SMART DECLINE

Vs

SMART MOVE

The story about Detroit’s economic decline and Shrinkage was raised by ‘Alex Altman’ the Washington correspondent for ‘TIME’.  Altman is the one who predicted the GM failure in 2008 (years before happening) by his famous article “Corporate Layoffs: The Worst is yet to come”.

In 2009 he had more to say;  

He raised the idea of city shrinkage phenomenon in Detroit. The article named “Detroit tries to get on a road to renewal” and tailed by a photo of Detroit’s suburb. This photo later became an iconic portrait of the “Depopulation Phenomenon” in the States.  

The idea, was followed by many scholars in different routes; urban spatial, economics, social justice, or even politics.

To Paul Krugman, the Professor of Economics and International Affairs at Princeton University, urban reduction is not a matter of “Decline”, yet, he translates the idea of city shrinkage into ‘Smart Move’. He says, ideas move, then money moves, then people.   

 

Just drawing a comparison between the size of the US Auto industry between ‘1900-1970’ and the same thing in ‘2010’ will clearly depict the idea behind the city shrinkage. The U.S. main goal is changed. Providing “know-What” in early 20^th century brought a huge amount of financial resources. However, in past years, many booming economics such as India, China or even Brazil, relied on their cheap labor force and made the competition hard for U.S.

Consequently, U.S shifted its industry to “know-how”.

Rather than providing goods, they are more interested to provide the knowledge of production. A great example would be Silicon Valley in San Jose, CA (or Austin, TX). Inevitably, there was a shift in labor-based industries since the hub of production was not any longer in the US. Instead, the e-hubs are defined, hosted and boomed in many parts of the Stases.

I did a small experimental research as follows that I believe could be interesting;

 The price quote of 20ft U-Haul rental truck from Detroit to Austin and the same thing in opposite direction are questioned.

Both items have the same millage, the same criteria and the same nodes, but in different directions. The price from Detroit to Austin is 1600 $ and the opposite direction is 450 $. It shows the economic shift from manufacture-based industries to e-based sections.

In short, the city shrinkage phenomenon has no correlation with financial crisis, ethics, equity, or even social justice.  It is just a matter of movement. Rusk the author of “Cities without Suburbs” argues “When a city stops growing, it starts shrinking; there is no zero growth rate”. Hence, by moving the ideas, money and population also move.

Endnotes;

-       http://trid.trb.org/view.aspx?id=719454

-       Altman, A. 2009. Detroit tries to get on a road to renewal

-       Hall, Peter. 1997. Modeling the post-industrial city

-       Harvey, D. 1996. Justice, nature and the geography of difference. London: Blackwell.

-       Hollander, J. 2009.Polluted and dangerous: America’s worst abandoned properties and what can

be done about them. Burlington

-       Hollander, J., and F. Popper. 2007. Planning practice and the shrinking city

-       Jackson, Kenneth T. 1985. Crabgrass frontier: the suburbanization of the United States.

-       Mayer, H., and M. Greenberg. 2001. Coming back from economic despair: Case studies

of small and medium-size American places

-       Mouffe, C. 1996. Democracy, power and the ‘‘political’’. In Democracy and difference:

Contesting the boundaries of the political

-       Popper, D.E., and F.J. Popper. 2002. Small can be beautiful

-       Safford, Sean. 2009.Why the Garden Club couldn’t Save Youngstown

-       Sandercock, L. 1998. Towards Cosmopolis: Planning for multicultural cities.

-       Shrinking cities? A comparison of recent planning exercises in Sudbury

-       Schulman, Bruce, J. 1994. From Cotton Belt to Sunbelt

-       Capitalism, socialism and democracy. New York: Harper.

-       Vergara, C.J. 1995. The new American ghetto. New Brunswick, NJ: Rutgers University Press.

