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2017 | OriginalPaper | Buchkapitel

1. The State, Decentralization and Entitlement, and the Organization of Cities

verfasst von : John R. Miron

Erschienen in: The Organization of Cities

Verlag: Springer International Publishing

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Abstract

This chapter discusses how the state might organize an economy where there are advantages to teamwork. This chapter presents a way of thinking about the liberal state that starts from the notion of its antithesis: an all-encompassing state. In an all-encompassing state, every decision in daily life is made by the state: there is no specific protection; no decentralization of decision-making; no rule of law; no specific rights (e.g., civil, labor, or property); no markets or prices; no personal or real property; and little, if any, privacy. An all-encompassing state presumably is cumbersome in operation, slow in deliberation, and highly intrusive in the daily lives of its people. How might such a state become less cumbersome, more responsive, and less intrusive? The state can decentralize or entitle in several ways: establish professional, policing, and judicial systems with some autonomy; appoint committees and boards with specified discretion; empower local governments; foster and regulate (competitive) markets; enable corporations and other economic organizations; enable and enforce contracts among individuals and other legal entities; recognize and protect (through remedies) the rights of individuals, families, and other legal entities; fund entitlement programs. In this chapter, I explain how decentralization and entitlement enable an urban economy: e.g., in terms of realty, contracts, labor markets, and local government. The big question here is how humankind in its effort to make the state work effectively ends up with competitive markets as we increasingly see them today. In important respects, competitive markets serve the interests of actors in the state better than do cooperative or consensus-based approaches. Understanding the state and how it functions is therefore essential to understanding how competitive markets came to be as they are and how these markets in turn shape the urban economy.

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Nächstes Kapitel State, Economy, and City: A Reconstruction

Condition in which a competitive firm, industry, or city is unable to keep its unit cost from rising as the scale of output increases.

See Mann (1986, p. 38).

A focus on how things are as opposed to how things should be.

Thought derived by applying a standard or norm.

Contrary to most authors on the subject, I avoid use of “system”, “process”, “representation” or “model” in describing “economy”; to me, these are largely meaningful only from an author’s own particular (often implicit) perspective.

Purchases of goods and services that are not intermediate goods used by other firms in the national economy to produce their own goods and services.

The notion of an economy is also closely linked to the notion of a “financial system” (financial instruments, financial institutions, and financial markets) that enables it. See Goldsmith (1987).

There may still be usefulness for corporations in respect of limited liability or in terms of establishing succession in estate planning.

I leave aside for the moment the issue of social discrimination wherein the vendor does not want to sell to a particular purchaser.

See Fukuyama (2011, pp. 41–43).

This is closer to Aristotle’s notion of the three prizes of fortune (honor and prestige; security of life and limb; and wealth) than to the conventional economic focus on quantities of goods consumed. See Polanyi (1957a, p. 77).

What Bavetta and Navarra (2012, p. 2) refer to as “negative freedom”.

What Bavetta and Navarra (2012, p. 2) refer to as “positive freedom”. Sen (1999, p. 18) equivalently sees freedom as an expansion of the capabilities of individuals to lead lives they have reason to value.

Equivalently, Johnson (1960, p. 327) makes two arguments for free trade: (1) interference with free trade worsens the allocation of resources and (2) economic liberty and free competition favors economic growth.

An excess profit attributable to an asset or market situation unique to a firm that cannot be replicated by other competitors.

Something, typically not inalienable, whose possession or use is valuable.

With each legal right, a corresponding duty is created. If person A has a right to possession of land, person B (other people generally) has a duty to respect A’s right of possession. The opposite of duty is privilege. Absent a right to possession, person B has the privilege of entering that land. See Hohfeld (1913, p. 32).

In an efficient market in equilibrium at price P, the supplier of the marginal unit just able to recoup costs and the demander of the marginal unit is not willing to bid a higher amount. Market failure describes any market which fails either or both of these.

Of course, for every right legally recognized, there is a corresponding duty or obligation (loss of privilege) among other subjects who now have to respect that right.

Loss, inconvenience, unpleasantness, or cost.

See Bavetta and Navarra (2012, p. 1).

Tolerated, allowed, or fulfilling expectations in quality or quantity: usually tied to the notion of a decent life.

In contrast, Steuart (1767; p. xiv) points out (1) how cities tend to depopulate the countryside around them, and (2) how far the progress of luxury brings distress upon the poor industrious man.

My approach is closer to Cartledge (2002, p. 19) who imagines a citizen-state or civic community united by constitutional and other laws defining who is a member. My notion of a state is more rudimentary than even this because I want to envisage the most primitive version of a state.

In contrast, Fukuyama (2011, pp. 52–53) draws a distinction between band, tribe, and chiefdom on the one hand (which he describes as relatively egalitarian) and state on the other (which he describes as hierarchical). In this Chapter, I do not draw such a distinction. I want the concept of state naturally to emerge from its fundamental roots at the band level and for hierarchy to emerge even from the egalitarian.

Adapted from Palay (1984, p. 265).

See Macneil (1978).

See Ward (1996, p. 427).

This is different from my earlier use of “privilege” in the social sense.

