Some articles on urban planning

As a subscriber to The Atlantic, I can read articles from 1857 to the present. It’s fascinating to read how people understood/discussed topics over these 160+ years.

Here are a few that I found searching for “urban planning” (I used my normal tools to make them accessible to you without hitting their paywall.)

If you have good articles to read, then please leave links in the comments!

Some old, insightful articles on boats

The Atlantic has been publishing since 1857. As a subscriber, I can access their archive, which is full of interesting tidbits. To focus my “plunge into the past,” I queried articles that mentioned sailing or sail boats, and found some really interesting stuff. The links on years go to PDFs.

1860: Boats turn from sidewheels to screw propellers, amid much skepticism.

1875: Mark Twain’s recollections on his time as a steamboat pilot (the basis for his 1883 book, Life on the  Mississippi) in parts: one, two, three, four, five, six and seven. One good excerpt:

In the space of one hundred and seventy-six years the Lower Mississippi has shortened itself two hundred and forty-two miles. That is an average of a trifle over one mile and a third per year. Therefore, any calm person, who is not blind or idiotic, can see that in the Old Oölitic Silurian Period, just a million years ago next November, the Lower Mississippi River was upwards of one million three hundred thousand miles long, and stuck out over the Gulf of Mexico like a fishing-rod. And by the same token any person can see that seven hundred and forty-two years from now the Lower Mississippi will be only a mile and three quarters long, and Cairo and New Orleans will have joined their streets together, and be plodding comfortably along under a single mayor and a mutual board of aldermen. There is something fascinating about science. One gets such wholesale returns of conjecture out of such a trifling investment of fact.

1895: Much more historical fact on the week of battles between the English and “Spanish Armada” that took place before storms sank so many Spanish ships (=saved by the Atlantic) in 1588.

1897: The US Constitution is now America’s longest serving (active duty) ship, but it was already a legend in 1897. Read how it got its reputation.

1899: Why America needs a bigger merchant marine. Contrast the promises in this pre-Jones Act (1920) perspective to the actual harm resulting from Jones.

1904: The story of a skipper who set sailing records with a clipper ship and then was killed in the Civil War.

1909: Another call to rebuild the US merchant marine (see 1899 above), with some useful and useless “logic.”

1910: How railroads replaced canals for inland shipping, everywhere.

1922: Ferries in the SF Bay Area — before the bridges.

1950: A poseur yachtsman is forced to actually buy a yacht 🙂

1965: Two boating guys go crazy when they form a “Yacht Club.”

2011: Plastiki: Sailing Across the Ocean on a Ship Made of Plastic Bottles

2020: Four Dutch teens on a “study aboard” cruise in the Caribbean are forced to sail home across the Atlantic. It went well.

2015: The Dutch try to help New Orleans reconnect with its delta geography,  which was altered in many detrimental ways since Twain’s 1875 reflections.

American views on Dutch history

The Atlantic has been publishing since 1857. As a subscriber, I can access their archive, which is full of interesting tidbits. To focus my “plunge into the past,” I queried articles that mentioned Amsterdam and the Netherlands Holland (a far more popular term), and found some really interesting stuff. The links on years go to PDFs.

1876: A Dutch inventor’s pressurized sewerage system (!)

1882: An afternoon in Amsterdam, i.e., rushing to catch the steamship to Zaandam and visiting “the cleanest village in the Netherlands” — later a site of massive chemical pollution.

1918: Dutch Quandries with staying neutral in WWI:

      1. Energy security: It’s hard to stay cold, also insights into the Dutch love for natural gas, post its discovery in the 1960s.
      2. Smuggling banned goods for profit or corruption: Still true with drugs and money laundering.
      3. War. Fight or neutral: Neutrality is hard to maintain, but fighting (WWII) was worse.
      4. Betrayed by USA: Getting pushed around is not new.

1935: A Hans Brinker boyhood (e.g., battling with wooden shoes, falling into canals, etc.

1937: The joy of skating — a tradition that is nearly dead today..

1938: Queen Wilhelmina after 40 years. A fine portrait, with examples like this (on her daughter’s marriage to a German): ‘This is the marriage of my daughter to the man she loves, whom I have found worthy of her love; this is not the marriage of Holland to Germany.’

1948: Holland is back, rebuilding, but they need American help and trade with Germany.

1958: New Europe. A fascinating, extremely well-written account of BENELUX, the steel and coal community, and the EU’s political project.

My one-handed summary: Those who do not know history… are missing a lot of useful wisdom.

An economic theory of clubs (Buchanan 1965)

Background

James Buchanan and Gordon Tullock are among the co-founders of the so-called “Virginia School” of economic thinking, which draws on public choice (bureaucrats, as people, may serve themselves before citizens), constitutional design (read my review of Buchanan and Tullock’s 1962 Calculus of Consent) and law and economics (see, e.g., my comment on Coase’s 1959 FCC paper).

Thus it’s easy to see how Buchanan might be suspicious of “good government” solutions, and how Buchanan might not agree with Paul Samuelson’s opinion that the existence of “public goods” means that the government should create and/or fund them.1 Samuelson gave this opinion in “A pure theory of public expenditure” (1954), a three-page (!) paper in which he shows (or argues) that “the planner” should levy taxes to supply public goods in accordance with a “social welfare function” that aggregates the preferences of all citizens. (This paper’s reliance on mathematical innuendo over common-sense perspectives makes it hard to follow.)


I am grateful that Alain Marciano explained this tussle over public finances in his 2021 article [open access].


Buchanan opposed Samuelson’s model for three reasons: First, there’s no way to aggregate a social welfare function (to find out how much of the public good to provide) without knowing everyone’s preferences (such “interpersonal comparisons of utility” are hindered by “the knowledge problem“). Samuelson’s theory ignores this empirically important issue. Second — even if such a calculation of “necessary production” was quantified, Buchanan opposed the idea of taxing all citizens to pay for something that some will value at less than their taxes paid. Samuelson did not worry about this problem, since the Kaldor-Hicks model (read this post) justifies losses to some if net gains are positive. Third, public goods often suffer from under-provision, i.e., nobody wants to pay for something they can get for free (non-exclusion).

Rather than just criticise, Buchannan offered club goods as an alternative to government-proclaimed and taxpayer-funded public goods.

