(2) BRIEFING Land-shackled economies | The Paradox of Soil; Land, the centre of the pre-industrial economy, has returned as a constraint on growth (cover story).
www.economist.com/news/briefing/ ... d-constraint-growth
Quote:
(a) "THE history of economics has been, among other things, a story of learning to care less about land. The physiocrats of 18th-century France saw it as the primary guarantor of wealth.
(b) "Western countries found ways to work around land’s scarcity, some of them ingenious—skyscrapers, artificial fertiliser, railways, suburbs—and some nefarious—dispossessing the oppressed and colonised. Improved transport allowed land farther off to do the work that land close at hand had done before, whether by producing crops half way round the world or housing workers out in the suburbs. High productivity allowed more food to be grown on fewer farms.
(c) "The value of land relative to GDP fell remorselessly
(d) “concern over land has come roaring back [since the second half of the 20th century]. The issue is not overall scarcity, but scarcity in specific places—the cities responsible for a disproportionate amount of the world’s output. The high price of land in these places is in part an unavoidable concomitant of success. But it is also the product of distortions [through 'regulatory limits on the height and density of buildings'] that cost the world dear.
(e)
(i) “Land’s new relevance is rooted in two main developments. The first, ironically enough, is related to the revolution in computers and communications that was beginning to become evident in the 1970s. In some ways this revolution has brought about the 'death of distance; foreseen by Frances Cairncross (a former journalist at The Economist). Supply chains leap borders and oceans; calls to customer services can be answered a continent away. But if distance has died, location has not. * * * Edward Glaeser of Harvard University and Giacomo Ponzetto of CREI, a research centre in Barcelona, reckon that this was because information technology made work in some knowledge-intensive industries far more lucrative. Financial traders could manage more money across more investors; software firms could sell their products cheaply and easily across a global market. As the return to knowledge-intensive activities exploded, so did the economic fortunes of idea-producing places.
“There is support for this idea in research done by Thor Berger, of Lund University, and Carl Benedikt Frey, of the University of Oxford. Before the 1980s there was no statistical link between the skill-level of a city’s workforce and its tendency to create new kinds of work. From the 1980s on, by contrast, new job categories appeared with much greater regularity in places with highly skilled workers than in those that lacked them. What is more, Mr Glaeser and his colleague Matthew Resseger find a close relationship between the population of a metropolitan area and the productivity of workers within that area. It seems that workers accumulate knowledge faster in cities with lots of idea industries.
“Top cities became hotbeds of innovative activity against which other places could not easily compete. The people clustered together boosted each others’ employment opportunities and potential income. From Bangalore to Austin, Milan to Paris, land became a scarce and precious resource as a result; the economic potential of a hectare of a rural Kentucky county is dramatically lower than that of a hectare in Silicon Valley’s Santa Clara county. And there is only so much of Santa Clara to go around.
(ii) Yet more Santa Clara could be built, were it not for the second and more distressing factor behind land’s return: the growing constraint imposed by land-use regulation. The Santa Clara town of Mountain View, for instance, is home to some of the world’s leading technology firms. Yet nearly half of the city’s homes are single-family buildings; the population density is just over 2,300 per square kilometre, three times lower than in none-too-densely populated San Francisco.
“The spread of land-use regulation is not hard to understand. The clustering that adds to local economic vibrancy has costs, too, as the unregulated urban booms of the 19th century made clear. Crowded slums were fertile soil for crime and epidemics; filthy air and water afflicted rich and poor alike. Officials began imposing new rules on those building in cities and, later, on those extending them: limiting heights and building designs; imposing maximum densities and minimum parking requirements; setting aside “green belts” on which development was prohibited. Such regulations have steadily expanded in scope and spread to cities around the world.
“As metropolitan economies recovered from their mid-20th-century slump populations began growing again.
(f) “David Ricardo, an eminent early-19th-century economist who was, among other things, a friend of [Thomas] Malthus’s [both British, though Ricardo was a 2nd generation of immigrants], would have recognised the issue. Back when land was at the centre of the discipline his observations led him to the idea of a rent: an unearned windfall accruing to the owner of a scarce resource.
“Strained food supply would raise food prices, he reasoned, which would encourage landowners to bring ever more land under cultivation. But higher food prices benefited all landowners. A lord sitting on highly productive agricultural land suddenly found his profits swelling: not as a result of innovation on his part but because humanity needed more of something he happened to own. This is what is happening in the world’s cities today.
“According to data gathered by Robert Shiller, of Yale University, the inflation-adjusted cost of building new housing in America is roughly the same now as it was in the 1980s. The inflation-adjusted cost of buying a new home, by contrast, has risen by 30% over the same period [basically Schiller was saying that Compared to a property developer of 1980s, the present-day developers has the same input but reap 30% more output (money).