-       Wiechmann, T. 2008. Errors expected – aligning urban strategy with demographic uncertainty

in shrinking cities. International Planning Studies

-       Wolin, S. 1996. Fugitive democracy. In Democracy and difference

-       http://www.theatlanticcities.com/politics/2012/04/what-cities-looking-shrink-can-learn-new-orleans/1685/

-       http://thinkprogress.org/yglesias/2009/04/25/192684/city-shrinkage/?mobile=nc

-       http://www.shrinkingcities.eu/index.php?id=73

-       http://www.eukn.org/E_library/Urban_Environment/Land_Use/Urban_Sprawl/Impoverished_facilities_in_shrinking_cities_have_implications_for_social_cohesion

The first attempt to define, categorize and rank global cities using relational data was made in 1998 by Jon Beaverstock, who worked at the time at Loughborough University in the United Kingdom (Jonathan V. Bea Verstock is now working in University of Nottingham). He started the ‘Global City’ phrase by the “Revisiting High-Waged Labor Market Demand in the Global City: British Professional and Managerial Workers in New York City” and continued that by establishing the ‘Globalization and World Cities Research Network’. The Globalization and World Cities Research Network, commonly abbreviated to ‘GaWC’, is a think tank based in the Geography department at Loughborough University in England, that studies the relationships between world cities in the context of globalization.

A roster of world cities was outlined in the GaWC Research Bulletin 5 for the first time and ranked cities based on their connectivity through four "advanced producer services": accountancy, advertising, banking/finance, and law. (http://www.lboro.ac.uk/gawc/rb/rb5.html)

The following is a general guide to the rankings;

·         Alpha++ cities are New York City and London, which are vastly more integrated with the global economy than any other cities.

·         Alpha+ cities complement London and New York by filling advanced service niches for the global economy.

·         Alpha & Alpha- cities are cities that link major economic regions into the world economy.

·         Beta level cities are cities that link moderate economic regions into the world economy.

·         Gamma level cities are cities that link smaller economic regions into the world economy.

·         Sufficiency level cities are cities that have a sufficient degree of services so as to not be obviously dependent on world cities.

http://www.lboro.ac.uk/gawc/world2010t2.html

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For the first time ‘Global City’ was imagined in ‘Metropolis’. ‘Metropolis’ is a 1927 German expressionist silent science-fiction film directed by Fritz Lang. The film was written by Lang and his wife Thea Von Harbou. Lang who was known as a master of German Expressionism divided the population into two distinct and separate classes—the thinkers and the workers.

“In late 2026, in a dystopian society called Metropolis, wealthy industrialists rule from vast tower complexes, oppressing the workers who live in the depths in the underground worker's city complex beneath them and …..”

Worth to see; http://www.youtube.com/watch?v=Ebejt0Pja8c

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Endnotes

o   http://www.demographia.com/db-megacity.pdf

o    "Glossary defining homelessness". Homeless.org.au. Retrieved 2010-09-01.

o   What is Sprawl?. SprawlCity.org. Retrieved on 2008-02-07.

o   Benjamin Grant (June 17, 2003). Urban gentrification is associated with movement "PBS Documentaries with a point of view: What is Gentrification?". Public Broadcasting Service.

o    World coal consumption 1980-2006 October 2008 EIA statisticsEIA, World Energy Projections Plus (2009)

o   "U.S. Coal Supply and Demand". Eia.doe.gov. Retrieved 2010-09-01.

o   Sharp, Michael D. (2005). Popular Contemporary Writers. Marshall Cavendish. ISBN 0-7614-7601-6.

o   Powell, Vincent (2005). The Legal Companion. Robson. p. 54. ISBN 1-86105-838-1.

o   Namu, Adilifu (2008). Black space: imagining race in science fiction film. University of Texas Press. ISBN 0-292-71745-8.

o    Westfahl, Gary (2005). The Greenwood encyclopedia of science fiction and fantasy: themes, works, and wonders.

o   Metropolitan area definition in the United States. Urban Geography

o   Regionalism’ in the USA: a critical overview

o    Spaces of Globalization: Reasserting the Power of the Local. Guilford Press, New York.

o   Metropolis. Settlement Transition in Asia. In University of Hawaii Press, Honolulu.

THE CORRELATION!

