Bitcoin Is Venice: An Immense Laboratory Of Trial And Error
This article is part of a series of adapted excerpts from “Bitcoin Is Venice” by Allen Farrington and Sacha Meyers, which is available for purchase on Bitcoin Magazine’s store now.
“If you say: ‘Well, look, you’re a feeling type, and I’m a thinking type, so let’s not discuss that because we are always going to be on different sides,’ then it removes from this discussion what I feel to be the absolute heart and soul of the matter when it comes to buildings. While I do not deny what you have to say about personalities, I can’t imagine a properly formed attitude towards building as an artist or builder. It must confront the fact that buildings are a matter of feeling. What does it mean when you say “Look, you’re this type, and you’re this type, and we agree not to discuss that fact?” Is the implication that you think that feeling is not related to buildings?”
-Christopher Alexander, “Contrasting Concepts Of Harmony In Architecture,” debate with Peter Eisenman
In 1947, the United Kingdom passed the Town and Country Planning Act. Building permits gave way to planning permits. Development rights were no longer granted by land ownership. With a grand vision, local planning authorities became arbiters. The United Kingdom began planning and stopped building in that year.
Individuals building with a human perspective were replaced by civil servants planning from a bird’s eye view. Two years later in the United States, the Housing Act was passed and, as Robert Caro puts it in “The Power Broker,” “For the first time in America, the government was given the right to seize an individual’s property not for its own use but for reassignment to another individual for his use and profit.”
The individual, thought to be driven by a selfish profit motive, was to give way to the enlightened central planner thought to be motivated only selflessly to maximize welfare. Private property rights were made a second-tier concern. By centralizing power, the U.K. government also invited lobbying both from corporations which could mold rules to their advantage and individuals who could impinge on other’s rights with not in my backyard (NIMBY) campaigns to stop, for example, farmers from properly developing their land.
The shift to architectural central planning (among many other equally awful varieties) after the second world war was precipitated by three major developments: the spread of mass manufacturing, the rise of the automobile and the success of exactly this mode of planning during the war. These forces combined reshaped man’s relationship to urban space. The automobile transformed the landscape into a green haze, onto which we didn’t mind imposing an industrial-scale monotony. Grand developments became grand affairs that fit into a grander vision. The diverse tastes of people were replaced by the aesthetic dreams of intellectuals.
Today, only one-in-three new homes in America are “self-built” by individuals. In the United Kingdom, the figure is an abysmal one in ten. Individuals find it prohibitively expensive and difficult to build a home due to the regulatory maze. Large developers have replaced individuals with a sketch for their “dream home” with glossy brochures. Housing became a proposal on the planner’s desk or a sales item on a developer’s profit and loss statement. It became a flow. It was no longer designed and built by people who viewed their home as an asset that they could own for decades and which might stay in their family for many generations.
Roger Scruton captures this tragedy beautifully, arguing in his documentary, “Why Beauty Matters,” that “architecture that doesn’t respect the past is not respecting the present, because it is not respecting people’s primary need from architecture, which is to build a long-standing home.”
The issue with modern housing isn’t necessarily that it is built by corporations. Our phones and cars are also built by corporations. The problem is that alignment is poor. It is impossible to achieve perfect alignment between customers and companies, no matter how free or regulated a market may be. However, some social structures and institutions create more or less alignment. [ii] It might seem that a real agent is aligned to the seller. They get a commission and a higher price.
But we’re forgetting one thing: time. Waiting another week for an offer $10,000 higher would only get the agent a few hundred dollars more. This is time that could be spent on another sale. Each sale is a revenue stream for the agent. They get a cut from each sale. The seller considers the sale the liquidation or disposal of stock whose value they would like to maximize. These are propositions that put very different values on time. The entity that is focused on flow looks at immediate profits. Stock owners place a high value upon the future.
Similarly, when individuals build homes, they build a stock that they will likely hold for decades. Developers see things from a completely different perspective. If something breaks when the home is 20 years old and the warranty is long expired, that is not their problem.