Note:
(a) "physiocrats of 18th-century France"
(i) physiocracy
en.wikipedia.org/wiki/Physiocracy
(ii) physi- (combining form; Greek [noun] physis growth [the same root that also develops into the noun "physics"):
"1: nature <physiography>
2: physical <physiotherapy>
www.merriam-webster.com/dictionary/physi-
(b) remorseless (adj): "not abating in intensity; relentless <a remorseless wind>"
www.collinsdictionary.com/dictionary/english/remorselessly
(c) section heading: “Old Kent Road to Mayfair”
(i) Monopoly (game)
en.wikipedia.org/wiki/Monopoly_%28game%29
(originated in the United States in 1903, by Elizabeth (Lizzie) J Phillips née Magie; section 2.2 UK version: The 1935 licensee replaced American locations with London's)
(ii) Mayfair Still the Most Expensive Street on the Monopoly Board. PropertyWire, June 27, 2013.
www.propertywire.com/news/europe ... s-201306277943.html
the first three paragraphs:
"Mayfair became an iconic London address when the Monopoly board game made it the most expensive street to buy houses at £400 but research shows just how much prices have risen since then.
"When the game came onto the market almost 80 years ago Mayfair was the most expensive street and Old Kent Road the cheapest at just £60.
"Of all the streets on the famous board they are still the most expensive and the cheapest but in reality a property in Mayfair would cost £1,426,689 and in Old Kent Road £192,714, according to research from the Halifax.
(iii) Mayfair
en.wikipedia.org/wiki/Mayfair
(an area; is named after the annual fortnight-long May Fair that, from 1686 to 1764, took place on the site that is Shepherd Market)
(d) Frances Cairncross
en.wikipedia.org/wiki/Frances_Cairncross
(1944- ; a British economist)
(e) “Giacomo Ponzetto of CREI, a research centre in Barcelona”
CREI is university-level “Centre de Recerca en Economia Internacional” (in English: Center for Research in International Economics; but I can not find out if it is public or when it was established)
crei.cat
(f) “Economic change led to the rejuvenation of cities around the world, stress on stagnant housing stocks, and soaring housing costs. In many developed economies, the value of housing is an ever greater store of wealth (see chart 2)“
(i) Take France as an example, whose residential property value is ~350% of GDP. By and of itself, it is not inherently wrong, albeit a bit counterintuitive. You see, GDP is economic output in ONE year.
(ii) YOU MAY WANT TO STOP HERE, because by now you know where the Economist is going, it rationale which is persistent throughout the years and across disciplines (such as prostitution and illicit drugs, all to be legalized; at least hints of legalization of drugs, yet the Economist has not had a full briefing to legalize drugs; I am waiting).
(g) section heading: "Belleville to Rue de la Paix"
(i) Belleville, Paris
en.wikipedia.org/wiki/Belleville,_Paris
(a neighbourhood of Pari; its main street, the Rue de Belleville; The name Belleville literally means "beautiful town;" Historically, Belleville was a working-class neighborhood; is home to one of the city's two Chinatowns)
(ii) Rue de la Paix, Paris
en.wikipedia.org/wiki/Rue_de_la_Paix,_Paris
(a fashionable shopping street in the center of Paris; opened in 1806; At first named Rue Napoléon, its name was changed in 1814, after the Bourbon Restoration, to celebrate the newly arranged peace)
(iii) The French version of Monopoly game contains both Rue de Belleville and Rue de la Paix.
(iv) French English dictionary
* ville (noun feminine; from Latin vīlla country house): "town, city"
en.wiktionary.org/wiki/ville
* paix (noun feminine): "peace"
en.wiktionary.org/wiki/paix
(h) section heading: “Mediterranean Avenue to Boardwalk”
(i) Mediterranean Avenue
monopoly.wikia.com/wiki/Mediterranean_Avenue
(the first property on a standard Monopoly board; Mediterranean has the lowest rent in the game)
(ii) Boardwalk
monopoly.wikia.com/wiki/Boardwalk
(the most expensive property on a standard Monopoly Board; The name was inspired by the Atlantic City Boardwalk in New Jersey)
(iii) list of boardwalks in the United States
en.wikipedia.org/wiki/List_of_boardwalks_in_the_United_States
(section 1.9.2 Atlantic City, New Jersey: was the first boardwalk in the United States, having opened in 1870; 4 miles long; This boardwalk gained fame due to the board game Monopoly, which was based upon the trading and dealing of real estate in Atlantic City)
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发表于 4-16-2015 18:54:06
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