics, 2004
“Economic growth – meaning a rising standard of living for the
clear majority of citizens – more often than not fosters greater
opportunity, tolerance of diversity, social mobility, commitment to
fairness, and dedication to democracy. … Even societies that
have already made great advances in these very dimensions,
for example most of today’s Western democracies, are more
likely to make still further progress when their living standards
rise. But when living standards stagnate or decline, most
societies make little if any progress towards any of these goals,
and in all too many instances they plainly retrogress.”
… Benjamin M. Friedman, The Moral Consequences of
Economic Growth
Economic Growth and Per Capita Income Growth of
the Poorest
Source: David Dollar and Art Kraay, Growth Is Food for the Poor, The World Bank, Washington, DC, 2001, p.45
“The poor do not usually win when there is a struggle over
redistribution of the existing pie. They only win when the
pie grows larger for everybody …”
… William Easterly, Challenge, 2002
“Many people blame globalization for poverty and injustice in
the developing world. Yet it is the absence of globalization
– or an insufficient does of it that is truly to blame for
iniquities.”
… Ricardo Hausmann , Foreign Policy, Jan/Feb, 2001
“Over the centuries those who have been blessed with wealth
have developed many remarkably ingenious and persuasive
justifications for their good fortune. The instinct of the liberal
is to look at these explanations with a rather unyielding eye.
Yet in this case the facts are inescapable. It is the increase in
output in recent years, not the redistribution of income,
which has brought the greatest material increase to the wellbeing of the average man. And, however suspiciously, the
liberal has come to accept the fact.”
… J.K. Galbraith The Affluent Society, pp 96-97
“We live in a world of staggering and unprecedented
income inequality … Of the tendencies that are harmful to
sound economics, the most seductive, and in my opinion
the most poisonous, is to focus on questions of distribution.
In this very minute, a child is being born to an American
family and another child equally valued by God, is being
born to a family in India. The resources of all kinds that will
be at the disposal of this new American will be on the order
of 15 times the resources available to his Indian brother.
“This seems to be a terrible wrong, justifying
direct corrective action, and perhaps some
actions of this kind can and should be taken.
But of the vast increase in the well-being of
hundreds of millions of people that has
occurred in the 200-year course of the
industrial revolution to date, virtually none of
it can be attributed to the direct
redistribution of resources from rich to poor.
“The potential for improving the lives of poor
people by finding different ways of
redistributing current production is nothing
compared to the apparently limitless
potential of increasing production.”
… Robert E. Lucas, Jr., Federal Reserve
Bank of Minneapolis, May, 2004
“Globalization is, in essence, a process that creates
opportunities for faster growth and more rapid
poverty reduction in those poor countries in which
the domestic economic and political environment is
conducive … The primary challenge for the DCs
[developing countries] who have been left out of the
globalization process is domestic: how to transform
the domestic environment into one that is conducive
to globalization.”
.. T.N Srinivasan, Stanford Institute for Economic
Policy Research, Dec., 2002
Caveat: “Standard economic prescriptions, such
as letting the incentives of free markets operate,
are only part of the answer. Free markets are not
particularly helpful in maintaining a work ethic.
However, without a public service ethic,
governments will undermine property rights rather
than protect them. Without a learning ethic,
economic activity in agriculture, manufacturing,
and services will stagnate rather than evolve.”
… Arnold Kling, Learning Economics, Xlibris Corp.
2004
“It is evident from the experience of the countries that
have successfully reformed policies that the payoff
for shifting to a virtuous circle can be enormous.
Better understanding of the political-economic
interactions that can enable this to happen is
therefore of major importance for improving the
development prospects of those countries still mired
in the ‘stop-go’ cycle of detailed controls and
intervention and gradually decelerating economic
performance.”
… Anne Krueger, The American Economist (1994).
Evidence for a Virtuous Cycle
People with secure property rights, including legal
infrastructure to enforce property rights (“economic freedom”),
become prosperous
Prosperous people demand more economic freedoms
(www.freetheworld.com, R. Levine, D. North)
Is there evidence of spontaneous orders in the
development of cities?