Economy, Politics or Economy-Politics

There is a game; on one hand, you have an opportunity to globalize the economy (Think about Hong Kong or Swiss) and on the other hand, you implement an economic dogmatic approach like Cuba or Iran (or an old example of Soviet Union).  The question is if the globalization does help nations, and if all know that, why still some nations are deprived of that.

Dogma is the official system of belief or doctrine held by a religion; Yet it introduce in economy by Peter Gordon. (http://www-bcf.usc.edu/~pgordon/index.php)

Nowadays, almost all economists are agreed that globalization is happening; an attempt to abolish barriers, not just in economy, but also in politic.  

This term is new and in Northern America is mostly comes with WTO or NAFTA. The question is;

How globalization is getting control?

How countries control global economy?

How small economies influence the larger countries?

How cartels are involved and with what degree of influence?

And more importantly

Who control who?

Are all the nations are taking advantages of globalization or some nations hurt?

What is the turnover of current global economy?

How globalization is getting support?

WHAT IS THE ROLE OF POLITICS IN GLOBALIZATION?

What is the “Economic Backwardness” in political perspective?

Economy is the part of the politics, inevitably the main part. Nations’ economic horizons get changed by political priorities in most of the times (though, I can bring an example like China that is totally reverse. They do organize their international relationship with other countries with respect to the possibility of taking economic advantages. China does use the power of Veto on the United Nations Security Council against US or England, just for the economic reasons, not because of the difference in political point of views. They ignored many sanctions activities against Syria or Libya, since they believe that trade with the isolated countries are much more convenient (and also beneficial) than doing the same with the WTO members). In other words, economy is serving politics. The other example could be OPEC.

OPEC is the Organization of the Petroleum Exporting Countries. Probably, the most influential economic cartel in the world.

OPEC decides about the price of the 68%of world’s energy (http://www.opec.org/opec_web/en/data_graphs/330.htm). Though, most of the decisions are coming from the countries that are not producers, yet are consumers. Here, we can see how developed countries (mostly, Western countries) dominate OPEC’s decision and how politics controls economics.

Conclusion; globalization exists. No Doubt. Countries do take advantages of that, but not all of them. Since, the amount of economic resources is limited; there is no chance to have positive affects everywhere. The positive side of the globalization belongs to countries with stronger participation with Western countries (and recently China/Russia) and the negative impacts go through the countries with isolated political systems (such as North Korea, Iran, and Syria). In other words, globalization does not general more monetary resources. It just shifts available resources from a point to other point.

The law of conservation of monetary resources looks like the law of conservation of energy, first formulated in the nineteenth century, is a law of physics. It states that the total amount of energy/money in an isolated system/world remains constant over time.

                  

Endnotes:

-          Marshall, Alfred. (1890) Principles of Economics.

-          Drazen, Allan (2008). "Political business cycles," 

-           Rose, N. L. (2001). "Regulation, Political Economy of

-           McCoy, Drew R. "The Elusive Republic: Political Economy in Jeffersonian America",

-          Lohmann, Susanne (2008). "rational choice and political science,"

-          Acemoğlu, Daron, and James A. Robinson (2006). "Economic Backwardness in Political Perspective

-          http://www.eric.ed.gov/ERICWebPortal/search/detailmini.jsp?_nfpb=true&_&ERICExtSearch_SearchValue_0=ED409816&ERICExtSearch_SearchType_0=no&accno=ED409816

-          http://books.google.com/books?hl=en&lr=&id=RoePU0zM7t4C&oi=fnd&pg=PR13&dq=economy+globalization+politics&ots=PGE4b58Hyv&sig=d4z1X-iktoKjp7TcG0sd1j2cZx4#v=onepage&q=economy%20globalization%20politics&f=false

-          http://www.jstor.org/stable/10.2307/3175354

-          http://www.tandfonline.com/doi/abs/10.1080/14649880120050165

-          http://www.lavoisier.fr/livre/notice.asp?ouvrage=2565948

Talking about finance, geography, urban, ........just made me enthusiastic enough to do some research and dedicate this week's topic into Geographic Equity Role in Public Transportation policy.

