Red Plenty and the allocation of resources

Lately I’ve been thinking about the themes that tie together the various interests I’ve been pursuing over the last year. What is the connection between science fiction and communism? Between horror and capitalism? Between religion, myth, and cities?

Scheutz’s difference machine, based on Babbage’s work.

Francis Spufford’s Red Plenty is an example of historical fiction that illustrates the potential between political alternatives and science fiction. What in essence is proposed is that the problem of allocation of resources – the primary concern of any economy, be it capitalist or socialist – is resolved through the use of computer algorithm; an early kind of cybernetics. As it plays out in the novel, the Soviet leadership is happy just to keep things marginally operable under current conditions (which contributed to numerous supply problems and eventual collapse), and so the scientific breakthrough is never applied to the actual management of the Soviet economy.

What is striking in thinking about this general issue is that it highlights how ridiculous the current economic model is, and how poorly it matches resources to need. Following Piketty’s r>g argument (that return on capital outpaces that of labour), market-based societies are increasingly subject to a minority monopolizes its share of wealth to maximize future returns, while the overwhelming majority is left with little.

What Red Plenty highlights is that economic models are historically contingent and contextual (not natural, self-regulating, etc.) and subject to political and sometimes democratic forces. The novel puts the question how should we allocate resources without reflectively defaulting to capitalism-is-necessary, there-is-no-alternative, leaving the only option to tinker with modern capitalism, offer technocratic solutions to a technical problem (capitalism isn’t running smoothly enough!), etc.

Instead, what Red Plenty suggests is a world in which economic systems and models can be considered on their merits. Remember, of course, that the fact that resources get matched to needs at all in capitalism is the result of a happy accident: as formulated by Adam Smith and others, it’s the fact that everyone’s looking to get rich that drives capitalism first and foremost, with the accidental result that people happen to get what they need (sometimes). This result, by the way – that resources are allocated to need – is exactly what Smith means by the “invisible hand.”

If you listen to free-marketeers (I’m thinking Greenspan and Hayek but I’m sure it’s easy to find), the reasoning behind the superiority of markets to other alternatives is their ability to function as information machines that rapidly correct and respond to changes. Whereas in central planning a committee has to meet and consider the figures about declining rates of certain crops and then determine appropriate allocations of resources, a market simply estimates supply/demand and matches a price point accordingly. The complex derivaties and risk-analysis methods highlighted during the 2007-8 housing crisis and recession are simply financial technology created to more precisely price various kinds of assets. Rather than fret about the arcane nature of complex derivatives and contrast the FIRE sector to ‘productive economies,’ the problem should really be assessed as such: how was this system matching needs to resources? Specifically, how did this system match people who need housing to actual houses? The answer is that it did, kind of, through fudging some risk assessments, misinforming people about adjustable-rate mortgages, and financing the whole operation by looking at the risk/debt that individuals signed up for as a potential asset for future revenue (with variable risk attached). Note how circuitous the whole affair is: the conditions necessary for matching people to housing involved being able to essentially speculate and gamble on how fast (or if!) they would be able to repay their mortgage. The only reason that people got matched with housing in the first place is because someone (banks) found a way to get rich while doing it. The fact that people actually got to live in houses for a while is a happy accident of the whole enterprise.

Since Big Data has been making leaps and bounds over the last few years, with disturbing consequences for policing and intelligence-gathering as evidenced by the Snowden leaks, it’s become evident that the processing, computing, and information-gathering capability of our society is increasingly detailed and granular. Rather than have computers monitor our every move, read our email and profile us for future thought-crimes, couldn’t we instead get computers to crunch data about the best way to match needs to resources? And maybe bypass the silly condition that someone has to get rich while doing it?


A City for Whom? Thoughts on Calgary’s Housing Crisis

Photo from Wreck City, see for more.

Photo from Wreck City, see for more.

This is a blog originally contributed and posted to the Urban Calgary Student’s Association.
Calgary’s residential vacancy rate the lowest in the country and its rental costs among the highest. The residential vacancy rate is hovering around 1.4 per cent, and the average rent for a two-bedroom apartment in Calgary is $1,267. Faced with a housing crisis, Premier Jim Prentice delivered a choice line: “I believe that the only real solution for this is the market.”

This is a surprising statement about an industry that has been carefully orchestrated and guided by government policy. First, the nature of land as a commodity is an issue. Karl Polanyi describes the establishment of land as commodity an “entirely fictitious” though necessary and useful exercise: one cannot really produce land, store it in warehouses, or convert entire landscapes into raw elements (though some try). So while it’s not a real commodity, in the same way that linen coats or widgets are, it gets treated as one as a basic part of a market system – one can’t have a factory without a place to put it. To turn land into commodity, it has to be given a status through laws, in institutions, and so on: this is called government intervention.