Clubs, communities and segregation

I had read Buchanan’s paper long ago, but I am re-reading it because I want to compare Buchanan’s work on club goods (this 1965 paper) with  Samuelson’s 1954 work on public goods (to which Buchanan was reacting), and the Ostrom’s work on common-pooled goods2 (1977, but as early as 1971). These three papers are relevant to my teaching and research (see this, this  and this), and this post is a “warm up” for integrating these ideas into my forthcoming Little Book of The Commons

Sign up here to be notified when The Little Book of The Commons is ready.

I have always assumed that exclusion (restricting demand) is trivial (“you’re in the club or you’re not”) and non-rivalry (providing supply) is easy to fix (“club members will cover costs”).I hadn’t expected controversy over funding club vs public goods, but the third concern above (under-provision due to insufficient finances) arises from the same concerns.

Aside: I’ve always treated club and public goods separately because they are provided by markets and government/community, respectively, but I had forgotten an earlier step of “which channel?” Many debates over public provision, PPP, privatization, etc. focus on this channel issue, which is relevant to drinkig water but also prisons, schools, broadcasting, security, standards, housing, and so on.

Buchanan, in essence, argued that some “public goods” should not be funded by taxes or provided by government. Instead, he proposed that clubs should provide them to dues-paying members.3 The following two examples show how such a simple formulation could be troublesome:

Good club: You and your friends buy a boat together, sharing expenses so that everyone can use the boat on their appointed weekend.
Bad club: You and your friends start a school for your kids; kids from “the wrong families” are not invited to join the club.

It’s obvious that “freedom of association” includes the right to exclude others, but what if your association lowers quality of life for those excluded others?

Although public and club goods appear similar in supply (both are non-rival, meaning that everyone can consume as much as they want) and different in demand (people can be excluded from club goods but not public goods), it’s also really important to recognize that club goods can substitute for public goods.

Schools can, in theory, be funded and operated as club goods (a “private school”) or public goods (“a public school”),4 but when it comes to reality, we run into issues of “whose money, where?” that readers from the US will recognize. This money (or funding) question is important because some citizens are happy to support their private schools but opposed to their taxes supporting others’ public schools. The parallel with governance is the same: Parents care about their kids’ schools more than schools with other people’s kids (more here).

It’s not club vs public goods, but common-pooled taxes and governance.

By now I hope you are seeing how Buchanan’s theory of clubs can be misused to support separate but equal, justify rich private schools and poor public schools, explain how white flight eroded the tax base, and so on.

And although Buchanan doesn’t directly say that clubs offer a way for rich whites to avoid subsidizing poorer non-whites, his words in this paper certainly allow for it:5

Hence, the theory of clubs is, in one sense, a theory of optimal exclusion, as well as one of inclusion… If individuals think that exclusion will not be fully possible, that they can expect to secure benefits as free riders without really becoming full-fledged contributing members of the club, they may be reluctant to enter voluntarily into cost-sharing arrangements. This suggests that one important means of reducing the costs of securing voluntary co-operative agreement sis that of allowing for more flexible property arrangement and for introducing excluding devices. If the owner of a hunting preserve is allowed to prosecute poachers, then prospective poachers are much more likely to be willing to pay for the hunting permits in advance (pp 13-14).

Substitute “school” for “hunting lodge,” and you can see how a rich minority might use this logic to exclude the poor majority from “free riding” on their money, i.e., by avoiding taxes and/or undermining government’s ability to run schools. OTOH, you can also see the problem with public goods: Who will pay for them when they can free-ride instead? There’s no good answer to that one, but culture, solidarity and/or enlightened self-interest can play a role (topics covered by the Ostroms).

But what about clubs?

Whew! That’s a lot to consider, but don’t forget Buchanan’s insights:

  1. Clubs can limit demand via exclusion.
  2. Clubs can provide “efficient” supply to all members in proportion to each member’s willingness to pay (e.g., different levels of membership), without recourse to a “social welfare function”
  3. Due to these characteristics, clubs can avoid “tragedies of the commons” (too much demand from members) by altering internal prices, exclusion and/or supply.
  4. In this (#3) sense, clubs and well-managed commons (those in a “situation” rather than a “dilemma,” in the terms of Ostrom) are similar. A well-managed commons uses boundary rules to exclude outsiders and  sanctions to punish insiders who take too much or provide too little.
  5. Buchanan writes “Goods that exhibit some ‘publicness’ at low income levels will, therefore, tend to become ‘private’ as income levels advance” (p 12) because richer people can afford to form clubs to provide goods at less-efficient economies of scale because they can control quality and reduce free-riding. We see this when country clubs replace public parks, private beaches replace public beaches, private cars replace public transportation, etc. People who switch from public to club are not racists (minorities leave poor neighborhoods when they can). They are using their wealth to get a better mix of costs and benefits.

My one-handed conclusion is that clubs make it easier to efficiently provide the right quantity and quality of goods to its members, in comparison to a government- or community-directed program funded by taxes on all. At the same time, it’s also important to consider if or how clubs can undermine the provision “for the common good” or worsen the impacts of inequality.


Notes

  1. For a comparison of private, club, common-pool and public goods, see this post. I am not a huge fan of Samuelson, whom I think used too much math in “proving” his points, but this post is more about his public finance philosophy than his math (see that Marciano paper).
  2. You’ve surely heard of Garrett Hardin’s “tragedy of the commons” paper from 1968, but he was more concerned about over-population than goods. He was definitely not writing about sustainably providing, protecting or consuming common-pooled goods (i.e., solutions). The Ostroms were.
  3. Read this post on Coase’s ideas for pricing club goods. Buchanan disagreed, but his “solution” (willingness to pay) is harder to implement.
  4. There’s a lot of confusion over “public,” which can refer to the definition of goods, goods/services supplied by the government, and/or goods/services that any member of the public can purchase or use. I can’t resolve all of them here, so I am using “” a lot. Sorry if it’s confusing.
  5. Read this review of a book on American Conservatism to see Buchanan’s intellectual opposition to government programs aimed at “melting together” people of different incomes, preferences and (relevant!) races.

The Federal Communications Commission (Coase 1959)

I often tell students that Ronald Coase won the economics Nobel for two papers — The problem of social cost (1960), or PSC, and The nature of the firm (1937) — but I had also heard this article mentioned more than a few times. So I acquired a copy (sci-hub ftw!) and got to reading.

The paper has six parts. I will give a short summary of each part before commenting on the paper as a whole.

