Boom towns: restoring the urban American dream

Abstract

Boom Towns: Restoring the Urban American Dream Stephen J. K. Walters Stanford, Calif.: Stanford University Press, 2014, 210 pp. The image of a boom town is commonly used to describe exceptional conditions through which a village suddenly becomes a city. Often such conditions are the discovery of mineral deposits that attracts industry and commerce. While in their booming condition, such towns are oases of societal flourishing relative to their preceding state. In Boom Towns, Stephen J. K. Walters, a professor of economics at Loyola University in Baltimore, explains that cities in general have the capacity perpetually to be forms of boom towns. Cities can serve as magnets to attract people and capital, thus promoting the human flourishing that has always been associated with cities at their best. It is different if cities are at their worst, as Walters explains in bringing Jane Jacobs's Death and Life of Great American Cities into his explanatory ambit. There are no natural obstacles to cities occupying the foreground of societal flourishing. There are obstacles to be sure, but these are man-made. Being man-made, they can also be overcome through human action, at least in principle even if doing so in practice might be difficult. Walters's analytical framework is centered on property rights and the ownership of capital. The boundary between boom towns and bust towns depends significantly on how towns treat property rights and, thereby, the returns owners are able to obtain from their capital investments in a city. Such capital is immobile, which makes it potentially subject to banditry and extortion by city officials. To the extent cities practice such hostage-taking, investment in those cities will be discouraged and bust-like conditions will emerge. Walters uses recent experience in the presence of state-wide tax limitations in California and Massachusetts to support his thesis. San Francisco and Boston had experienced significant declines in population until tax limits were imposed at the state level. In consequence, the return to capital invested in those cities increased and the decline in population was reversed. While security of private property is pivotal for the generation of boom towns, flourishing cities also require public property that is well managed and complementary to the commercial and industrial efforts of its residents. Cities, however, may manage public property badly, undermining flourishing in those cities. Bad management of public property reduces the return to private capital just as surely as extortionate taxation does. Such bad management can take the form of lavish spending on public construction projects as well as failing to provide clean and secure public spaces. The latter example is illustrated by what is known as the window fallacy, whereby allowing broken windows to accumulate signals a weak resolve to provide security for property, which in turn induces deterioration within the city by reducing the value of property rights. Walters hits his target head on in stressing the pivotal significance of property rights in accounting for the condition of cities, with the margin between flourishing and deteriorating cities governed by how property rights are treated within cities. Walters's analytical framework makes heavy use of Jane Jacobs's Death and Life of Great American Cities. In places I think he asks this framework to bear more weight than it is truly able to support. In this respect, a form of flying buttress could be constructed from other work by Jane Jacobs. In particular, I would recommend Cities and the Wealth of Nations and Systems of Survival. I could even add a third book, Dark Age Ahead, for its ability to portray the world that could He ahead of us if the insights contained within Boom Towns are ignored. In Cities and the Wealth of Nations, Jacobs explained that societal flourishing is a by-product of flourishing at the level of cities. …