I am following here the argument of Hohfeld (1913).

See Rose (1993) and Ferguson and Gupta (2002).

See Stone (1994, p. 14).

Stone (1993, p. 7) also mentions the first two of these.

Person whose actions are outside the usual or accepted range of social or sexual behaviors.

Person whose limitations in abilities, own means, and/or access do not allow them the possibility of a decent life. To me, it is unclear whether the disadvantaged includes, in addition, those who are otherwise simply feckless.

A condition wherein the state requires its agents to justify their actions or decisions.

See Acemoglu et al. (2004).

To benefit unfairly from the work of—or at the expense of—others.

Governance by a whole population— typically through elected representatives—and emphasizing social equality and the commonwealth.

Helman and Ratner (1992, p. 3) describe a failed state as incapable of sustaining itself as a member of the international community and instance civil strife, government breakdown, deprivation, violence, anarchy, and human rights abuses.

This leads some to argue, for example, that a state cannot regulate an industry to be competitive. Writing about the transportation sector, Melton (1975, p. 554) argues that “there can be regulation or there can be competition. There cannot be both… An examination of transport history clearly indicates the inevitable result—a return to the conditions which led to the regulation initially.”

In the same way, we can characterize a competitive market by the equilibrium price and quantity transacted.

Following Olson (1982).

An action is wrong because it directly hurts another person or infringes upon their rights or freedoms.

An action is wrong because a person fails to carry out their duties within a community, or to the social hierarchy within the community.

A person disrespects the sacredness of God or causes impurity or degradation to oneself or to others.

See Shweder et al. (1997).

I am thinking here of environments that range from a rent-seeking society (with its veneer of legality) to a kleptocracy (theft and corruption absent veneer). On the former, see Krueger (1974). On the latter, see Acemoglou et al. (2004).

Illustrative of aggrandizing, Ryan (1987, pp. 8–9) comments on the plundering of the poor by the rich in ancient Athens.

Acemoglou et al. (2004) argues that kleptocracies use a divide-and-rule strategy based on the idea that other actors need to cooperate to depose them. Grossman (1999) presents a theoretical model to explain the occurrence of revolutions in the context of rivalry among kleptocrats.

Governance characterized by the accumulation of power, status, or wealth in the hands of a few.

I invoke a moral code of community here and imagine a privileged group (e.g., the rich) using the state to exploit or suppress a less-privileged group.

I am assuming here that actors are motivated by their sense of the commonwealth rather than by rent-seeking.

Similarly Cartlege (2002, p. 19) argues that, in ancient Greece, politicization explained the necessity of alienating market exchange. However, Alchian and Demsetz (1973, p. 16) argues that even the most centralized state cannot specify production and allocation in detail. Instead, the state would have to rely on techniques, rules, or customs to resolve conflicts in the allocation of resources.

For those who think their love for spouse and children is paramount, the intrusiveness of oversight by an all-encompassing state strains credibility.

Fairness implies actions conform to laws, rules or standards, are just or appropriate in the circumstances, and nonviolent. However, the all-encompassing state has no laws.

In an all-encompassing state, everything belongs (that is, is due to) the state. Where the state creates a right to ownership, something belongs to an individual because they can then be in rightful possession.

Such a dichotomy underlies Besley and Persson (2011). Also illustrative of the latter approach, Krueger (1974, p. 291) argues that restrictions on economic activity by government can give rise to monopoly profit and that certain individuals seek out these opportunities.

Governance in which every decision in daily life is made by the state: there is no specific protection. There is no decentralization of decision-making, no rule of law, no specific rights (civil, labor, or property), no markets or prices, and no private property.

Of course, the state may, at some point, choose to rethink, redesign, or abandon a current decentralization or entitlement that it finds wanting.

In this book, I use autonomy to refer to “independence” as in freedom from external control in pursuit of self-actualization. I specifically do not use it in the sense of Kantian moral philosophy of the ethical life: being influenced solely by morality rather than desire.

A place of refuge or safety (e.g., for undocumented immigrants).

To be defined in Chap. 2 as a band of 20–70 hunter-gatherers (possibly organized as nuclear family units) that constituted the earliest form of a state.

The conveyance of rights in sovereign land by the state to an individual, firm or other organization.

Authority to appropriate realty for public use, following due process and upon proper compensation, without the owner’s consent.

Reversion of realty to the state when the owner dies without a legal heir.

To have sufficient resources (e.g., funds) or access to be able to do something.

A group regarded as part of the body politic.

With public goods, all enjoy in common. Each individual's consumption of a public good is non-rivalrous; there is no subtraction from any other individual's consumption of that good. Each individual’s consumption is also non-excludable; there is no simple way to prevent any individual from consuming the good.

Titel: The State, Decentralization and Entitlement, and the Organization of Cities
verfasst von: John R. Miron
Verlag: Springer International Publishing
Buch: The Organization of Cities
Print ISBN: 978-3-319-50099-7

Electronic ISBN: 978-3-319-50100-0

Copyright-Jahr: 2017
DOI: https://doi.org/10.1007/978-3-319-50100-0_1

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