  1. The development of government regulation: A lack of regulation of radio spectrum can lead to interference among broadcasters, with the powerful drowning out the weak but most broadcasters interfering with each other. The US Navy (!) attempted to take control over radio spectrum after WWI, but regulation was eventually handed to the FCC in 1934.
  2. The clash with the doctrine of freedom the press: The First Amendment does not allow censorship of the press but interference among radio broadcasters (and other users of spectrum from everything from TV to mobile phones and wifi) meant that total freedom might lead to chaos. Regulation could prevent chaos, but it could also allow censorship, i.e.,


    “Some interpreted the fact that the Commission was denied the power of censorship as meaning that it would not concern itself with programing but would simply act as “the traffic policeman of the ether.” But the Commission maintained — and in this it has been sustained by the courts — that, to decide whether the “public interest, convenience or necessity” would be served by granting or renewing a license, it had to take into account proposed or past programing. One commentator remarked, that by 1949, the “Commission had travelled far from its original role of airwaves traffic policeman. Control over radio had become more than regulation based on technological necessity; it had become regulation of conduct…”
    [p8, bold added]

    The result was that the FCC had the power to choose who got (or maintained) access to valuable spectrum, which gave it significant power. How did the FCC allocate licenses? The popular term among economists is via a “beauty contest” in which various supplicants competed to promise the “most beautiful” use of the spectrum. Such a subjective system can lead to mistakes in allocation, but it can also encourage corruption, i.e., FCC staff deciding based on relationships, favours and bribes.

  3. The rationale of the present system: [As of 1959], the FCC allocated licenses based on the vague directive of “serving public interest, convenience or necessity.” A judge claimed that FCC regulation was needed because demand exceeded supply. Nonsense, says Coase: Markets resolve scarcity problems all the time. The FCC’s economist (!) argued against prices because markets were not perfect (!) and many users were non-commercial entities such as the military or weather stations. A law student, Leo Herzel, countered with a defence of prices and property rights in spectrum. He pointed out (correctly) that the FCC only needed to create rights that could be auctioned to (and resold among) users. Even further, government entities might “waste” free spectrum. This discussion of creating property rights and then allowing trade to allocate those rights to the party who valued them them most (and thus might be able to put them to the highest and best public use) will be familiar to anyone who has read PSC.
  4. The pricing system and the allocation of frequencies: Coase uses humor and sarcasm to undermine FCC claims of efficiency (licensing applications could take years to process), honesty (existing radio operators paid nothing for valuable TV spectrum), and accuracy (they could not — as Hayek pointed out — hope to summarise information as well as prices do). This section alone could should crush claims of government advantage in  operating or allocating private goods (anything from spectrum to school places to land).
  5. Private property and the allocation of frequencies: Coase invokes the case of the doctor and candy maker (Sturges v Bridgman) — which appeared one year later in PSC — to explain the value of property rights as well as how trades will occur if willingness-to-pay exceeds willingness-to-accept. He does this to highlight the value of spectrum to those claiming they deserve to get it for free and why radio and TV stations with “free” spectrum are sold for high prices. (Coase also notes that markets in rights should be replaced by regulation if too many participants — and thus transaction costs — make it difficult to make deals. This observation is central to PSC.) This section more or less sets up Coase’s case for auctioning rights as the best way to (a) raise revenue and (b) allocate rights. The FCC didn’t auction spectrum until 1994!
  6. The present position: Coase summarizes with the recommendation that the government create, sell and enforce property rights in spectrum as a separate step from regulating particular programming. The Public has an interest in promoting and enjoying the highest and best use of scarce spectrum, but the Government (FCC) is not the body to decide such use. That question is best solved with markets in property rights.

My one-handed conclusion is that this paper is interesting for both its contribution to Coase’s PSC and its clear discussion of how and why government regulation can go wrong.

 

 

Information & efficiency (Demsetz 1969)

I heard about this paper [pdf] when it was mentioned in a podcast, in the context of comparing a real market failure to an imagined government intervention to fix that failure.

Demsetz starts off his paper by noting that he will be critiquing Kenneth Arrow’s claim that an imperfect market allocation invites government intervention to fix it. Demsetz (rightly) points out that government interventions, in reality, might also fail, i.e.,

The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing “imperfect” institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements.

What’s crazy is that this delusion (the one Demsetz opposes) is still prevalent in many policy debates. For example: “we can’t tax carbon because we don’t know the right price, but we can definitely subsidise “energy efficiency” because that’s going to produce a predictable fall in use.”

Demsetz goes on to list a number of ways in which the nirvana fallacy leads to misguided policies, e.g., ignoring issues with information, people’s aversion to risk, moral hazard (taking risks with others’ money), and human’s general propensity to behave less as mathematical automatons and more as emotional, limited and conflicted individuals who may (not) follow social, legal and economic cues.

Demsetz also makes the obvious (and often overlooked) case for governments being composed of individuals — all with their own views and foibles — rather than the efficient calculating machine (the “social planner”) assumed by many academics — and interventionists.

He also repeats the (often ignored) argument in Hayek (1945) regarding information and innovation, i.e., that a central planner cannot hope to have as much information as many different people in distributed settings, locations and positions. The implication is that a less-than-humble planner  will make errors in calculating and implementing decisions that can be handled by those individuals.

The last part of the paper has some relatively simple maths and figures to support Demsetz’s points.

I recommend this paper to all economists — and many activists — for the important points it makes, i.e.,

I have stated elsewhere what I believe to be the basic problem facing public and private policy: the design of institutional arrangements that provide incentives to encourage experimentation (including the development of new products, new knowledge, new reputations, and new ways of organizing activities) without overly insulating these experiments from the ultimate test of survival. In the context of the problems discussed in Arrow’s paper, these institutional arrangements must strive to balance three objectives. A wide variety of experimentation should be encouraged, investment should be channeled into promising varieties of experimentation and away from un-promising varieties, and the new knowledge that is acquired should be em-ployed extensively. No known institutional arrangement can simultaneously maximize the degree to which each of these objectives is achieved 

 

Marshall’s legacy

After 18 months of reading and commenting on every single chapter (except the mathematical appendix) Alfred Marshall’s (AM’s) Principles of Economics (1920), I read some essays on what others thought about AM.