This difference in perspective can matter a great deal to the experience of living in a home or a place. This is not so just because something might break years down the line, but because the feeling of being at home itself may be fundamentally broken by the misalignment of incentives in crafting the original design. Once again reflecting Hernando de Soto’s insight that capital is essentially a shared experience and the product of collective imagination, Ann Sussman and Justin B. Hollander insist on the importance of “narrative” to urban design in “Cognitive Architecture,”[iii] writing:
“Imagining scenarios or stories and not actually acting on them is a significant attribute of the human narrative capacity. This behavior is called “decoupling” or “the separation of mental and physical action.” Biologists again consider it to be highly beneficial. Decoupling allows us the freedom to imagine multiple narratives, without having to ‘engage the motor apparatus’. It is essential for us to live rich and varied lives. Decoupling allows for the creation of imaginative work that makes it possible to lay the foundation for the arts.
“Why does this matter for architecture or planning? It is a reminder of another way that people look for connections and orientation in their environment. As we search for faces in our childhoods, so do we look for connections and ways to make meaning of our surroundings. Every plan and urban design can acknowledge and respond to this trait in one way or another. One could make the argument that it is the inherent lack of a narrative quality in many of the post-war American suburbs, (as opposed to the earlier nineteenth century street-car versions) that gives these areas their feelings of placelessness and anomie.”
As captured by Sussman and Hollander, the history of the built environment in the 20th century mirrors the path of money. As central bankers and politicians want to keep housing affordable, politicians want to maintain a steady supply of money. This is exemplified in the U.K. government’s annual housing construction targets (i.e. a flow). [iv] Naturally, the whole thing is subsidized with self-referentially low-priced toxic loans, which are “guaranteed by a central banking institution.”
Control of the urban form is an ancient struggle. The Romans had a central Empire. The cities and settlements that they left behind prove this. The land was subject to military rationality. The figures below show that communal buildings and spaces were located in prominent central locations. They were surrounded by orderly grids as shown in the figures. Following the Empire’s collapse, property rights were de facto decentralized as the central government weakened. Local urban capitalists began to reappropriate their cities one by one. Some streets were preserved, but they were less straight. Blocks were split. New public spaces are created from communal compromises. Piazza Navona, one of Rome’s top tourist attractions, follows the outline of an old stadium.
Medieval post-Roman jumble proved more resilient than Ancient Roman rationality and efficiency. Although a central vision is able to optimize for certain variables, it cannot cope with complexity and dynamism. This is to say that it has difficulty with capital growth in all forms. The result is efficient, but fragile. The long-term uncertainty encourages adaptation and allows for small-scale, successful experiments. This method of building dominates our history as Charles Marohn explains in “Strong Towns“:
“When we ponder the layout of ancient cities, we must acknowledge that they are the byproduct of thousands of years of human tinkering. People lived in different ways and came together to form villages. They copied what worked and expanded on it. They discarded what didn’t work. If they hadn’t already killed them or disbanded them, that is.
“The traditional way of building — the way they would have all intuitively understood as the only proper way to do things — used individual action to maximize the collective value of the place.”
Beyond the aesthetic concerns, Marohn also explains that planners, unlike individual builders, cannot make financially viable cities. Complex economic interdependencies are what large developments are made up of that no single model can capture. Planned cities, like planned economies, are unable to tap into the distributed knowledge. Political expediency also biases planners towards “growth” at all cost (i.e., not real growth but mere increase). Marohn said:
“Each iteration of new growth creates enormous future liabilities for local communities, a promise that the quickly denuding tax base is unable to meet. These new areas required police and fire protection, street lights and libraries, as well as police and fire protection. All those miles of roads, sidewalks, curbs and pipes would eventually need to be repaired and replaced. At the local level, we traded our long-term stability for near-term growth.”
