Archive for April, 2011

Capital City: Exploiting Wasted Urban Resources

Saturday, April 23rd, 2011

We learn from dribbled-out census data that our nation’s urban centers are rapidly falling into social ruin. The census doesn’t tell us why, but it seems to be a consequence of huge shifts of capital. Aside from Washington and New York, where the owners of most of the capital still do business, most US cities, shunned by financiers and other investors, have seen their social institutions crumble over the past couple of decades. Lately, capitalists have been fleeing the cities like rats leaving a sinking ship. Despite the proliferation of catchy slogans, tax abatements, sports franchises, and institutional “reforms,” cities continue to shed residents, scare visitors and chill potential employers and investors.

This is sad, especially for those who remember bustling downtowns and buzzing neighborhoods. It looks like a big waste of resources, and it is, but investors don‘t seem to be interested. In the choice between a portfolio of derivative financial instruments and an urban factory or apartment block, the capital seems to stick to the paper.

Meanwhile, residents–over half of them idle, according to recent statistics–wait hopefully for capitalists to organize them into work teams. Maybe it’s time for city residents to organize themselves–most us have nothing better to do–and start thinking about urban resources as communal capital, capital that might yield a return other than money. City people might do well to take an inventory of their common assets and make decisions that could turn them to capital advantage.

Most of us think of capital as a form of money, but it’s really more than that. It’s the means of production. It’s the totality of the land, equipment, supplies, contracts for labor, and cash needed to move an enterprise. When a profit-seeker invests in capital, he does it with money, and he expects money in return, but capital can yield returns other than money. Residents of a city dedicating their urban capital to one or another communal endeavor might happily receive non-monetary returns on their investment.

For example, when profit-seekers rehabilitate a building, they typically displace the residents, often permanently, and rents go up as conditions improve. The people putting up the money for the building and the rehab want a monetary return on their investment, and they won’t put their money there if they don’t profit from it. The residents of the building also have an incentive to improve the building, but, unlike investors, they have little interest in the rent roll: they profit directly from an improvement in conditions. Properly organized, they might pool their resources, including their labor, if they saw a prospect of that sort of profit, even foregoing profits of other kinds. If the residents could be organized to improve their residence, they might not need any other sort of gain. They could make an investment for their own good.

Look at it as alternative capitalism. Conventional capitalists bring investors together from remote parts to make money by exploiting selected capital. Alternative capitalists organize people already living in close proximity to exploit local capital for their mutual benefit. Cities seem a perfect medium for this sort of organization. Like no other social institution, the city has vast unexploited resources available to the residents for the good of all, and it’s worthwhile to consider what these resources are and how people might make use of them.

Buildings

Buildings are the main physical component of the city. A city is mostly a collection of buildings, streets, residents and commerce, and buildings are the most prominent feature distinguishing it from other types of communities.

Most buildings belong to private parties, but the fact that they are located in cities makes them a public resource. From a legal standpoint, cities’ rights of eminent domain, properly exercised, trump landlords’ interests every time. Cities have a legal right to acquire real estate for the public good, something private investors can‘t do.

Sound public policy using eminent domain could put unused buildings into productive service. Some are in disrepair. It’s in the interest of all to put them in serviceable condition, even though the work might not generate profits. Some are partially occupied or unoccupied. It’s in the interest of all to match them with occupants, even if the rent-roll generates no profit. Some are beyond repair. Sound public policy could put the land under them to productive use.

Considering the labor expended in the construction of a building, it‘s hard to believe that an intact building could have no value, but it’s true: many of the derelict buildings that dot city streets have no value apart from their place in a neighborhood. In a throw-away economy, there may be no advantage in recycling a durable, well-constructed building where a cheaply-built short-lived new building could be standing. To neighbors, recycling a building could represent employment, commerce, and improvement. The rooves alone are a resource, standing high in the sunshine and high in the wind, ready and able to generate power. An unused building in a neighborhood is a glaring example of a capital asset going to waste. Cities have them by the hundreds.

Residents

A concentration of people is a capital asset. For one thing, it’s a market. The more people there are, the more opportunity there will be for commerce. The denser the populace, the richer the market. The people who make up a market could organize themselves to benefit from it, but the traditional approach has been to let the capitalists run their own markets. In many urban centers, this has meant abandonment. Businesses have rolled up their tents. Local, face-to-face markets seem have been displaced by global electronic exchanges. The concentrations of people that make up a city represent a capital asset going to waste.

A concentration of people isn’t just a marketplace. It also has value in its potential to save money. One at a time, tomatoes cost about a buck apiece. Buy a basket of them and you pay half as much for each one. The bigger the order, the lower the price. A big concentration of people can, with a bit of organized effort, eat more cheaply per person than the same number spread out over a big area. And it’s not just eating. Economies of scale save money wherever supplies are abundant. With a little planning, buyers can watch for bargains–usually resulting from surplus supplies–and save a bundle. This is the business of retail sales, and it can be very profitable. Small concentrations of people have to let retailers do their buying for them, but big concentrations can do it on their own.