Webster and Lai (2004) suggest that there is spatial
order – even in a world of second-best.
Suburbanization Around the World
Share of Change in Population
United States
Since
Areas
1950
39
Core
7.3%
Suburbs
92.7%
Classification
Urbanized areas over 1,000,000
any census since 1950
Canada
1951
4
5.3%
94.7%
Metropolitan areas over 1,000,000
Western Europe
1965
42
-14.2%
114.2%
Metropolitan areas over 1,000,000
Japan
1965
8
7.6%
92.4%
Metropolitan areas over 1,000,000
Australia & New Zealand
1965
6
7.2%
92.8%
Metropolitan areas over 1,000,000
Hong Kong
1965
1
-1.6%
101.6%
Metropolitan areas over 1,000,000
Israel
1965
1
-1.6%
101.6%
Metropolitan areas over 1,000,000
101
4.4%
95.6%
2
59.7%
40.3%
Seoul
55.2%
44.8%
Busan
85.1%
14.9%
Total
South Korea
1966
Metropolitan areas over 4,000,000
Source: http://www.demographia.com/db-highmetro.htm
1) For Seoul metropolitan area, Incheon Metropolitan City (excluding Ganghwa-gun and Ongjin-gun) is also considered as a central city.
2) Four cities and counties (Jinhae-si, Yangsan-si, Gimhae-si, and Gijang-gun) are considered as the suburbs of Busan metropolitan area.
Population Shares of 75 Largest U.S. Cities,
1900-2000
1900
1920
1940
1960
1980
2000
3.000
5.620
7.455
7.782
7.072
8.008
Top 20
11.971
19.487
25.026
28.092
27.304
30.944
Top 75
16.766
28.101
36.178
43.977
44.645
53.467
US
76.094
106.461
131.954
179.979
227.225
282.224
NYC Share
4.52%
5.28%
5.65%
4.32%
3.11%
2.84%
20 Share
15.73%
18.30%
18.97%
15.61%
12.02%
10.96
75 Share
22.03%
26.4%
27.42%
24.43%
19.65%
18.24%
NYC
source: U.S. Census
Spatial Structure and Commuting, 2000
Minimum density method
MSANAME
3 millions and plus*
New York
Los Angeles
Chicago
Washington
San Francisco
Philadelphia
Boston
Detroit
Dallas
Houston
Atlanta
Miami
Seattle
Phoenix
1 to 3 millions*
half to 1 millions*
Pop
2000
21199865
16369949
9157540
7608070
7039362
6188463
5828672
5456428
5221801
4669571
4112198
3876380
3554760
3251876
Pop
2000 Commute time by
Growth
Drive alone mode (min)
'90-'00 Metro Main
SubDis(%)
center centers persed
18.2 27.8
35.2
29.8
26.3
8.4 28.5
52.8
34.6
26.9
12.7 27.8
34.1
29.6
26.1
11.1 28.9
38.3
32.3
27.6
13.1 30.3
37.8
32.6
28.3
12.6 28.4
35.4
30.8
26.8
5.0 26.1
34.1
28.3
25.3
6.7 27.1
37.6
28.2
25.8
5.2 26.2
31.0
28.3
25.0
29.3 27.4
32.8
28.0
25.4
25.2 28.1
31.7
29.0
26.5
38.9 30.9
35.6
34.0
29.0
21.4 27.9
33.0
28.7
26.4
19.7 26.2
29.9
27.5
24.7
45.3 25.4
29.3
24.9
24.1
26.5
24.6
23.4
17.7 24.1
23.2
22.0
22.2
13.2 22.3
Emp
2000
9418124
6716766
4248475
3815240
3512570
2780802
2974428
2508594
2565884
2076285
2088215
1623892
1745407
1463581
Employment share (%)
Main
SubDiscenter centers persed
17.6
14.3
68.1
21.2
7.7
71.1
12.2
21.2
66.6
17.7
5.6
76.8
18.4
16.7
64.9
13.8
22.7
63.6
13.4
6.6
80.1
18.3
3.1
78.6
6.3
25.8
67.9
19.8
20.5
59.7
24.5
13.0
62.5
18.9
12.6
68.4
18.8
10.8
70.4
20.5
21.8
57.7
22.8
11.9
65.2
17.9
9.9
72.2
17.8
6.7
75.5
No. of
Subcenters
Source: Lee, Bumsoo. 2006. Urban spatial structure and commuting in US metropolitan areas. Western Regional Science
Association 45th Annual Meeting.