Under a healthy trial-and-error system, individual investors would add to private capital and pay taxes from its collective profits to finance common public infrastructure. The great planning experiment that began after the second world war was against this idea. It is fascinating to see how planned cities have performed over the decades. In a 2002 report, the U.K. government noted the following:
“While many New Towns have been economically successful, most now are experiencing major problems. Their design is inappropriate to the 21st Century. Their infrastructure is aging at the same pace as many others, and many of them have economic and social problems. Many are small local authorities which do not have the capacity to resolve their problems.”
The first sentence of the quote above is pure gold. Nevermind their objective failure in every other respect, they have been economically successful! There was growth! All these people are amazing! Unfortunately, these towns are not financially viable. They are ugly and were designed with the car in view. Unplanned towns that are centuries older than the car are more resilient and adaptable.
Under a social system respecting bottom-up organization, the easiest things to build are the smallest, such as a family home. These structures require little time, money, or coordination. These structures get instant feedback. There is no bailout. Larger communal projects are, however, much more difficult to implement as they require political support. The support might be viewed as coming from the governance principles that are shared by the affected, and any cultural and aesthetic capital they wish to protect. Individuals will need to reach consensus, being mindful of their strong property rights. All will need to compromise and sacrifice more.
In a top-down system, the opposite is true. Building a home on a plot of land you own becomes more complicated than a developer building 500 “units” on a field or the government expropriating land to make room for a highway. The central authority is kept in the dark about whether any particular experiment has been successful for two reasons.
First, there is no perfect counterfactual to compare against. What would be better than a street with unique homes than one that looked identical? We cannot know for sure even though surveys show an overwhelming majority of Brits would rather live in old rather than new-build homes. Second, even if there is significant negative feedback, government can just decree and force adoption. Stopping individuals from building profitably or bailing out bankrupt developments can endanger any chance of fulfilling experimentation and discovering social truths.
James Scott highlights this fundamental dichotomy in “Seeing Like A State,” lamenting the influence of the patron saint of top-down architecture and urban planning, Le Corbusier. Scott seems to see Le Corbusier’s crime as more that just the failure of his architectural output and that which inspired it. Scott also points out that his crime stemmed from a kind solipsistic antihumanism. Scott writes:
Le Corbusier appeared to have no respect for the agency of others, as Michael Oakeshott might complain. Scott writes:
“Believing that his revolutionary urban planning expressed universal scientific truths, Le Corbusier naturally assumed that the public, once they understood this logic, would embrace his plan. The original CIAM [iv] manifesto required that primary school students were taught the basic principles of scientific housing. This included the importance of sunlight and freshness to health, the basics of heat, electricity, lighting and sound, and the principles of furniture design. These were scientific matters, not taste. Instruction would eventually create a clientele worthy to be called a scientific architect. While the scientific forester could go straight to work on the forest and make it conform to his plans, the scientific architect had to first train a new clientele who would ‘freely choose’ the urban life Le Corbusier had designed for them.
“Any architect, I imagine, supposes that the dwellings she designs will contribute to her clients’ happiness rather than to their misery. The difference is in how the architect views happiness. For Le Corbusier, ‘human happiness already exists expressed in terms of numbers, of mathematics, of properly calculated designs, plans in which the cities can already be seen.’ He was certain, at least rhetorically, that since his city was the rational expression of a machine-age consciousness, modern man would embrace it whole-heartedly.”
Scott’s critique of this flavor of high-modernism as applied specifically to urban planning leans heavily on the life and work of Jane Jacobs. Scott praises Jacobs’s far superior attentiveness to precisely the agency Le Corbusier anti-humanly denies and rejects, as revealed in her appreciation of different forms of order, writing:
“A fundamental mistake that urban planners made, Jacobs claims, was to infer functional order from the duplication and regimentation of building forms: that is, from purely visual order. Complex systems, however, don’t have this quality. Display a surface regularity; their order must be sought at a deeper level…
At this level one could say that Jacobs was a ‘functionalist,’ a word whose use was banned in Le Corbusier’s studio. She asked Jacobs, “What function does this structure serve and how well does that serve it?” The ‘order’ of something is determined not by its aesthetic appearance but by its purpose. Le Corbusier, on the other hand, seemed to believe that the most efficient forms would always be classically clear and orderly. Brasilia and Le Corbusier both designed and built physical environments that were harmonious and simple. For the most part, however, they failed in important ways as places where people would want to live and work.”
