Toward More Prosperous Cities: Cities should fight poverty, not increase it

Canada, Housing Affordability, Publications, Uncategorized, Wendell Cox (historic)

1. The public policy context

Economics has been and must continue to be the foundation of human progress.

Means and Ends: The objective should be to achieve wide-spread affluence and eradicate poverty around the world. Beyond the rule of law and security, these may be the most important public policy objectives. Greater affluence means maximizing real household discretionary incomes (incomes after deduction of taxes and the costs of basic necessities, especially housing, food and clothing).

Cities, urban policy and urban transport are means to facilitate these objectives. However, they are not ends themselves. I advocate neither “sprawl” nor “automobiles.” My interest is the objectives of broadening affluence, not urban form or transport, which can be important means for achieving greater affluence and reducing poverty.

The Necessity of Economic Growth: Economics is a history of poverty. University of Rochester (NY) Economist Steven Landsburg put it this way:

Modern humans first emerged about 100,000 years ago. For the next 99,800 years or so, nothing happened … Almost everyone lived on the modern equivalent of $400 to $600 a year, just above the subsistence level.

Data compiled by the late OECD economist Angus Maddison estimates the world gross domestic product per capita (GDP) at approximately $1,100 in 1820 (2010$ purchasing power adjusted). Netherlands was the most affluent, with less than $3,100 per capita, similar to the present levels of India and Nicaragua.

Since 1820, the world population has increased substantially (5.5 times), but the economic pie has expanded far more. The world (GDP) product grew 70 times (inflation and purchasing power adjusted), approximately 13 times population growth. Yet, much (too much) of the world continues to live in poverty.

The Importance of Public Stewardship: Public financial resources need to be spent efficiently. The need for government efficiency has become more imperative, as high income nations have obligated themselves beyond their capabilities. There is, at least as yet, no politically acceptable roadmap out of these difficulties. Yet, as I learned in my first 30 days on LACTC, governments tend to assume that the answer to every question is more money. This led me to adopt the following mission statement for my original website, “publicpurpose. com,” (1995): To facilitate the ideal of government as the servant of the people by identifying and implementing strategies to achieve public purposes at a cost that is no higher than necessary. The reality is that when too much is spent to produce an amount of any public service, such as mass transit, less public service can be afforded, and/or money that could be creating jobs is taken unnecessarily from people.

View entire study as PDF (15 Pages)