   The geography of urban transportation in U.S. cities is deeply formed by the geography of urban transportation finance. And ‘financing/funding’ the urban transportation (from where taxes are collected and to where they are distributed) is managed by politicians, neither urban planners nor transportation experts. To focus on how this funding decisions are made, it should be necessary to draw a distinction between different distribution concepts; Individual, Group and Geographic.

    There are also hard debates over these equity concepts and the logic of distribution methods. In one hand, Finance scholars and activists are more interested on individual equity and group equity. They argue that funds have to be distributed with the respect of the number of ridership and patrons. In other hand, ‘Elected Officials’ are concerned most with geographic equity. Taylor argues that the reason for geography equity is that ‘representation in the United State is organized geographically into a hierarchy of jurisdictions’. Consequently, geographic equity allocates public transit funding in equal among jurisdictions, regardless how it is consumed or what the urbanized level of state is. For example, the ridership of the New York Metropolitan Transit Authority (N.Y.MTA.) is 900 times more than this number in Chapel Hill, NC but the latter city enjoyed federal transit subsidies for 400 percent more than New York for each trip!

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Why Geographic Equity Has a Role on Public Transportation Policy?

A- Hierarchy of jurisdiction that is geographical

Representation in congress and the majority of state legislatures matched the geographical distribution of voters rather than urban transit client.

B - Policy makers misunderstanding

   Boxer (1998) argues that when announcing federal funding of new transportation project to constitute, congress members cite the economic benefits such projects will bring to the affected district. He believes elected officials, were interested on capturing the federal funds for transit projects for the economic revitalization and job creation in depressed areas. Hence, transit funding by federal was pushed through geographic equity that seemed more ‘Popular’ rather than other distribution systems. Moreover, Taylors highlights the congress members reflect in summer 1998 to TEA-21 legislation and argues that they hailed TEA-21 as an engine for continued economic growth by job generating.

C - Public concern with worsening environment quality (started at 1970s),

Vanguard strategy and anti auto activists (Dunn, 1998)

D - The effect of transit investment on public

   Taylor believes that transportation public works (notably, rail system) are usually popular with voters and the people whom they elect. Because of this reason, policy makers (and who need voters) are interested on geography equity. Mark Garrett believes the combination of federal funds for transit and dedicated local and state funding programs often produce politically powerful action for transit, even in situations where it fails to satisfy either the usual social equity or economic efficiency rationales.

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1-      Hanson and Giuliano, chapter 11

2-      American public Transportation Association, 2003b

3-      Reconsidering social equity in public transit, Garrett, Taylor

4-      Fiscal Equity in Urban Mass Transit Systems: A Geographic AnalysisHodge

                5-      TRANSPORTATION NEEDS AND EQUITY

                6 -      Evaluating Transportation Equity, Guidance For Incorporating Distributional Impacts in 

                       Transportation Planning, Todd Litman                                                                

                7-      Addressing Urban Transportation Equity in the United States

                8-      Journal article by Robert D. Bullard; Fordham Urban Law Journal, Vol. 31, 2004

      9 -      Integrating geographic information systems into transit ridership forecast models

            10-  A Coverage Model for Improving Public Transit System Accessibility and Expanding Access 

The idea of income elasticity of demand (We can consider city size as demanded good) in city formation came from “the soccer field”. You push the ball, if you have enough power; otherwise, welcome to hell!

The same challenge happened in almost all poly-centric metropolitans. The traditional CBDs were not able to tolerate the demanded growth. People/government seeks alternatives and ended up in the poly-centric pattern, inevitably (Joel Garreau, Edge city life on the new frontier, 1991).

Yet, the question is how the optimal size of the city and economics correlated and how this correlation (if exists) interpreted by economic models. Surprisingly, all reading assignments of this week came from the Krugman’s school of thoughts. Paul Krugman (Economics Nobel Prize winner, 2008) analyzed the equilibrium and the optimal resource allocations in a mono-centric city under the exploitative competition of economic sub-sectors. He believes on the macro-economic impacts and always makes a comparison between the constant elasticity of substitution (CES) and the variable elasticity of substitution (VES).