13
24
36
12
17
15
8
6
18
8
9
6
6
11
7
3
1
Average commute length, time, and distance
All modes4)
POV
Transit3)
1983 1990 1995 2001 1983 1990 1995 2001 1983 1990 1995 2001
National
length (miles)
8.5 10.7 11.6 12.1
8.9 11.0 11.8 12.1 11.8 13.3 13.0 12.6
1)
time (minutes)
18.2 19.6 20.6 23.6 17.6 19.1 20.1 22.5 39.8 41.4 42.1 56.6
2)
speed (MPH)
28.3 33.4 34.7 32.3 30.2 34.7 35.2 32.3 18.0 18.0 19.6 19.1
1983 1990 1995 2001 1983 1990 1995 2001 1983 1990 1995 2001
MSA
length (miles)
8.5 10.6 11.7 11.9
8.8 10.9 11.9 11.8 11.8 13.2 12.9 12.4
time (minutes)
18.8 20.2 21.5 24.2 17.9 19.5 20.8 22.9 39.9 41.3 42.1 56.0
speed (MPH)
27.2 32.3 33.7 31.1 29.3 33.6 34.2 31.0 17.8 17.9 19.2 19.4
5)
Not in MSA
1983 1990 1995 2001 1983 1990 1995 2001 1983 1990 1995 2001
length (miles)
8.6 11.0 11.2 13.0
9.2 11.4 11.6 13.3 16.4 17.7 32.0 22.6
time (minutes)
16.1 17.2 17.2 20.8 16.6 17.3 17.4 20.8 30.3 44.0 49.6 96.0
speed (MPH)
32.2 37.8 38.9 37.7 33.4 39.1 39.5 38.2 32.4 21.2 42.2 17.1
Annual Change (%)
All modes
POV
Transit
National
90-01 83-90 90-95 95-01 90-01 83-90 90-95 95-01 90-01 83-90 90-95
length (miles)
1.2
3.2
1.8
0.7
0.8
3.2
1.4
0.4
-0.5
1.7
-0.4
time (minutes)
1.7
1.1
1.0
2.2
1.5
1.1
1.1
1.9
2.9
0.6
0.4
speed (MPH)
-0.3
2.4
0.8
-1.2 -0.6
2.0
0.3 -1.4
0.6
0.0
1.7
MSA
90-01 83-90 90-95 95-01 90-01 83-90 90-95 95-01 90-01 83-90 90-95
length (miles)
1.1
3.1
2.1
0.2
0.7
3.2
1.8 -0.2
-0.5
1.6
-0.4
time (minutes)
1.6
1.0
1.3
2.0
1.5
1.2
1.3
1.6
2.8
0.5
0.4
speed (MPH)
-0.4
2.5
0.9
-1.4 -0.7
2.0
0.3 -1.6
0.8
0.0
1.4
Not in MSA 90-01 83-90 90-95 95-01 90-01 83-90 90-95 95-01 90-01 83-90 90-95
length (miles)
1.6
3.5
0.4
2.6
1.4
3.2
0.2
2.4
2.3
1.1 12.6
time (minutes)
1.8
0.9
0.0
3.3
1.7
0.6
0.1
3.1
7.4
5.5
2.4
speed (MPH)
0.0
2.3
0.6
-0.5 -0.2
2.2
0.2 -0.6
-2.0 -5.9 14.7
95-01
-0.6
5.0
-0.4
95-01
-0.7
4.9
0.2
95-01
-5.6
11.7
-14.0
• How to explain recent commute time increases (13.3%) in US
metropolitan areas in the latter half of the 1990s – even though
commute times had been remarkably stable through previous
decades.
