In anticipation of my appearance in her fair city, design journalist Clair Enlow reviewed my book for the newspaper she writes regularly for, the Seattle Daily Journal of Commerce, which has articles about the real estate industry for the most part. I’m going to post her whole column here about my book. It was a nice piece of writing.
January 23, 2013
Design Perspectives: Book explores free markets that benefit everyone
By CLAIR ENLOW
Special to the Journal
Every day, it seems, we wake up and see our lawmakers in a standoff, and our national government nearing a standstill. Versions of the same scenes play out in state legislatures.
On screen, most of these officeholders are talking about the economy and the need to do something. Behind the lyrics there’s a chorus on the right saying the “free market” is a natural system, capable of providing almost all we need, if it is left alone. But it is in natural conflict with government, and can succeed in its mysterious and marvelous work only if government is kept severely in check.
For true right wing ideologues, this is not just a matter of principle. It’s war. Rhetorical hostages must be taken and arguments are useless. No one seems capable of presenting a countervailing view of the world that can break the deadlock.
Photo by Clair Enlow [enlarge]
A new book contends that markets are created by governments, through laws and infrastructure. Some markets, like Las Ramblas in Barcelona and Pike Place Market, above, are actual places nurtured and protected by the public.
But here is a tool. Anyone who wants to enter the fray from the other side should arm themselves with “The Surprising Design of Market Economies,” a new book by Alex Marshall (University of Texas Press). Marshall will appear at 7 p.m. Feb. 1 at Elliott Bay Book Company, 1521 10th Ave., Seattle.
Free markets aren’t so free
Here’s his message: The “free market” is really many markets — and they were never free. They were created, and paid for dearly, by — you got it — the government. Us.
Markets are anything but “natural.” They are designed. We come and go as we please and we do business in them. But we can’t get out of our responsibility for them, any more than we can escape responsibility for our own homes. And we’ve got to invest in them, or they will simply decline. Markets are powerful. But like them or not, we get the ones that we design and maintain, together.
Marshall shows how government, through history, has built the floor, the ceilings and the walls of the “free market.” They are made out of laws, on the one hand, and public infrastructure, on the other. Histories of modern, prosperous economies and markets vary, but they always involve lots of infrastructure — things like bridges, sewers, the Internet, education and law enforcement. Not coincidentally, that goes along with increasing investment in infrastructure as a percentage of gross national product, a trend Marshall says is the bedrock of economies in the developed world.
Marshall
Like many of today’s best writers on economics, from Malcolm Gladwell to Michael Lewis, Marshall is not an economist. He is a journalist, a senior fellow with the Regional Plan Association in New York City, and has written two previous books on cities.
His new book is not a comprehensive analysis of our economy. There is nothing about some of the most complex and troubling aspects of our age, such as banking and the growth of the financial sector.
For the most part, “The Surprising Design of Market Economies” is about the arc of history. This is fitting, since the stories about our past are at the heart of the ideological conflicts.
With an incisive voice and impressive research, Marshall goes centuries back for the roots of his premise, tracing the lines between “public” and “private” and showing they have been crossed so many times they are practically meaningless. One whole chapter is devoted to railroads, and the unresolved conflicts between public purpose and private capital that left us with a system far inferior to those in other parts of the developed world.
But no matter how deep he digs into the past, everything Marshall chooses to focus on ties squarely with the present.
Power to the corporations
In some of the most illuminating chapters, he traces the concept of corporations, showing that the laws governing them began with those that created cities, from London to New York. Marshall then points to the enormous powers and freedoms that have accrued to private, for-profit corporations, while the city of New York, whose charter comes from the state (just like other cities), must go begging to the state of New York for the right to levy “congestion pricing” on cars entering the streets of Manhattan. London and other cities have done this with great success, but Mayor Michael R. Bloomberg came away empty-handed.
Ownership laws — land, patents, equities — are always in flux, seeking balance. For instance, our system of patents actually originated in 15th century Venice as a rather ingenious way of rewarding individual inventiveness. Inventiveness indeed flourished, according to Marshall, and so did that city-state. But the time limit for patents was ten years, and over the next 300 years, Venice issued less than 2,000 of them.
Fast-forward to today’s world of patents and the evolving definition of intellectual property. According to Marshall, there were more than 185,000 U.S. patents issued in one year, 2008. Industries must contend with endlessly patentable features and “trolls” who make a business of buying up patents and suing companies for millions for infringement.
Patents and copyrights are good and necessary for optimum innovation and fairness, in Marshall’s opinion, but clearly the system needs a redesign. Much of our economic environment does. But we will not get there by idolizing a mythical “free market.”
“The Surprising Design of Market Economies” is not a book of radical economics. It’s about balance, reason, and reality. But it’s also about alternatives — and ongoing, successful experiments.
There are many frameworks for supporting people and enterprises, creating supply and meeting demand outside of the profit-driven model of private enterprise, and they are not new or radical. As Marshall points out, cooperatives — common in states like Minnesota and Washington, with deep Scandinavian and German roots — thrive in the USA, and they rely on common ownership, cooperation and democratic (one person, one vote) principles. Group Health Cooperative, PCC Natural Markets, REI, and any number of credit unions all come to mind.
We know that private enterprises and markets can be powerful and productive. But we also know they can be unfair and destructive of what should be free and natural — like clean air and water, not to mention a stable climate.
As this book shows, we can do much better. We’ve got to keep responding to our times and technologies, as we do the best we can to create markets that are fair, sustainable, and productive in the best possible sense.
If we can do that, we may get the markets — and the world — we deserve.
Clair Enlow can be reached at (206) 725-7110 or by e-mail at clair@clairenlow.com.