NB: My overall impression is that PoE was worth my time, but probably not worth the time of anyone except those interested in the history of economic thought. Yes, it’s interesting to read how AM explained and explored elasticity, the role of time, the representative firm, and so on, but I doubt that those benefits justify the time it takes to read 70+ chapters on topics that can be found in (over)simplified forms in modern textbooks. That said, I think that anyone looking into canonical concepts in economics should read what AM had to say about them. (NB: AM sometimes uses different terms so “control F” won’t help you!)

Here are my notes and some excerpts from five commentaries:

J.M. Keynes (1924). “Alfred Marshall, 1842-1924” [pdf].
  • This 60-page biography, published a few months after AM’s death, offers many insights into AM’s upbringing and thinking. He was planning to become a priest but turned to mathematics and then economics. His respect for history and the idiosyncratic details of “the everyday business of life” meant, in today’s jargon, that AM was more institutionalist than modeller.
  • Every summer, AM walked in the Alps, to clear his head and strengthen his body. His long life attests to those vacations.
  • The socialists assumed human nature would change with the ownership of capital. AM was skeptical. He studied actual business and workers.
  • AM published very slowly. Most of his ideas were known (via his lectures) well before PoE appeared. Jevons (according to JMK) was impatient and shallow compared to AM. Mixed speeds and energies meant that some people misattributed discovery.
  • AM was first to popularise mathematical diagrams for explaining economic ideas, but he hesitated to lean too much on mathematical descriptions of real life:
  • Page 333:

    Marshall… always felt a slight contempt from the intellectual or aesthetic point of view for the rather “potty ” scraps of elementary algebra, geometry, and differential calculus which make up mathematical economics.1 Unlike physics, for example, such parts of the bare bones of economic theory as are expressible in mathematical form are extremely easy compared with the economic interpretation of the complex and incompletely known facts of experience,2 and lead one but a very little way towards establishing useful results.
    Footnote 1: Mathematical economics often exercise an excessive fascination and influence over students who approach the subject without much previous training in technical mathematics. They are so easy as to be within the grasp of almost anyone, yet do introduce the student, on a small scale, to the delights of perceiving constructions of pure form, and place toy bricks in his hands that he can manipulate for himself, which gives a new thrill to those who have had no glimpse of the sky-scraping architecture and minutely embellished monuments of modern mathematics.
    Footnote 2: Professor Planck of Berlin, the famous originator of the Quantum Theory, once remarked to me that in early life he, had thought of studying economics, but had found it too difficult! Professor Planck could easily master the whole corpus of mathematical economics in a few days. He did not mean that! But the amalgam of logic and intuition and the wide knowledge of facts, most of which are not precise, which is required for economic interpretation in its highest form, is, quite truly, overwhelmingly difficult for those whose gift mainly consists in the power to imagine and pursue to their furthest points the implications and prior conditions of comparatively simple facts which are known with a high degree of precision.

  • AM: “Economics is not a body of concrete truth, but an engine for the discovery of concrete truth.” But his desire to do good meant that (according to JMK) “he had an inclination to undervalue those intellectual parts of the subject which were not directly connected with human well-being or the condition of the working classes…” and thus slow intellectual progress [pp 344-5].
  • AM’s inclusion of time and (dis)economies of scale really fleshed out the reality of production in economics.
  • AM’s understated writing style reduced his wow-factor with some but also helped his ideas spread among non-academics and skeptics.
  • AM’s lecturing style was far less refined or formal than his writing style. AM  wanted students to “think with him” (page 359) rather than copy complete thoughts. This style challenged under-prepared students but spurred the curious to explore the material. (I try to teach in this way, but now it’s called “co-creation.”)
  • AM wrote in favor of allowing women to work and contribute to society but opposed giving them degrees (!). He also wrote in favor of economics as a separate study from politics, i.e., splitting departments of political economy. It’s easy to see the error in his perspective on women (or eugenics), but I am still in the minority in calling for more political economy.
  • AM was lucky to have a best-selling book in his final years, as he had not saved enough money to retire. (Pensions were not a thing in the early 20th century!)
J.A. Schumpeter (1940). “Alfred Marshall’s Principles: A Semi-Centennial Appraisal.
  • AM was one of the first economists to realize that economics is an evolutionary science” [p 237]. This observation or claim is important when it comes to understanding the differences between economists who focus on equilibrium [the destination] and those (like AM) who focus on the processes affecting movements (in any direction) and/or goals [the journey].
  • AM’s focus on the engine of analysis rather than the truth of the destination meant that his ideas could be used by anyone, at any time, to understand more about an economic topic.
  • AM, playing the role of guide, suggested ideas or paths worth pursuing. Those who followed him could fruitfully spend years tying up the loose ends he uncovered.
  • AM’s ideas on returns to scale, substitution, competition and time (evolution!) have endured. His focus on facts, quantification and results helped make economics useful.
G.F. Shove (1942). “The Place of Marshall’s Principles in the Development of Economic Theory.
  • AM wrote “an apologia for economics… a kind of Counter-Reformation” to demonstrate the underlying value of economics, which had been buried in obscure theories. AM wanted economics to “deal with man as he is, seen in the round” [p 310].
  • AM discussed long-term supply and demand, but he put little weight on equilibrium, since underlying tastes and technologies changed too fast for stability to endure.
  • AM established a third era of economic thought that built on earlier Classical (Smith) and Ricardian (Ricardo).
  • AM developed the idea of bidding for monopoly rights that is — in the case of water utilities — one way that markets can discipline monopolistic industries.
  • AM understood and discussed problems with imperfect markets, although later economists contributed more to this topic.
  • AM argued, from a biological-evolutionary perspective, that it was “better to be vaguely right than precisely wrong,” but later economists (see 1944 and 1946 links in the footnote at the end of this post) would revert to the security of precise (and wrong) mathematical equilibria.
  • That said, others have embraced AM’s manner of using statistics and data to check theory — methods that have exploded in popularity with econometrics and (better, IMO) experimental economics.
  • AM’s caution in regard to equilibrium would have been helpful in dealing with the Great Depression and WWII. Keynes escaped the suffocating assurance of supply=demand, but many other economists could not.
  • Post-AM economists brought much-needed attention to the dynamics inherent to negotiations among players with major market power and the role(s) of money and finance in the real economy. AM built the foundations they needed.
  • Plenty of other challenges (e.g., group-action, heterogeneous agents, collective control and mass bargaining) still need attention. It got attention from Samuelson (public goods, 1954), Vernon Smith (experimental markets, 1955/1964), Olson (collective action, 1965), and the Ostroms (common-pooled goods, 1977).
C.W. Guillebaud (1952) “Marshall’s Principles of Economics in the Light of Contemporary Economic Thought”.
    • AM’s PoE was “still a standard textbook” in 1952, but CWG advised students to skip most of AM’s (now outdated) moralising about behavior and society. This advice might have made reading less boring, but it seems to have been costly, if we look at the contemporary amorality of many economists. (I didn’t find AM’s writing too boorish, but the 1950s were go-go years…)
    • AM focussed on partial-equilibrium analysis because general-equilibrium was far too unstable to ever arrive:

      The Marshallian world is a more complex matter. It is not in the least static – it is in fact a world of ceaseless movement and change. Population is increasing (or it might be diminishing), capital is growing, tastes are changing, technique is altering. Some industries are expanding, while others are contracting, and the same is true of the individual firms within each industry. Not only is there seasonal and frictional unemployment of labour (the ins and outs) but there is also structural unemployment due to changes in tastes and demand on the one side, and in technique and inventions on the other. But the aggregate volume of unemployment is not so large as to indicate an overall shortag of effective demand. [p 115]

    • CWG gives (p 123) a nice summary of the short vs long run:

      In the case of the market we are dealing with a stock of goods that are already in existence and which are the fruits of past production.
      In the case of the short period we are dealing with a flow of output from a substantially fixed stock of specialised instruments of production.
      In the case of the long period we are dealing with a flow of output from a flow of all the factors of production that are required to produce that output.

      R.H. Coase (1975). “Marshall on Method
    • As promised, Coase uses most of this (short) article to discuss AM’s methods, which were mostly NON-methods, i.e., AM “would have nothing to do with controversies between deductive schools, inductive schools, historical schools and so on. There was work for all, and he welcomed all. Constructive work was what he wanted” [p 27].
    • What about inductive vs deductive? AM states his ideas in a letter (~1903) to Keynes’s father [pp 26-7]:

      … You make all your contrasts rather too sharply for me. You talk of the inductive & the deductive methods: where as I contend that each involves the other, & that historians are always deducing, & that even the most deductive writers are always implicitly at least basing themselves on observed facts… It is a mere question of arrangement: but I think it is a very important one practically. I think the right order is first to emphasize the mutual dependence of induction & deduction, & afterwards to show in what kinds of inquiry the economist has to spend the greater part of his time in collecting arranging & narrating facts, & in what kinds he is chiefly occupied in reasoning about them & trying to evolve general processes of analysis & general theories which shall show the Many in the One & The One in the Many.

      My second point is that you continually use the word theory where I shd use analysis. This seems to me in itself to cause confusion wh is increased by the fact that later on you exclude modern facts from history; & yet you do not boldly say that theyare part of theory. If they are then I agree with you that a study of theory shd come before a study of history. But I do not myself like to put the case in this way.

      My own notion is [and here Marshall is I take it describing how economics should be presented to students]

      i. Begin with analysis, which is an essential introduction to all study of facts whether of past or present time, with perhaps a very short historical introduction.
      ii. Go on to call to mind the students knowledge of the economic conditions wh he lives. Show the relations in wh they severally stand to one another & carry analysis further, making it more real & concrete.
      iii. Build up a general theory or process of reasoning applicable to Value Money Foreign Trade etc, with special reference to the conditions in wh the student lives, & pointing out how far & in what ways, it can be made to bear on other conditions.
      iv. Give a general course of economic history.
      vi. Consider economical conditions in relation to other aspects of social life.
      vii. Treat of the economic aspects of practical of practical questions in general & social reform in particular.

    • As Coase observes, AM was primarily concerned with understanding and explaining the real economic system that people live, not the abstract, theoretical system beloved by academics. Indeed: “Though a skilled mathematician, he used mathematics sparingly. He saw that excessive reliance on this instrument might lead us astray in pursuit of intellectual toys, imaginary problems not conforming to the conditions of real life: and, further, might distort our sense of proportion by causing us to neglect factors that could not easily be worked up in the mathematical machine” [p 30].
    • Thus, Coase arrives [p 30] at my favorite advice from AM (1906):
        1. Use mathematics as a shorthand language, rather than as an engine of inquiry.
        2. Keep to them till you have done.
        3. Translate into English.
        4. Then illustrate by examples that are important in real life.
        5. Burn the mathematics.
        6. If you can’t succeed in (4), burn (3). This last, I did often.

…and that ends my summary of commentary by five major economists on Alfred Marshall.

My one-handed conclusion, after 18 months of reading Marshall, is that he was one of the truly great thinkers, practitioners and expositors of economics.


This post is the last in a series for the Marshall 2020 Project, i.e., an excuse for me to read Alfred Marshall’s Principles of Economics (1890 first edition/1920 eighth edition), which dominated economic thinking until Van Neumann and Morgenstern’s Theory of Games and Economic Behaviour (1944) and Samuelson’s Foundations of Economic Analysis (1946) pivoted economics from institutional induction to mathematical deduction.

CliFi — Los Angeles and Riyadh

NB: I wrote these four CliFi scenarios* in 2019 for a paper on life in a “post-water” world, but they had to go, so I am posting them here for your enjoyment (or horror). Please tell me what you think!

Scenario 3: Los Angeles loses its aqueducts

The City of Los Angeles imports about 90 percent of its drinking water via the Los Angeles, California and Colorado River aqueducts, which cross hundreds of kilome- ters of agricultural land on their way to the city (Lin, 2017). Although Los Angeles has been fighting others for decades over water rights, extractions and exports (Got- tlieb & FitzSimmons, 1991; V. Ostrom, 1953; Zetland, 2008), rights to these water sources are relatively secure. The story with conveyance is different because the aqueducts that bring water to Los Angeles could suddenly fracture as stress in- creases due to uneven ground subsidence caused by overdrafting groundwater. Let’s unpack that causal chain.

First, there’s a long history of California farmers using groundwater when surface supplies are absent or reduced due to a drought. In cases of “overdrafting” — using more water than is replaced by natural recharges — ground levels can subside as water is abstracted. In California’s Central Valley, many areas fell by 3–6m (with the extreme of 8.5m) between 1926 and 1970. In the past 50 years, there have been efforts to reduce overdrafting and subsidence (one persistent reason/excuse for importing more surface water to the region is to relieve pressure on aquifers), but normal and drought-response overdrafting continues to lower ground elevations. Between 1995–2010, the ground dropped by 22–60cm in the area through which the Colorado River Aqueduct passes (Sneed, Brandt, & Solt, 2014). In the southern Central Valley (through which the California Aqueduct passes), ground levels dropped by 12cm in most of the area between 2007–2010, with local extremes of 90cm (Faunt, Sneed, Traum, & Brandt, 2016).