Left to right; Becker, McFadden, and Krugman

On the other side, 
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Gary S. Becker brought the idea of micro-impacts of individuals in metropolitan areas; how mass population dictates the size of city and how the dynamic relation between macro and micro scales works (The Economic Approach of human behavior, 1976, University of Chicago, He won the Economics Nobel Prize sixteen years after publishing this book in 1992. Becker is judged by many to be the most influential economist alive). The idea of Becker has been followed by Daniel McFadden and his assistant Kenneth Train for almost two decades. (McFadden also received the Nobel Prize in 2000” For his development of theory and methods for analyzing discrete choice”). McFadden introduced the concept of “Macro-Micro-Hybrid” model. He argues that the size of an economy in general and city in particular (they consider city as economic target and the size of the city as demand) comes from not only the macro-economics of Top-down model (Krugman’s idea), but also is strongly related to micro-economics of bottom-up model. In addition to these two models there is the third model to bridge these models which called hybrid model (Combining Bottom-Up and Top-Down, Christoph B¨ohringer, Thomas F. Rutherford, Rutherford calls this model as soft-link).

By way of illustration, the size of the city as a variable is getting influence by a number of parameters. These parameters are divided into two categories;

-          Macro Level; which is the economic sub-sectors such as industries, agriculture, and energy.

-          Micro Level; consisting of Individuals living in city. Following figures depicts how these two models linked. The third model matches the bottom-up (Micro) and top-down (Macro) models and brings the ability of dynamic feedbacks between two main models.

----------------------------------------------------------------------------------------------------------------

Endnotes:

1-      http://www.ipcc.ch/ipccreports/tar/wg3/index.php?idp=310

2-      Combining Bottom-Up and Top-Down, Christoph B¨ohringer, Thomas F. Rutherford

3-      Combining Top-Down and Bottom-Up in Energy Policy Analysis: A Decomposition Approach, Christoph BÄohringer and Thomas F. Rutherford

4-      The synthesis of bottom-up and top-down in energy policy modeling, Christoph Böhringe Energy Economics, Volume 20, Issue 3, 1 June 1998, Pages 233–248

5-      Exploring the gap ☆: Top-down versus bottom-up analyses of the cost of mitigating global warming, Deborah Wilson, Joel Swisher, Energy Policy, Volume 21, Issue 3, March 1993, Pages 249–263, Policy modelling for global climate change

6-      Integrating the bottom-up and top-down approach to energy–economy modelling: the case of Denmark, Henrik Klinge Jacobsen, Energy Economics, Volume 20, Issue 4, 1 September 1998, Pages 443–461

7-      Hourcade, J.-C., M. Jaccard, C. Bataille, and F. Gershi, “Hybrid Modeling: New Answers to Old Challenges,” Energy Journal–Special Issue, 2006, pp. 1–12.

8-      Computable General Equilibrium Models and Their Use in Economy-Wide Policy Analysis: Everything You Ever Wanted to Know (But Were Afraid to Ask) Ian Sue Wing Center for Energy & Environmental Studies and Department of Geography & Environment Boston University and Joint Program on the Science & Policy of Global Change Massachusetts Institute of Technology

9-      Hybrid Modeling: new Answers to old Challenges introduction to the Special issue of The Energy Journal, Jean-Charles Hourcade, Mark Jaccard, Chris Bataille, Frédéric Ghersi

10-  A hybrid Top-down/Bottom-up model for energy policy analysis in a small  open economy - the Portuguese case,  Sara A. Proença et al.

11-  EXTENDING GENERAL EQUILIBRIUM TO THE TARIFF LINE: U.S. DAIRY IN THE DOHA DEVELOPMENT AGENDA, Rutherford et al.

12-  TRACE (1999), Elasticity Handbook: Elasticities for Prototypical Contexts, TRACE; Costs of private road travel and their effects on demand, including short and long term elasticities; Prepared for the European Commission, Directorate-General for Transport, Contract No: RO-97-SC.2035,