Concentrations of people can take on big projects and share the bounty. An urban center can minimize costs by centralizing such functions as energy generation, waste disposal, water and food acquisition and distribution, education and training, dissemination of news and information, and transportation. Lots of people in one place comprise a valuable capital asset that, in the global marketplace, has been all but abandoned by conventional capitalists. It is an asset that is rarely exploited for the benefit of the people themselves. Nothing keeps us from claiming this capital and putting it to use except narrow-minded timidity.

Community of interest

For people living in close quarters, quality of life is a common interest and an ongoing project. Cooperation, rules, and self-improvement are in everybody’s best interest. It may take a village to raise a child, but it takes a city to raise a citizen. In a suburb or small town, you can pursue your own interests to the exclusion of all else . In the city, you can’t. You have to worry about your neighbor and your neighborhood. If your neighbor’s kid doesn’t learn to read, you pay. If you decide to provide a home for six pit bull terriers, your neighbors will have something to say about it, as you would if the situation were reversed. Neighborhoods that have nurtured the art of cooperative living offer safety, stability, and a measure of consensus, and this gives residents a sense of rootedness and community. There‘s even a certain uniformity of political opinion in a typical neighborhood, with a decidedly liberal bias on most issues. People moving to an urban neighborhood from a small town or suburb notice all this, and they respond positively to it. Community of interest is a valuable capital asset that hardly exists outside the inner city.

Location

Most cities developed as hubs of social and commercial activity because of some peculiar advantage of the location. Some developed alongside a convenient port, some because of a nearby source of water or raw materials, some because they’re situated at a junction of roads, trails or waterways. Commerce tended to radiate outward from these centers of activity. Location on a port or waterway, at a junction of roads, or at the center of a network of commerce or agriculture is still a valuable capital asset, even though it’s been largely neglected by capitalists. A harbor or railroad junction can generate lots of money for remote investors, but sound public policy can put advantages of location to use for the benefit of the people living nearby.

Mutual proximity

Putting a lot of people together in a small space might intrude on their privacy, but it also means they don’t have to go far to see each other, to obtain things they need from each other, to work with each other, and to take care of each other, and this mutual proximity is a capital asset. Being within walking, biking or bus-ride distance of work, school, home, Mom, market, church, club, playing-field or lunch is an asset of indeterminate value, depending mostly on the price of gasoline and the price of an hour or a minute. Close neighbors get to share a snow-blower, let their kids walk to school together, watch out for danger, baby-sit for each other, and enjoy a hundred other advantages that suburban residents can’t. Mutual proximity as an asset has been neglected by capitalists for the better part of two generations, but individuals are rediscovering its value every day. City folk have always enjoyed their walks, but if they ever organize to exploit this valuable capital asset–with free public transportation, for instance, or domed downtowns or pedestrian-only districts–they might enrich their lives immeasurably.

Trash

Most of us don’t think of waste as an endowment, but that’s only because most of us live in relative abundance. Dumpster-diving and scavenging are for the poor, and anything they leave behind isn‘t worth saving, we think. Until we see the volume of it. Between local trash and what’s shipped in from out of town, a city generates a mountain of waste in a very short time, and if we ever found a way to farm with it or pave the streets with it, we’d be sitting pretty. In fact, there are ways to pave streets and make building materials and reclaim metals and create fertilizers with some of the components of urban waste, but capitalists can’t make enough on these processes to profit from them and so we pile our wastes up on city land or burn it. This is a huge capital asset going to waste.

Diversity

Whether you’re organizing an ethnic dance troupe or recruiting employees for factory jobs, you’re likely to find what you need more quickly in a city than elsewhere. Same goes for book discussion groups, theatrical productions, parent-teacher organizations and other complex activities that require diverse human resources Every language, every skill, every occupation, every belief, every art, every craft is practiced here. There’s somebody for every job. The human resources are here to accomplish just about anything, and they‘re your neighbors. Imagine if residents took inventory of the diversity of human resources at their disposal and exploited this asset for their mutual benefit. Instead of waiting for profit-seekers to organize them to work for the benefit of the profit-seekers, they could organize themselves to work for their mutual benefit.