Changes in ground elevations wreck havoc with water conveyance infrastructure that must be massive enough to carry large volumes of water but also precisely sloped to maintain flow. Chronic subsidence requires ongoing monitoring and maintenance, but all bets are off if there was an earthquake on the San Andreas Fault, over which all three aqueducts (Lin, 2017) pass. A three-way failure would mean that Angelenos and the other 20 million residents of Southern California would lose 90 percent of their water supply.

Chaos would result. Although 50–70 percent of the the region’s residential drink- ing water is used for grass lawns and landscaping, it is hard to imagine people in the region coping, let alone cooperating. The first response — running the taps to fill bathtubs — would drain local and overwhelm pumps. Water distribution centers need to be numerous to prevent traffic jams that would result if the sprawl converged. These water troubles would be a lucky break. An earthquake is also likely to cause fires, and California is now said to have a “year-round” fire season (Economist, 2019).

Local water management institutions are somewhere between unprepared and lucky. They are unprepared with a system designed importing water, limited local storage capacities, and limited local supplies. Turning to local politics, it would take some time to agree on how to handle a crisis, given ongoing battles over everyday operations.

On the lucky side, people in Los Angeles and the area use vast volumes of water on landscaping, so a drastic cutback wouldn’t be too hard. Second, there is probably enough local storage to keep people going until emergency repairs of aqueducts were made. Finally, the earthquake would be during a rainy winter and not damage too much infrastructure.

In sum, Los Angeles is extremely vulnerable to the damages caused by overdraft- ing farmers whose consumption of a private good (irrigation water) is damaging the commons of the landscape. The city of Los Angeles and others in the region can probably get by if and when an accident happens, but they might be unlucky and pay dearly for ongoing poor management.

Scenario 4: Riyadh is stranded

The Saudi capital, home to at least 6 million people, gets half its water from desali- nation plants located nearly 500km away on the Persian (sometimes called Arabian) Gulf. The rest of the water comes from relatively local wells drilled deep into fossil (non-recharging) aquifers (Ouda et al., 2018). In the summer of 2027, demand for water is extreme due to average daytime temperatures of 36C, a culture of heavy water use, and population of over 8 million people. The Ras Al-Khair desalination plant (RAK) supplies 90 percent of Riyadh’s desalinated water due to the recent retirement of two older plants (Ouda et al., 2018), and SWCC (Saline Water Con- servation Corporation) is running it at full capacity in stifling heat, producing water that is raised 600m on its way to the thirsty distant capital. Groundwater pumps are working as usual, diverting their water into treatment plants whose potable water flows into one of the 50 storage tanks located around the capital (MEED, 2013).

Al Qaeda took these facts into account when planning their strike against the regime of King Mohammed Bin Salman, who has not only maintained diplomatic and military relations with the United States but also weakened the spiritual purity of his people. His reforms are not offensive because they allow women to drive, but because a majority of the population now goes to the movies instead of the mosque on Fridays. Donations have fallen as frivolous spending increases; Al Qaeda’s budget for justice is dropping.

The operatives work in five cells, unknown to each other. They have a date for action: August 15 2027, which is also the Prophet’s Birthday (Peace Be Upon Him). They have trained and prepared. They are ready.

In the early hours of the fifteenth, alarms sound in the RAK control center. Intake pipe #3 (out of 6) seems to be clogged at its mouth, which rests 30m below the gulf, 1.5km offshore. Control operators turn off pumps on #3 and order an inspection crew to go out. Due to the holiday, there are only two maintenance crews on hand, but this routine maintenance is not too difficult, so they leave shore within an hour. Just after 8am, and before that crew can report in, another alarm sounds as a cooling pump 22 shuts down after losing pressure. Perhaps a poor weld has burst due to load or heat. Roughly 15 minutes later, a radio cracks with static — someone from pumping station 4B is trying to get in touch. The control center staff, already distracted by two incidents, have a hard time understanding what the man is screaming, but they hear explosions and then static. Station 4B is 150 km away, on the pipe’s route to Riyadh. Pressure on line B drops to zero as the station goes offline. Only line A continues to operate, pumping water to Riyadh. Omar, the head of operations, suddenly realizes that the situation has exceeded the limits of bad luck. He triggers the emergency plan, which alerts the army, royal palace and SWCC staff that the Kingdom’s water is threatened.

Twenty minutes later, he’s still waiting for a response from the army, which attending upon a royal family pro-occupied with birthday festivities. The palace, likewise, is silent. His SWCC colleagues assure him that local storage is sufficient to meet demand while line B is repaired. Omar turns to report that news when two of his staff run up from opposite directions. “The maintenance crew was attacked by a drone on their way out to #3,” says one. “Their boat is on fire, and they have jumped into the sea.” The other man, barely listening to his colleague, says “we’ve also lost cooling on pumps 8, 17 and 32! Something is wrong with the systems. We’re losing capacity.” Omar flinches. The facility has multiple production units, but the leaks are scattered rather than concentrated. He tells the first one to call the navy. To the second, he says “reduce pressure — we need time to figure out what’s happening. Send out the other crew.”

Just then, the radio cracks to life. His colleague Dasan is calling from the capital. “Omar, we’ve got a real problem: Our storage tanks have been attacked by drones with explosive devices. We’re not sure which ones, yet, but we’re sending out crews.”

Just then, he gets a call from his wife. He doesn’t usually carry his personal phone at work, but his granddaughter is about to give birth any day. He picks up the phone: “Lala — I can’t speak now. We’ve—” She interrupts him: “Omar! Quick, look on Twitter!” He switches to his Twitter app and pales. The screen is filled with panic: #RiyadhDies and #poisonwater are trending in English and Arabic.

The loss of desalinated water supply, combined with mistrust of groundwater quality and ignorance of water safety (Alamri, 2019; Al-Omran, Al-Barakah, Al- tuquq, Aly, & Nadeem, 2015), leads to widespread panic. Tens of thousands flood hospitals and clinics with real or imagined sicknesses. Normal procedures grind to a halt. Over a hundred thousand cars flee the city. Thousands die in car accidents. Thousands drive into the desert to escape traffic jams, but their trust in GPS is defeated by sand washes and hidden cracks. Many stranded families die of thirst, clutching useless cell phones.

