Smart, like a Fox

Smart Growth is being sold as the latest remedy to, once again, save humanity from itself. Smart Growth, we are told,
is logical, consistent, fair and workable. It is, in fact, none of these things. Smart Growth is built on false premises,
riddled with economic errors, and ethically questionable to boot.

The forebears of Smart Growth, whether they are Soviet Five year plans, Farm collectivization, or the
urban “renewal” orgies of the 60’s are now seen by history as disasters that created more problems than they “solved”.
They failed because they were built on false premises and ignored basic realities of economics and human nature.
Whether out of ignorance or willful disregard, the proponents of Smart Growth seem determined to repeat the same
basic errors of collective ideology dressed up in new rhetoric.

Because we cannot escape the effects of economic principles in our daily lives,
even if we are ignorant of them, we’ll begin our criticism of Smart Growth in that arena.

(The material that follows below is indebted to the research of John Brantland, Mises, Rothbard, Hayek and others and is an atttempt to condense
a large body of understanding into a short space.)

Economics has been called the art of anticipating or avoiding unanticipated consequences.
The economist, as with the physician, must "first seek to do no harm” , and to follow this rule scrupulously;
not always an easy matter. In economics the proper path is not always intuitively obvious, and even when it is,
political calculation has much more influence on policy than fiscal consideration.

Smart Growth is a bit of a charlatan; it appropriates the language of economics, speaking of “resources”
and “sustainability” to give an appearance of academic legitimacy, while ignoring and contradicting basic
economic principles. Smart Growth is essentially an economic metaphor rather than an economic theory.
And metaphorical economics don’t work.

Smart Growth’s failure begins at the most basic level: the whole theory is based on false and unworkable
definitions of valuation, capital, and income. Since these are the building blocks of any theory of sustainability,
when you get these wrong, what follows is necessarily in error too. False premises lead to false conclusions every time.

Valuation- what's it worth?
It can be shown that all values are subjective rather than intrinsic. Circumstance and personal preference
are what set the value of things and resources. What is a glass of water worth in a torrential downpour?
What is the same glass worth in the middle of a desert?

Capital and Income
In the Smart Growth model “The public is presumed to have an ethical responsibility to maintain a
‘broadly defined capital stock’ to sustain a ‘broadly defined income’ for future generations.”1
The capital stock” consists of a conglomerate that includes, the atmosphere, the oceans, land, eco-systems,
various resources and the like. Even though we learned in grade school that we couldn’t compare apples
with oranges (they are incommensurate), this is exactly what such an agglomeration attempts.

Even though values are demostrably subjective, planners must necessarily rank various oceans,
atmoshperes, forests, "wise uses" and snail darters into some form of hierarchical melange as a necessary first step.
A plan can only proceed by gathering "data" and ranking it. Even when the data consists basically of
subjectively derived comparsions between various subjects and ideas that
themselves had been subjectively ranked earlier.

Imputations of April
Having performed this first sleight of hand, they further stretch reality by putting a number
on this newly created abstraction. This is done by imputing (assigning) a dollar amount to the "value" just created.

In other words, first you decide that keeping April the Cow in pasture is more important
than walk-to-town housing. You quickly learn from local realtors that the imputed value of "Aprilness"
is about $90,000. End of story.

Where the trouble comes is when you start putting dollar amounts on "open space" or "rural values"
which is ultimately what planning does. Finding agreement about rankings and values in this area is
much harder to achieve, and the stakes in the outcomes are much higher too.

The Rich Uncle

Sustainability presumes that these sorts of values should be defined as a ‘broadly-defined income’
that must be sustained for future generations. The economic reality of this proposition is equivalent to
an on-going fantasy about the interest you 'll soon receive on an imaginary asset of great value that is
owned by a forgotten, but very rich, uncle.
Despite the fact that this fictional capital stock and imputed income are basically
theoretical flights of fancy, they are cheerfully then used as the basis for “corrective policy”. The "problem"
and the fix both being figments of the planner's imagaination. It all comes down to nothing
more than the imposition of one set of arbitrary values over another.

Only privately owned goods can become capital goods.
Markets, ie: voluntary exchange evolved as the mechanism whereby values are established.
Markets are as old as humanity.

Here's what you will lose
“Without private property and monetary exchange, sustainability theory yields no valid theory
for reckoning depreciation, depletion, resource despoliation, rational capital maintenance or replacement of capital.
Also, legitimately conceived and enforced property rights assure tort protection from pollution and an ethical
reckoning of costs associated with resource use.

" In addition, property rights and monetary exchange foster an evolution in the resource
base as economic scarcities emerge. …[I]ncreased government regulation, taxation and expenditure
will raise private time preference and reduce private incentives to save and provide for the future.
True sustainability requires privatization of resources that are not privately owned and institutions that foster
monetary reckoning.”2


The anti-economics of Smart Growth and coercive planning in general creates scarcity, raises prices,
reduces choice, and benefits only selected classes in society. It is a top-down approach that is foisted
on the general public by various interest groups who claim moral imperatives or superiority while engaging
in self-interest and coercion on a massive scale (relevant criticism and comment can be found here.)

Because the economic and social fall-out from Smart
Growth and similar endeavors has been well-known in academic and financial circles since the early
1900’s one has to wonder if anti-growth proponents are misinformed or simply don’t care. To seek an answer
to this question we will have to turn our attention to the more subjective and difficult terrain of ethical considerations.


1,2: John Brätland