The Poverty of Economicism

Debates between planning experts and Neo-liberal economists are often frustrating. Recently I almost spoiled my winter holiday by engaging in a never-ending discussion (in Twitter!) on so-called alternative costs in urban development. The economic argument–as we know–is that in addition to the building costs of public buildings we should make clear to the decision makers also their alternative costs, the money lost when the land is not sold to the highest bidder. Some would go even further, stating that we should compare these costs with the costs of other public investments, such as schools or elderly care. This argument is particularly used by populist politicians who are against any kind of cultural building that they see 'elitist'.

The public library Oodi (designed byALA architects)

My argument, on the other hand, is that in order to make informed decisions, the decision makers should also understand the values that are generated by urban development. As an example we can consider one of the recent modern buildings in Helsinki, the new central public library Oodi, which has been praised for its architecture and as a new type of public space for the citizens. It has also been internationally recognised as a symbol of the Finnish institution of public libraries. Clearly, in addition to the building and alternative costs, also these positive impacts should be made visible. But this is not easy, since even many of the economic costs and benefits are indirect and have no geographical borders. Public libraries are an important part of the Finnish educational system, which includes free public schools, free vocational education and free universities. These will produce educated workforce, innovations and entrepreneurship in the long run, which are necessary for foreign investments and a thriving economy. The international recognition of the country as a successful welfare state with well-educated people and interesting architecture can also promote tourism and other industries.

But this is just the economy. Even if one could calculate the long-term economic benefits of the library–which is not easy to do in a reliable way–works of architecture are not simply factories to produce workforce or advertisements to promote tourism. They have a value of their own. For me (as an architect and philosopher), it is not difficult to see the difference between values and benefits. We clearly have values in research, in literature, in music, in the fine arts, in social relations–and in architecture and urban design. These are not determined by the copies sold, the number of people attending concerts, or the price of the paintings. If we want to know the value of a work of art or research, we need to ask the experts. We have no alternative. And they will not give us a monetary value that could be part of a cost-benefit analysis.

It seems, however, that economists don't even have such a concept of value, which means that no discussion is possible and results in a dead end. It reminds me of Wittgenstein's famous observation that one cannot see the the limits of one's world and language, since one would have to be able to 'measure' them from the outside, and this is exactly what cannot be done while being inside. Later, if we get more education and experience, we are able to see the limits of our former self. But not before.

In the economists' world, money is the measure of all things. Their conceptual framework consists of costs and benefits, consumer preferences, investment, returns, cost-effectiveness etc., and it does not include a plurality of values, which is so typical in cultural disciplines. And there is absolutely nothing wrong with that. All disciplines are limited, either in their scope or in their perspective. A geologist has nothing to say of human psychology or sociology. The problems arise only when experts of one field fail to see the limits of their discipline, trying to colonise the whole world within their conceptual cage. In other words, the problem is not with economics, which is a perfectly respectable social science within its limits, but with economicism. This term refers to the attempts of managing the whole world with the conceptual framework and methods of economics. Or in our case, trying to understand and reform urban planning and architecture with something like cost-benefit analysis.

Before discussing this concept in more detail, I need to admit right away that economics is not the only discipline with this problem of colonisation. My own discipline, architecture and urban planning, is equally guilty of such grandiosity. Master planners and 'starchitects' tend to see the world in terms of aesthetics; structural rationality or functionality do not alone qualify for great architecture, and although economic considerations are necessary, they do not determine the quality of architecture or urban design. Again, this is a problem only if one tries to neglect the input of other disciplines, such as ecology, sociology, history, geography or–indeed–economics. This attitude has a similar name: aestheticism.

But let us return to economicism. One of the most famous representatives of the current Neo-liberal economics is Edward Glaeser. He could even be called a 'starconomist' or 'celebrity urbanologist' as Jamie Peck suggests (Peck 2016). For our purposes he is an ideal case, since his father was an architectural historian and curator of the Museum of Modern Art, and thus he can be assumed to have some understanding of architecture. In addition, he has attempted to draw the line between architecture and economics in his address to the American Association of Architects, which was published in the Architectural Review in 2011. This short text deserves some close reading (for those who do not know, this is a detailed method used in literary criticism and philosophy).

This is how he writes about his father: "My father was an architectural historian, who through my childhood was a curator at the Museum of Modern Art. I never inherited one-twentieth of his aesthetic gifts, but I continue to have a healthy admiration for them and for the genius of great architects."

In this statement he admits that there are qualitative differences between people's abilities to make aesthetic judgments, and that his skill is more than twenty times inferior to his father's; they are not simply two equal tastes or opinions. Whether it is a gift from God or developed through education and experience is not evident, but it is also not relevant here. He further says that he has "healthy admiration" for these gifts, as a civilised person should: admitting to be inferior in certain skills and knowledge but also that they are real. In matters of the quality of architecture, thus, one should rather consult his father or any other equally talented and educated person. Let us keep this in mind.

Before this personal judgement, however, he tries to distinguish the architectural expertise from economics with the following words:

"This perspective may help to explain the different approach that economists and architects take towards building a new skyscraper on Manhattan's Madison Avenue. The architect may ask whether the building will be beautiful, on its own or in its neighbourhood; he may ask whether the structure's form is true to its function, or whether it will inspire or depress.