Infrastructure

Cities have the advantage of a developed physical infrastructure as well as a developed social infrastructure. These are capital assets. The streets, schools, hospitals, water mains, power lines, sewers, fire hydrants, phone networks, police cruisers, and other public facilities are capital assets of a physical kind. They’re taken for granted by residents and business, and we notice them only when they‘re not there or not functioning. Individuals benefit from them, but we’re responsible as a community for maintaining them. We haven’t always kept them in good working order, and we haven’t done much better maintaining the social infrastructure of government, churches, clubs, political organizations, sports teams, and various good works. In the cities, the formal social infrastructure is stressed to breaking by corruption and lack of participation. Despite the recent history of neglect, the social and physical infrastructure of our cities is there to be restored, and this is a valuable capital asset that’s going to waste.

Vacancy

Unused space is a resource in a city. One party’s vacancy is another party’s opportunity. It’s in the public interest to link vacant spaces with productive activities, both commercial and residential, but it doesn’t happen, because investors see no value in it. Residents tend to reflect the capitalist view, looking at vacancy as valueless emptiness. We should see it as a collective legacy, an item of unused capital with endless possibilities if thoughtfully exploited.

Cash flow

Lots of money changes hands in an urban center, and this condition is a capital asset. Get a piece of it, and you have an income. I learned this 40 years ago as a Good Humor Man. The biggest grossing route was a nickel-and-dime operation in Hartford’s poorest neighborhood. I found out that a housing project full of poor people generates more business in nickels than a suburban neighborhood yields in quarters and half-dollars. Enormous sums change hands in the aggregate of a day’s urban commerce, and the money collects in private hands. City people can let profit-making business exploit these pools of cash, or they can use the flow to their own advantage. A city bank could go a long way toward exploiting this valuable capital asset. It could be completely automated, with branches in various city offices, too convenient not to use. It wouldn’t be a profit-making venture but a civic improvement pool. City taxes and fees could pass through it. City payroll could pass through it and so could residents‘ money. The only reason we don’t have this is that rich people now exploit these cash flows through private banks, and they’re not about to relinquish their advantage.

How-to

If urban capital is so valuable to the urban public, why isn’t anybody doing anything with it? The reason seems to be that exploiting capital for the public good violates the rules of capitalism. Public enterprise just isn’t allowed. The capitalists who control every city in America are in agreement that exploiting capital for the public good is socialism. You start establishing city banks and city taxis and city power companies and city this and city that, and you’ll freeze out private enterprise. Plus, if you start offering free stuff, like electricity and health care, things that people now have to pay for, business will suffer. This is the accepted ideology of the ruling class, and it’s the reason our cities are dying.

City people never signed up for knee-jerk hypercapitalism, but they haven’t permitted themselves to defy it either. They’re scared to offend the Chamber of Commerce, and for good reason. All forces seem arrayed to separate them from their jobs. The employer says, “One wrong move by you workers, and I’m off to India.” Of course, we know he’s leaving eventually anyway, but we obey. For some of us, this is starting to get old. Maybe there’s a way to organize to employ ourselves using the idle capital of our cities.

We would have to think in terms of value other than monetary value. We would have to be willing to secede in a way from the private sector. We would have to work for no pay. We would have to trust one another, even love one another, pooling resources just because of our mutual proximity and our common interest. We would have to elevate self-reliance, cooperative effort and participation to sacramental status. We would be opting out. We would become a force for deglobalization. My city has leaders that could facilitate a process like that, but they’re not allowed to do it.

I don’t know about you, but I’m not happy to buy bread baked in Pennsylvania, milk shipped from Vermont, and hamburger transported from Missouri, when there are perfectly serviceable commercial bakeries, dairies and packing plants lying vacant a few blocks from my house, 20 percent unemployment in my neighborhood, and hundreds of acres of fertile land for miles in every direction. It’s wasted capital.

I don’t know about you, but I shiver on the empty streets of my city, Hartford, remembering how it used to be. Downtown used to be elbow-to-elbow. There were three big drugstores. Four department stores. Two hardware stores. Four five-and-tens. Six movie theaters. Four newsstands. Coffee shops, hamburger joints, and fancy restaurants dotted Main and Asylum Streets, and there were bookstores and second-hand shops on Mulberry Street, most of which got plowed under 50 years ago. There was no parking to speak of. You took a bus to the movies, to the dentist, to an after-school job. The two main commercial strips, Park Street and Downtown, were surrounded by high-density tenements, so people in rags mingled on the street with people in furs. All gone. Now it’s parking lots, paved and unpaved, as far as the eye can see, mostly empty most of the time. What if we mobilized the idle capital at our disposal to reverse this devastation and restore the lively atmosphere of a few decades ago. What would it take? Could it be done without money?

Suppose there were a buildings plan for Hartford that involved the public employment of residents to rehabilitate the buildings and neighborhoods they live in for reduced rent. Public housing, not just for needy people, but for needy property, augmented by social services that promote quality of life and capital improvement.

