Part of the point of this blog is to give me license to talk about whatever interests me, so welcome to the first memo from the Dept. of Wonkery.
Wandering among the flotsam that’s left after my workday writing assignments are done, I often pick up stray bits of economics, public policy, and foreign affairs and tack them down together in ways that seem cool. I’m that guy who makes weird driftwood sculptures in his yard, except that the driftwood is current affairs and the yard is this blog. I invite you to drive by and take a look from time to time.
One bit of flotsam this week comes from a magisterial and much needed essay in The Economist called “The Economist at 175, reinventing liberalism for the 21st Century.” It’s a call to reclaim the reforming zeal that lead to women’s rights, free markets, free trade, social mobility, and democracy. In other words, all the good stuff that seemed inevitable during those heady days between the fall of the Berlin Wall in 1989 and September 11, 2001.
Ever since I started subscribing to The Economist last year, I’ve been cheered by it. It’s a haven of crisp prose and clear thinking in an age lacking both. But it can also be a shrill voice in defense of economic development at all costs. During the run of its publication, The Economist supported free trade, open migration, women’s rights, gay rights, and freedom of religion before they were widely accepted. Bravo. It also opposed economic relief from to Ireland during the great famine, supported Margaret Thatcher and Ronald Reagan, and cheered the 2003 invasion of Iraq. Wince.
Lately they’ve been big on the idea of the “radical center,” an unapologetic vindication of a secular, liberal order. Supporting the radical center means sacrificing parts of the past but also not clinging to radical modern ideology when it doesn’t work. If it advances prosperity and freedom, the thinking goes, let’s just try it, it no matter whose party claims it. If it seems crazy and extreme, let’s pass, no matter how sympathetic the arguments are.
What does the radical center look like? At the moment, it means supporting economic growth but opposing the consolidation of power by tech companies. It also means supporting open borders despite the indigestion for the right wing in the E.U. and the America. Bravo.
Radical centrists also believe in the promise of urbanization as an engine of economic development. This is one of Stewart Brand’s environmentalist “heresies”; the more people move to cities, the less they are connected to nature, but less their carbon footprint, due to smaller family sizes. The future might be cramped and grubby for humans, but the rest of the planet will be better off for it.
I’m all for urbanization, but not to the point of advocating a land tax, like the editors of The Economist. A land tax would levy taxes based on the value of the land rather than the buildings on top of it. A land tax would lower the costs of moving to cities for the world’s poor by spurring development. Higher taxes in high value neighborhoods would force those who couldn’t pay them to develop their land, presumably by selling it to real estate developers in exchange for a huge profit.
This is a good idea in theory, but it risks sacrificing the quality of life in cities. I firmly believe that the character of cities is just as important as their utility. The word civilization literally means “the art of living in cities.” And having cities which are places worth living in, not simply containers to most efficiently house large working populations, is an essential part of good government.
Furthermore, it’s not assured that developers will replace old buildings with newer but more affordable housing. They understandably in the interest of developing housing that is the maximum that the market will bear. How might a land tax fare in Seattle, for example, a city whose housing woes are world news thanks to the city council’s public tussles with corporate resident Amazon.
A friend in Seattle tells me that, while the homeless camp in the streets, new high rises go empty because the six-figure incomes needed to afford rents aren’t in ample enough supply. You can imagine the owners of smaller buildings, like 2-4 story apartment complexes or street-level shops and cafés selling off their property to get out of usurious taxes, only to have the new buildings go empty. In other words, a land tax would be just enough to destroy the character of local neighborhoods while likely doing nothing to fix the affordable housing problem. I am speaking here as a pragmatist, not a romantic who loves old buildings (though I am both.)
If taken to its extreme, what might a land tax do? What if you taxed the land under the Imperial Palace in Tokyo, purportedly the most valuable piece of real estate on earth? Or the land under Westminster Abbey, Buckingham Palace, New York’s Natural History Museum, or Carnegie Hall? But these are special cases, you say, exempt from taxation precisely to keep them out of the cycle of development and redevelopment which changes the character of cities beyond all recognition.
So where then do we draw the line between a building that contributes to the character of a city and one that blocks economic progress? In many cases, beloved buildings (and even familiar eyesores) become part of the character of a place in ways that the tax code isn’t designed to recognize. To the editors of The Economist all these concerns are just “NIMBYism,” which stands for “not in my backyardism.” This is about as subtle and compassionate as the Washington consensus term for all opposition to foreign wars, “Vietnam syndrome.”
No doubt The Economist’s editors dislike NIMBYism in both poor neighborhoods and rich ones, which is admirable. And the idea of rallying centrist liberals behind the idea of solving the affordable housing problem is also admirable, but a land tax alone isn’t the way to do it. If radical centrists want to be heroes again, they’ll need a better cause.