• Substantial income growth and subsequent increases in vehicle
ownership (Gordon et al., 2004). More income, more cars, more
errands by car – but few more roads. 1985-2006 VMT grew 100%,
but lane-miles grew by 5%
http://www.fhwa.dot.gov/policyinformation/pubs/pl08021/index.cfm
1990
1995
2001
90-95 95-01
Population (000)
239,416 259,994 277,203 8.6% 6.6%
Workers (000)
118,343 131,697 145,272 11.3% 10.3%
Disposable Personal Income ($)
20,058 20,798 23,687 3.7% 13.9%
Vehicles per Household
1.77
1.78
1.89 0.6% 6.2%
Vehicles per Driver
1.01
1.00
1.06 -1.0% 6.0%
1990 Adjusted
All
(billion)
Work
Non-work
(%)
(%)
284,551
100 49,327 17.3
235,224 82.7
Mon-Thu AM peak
27,272
100 12,227 44.8
Mon-Thu off-peak day
66,526
100
Mon-Thu PM peak
Mon-Thu off-peak night
All
Work
(%)
366,458
100 60,651 16.6
305,807 83.4
15,045 55.2
36,121
100 13,683 37.9
22,438 62.1
7,906 11.9
58,620 88.1
89,124
100 10,724 12.0
78,400 88.0
42,259
100 10,495 24.8
31,764 75.2
48,367
100 11,712 24.2
36,655 75.8
32,709
100
6,152 18.8
26,557 81.2
33,750
100
7,818 23.2
25,932 76.8
5,068
100
2,536 50.0
2,532 50.0
9,136
100
3,270 35.8
5,866 64.2
14,890
100
1,655 11.1
13,235 88.9
24,927
100
2,712 10.9
22,215 89.1
Friday PM peak
9,094
100
2,032 22.3
7,062 77.7
13,240
100
2,679 20.2
10,561 79.8
Friday off-peak night
8,723
100
1,233 14.1
7,489 85.9
10,180
100
1,815 17.8
8,365 82.2
Saturday all day
39,108
100
2,982
7.6
36,127 92.4
54,218
100
3,786
7.0
50,431 93.0
Sunday all day
38,902
100
2,109
5.4
36,793 94.6
47,395
100
2,452
5.2
44,943 94.8
Friday AM peak
Friday off-peak day
(%)
Non-work
(%)
All
(%)
2001
Growth 1990-2001
(%)
All
All
Work Non-work Family/ School/ Social/
personal church recreation
28.8
23.0
30.0
28.8
35.2
30.2
Mon-Thu AM peak
32.4
11.9
49.1
66.8
19.5
113.1
Mon-Thu off-peak day
34.0
35.6
33.7
32.0
19.5
49.3
Mon-Thu PM peak
14.5
11.6
15.4
2.1
66.0
29.5
3.2
27.1
-2.4
-9.2
18.9
0.9
Friday AM peak
80.2
28.9
131.7
154.1
82.2
258.9
Friday off-peak day
67.4
63.9
67.9
65.4
53.7
82.5
Friday PM peak
45.6
31.8
49.5
36.8
227.2
56.9
Friday off-peak night
16.7
47.1
11.7
8.0
80.3
11.3
Saturday all day
38.6
27.0
39.6
39.6
124.3
35.6
Sunday all day
21.8
16.3
22.2
22.9
35.2
16.0
Mon-Thu off-peak night
Large metros accommodate to growth by dispersing
Minute
Minute
Metro wide com m ute tim e vs . Metro population s ize
60.0
55.0
55.0
50.0
Y = -7.428 + 2.220 X
45.0
50.0
Metro
40.0
35.0
Commute
time by
Drive
alone
(mins.)