How about a policy to mobilize unemployed people to outfit factories to produce goods for local use? Finance it with a city bank that handled the municipal payroll and some of the commercial cash flow within the city limits. Food, building supplies, maybe photovoltaic cells from a local source. Once started, a public enterprise of this kind could be self-sustaining. Suppose there were an initiative mobilizing unemployed workers to put solar cells on every urban roof, splitting the electricity savings between the workers and the residents. How about an eminent domain panel to link vacant real estate with potential public enterprise?

Suppose there were a transportation plan for Hartford that paid all bus fares within the city limits. Nobody considers paying a fare to take an elevator or escalator. A city transportation plan for the present day could do the same with city buses and phase out driving in the city during business hours. Some businesses find it profitable to provide free transport from airport to rental car lot or to overnight accommodations. That’s because free transportation attracts people to a destination. Every bus with a stop downtown could be no-fare. Free cabs could radiate outward from a transportation hub tucked under the interstate. Pay for it with property tax. It would be worth the investment. Commerce would boom. We could build something on the vast parking lots that make downtown look so toothless now. Hartford has never stopped being the central point of the metropolitan area, but people stopped coming when gas got cheap and they paved the world. Those days are over. We could have free parking at the hub and free bus and cab in every direction. Maybe a small tax on theater tickets or liquor sales to defray the cost.

Residents united could find profitable ways to deal with the mountain of waste that is generated in the city and, in some places, trucked in. In sufficient volume properly handled, waste is a valuable resource. There are metals to be extracted, fibers to be recycled, organic matter to be composted, fluids to be recovered, and solids to be cleaned, stabilized and re-used. A pile at the river’s edge is not the highest and best use of this material, but residents disunited can do no better with it than to place it out of sight.

A city commerce plan could provide for a downtown street market of the sort that is seen in cities across Europe and Asia. Free bus transportation would ensure a steady stream of customers. It might cut into Stop and Shop’s profits, but residents would be OK with that, and the supermarket would still have the advantage of the free bus. How about a dome over the heart of downtown–turn it into an indoor mall every winter–constructed as a public enterprise by and for local people?

The possibilities for private investment seem to end at the city limits, but the possibilities for public enterprise stretch beyond the horizon. We might do well to take an inventory of our urban capital and organize to put it to public use.

Disbar

Wednesday, April 6th, 2011

When I was admitted to the bar 30-some years ago, I took on the responsibility to police my profession. It’s right there in our first canon of legal ethics: “A Lawyer Should Assist in Maintaining the Integrity and Competence of the Legal Profession,” says the American Bar Association’s Model Code of Professional Responsibility.

To this end, I am instructed to “maintain high standards of professional conduct and . . . refrain from all illegal and morally reprehensible conduct. Because of his position in society, even minor violations of law by a lawyer may tend to lessen public confidence in the legal profession. Obedience to law exemplifies respect for law. To lawyers especially, respect for the law should be more than a platitude.” So says the code.

I question whether my brothers at the bar, Attorney Obama, President, and Attorney Holder, Attorney General, have violated this first canon of legal ethics by their advocacy of extra-judicial proceedings in the prosecution of Khalid Sheikh Mohammed and four others. Holder announced a few days ago that the alleged terrorists will be tried at the prison on the naval base at Guantanamo, Cuba, in a military court.

Holder’s order is in direct contravention of the Bill of Rights. The Sixth Amendment states that “In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury.” A trial before a panel of military officers nine years after the alleged crime in a prison Americans can’t gain admittance to on a foreign island Americans aren’t allowed to travel to doesn’t suffice, and Holder and his boss have an ethical duty to point that out. It’s true that the military brass have gotten away with this in the past, but it’s still illegal. A court-martial might be able to hang these five Arabs, but lawyers could risk their licenses in letting that happen. Attorneys aren’t allowed to misstate the law, and they’re not allowed to advocate illegal proceedings.

Holder, probably on Obama’s instructions, faulted members of Congress for forcing the civil authorities to cede the case to the military, but members of Congress have no power to affect criminal prosecutions, and the restrictions Holder complains about do not have the force of law. On the contrary, it‘s a federal crime for a person in a position of authority, even a congressman, to interfere in a federal prosecution, as Holder says members have done, and this makes his deflection of responsibility itself a corrupt act.

The only precedent in the administration’s favor is the Bush-Clinton doctrine, which states that presidents and their minions are above all laws, but this doctrine is still evolving, and it‘s not clear yet that it exempts government lawyers from legal ethics. Clinton did get disbarred, remember.

It’s my duty to tell you this: lawyers should be working toward the disbarment of Holder and Obama, for this offense and this offense alone. It has the potential to be a solid legal challenge to the Bush-Clinton doctrine, and it’s also a way of vindicating constitutional rights without having to get arrested, beaten, or trampled.