In the aftermath, over 50 officers and SWCC staff are arrested on the King’s orders. Five men are found guilty of “failure to protect the nation” and executed. Omar and Dasan are lucky to only be fired, in what the engineers call (under their breath) “Al Qaeda’s Plan B.” The death of 14,500 residents triggers an exodus of families from the capital to cities closer to reliable water supplies. By 2030, the capital’s population has dropped by 1 million, housing prices have dropped by 40 percent, and three-fourths of the staff of international firms have left the country.

These incidents are fictional, but not impossible. Riyadh’s vulnerability to sup-
ply disruptions is well known, as are its excessive demands (around 250 liters/capita/day) and 30 percent water losses (Ouda et al., 2018). Stress on this system will only grow worse as the capital’s population grows and temperatures rise. Riyadh will be able to manage its water with luck, but climate change will test that luck.


* CliFi (or Climate Fiction) draws on science fiction’s long tradition of thinking about possible future by combining human behavior with future technology. In the case of CliFi, the future “technology” is a changing climate, and these examples look into climate-related post-water shocks. I used this speculative method for two volumes of “CliFi” short stories [free to download] that I edited and published a few years ago.

References
  • Alamri, A. (2019). Water Usage and Human Health: A Preliminary Study in Riyadh, Saudi Arabia (Unpublished master’s thesis). Oregon State University.
  • Al-Omran, A., Al-Barakah, F., Altuquq, A., Aly, A., & Nadeem, M. (2015). Drinking water quality assessment and water quality index of Riyadh, Saudi Arabia. Water Quality Research Journal, 50(3), 287-296. 
  • Economist. (2019). Alaska hotshots. The Economist, 25 July.
  • Faunt, C. C., Sneed, M., Traum, J. A., & Brandt, J. T. (2016). Water availability and land subsidence in the Central Valley, California, USA. Hydrogeology Journal, 24(3), 675-684.
  • Gottlieb, R., & FitzSimmons, M. (1991). Thirst for Growth: Water Agencies as Hidden Government in California. Tucson: University of Arizona Press.
  • Lin, R.-G. I. (2017). California could be hit by an 8.2 mega- earthquake, and it would be catastrophic. Los Angeles Times, 8 Sep.
  • MEED. (2013). Riyadh plans water storage programme. Middle East Business Intelligence, 24 Apr.
  • Ostrom, V. (1953). Water Supply (Vol. VIII). Los Angeles: Haynes Foundation.
  • Ouda, O. K. M., Khalid, Y., Ajbar, A. H., Rehan, M., Shahzad, K., Wazeer, I., & Nizami, A. S. (2018, 02). Long-term desalinated water demand and in- vestment requirements: a case study of Riyadh. Journal of Water Reuse and Desalination, 8(3), 432-446.
  • Sneed, M., Brandt, J. T., & Solt, M. (2014). Land subsidence, groundwater levels, and geology in the Coachella Valley, California, 1993-2010 (Tech. Rep.). Reston, VA: U. S. Geological Survey.
  • Zetland, D. (2008). Conflict and cooperation within an organization: A case study of the Metropolitan Water District of Southern California. Doctoral dissertation, UC Davis (Agricultural and Resource Economics). 

CliFi — Amsterdam and Jakarta

NB: I wrote these four CliFi scenarios* in 2019 for a paper on life in a “post-water” world, but they had to go, so I am posting them here for your enjoyment (or horror). Please tell me what you think!

Scenario 1: Drought in Amsterdam

Amsterdam is located in Nord Holland, a province in the west of the Netherlands that lies in the Rhine–Meuse–Scheldt delta, and thus at the foot of several major rivers. The local ecology and many methods of managing water take excess water and cooler temperatures for granted, but these gifts are not forever. As I write (July 2019), the Netherlands has just reached its highest recorded temperature (40.4C), and the heat is causing problems for people, farmers and infrastructure. What will happen if these temperatures become common-place? How would Amsterdam cope with the risks from heat and drought?

The good news is that water for humans is unlikely to run out. Amsterdam sits adjacent to the IJsselmeer, the largest freshwater lake in the Netherlands, which has a surface area of 1,133 km2 and average depth of 4.4 meters, meaning a volume of around 5 km2 (Rijkswaterstaat, 2017). That’s over 50 times Amsterdam’s current water use (Waternet, n.d.).

The bad news is that drought would also damage local ecosystems. Falling groundwater would mean dead vegetation and weaker trees, some of which would fall in otherwise “normal” storms. Increased heat will lead to infrastructure failures, such as draw-bridges that lock shut due to metal expansion, or roads, rails and runways that are too hot to bear trucks, trains or planes (Staff, 2019). Individuals faced with “public bads” of hot air and drying ground, will install and use air conditioners and spray drinking water on parched gardens. Poorer citizens and marginal businesses will suffer — unable to afford the costs of equipment or the energy to run it. Some city services will fill the gap, but productivity and happiness will drop (Deryugina & Hsiang, 2014; Kjellstrom, Holmer, & Lemke, 2009).

In terms of institutions for managing water, perhaps the only possible responses to the public bad would be a program of improved public goods to increase local cooling, such as denser tree cover and perhaps restoring water-flows to canals that were filled and converted into roads decades ago. Ignoring sea-level rise and storm surges, Amsterdam should be able to limit the risks from drought and heat.

Scenario 2: Jakarta floods

Jakarta, the capital of Indonesia and home to over ten million people, has been having trouble with sinking land, saltwater intrusion and floods for decades (Pur- nama & Marfai, 2012). These three problems can be attributed to the abstraction, use and discharge of freshwater from local aquifers. This classic case of a tragedy of the commons results from the private use (withdrawal) of freshwater from the common-pool aquifer that everyone can access but also which keeps the land from sinking.