Y = -58.734 + 6.065 X
45.0
40.0
35.0
30.0
30.0
25.0
25.0
20.0
20.0
15.0
15.0
10.0
13.0
CBD
10.0
13.5
Minute
14.0
14.5
15.0
15.5
16.0
16.5
17.0
Ln (pop)
13.0
Minute
Subcenter com m ute tim e vs . Metro population
60.0
60.0
55.0
55.0
50.0
45.0
40.0
35.0
Y = -18.063 + 2.933 X
Subcenter
13.5
14.0
35.0
25.0
20.0
20.0
15.0
15.0
15.5
16.0
16.5
17.0
Ln (pop)
Dispersed
40.0
25.0
15.0
Y = -4.613 + 2.002 X
45.0
30.0
14.5
Com m ute tim e outs ide centers (Dis pers ed) vs . Metro
population
50.0
30.0
10.0
13.0
CBD com m ute tim e vs . Metro population
60.0
10.0
13.5
14.0
14.5
15.0
15.5
16.0
16.5
17.0
Ln (pop)
13.0
13.5
14.0
14.5
15.0
15.5
16.0
16.5
17.0
Ln (pop)
Trends of Air Pollution Emissions (Million short tons)
Air Pollution from Transportation Sector (million tons)
120.00
100.00
80.00
1970
1980
1990
60.00
1995
1998
1999
40.00
20.00
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0.00
Source: Bae, C.-H.C.(2004) “Transportation and the Environment,” The Geography of Urban Transportation. S. Hanson and G.
Giuliano, eds., Ch.13, pp.256-281.
U.S. Public Transport Market Shares
Year
Public Transport Market Share
1950
18.26%
1960
7.11%
1970
3.63%
1980
2.82%
1990
2.06%
1995
1.79%
2000
1.87%
2001
1.84%
2002
1.77%
Without New
York City
1.16%
Source: http://www.publicpurpose.com/ut-usptshare45.htm
“Over $25 billion were spent between 1970
and 2000 in sixteen major cities in the U.S. on
the construction of new rail transit lines.
Billions more have been spent on maintaining
and improving the existing rail transit lines.
While the supply of rail transit has increased,
the fraction of metropolitan workers
commuting using public transit has declined
from 12 percent in 1970 to 6 percent in 2000.”
… Matthew Kahn
“Most American anti-sprawl reformers today believe that
sprawl is a recent phenomenon caused by specific
technological innovations like the automobile and by
government policies like single-use zoning or the mortgage
interest deduction of the federal income tax. It is important
for them to believe this because if sprawl turned out to be a
long-standing feature or urban development worldwide, it
would suggest that stopping it involves something much
more fundamental than correcting some poor American
land use policies.”
… R. Brueggman, Sprawl: A Compact History, 2005
The Current Economic Crisis … “A crisis
is a terrible thing to waste …”
• Schumpeter’s “Creative Destruction”
– He would have argued “Let the big banks and the
auto companies fail.” Clean-up by entrepreneurs is
the only remedy
– Capitalism without bankruptcy is like
Protestantism without hell
– Regulators and politicians will do more harm than
good
The Current Economic Crisis (cont.)
• Hayek’s View
– If you read Hayek carefully he did not advocate anarchocapitalism or laissez-faire
– Instead, he argued that markets work much better than
the alternatives – because market prices prompt and
inform the many agents who help to implement the
innovations of the Schumpeterian entrepreneur
– Require rules and norms (e.g. enforcement of contracts,
protection of property rights, an oversight legal system)
and a degree of private sector regulation. These were
overwhelmed in the international rush for securitized
mortgages – and borrowing with MBS as collateral
Current Economic Crisis (cont.)
• Greenspan FRB, in effect, engineered a boom-bust
cycle (in fact, more than one)
• And housing in the U.S. has been subject to industrial
policy since the Hoover administration
• The Economist recently reported 2-billion new
bourgeois in world; they found Wall Street and Wall
Street found them
• Moral hazard is real. Bail-outs of the 1980s and the
1990s were not forgotten (e.g., AIG)
CONCLUSIONS
Hayekian spontaneous (emerging) orders
explain our economic good fortunes – even in
a world of second-best outcomes.
As some authors (Webster-Lai) have suggested,
these orders are also seen in urban
development trends.
Smart growth (and such) analyses and proposals
are dangerously innocent of these ideas and
facts.
There is good evidence for a virtuous cycle:
economic freedom prompts prosperity and
prosperous people demand economic
freedom
But there is also evidence for a vicious cycle: bad
policies prompt bad times and bad times
prompt bad policies
Which one will dominate?