As wonderful a contrast as can be drawn between Jacobs and Le Corbusier, there perhaps exists no ideological clash in urban planning as emblematic as that pitting Jacobs against Robert Moses in New York City in the 1950s and 1960s. Jacobs championed localism. She was a resident of Greenwich Village who opposed the sweeping changes she experienced as a result of the Housing Act of 1949. Her methods, like those of Martin Luther King, Jr., were distinctly and unmistakably bottom-up. She organized citizen and neighborhood campaigns to correct the Housing Act’s imbalance by speaking out for those whose property rights were being eroded. Her writings helped to spread her ideas and struggle. Her 1961 book “The Death And Life Of Great American Cities” remains a classic of urban planning. She had no power. It was a result of people listening to her and agreeing to what she said.
Opposite Jacobs, Moses was almost a caricature of centralized, coercive and unaccountable power. He was a New York City official, never elected, and he had enough power through the government departments that he controlled to worry the mayors and even President of the United States of America. His departments were able to raise their own funds, which gave Moses the ability to ignore criticisms and, most importantly, to deny any feedback. Because he knew best, he planned and decreed from Randall’s Island between Manhattan & Long Island. As Caro recalled in “The Power Broker”:
“Moses said that he was the antithesis of the politician. He said that he never allowed political considerations to influence any aspect of his projects, including the location of highways or housing projects or the award of contracts or insurance commissions. He said he would never compromise. He has never done so and will never again.
“He was America’s greatest road builder, the influential single architect of the system over which rolled the wheels of America’s cars. This was a paradox. For, except for a few driving lessons he took in 1926, Robert Moses never drove a car in his life.”
Jacobs and Moses may be the single best anthropomorphized embodiment of the conceptual conflict in the characteristics of social processes to which we have been drawing attention throughout the entire series, respectively: bottom-up versus top-down, process versus equilibrium, organic versus synthetic, dynamic versus static, experimentation versus modeling, discovery versus decree, evolution versus design; even, if somewhat anachronistically, peer-to-peer versus client/server.
From Jacobs’s perspective as written in “The Death And Life Of Great American Cities,” cities were, “an immense laboratory of trial and error.” She saw planners as people who, “have ignored the study of success and failure in real life … and are guided instead by principles derived from the behaviour and appearance of towns. ” Their enduring conflict is practically ontological. Jacobs looks as what a city is. Moses dreams what a city ought to be. Jacobs is open to the irreducible complexity of the built environment. Moses saw the problem as a complex puzzle with clear solutions. As Jacobs said:
“Simple needs of automobiles are more easily understood and satisfied than the complex needs of cities, and a growing number of planners and designers have come to believe that if they can only solve the problems of traffic, they will thereby have solved the major problem of cities.”
What planners get in the end, she argued, was a “[d]ishonest mask of pretended order, achieved by ignoring or suppressing the real order that is struggling to exist and to be served.”
Scott praises and elaborates on this tendency in Jacobs’s thought, arguing:
“Jacobs has a kind of informed respect for the novel forms of social order that emerge in many city neighborhoods. Jacobs’s respect for the human connections that make up a neighborhood is evidenced in her attention to these mundane, but important, aspects. She recognizes that no urban neighborhood is static. However, she insists on the minimum degree of continuity, social networks and’street-terms” acquaintanceship necessary to knit together an urban area. She says that self-government is only possible if there is a continuity of people who have formed neighborhood networks. These networks are the city’s irreplaceable social wealth It is clear from this perspective that Jacobs was opposed to wholesale slum-clearance programs that were so popular in her time. Although the slum may not have much social capital but it had something to build upon, not destroy. Jacobs is not a Burkean conservative who celebrates history’s achievements. Her emphasis on innovation, renewal, and change keeps her from becoming one. It would be foolish and futile to try to stop this change, even though one could try to moderately influence it.