There are two main solutions to these dilemmas: to mitigate or adapt. Mitiga- tion would require building infrastructure to import fresh water and inject treated wastewater under the city, but that’s not happening. Instead, there are efforts to adapt by raising dikes to protect sinking land and building a barrier island to slow down storm surges that risk flooding land (Sherwell, 2016). This “Garuda Project” is complex and controversial, but it is surely cheaper than rebuilding drinking- and wastewater systems to serve ten million, mostly poor residents.[19] Unfortunately, the Garuda project might deplete funds, weaken solidarity, and increase risk. Where’s the post-water element? The people (and leadership) of Jakarta need to live as if they are on an arid island, but they are consuming scarce fresh water as if it’s abundant, which puts them at risk of getting too much salty water.

Let’s assume that the Garuda project is built, and business as usual continues. The ground continues to sink, but the barrier island has created a lagoon on the city’s shore, and flooding has decreased. Barrier island residents live apart from fellow citizens whose houses lie 3m below sea level are protected by higher walls.

Now introduce surprisingly fast climate change based on exceptional methane releases (Weitzman, 2011). Increasing temperatures and greater atmospheric activ- ity means larger typhoons (called cyclones or hurricanes elsewhere in the world). Although Jakarta is not usually struck by typhoons, Typhoon Indra strikes in 2035 with high winds and a storm surge that overwhelms the barrier island (flooding hundreds of expensive cars and cutting power to the whole island) and flows into Jakarta. Thousands die as 8m waves crush down on sunken neighborhoods. When the storm recedes, half of the four districts closest to the sea is gone, replaced by a new shoreline and “beaches” of rubble, crushed cars and bodies. Half a million people are homeless. Fifty thousand are dead or missing.

The overwhelmed local government asks for help. Foreigners bring money and ideas, but no consensus recovery plan. Millions leave the capital for inland regions, hungry and desperately poor. Domestic aid is hard to organize or fund without political leadership, and the rich (such as those on the barrier island) do not feel inclined to pay. They withdraw further into their climate-proof enclaves. The poor cannot grow their own food. Local farmers do not have enough water to grow even their typical crops. Hunger intensifies. Many are sick from drinking polluted water. Aid workers do their best, but a significant minority support a new group that goes by the handle @newgaruda.

This example focusses on three factors: inequality, underinvestment, and climate risk. Inequality makes it hard for people to cooperate, as they “other” neighbors. Underinvestment (in mitigation) falls in to the “penny wise pound foolish” trap of trying to cover a basic problem with a partial (and inadequate) solution. Climate risk is present in all these examples, but this example uses uncertainty — a big storm in an under-prepared location.


* CliFi (or Climate Fiction) draws on science fiction’s long tradition of thinking about possible future by combining human behavior with future technology. In the case of CliFi, the future “technology” is a changing climate, and these examples look into climate-related post-water shocks. I used this speculative method for two volumes of “CliFi” short stories [free to download] that I edited and published a few years ago.

References
  • Deryugina, T., & Hsiang, S. M. (2014, December). Does the Environment Still Matter? Daily Temperature and Income in the United States. NBER Working Paper, 20750.
  • Kjellstrom, T., Holmer, I., & Lemke, B. (2009, Nov). Workplace heat stress, health and productivity – an increasing challenge for low and middle-income countries during climate change. Glob Health Action, 2.
  • Purnama, S., & Marfai, M. (2012). Saline water intrusion toward groundwater: Issues and its control. Journal of Natural Resources and Development, 2, 25-32.
  • Rijkswaterstaat. (2017, Oct). Natura 2000 Beheerplan IJsselmeergebied 2017–2023 [IJsselmeer region management plan] (Tech. Rep.).
  • Sherwell, P. (2016). $40bn to save Jakarta: the story of the Great Garuda. The Guardian, 22 Nov.
  • Staff. (2019). It has never been hotter since records began: temperature tops 39c. Dutch News, 24 July.
  • Waternet. (n.d.). Ons drinkwater [our drinking water].
  • Weitzman, M. L. (2011). Fat-tailed uncertainty in the economics of catastrophic climate change. Review of Environmental Economics and Policy, 5(2), 275- 292. 

Clean water and American waterworks

FC mentioned that Werner Troesken, who died recently and unexpectedly,  had worked in the same area as me (water services). I went to his Google Scholar to see what he had written and found — amazing! — that I had used his most cited paper (“Population growth in US counties, 1840–1990”) in my PhD dissertation (p84):

A literature review uncovered only one article that discusses the influence of water on urban growth. Beeson et al. (2001) find that precipitation has a significant positive effect on population density in the United States of 1840. By 1990, this significance disappears. In fact, precipitation has a negative correlation with population growth in the 150 years after 1840. These results correspond to what we know about water in the western US: As infrastructure has brought water to arid regions, people have moved from wet, colder areas to dry, warmer areas.

In fact, I just mentioned this result to someone last week.

As I browsed through Troesken’s other papers, I found two with interesting results. In “Municipalizing American Waterworks, 1897–1915” [pdf], Troesken and Geddes (2003) describe how private water companies, fearing seizures by municipalities, would underinvest in infrastructure and thus give municipalities an excuse (under-investment) to take them over! This damned-if-you-do, damned-if-you-don’t result makes sense in the contexts of “bilateral monopoly” (a single seller facing a single buyer) and “stranded assets” (an asset that, once built, cannot be moved or re-used in any way), since in those situations it’s hard to get one side to spend on an investment that the other side might use (or benefit from) without needing to pay. In our paper on the history of the Dutch drinking water sector [pdf], we ran into this situation with English companies underinvesting (or not investing) in Dutch cities that ended up building their own water and wastewater systems.

In a second paper, Ferrie and Troesken (2008) describe “Water and Chicago’s mortality transition, 1850–1925” via the direct reduction in typhoid fever due to access to clean water and a much larger indirect impact of lower mortality among those who survived typhoid but died of another disease. This paper is interesting because the indirect drop in deaths is triple the direct drop. In our drinking water paper, we did not get into the details on the benefits of clean water, but we surely would have cited this paper in support of wide, diffuse benefits.

It’s a pity that Professor Troesken’s life ended prematurely. We need more economic historians like him.

Addendum (1 Nov): I forgot that I had downloaded another paper (“Regime change and corruption: A history of public utility regulation” [pdf]), which I just read. This chapter is interesting for two reason. First, Troesken argues that ownership changes (from public to private ownership of utilities — and vice-versa) is driven by the need for regime change because the existing structure (either private or public) has been compromised by regulatory capture. Second, this paper — and its thesis — fits into my existing idea that the public-private cycle is driven by public underinvestment (to keep prices low) that lead to privatization, which leads to re-municipalization once those investments are made (and prices rise).