None of these questions–or any like them–will occur naturally to the economist. Indeed, the economist will ask not whether the skyscraper should be built, but rather whether the government should allow the skyscraper to be built. Economists have no business judging the aesthetics of the proposed structure, any more than it is our business to ask whether people should buy long or short skirts, or read Proust instead of Joyce."

At first this sounds clear: architects are asking and trying to answer questions that economists don't even ask, because it is not their business. The last sentence is curious, however: he compares the questions of aesthetics to consumer preferences, long or short skirts and Proust vs. Joyce. Does he mean to say that aesthetic qualities are just like any consumer preferences? This interpretation would hardly represent "healthy admiration". It is also curious that he first gives an example of the 'lower end' of consumption (long and short skirts) but also another example of the 'higher end' of cultural products, Proust and Joyce, two of the most important but also difficult authors. If he had used Dan Brown instead of Joyce, would the economist still have no business in judging between them? Maybe so (except perhaps @filsdeproust, but not even him as an economist). A cultural critic or literature scholar would have no difficulty in saying that they are not even in the same territory. They would not say that people should read Proust instead of Dan Brown, rather to the contrary: if you are not motivated or don't have the necessary basic education, you should not even try. But if you have, it makes sense to read Proust instead of Dan Brown, if you want to get something out of your reading.

It seems that we are approaching the key issue. Glaeser continues: "Skyscrapers may also impose costs on third parties. Some views may be blocked. City streets may become congested. An older building, which brings delight to millions, may be destroyed by new development. One approach to these costs, which are not naturally paid by the building's developer, is to impose impact fees, as in some places in California. Typically, regulation has been used to achieve the same ends, because it is simpler and easier to enforce."

Thus, developing the city in any way you like creates "externalities" in the economist's vocabulary, but they can be compensated with "impact fees". However, cities are rather using regulation, because it is "simpler and easier to enforce". For architects and urban planners, however, "regulation" of urban development is simply urban planning, and the objective of this activity is to create a good, functional, sustainable and beautiful city. If the city fails in this endeavour and ends up in a bad, non-functional, unsustainable and ugly city, no impact fee will make it good, functional, sustainable or beautiful again. These qualities are simply lost, no matter how much money you pay to those who suffer.

This is the the plurality of values mentioned earlier, which seems to be one of the main differences between economics and the cultural disciplines. If the economist, however, has a healthy admiration of other fields, he cannot simply impose his vocabulary on them. How can we judge, then, whether the skyscraper should be built, how many stories it should have, and whether the existing old building should be demolished? Here we find a much less humble Glaeser:

"Economists don't typically think that the government should be forcing people to embrace more beautiful building, in part because we don't trust the tastes of our elected policy-makers. Some kings and emperors have been patrons of genius, but others have not. Does the track record of public architecture in the US really suggest that our policy leaders are preternaturally gifted judges of great building? Even when respected architects get to make decisions, the results can often be distinguished buildings that are despised by locals, such as Kallman, McKinnell & Knowles' Boston City Hall. That outcome is hardly ideal."

Thus, according to Glaeser and his fellow economists, elected policy makers cannot be trusted in matters of beauty, but neither can respected architects. Who is to make this judgment, then? The economists? But as he already said, this is not the business of economists. The general public? Is aesthetics just a matter of consumer preferences? Farewell to Proust (and Joyce), enter Dan Brown?

The picture is now becoming clearer. Glaeser sees that he needs to be able to say something about beauty or historical value in order to argue against regulations that would not allow the imaginary skyscraper or demolition of the old building. But because he is not willing to ask someone like his father (which would be interdisciplinarity, not colonialism), he has only poor alternatives. He has to claim that there is no such thing as informed expert opinion of aesthetic or historical value, only consumer preferences. Or he has to claim that, unlike economists, the experts of the other fields cannot be trusted. "I believe that many cities regulate too much, by restricting land use or by preserving historic areas that aren't all that historic or all that beautiful." But in that case he has to give the power of judgement to himself, the one with less than twenty times the understanding of someone like his father. Or he has to redefine the concepts of aesthetic and historical value by using the conceptual framework of economists. In other words, he has to claim that experts in architecture and history do not actually know their field, only pretend to know it. Because they are not economists.

Since somebody would certainly take this text to be against economists, let us return to my own profession, architecture and urban planning. When I started studying architecture forty years ago, I had already graduated in philosophy, economics and history and theory of art from the University of Turku. Thus it was a little bit easier for me to 'measure' the limits of architectural thinking from the outside. Yesterday I had another discussion in social media on the social impacts of architecture, and I noticed that the doctrine of environmental determinism is still alive and kicking in the professional circles. That is, architects often believe that certain solutions in the built environment–such as forcing people to meet each other in staircases or creating nice meeting places and urban squares–would by themselves promote community development. Apart form some celebrity sources (such as Jan Gehl), these believes are not based on any research in social sciences. Colonial tendencies–refusing to listen to those who know–simply leads to poor understanding, not to any kind of 'democratic' epistemology. 

In both cases, I would rather opt for interdisciplinarity.



References 

Glaeser, Edward (2011) The Only Way is Up. Architectural Review, Vol. 230, Issue 1376.
Peck, Jamie (2016) Economic Rationality Meets Celebrity Urbanology: Exploring Edward Glaeser's City. International Journal of Urban and Regional Research, Vol. 40, Issue 1.