Jacobs described Ebenezer Howard, one of the founding figures of modern planning, as follows:
“He conceived of good planning as a series of static acts; in each case the plan must anticipate all that is needed and be protected, after it is built, against any but the most minor subsequent changes. He saw planning as essentially paternalistic and even authoritarian. He was uninterested in the aspects of the city which could not be abstracted to serve his utopia.”
As a kind of devil’s advocate in defense of planners, let us offer that it is true that valuable communal projects like highways or even parks will always face opposition. Some people will be adversely affected and will resist any change. We believe that people can block development through NIMBY actions because property rights were weakened or centralized in the first instance. If a community project adds value to the community, they would be able to offer to pay those who are affected to allow them to give their land for development.
The problem comes when such bottom-up feedback mechanisms are short-circuited. By taking only a top-down view, Jacobs said, paternalists “want to make impossibly profound changes, and they choose impossibly superficial means for doing so.” This is the real problem. At first glance, it might seem that Moses was also a capitalist. He built lots, after all. But this is not enough. He was flying blind without a proper feedback mechanism. His methods did not mobilize private initiative. The result, Caro explains, was that:
“He had built more housing than any public official in history, but the city was starved for housing, more starved, if possible, than when he had started building, and the people who lived in that housing hated it — hated it, James Baldwin could write, ‘almost as much as the policemen, and this is saying a great deal.’ He had built great monuments and great parks, but people were afraid to travel to or walk around them.
Jacobs is understandably even less charitable in her assessment, writing in “Dark Age Ahead“:
“Robert Moses, the nearest thing to a dictator with which New York and New Jersey have ever been afflicted (so far), thought of himself as a master builder, and his much diminished corps of admirers still nostalgically recall him as that; but he was a master obliterator. If he had had his way, which he did not because of successful community opposition, one of Manhattan’s most vibrant, diverse, and economically productive neighbourhoods, SoHo, would have been sacrificed to an expressway.”
Accumulating capital of any variety is nigh impossible without small experiments feeding information back into an adaptable system. Jacobs understood the importance of capital stock. Jacobs supported small-scale, organic change, but rejected any sudden changes from the outside.
“Whenever the capital is lost, from whatever cause, the income from it disappears, never to return until and unless new capital is slowly and chancily accumulated,” she said, clearly marking herself as a conscientious urban capitalist — that is, a nurturer and replenisher of urban capital — and of the most remarkable of recent times, at that.
[i] Scott touches on the fallacy of transferring this attitude, skillset, and approach too readily from one space to another, having merely — if accurately — witnessed its success in the first realm, but without proper consideration as to what about that realm made it successful. He writes in “Seeing Like A State”:
“When are high-modernist arrangements likely to work and when are they likely to fail? The abject performance of Soviet agriculture as an efficient producer of foodstuffs was, in retrospect, ‘overdetermined’ by many causes having little to do with high modernism per se; the radically mistaken biological theories of Trofim Lysenko, Stalin’s obsessions, conscription during World War II, and the weather. It is clear that high-modernist centralized solutions can be the most effective, equitable, and satisfactory for many purposes. It is possible to coordinate large organizations with a few experts in order to accomplish complex tasks such as space exploration, flood control, plane manufacturing, and other endeavors. The control of epidemics or of pollution requires a center staffed by experts receiving and digesting standard information from hundreds of reporting units.”
[ii] An excellent example can be found in the “Freakonomics” documentary series
[iii] The subtitle of this book is far more telling of its message: “Designing For How We Respond To The Built Environment.”
[iv] Congres Internationaux d’Architecture Moderne, or the International Congress of Modern Architecture, the organization founded by Le Corbusier in 1928 to promote his preferred style across the world. N.B. N.B.
This is a guest post by Allen Farrington and Sacha Meyers. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
The author of 5 books, 3 of which are New York Times bestsellers. I’ve been published in more than 100 newspapers and magazines and am a frequent commentator on NPR.