Beyond this theoretical feature of land-as-commodity, consider also the fact that housing has been massively shaped by the Canada Mortgage and Housing Corporation (CMHC), a Crown corporation. Historically the CMHC has financed suburbanization across the country through low-cost mortgages, and today, ensures residential mortgage loans as part of its mandate. As Richard Harris argues, a particular kind of housing (suburbs) and a particular way of financing it (CMHC) made it the only readily available housing option for most post-war Canadians.

All this is to say: it’s a bit rich that Prentice is deploying “the market” as the solution, when “the market” is itself orchestrated by government policy. This is a way of avoiding the issue, while explicitly offering support for the beneficiaries of the current system.

Who benefits from the current system? High housing prices are great for people who happen to own lots of housing, build housing, and invest in housing. If you happen to rent property, high demand works in your favour. If you sell homes, sell mortgages, or sink a chunk of your paycheque into a mortgage payment on a regular basis, a higher price, higher property value, and high demand probably work in your favour.

An unfortunate result of suburbanization and the accompanying home-ownership craze, as David Harvey has noted, has been a new kind of politics: focusing community action towards the defence of property values and individualized identities. By contrast, a functioning democracy might allow for the following questions to be worked out politically: what kind of city do we want to live in? Who is included? Who is excluded? How should we allocate our collective resources?

Narrowing the discourse about housing (and cities generally) to simple “market realities” excludes social actors that aren’t major market players – like the working poor, the young, the homeless, the unlucky – and is a way of avoiding what should be a political and democratic conversation, and turning it into a decidedly more private and profitable one.

Zombies and Urban Space

This is a blog post I originally wrote for UrbanCSA (Urban Calgary Students’ Association); click to check their site out!

spooky calgaryA precondition to the eruption of a zombie horde is an empty street. A newspaper, or tumbleweed, caught in the wind floats across the abandoned scene. The soundtrack ramps up, and the flesh-eating undead turn the corner. A perfect setting for the classic zombie story.

Most people would consider zombies the creepy part of this scene. But really, the scene is creepy before they appear: the street is empty, and the uncomfortable strangeness and isolation that results from the empty street makes discovery of the zombie horde all the more chilling. The people that were supposed to be populating the street are gone. The monstrous aspect of the undead is paired with an absence of people from the urban milieu. People have been removed from urban life, and it creates an exposed, isolating setting, where all manner of terrible things can occur. The absence of life from the street creates the conditions for a total breakdown of social order, and urban space is transformed: no longer homes, shops, streets and parks, the city is now a survivalist battleground where horror reigns. This is the opposite effect of Jane Jacobs’ “eyes on the street”—the absence of street-level human activity transforms the space into an occasion for terror.

One key insight that I find particularly useful from psychogeographical texts is the importance ascribed to the subjective human experience in urban settings, and in particular, the emotional and imaginative states experienced as one journeys through urban space. The strength of this type of analysis is that in addition to the various technical and architectural specifications common to urban design (street/sidewalk distance, pedestrian access, zoning), psychogeography takes into account the importance of the imagination. Streets and cities are not made up simply of bricks, concrete, cement, trees, and signage, but provide the context for continuous imagining of scenarios as humans walk about them. Housed by human brains, cities are where dreams and fears walk around.

The reason one particular area might feel exciting, or another dangerous and fright-inducing, has to do precisely with how the technical / architectural / design features of an urban landscape interact with this human imaginative capacity. One fears murder, monsters and being mugged when entering a dark, menacing alleyway; one feels caught up in a world of dreams when engaged in a street carnival; one feels a part of a bustling community and economy when strolling through a busy market.

This is more obvious when the rhetoric and mythology surrounding individual cities is explored. The sloganeering around cities is engaged precisely in the manipulation of imagination and linking this imaginative process to particular spatial zones. Nothing about the brick-and-mortar identifies Calgary as “heart of the New West”, or city of mavericks, or whatever it’s called now. This sloganeering is intended to spur a certain set of imaginings when walking about the city: oneself as a pioneer, as intrepid, as exploring or breaking new ground, as part of a “new” economy and community.

When engaging in arguments for density, pedestrian-friendly design and cycle lanes, it can be easy to get away from how urban spaces make you feel. So here’s an important question: how do you feel when walking around Calgary? Perhaps more directly: how many of Calgary’s streets are primed for a zombie outbreak? In what areas are there sufficient “eyes on the street” to make you feel safe? What streets, as you walk through the city, make a pedestrian feel abandoned, uncomfortable or downright spooked?

Joël Laforest is an Urban Studies major and contributor to the UrbanCSA blog. He is well-versed in psychogeography and an avid fan of science fiction.

At the Beginning of Glorious Days

(by alexander_krolikowski on Lomography)

(by alexander_krolikowski on Lomography)

My intent in creating this blog is largely to document what I’m reading and working on project-wise, as well as occasionally offer reflections on philosophical, academic, and regional political matters. My writing is often overwrought — something I wish to shed, or at the very least reduce — so this is an effort to improve my skills in that department, by writing in a semi-disciplined and straightforward way.