What Elites Do Instead of Providing Services, Redux

2017-05-21

Three years ago, I wrote about how American urban elites propose public monuments in lieu of providing public services. My topical example was an article by Larry Summers, whose proposal to reduce inequality was to invest in nicer-looking airports – per Summers, the rich have private jets, the poor fly commercial. The post overall focused on government projects. But in the last few days I’ve seen two examples in the same direction, involving thinktanks and the private sector, and no government projects at all. One is from a panel headlined by J. D. Vance, which Pete Saunders and Aaron Renn both sat on; I can’t find a link to the video anymore, but here is a recap (update: here is the video). The other is from a Brookings report about Philadelphia. In both cases, the elite speaker (Vance, or Brookings) looks at a region that’s not as wealthy as it would like to be, and proposes everything except better services.

Vance’s panel was held in Cleveland and discussed how Rust Belt towns could grow again. Vance, famous for talking about deep poverty in white Appalachia and for not proposing any political liberal or socialist solution to it, gave his usual spiel: Cleveland needs innovation, entrepreneurs, and venture capital. One of the panelists proposed dropping the name Rust Belt and replacing it with Heartland. It reminded me of how Providence subsidizes smartphone app developers in vain hopes that they’ll make it big and stay in town rather than decamping to Cambridge. Providence, too, went through rebranding attempts: first Renaissance City, and then, when I lived there, Creative Capital.

There is a cottage industry of right-wing pundits who talk about poverty and propose everything except center-left and left-wing (not the same thing!) solutions. Vance is clearly there, but the panel still didn’t discuss the usual center-right and neoliberal (not the same thing, again) solutions. Development economists on the right have a long list of proposals for fighting poverty, mainly in the third world, but with some applications to developed countries as well: give squatters legal title to the lands they’ve developed, make it easier to start a business, reduce occupational licensing requirements, improve capital markets, levy broad-based taxes, avoid industrial policy picking winners and losers. This is not what the panel said. The panel didn’t really say anything concrete, except that more ambition is needed.

The Brookings report about Philadelphia is similar in concept, even if the political and economic context is different. Brookings is center-left (though moderate enough to attract conservative experts like Ed Glaeser), and Philadelphia is not poor, just less rich than New York and Washington. But the list of recommendations, on PDF-pp. 39-40, is an exercise of how not to say anything. Most of the recommendations are nebulous: “appoint an executive director.” The one specific actionable item is to bring in star faculty to the universities; Penn in fact does that periodically, and the results are not always good, with several examples of tenured hires who weren’t as productive as hoped for.

These plans are reminiscent of alchemy. Medieval alchemical texts were never clear about what to do exactly; they couldn’t be, because then readers would try to replicate the results and see the recipe doesn’t work. So they can’t give an exact recipe for how to grow, because that wouldn’t work. Instead, they propose ten nebulous items. A city that succeeds will get praised for how it implemented six of them; a city that fails will get criticized for how it only implemented six and did so in the wrong way.

Nor can these plans offer services. They cannot talk about investing more in education and in hospitals, in improving social services, etc. That’s political. If they do talk about education, they talk about it in the same terms as a self-important tech entrepreneur or venture capitalist: attracting excellence, enterprise universities, global talent, anything to avoid talking about school segregation or funding disparities.

Cleveland urbanist Alex Baca complains that the Vance panel was overfocused on private-sector solutions and not on public-sector investments. But I don’t think that’s really the problem. Elite institutions and pundits who, to look like they’re above the political fray, propose non-solutions and irrelevant brand-building exercises, come up with both private and public programs. The biggest enduring fad, charter schools, is funded by the public, just not run by it. Brookings and Vance are proposing private programs, and New York and Providence both wasted money on public enterprise programs, but the principle is the same: branding is cool, social services are dirty.

The political problem is that the consultants need to justify their own existence. This requires them to exclude every solution that has a political address. Vance himself hints at his own conservative values (he thinks declining religiosity is a sign of decline), but he makes sure to propose things that everyone can relate to and that peg him as J. D. Vance, independent thinker, and not J. D. Vance, a cog in the religious right’s machine. This does not mean that his proposals are a veneer for the religious right. On the contrary: I think they’re a deliberate attempt to be independent of political partisanship. But the same principle also excludes every social program that orthodox progressives support. A consultant who proposed raising income or sales or property taxes, rather than an opaque TIF deal, would be treated as belonging to the city’s progressive Democrat faction; the same is true of a consultant who proposed raising teacher pay rather than bringing in outside school administrators.

This is not purely self-serving, since urban politics is corrupt, especially in poorer cities. Being treated as an outsider above the fray has legitimate value: a consultant who proposes ideas that are viewed as fresh will get more locals to listen purely for the mystique of outside opinion, regardless of whether those ideas are good. But the self-serving aspect of this kind of self-marketing ensures that there is no quality control, and the consultants who succeed the most at this are the ones who devote the least amount of effort to ensuring their proposals actually work.

I think the ultimate cause of this is the need to be seen to be doing something. If a peripheral city asked me what it could do to be as rich as San Francisco, I’d tell it, nothing. It can tax itself to make its poverty less desperate, it can improve the business climate somewhat, it can have better public transit based on best global industry practices, but it’s not going to be San Francisco, Munich, New York, or Paris. Forget about it. Elite consultants instead overpromise: they tell those cities what they want to hear. And they make sure to pick solutions that a) they will not be held accountable for when they invariably fail, and b) are complicated enough so as to justify those consultants’ own existence. Local urban elites benefit from looking leader-like and implementing a new program; consultants benefit by getting both money and kudos. Everyone wins, except the people who are governed by this arrangement.

Written by Alon Levy Posted in Politics and Society