Reading Hayek in Holland
marketurbanism.com
marketurbanism.com
But if you look at old photos of European or American cities before the rise of the internal combustion engine, you typically see a completely unplanned street usage: bicycles, pedestrians, horse drawn vehicles, kids running amok, etc. all sharing the space in seeming anarchy.
It required massive central planning to replace this shared space with segregated streets with 90% of the space dedicated solely to motorised traffic. Entire neighbourhoods were razed to allow central planners to run huge new traffic arteries through the centers of cities. Land was "opened up" for suburban development through central planning and massive centrally planned road and motorway building.
I guess my point is that associating "central planning" with liveable patterns of development does not seem reasonable to me. Central planning can and has been used for good and for bad - it was used to destroy urban environments in favour of motorised vehicles in some places, just as it's been used to promote much more liveable development patterns in places like the Netherlands.
Traffic arteries are not the result of central economic planning. They are the result of the free market dumping the externalities of cars.
At that point you have two choices. Either you ban the car, and interfere in the free market and "pick winners and losers", something Hayek wouldn't like, or you adapt the infrastructure to what people are asking for in order to reduce traffic fatalities and other externalities of car ownership.
Central planning would be saying - no, cars aren't working at scale, we will limit the production of cars.
In this case the government didn't do central planning. It didn't pick winners and losers. It went with what the free market decided.
That is why we have legacy highways and sprawling public housing projects.
You found an unrelated problem.
The first automobile suburb was Long Island. Created by Robert Moses. Copied by all. Money was stolen from public transit and spent on roads, stolen from urbans to pay for suburbs.
In fact, cars did not scale. The road capacity did not, could not, ever, accommodate the demand. Physically, logically, economically impossible.
https://en.wikipedia.org/wiki/Power_Broker
https://www.amazon.com/Power-Broker-Robert-Moses-Fall/dp/039...
Before the first automobile suburb, cars were already in sufficient concentrations to require infrastructure to be taken away from other modes of transport and onto cars - the first example was in the 1910s, MUCH before Robert Moses designed any suburb - see https://en.wikipedia.org/wiki/Jaywalking#Origin_of_the_term
This is simply an a-historical take on reality. Cars got infrastructure by being enough of a nuisance to force the government to build around them. And it started in the city, not in the suburbs. Not that suburbs are good, but it's important to get these things right.
Things can scale without scaling enough. Cars did scale, they just did so unsustainably. Since we're being pedantic anyways.
There are also people who cannot drive who desire mass transit.
At the price it would be to make and operate a transit system without taxes or eminent domain or enforced monopolies, or land value increase kickbacks, almost none of the people that need it would find it a compelling value proposition. And then as a result low ridership would lead to even higher per person price, which makes it even less feasible.
It's just not possible for the private sector to make a good transit system without most of the heavy lifting coming from the public sector. Public transit has to exist outside the market.
For example even in m city with a really efficient system, even with all of the infrastructure already built using government powers and mostly paid off, even if the price increase did not increase ridership, I would have to pay ~3x more for transit, which would make it unaffordable.
The trains are still pretty affordable, and everyone uses them.
The JR group itself is only profitable because the Japanese government took on the vast majority of the debt from actually building the infrastructure.
So no, the JR Group is not a counterexample. It's still unable to actually build infrastructure without government power despite having inherited so much of it, and it's not able to profitably pay off that infrastructure which is instead paid by the government.
But perhaps your dictionary has a different definition for "pendantic" than mine.
Saying that the reason for cars dominating the urban landscape and replacing the "anarchy" that came before them as GP said it is something that happen 30 years after it becoming illegal to walk in the street and cars legally becoming the preffered denizen of the road is ahistorical. Unless you believe Robert Moses is the reason these laws were passed.
The enabling innovation begetting suburbs was the concept of highways, roads dedicated to cars to the exclusion of non-cars.
From this https://en.wikipedia.org/wiki/Good_Roads_Movement
To this https://en.wikipedia.org/wiki/Highway#History
In response to jaywalking? Sure, I guess, a bit. But mostly because of traffic, congestion.
> Unless you believe Robert Moses is the reason these laws were passed.
Exactly.
https://en.wikipedia.org/wiki/Northern_State_Parkway
At the time, New York state was the center of the universe. Whatever happened in Albany became the template for federal policy. (Another example is the New Deal.)
Moses was the guy who figured out how to make it happen. His nickname was something like "Master of Albany". Laws are nothing without funding. Moses invented completely novel financial schemes, often bordering on fraud and theft. These innovations were then replicated nationwide. With little democratic oversight or even awareness.
There's no amount of source dumping you can do to get around the concept of causality. Robert Moses is not the one who killed the pre-car street. Cars and their drivers did by posing a deadly threat to anyone there.
Jaywalking -> Freedom Markets™ -> Highways
No central planning required.
Highways were not the first roads where cars drove out people. The first roads where that happens were just city roads when cars started proliferating.
It's almost like the private, selfish choices of people can lead to negative outcomes for all of society.
The biggest one is that if you don't fit the Dutch mold, it feels like having an overbearing parent at your back at all times. If you do fit the Dutch mold, it is the greatest country to live in.
Some more negative aspects. There are limits to parking spots per home. There are neighborhoods were you can only have a single car per family. There are no more parking spots. Expecting visitors? Sorry.
The Dutch government prefers people to take public transportation which generally is excellent but they make owning a car expensive and complicated (like parking example above).
You need building licenses for almost any change to your home - outside or inside. You want to create an extra bathroom?Apply for a license. Want to remove a tree from your yard? Well good luck with that.
The Netherlands is one of the most beautifully urban-designed places in the world for sure but it comes at a price. Some people love it and some people do not.
You don't need a license for every change to your house. For a tree, depends on the tree.
Of course this is not "Sorry, no can do" but a "sorry, they'll have to come by public transport, park their car at the edge of the city and do the last part by public transport/bicycle/foot, or park their car in one of the free spots that's available because some neighbours are away with their cars".
The only cities in the US with actual transit systems that can 100% replace cars without being super annoying / delayed are NYC (and larger commuting areas like Jersey City), Boston, and Chicago. I know people in Boston who have lived in the farther-out neighborhoods (Jamaica Plain, Roslindale, etc.) completely without cars and it is do-able.
Within those three cities, there is still a lot of parking, and if you need more dedicated space there are garages with reasonable monthly rates. My understanding in places like Amsterdam the parking / driving situation is vastly different.
Every Dutch (and American, to be fair) homeowner at some point will have to make decisions about what work to do by the book, and what gets done "zwart" (yes, "black" as in market. No permissions sought and Usually cash "under the table" too.) At least in my experience and observation in the Hague, anything non-structural within the building envelope is done this way by default.
Digression: the politics of migration here are far from settled and this is one implicated area. Dodging permits and taxes is often stereotyped here as behavior of migrants from the eastern EU working in bulding trades but my native-born Dutch contractor was surprised when I told him I wanted the finish work in our house done on the books with a factuur, taxes paid. Even for things outside the building envelope, there are substantial gray areas where one could seek permission (and thus denial) but one need not.
Honestly the thing that rang most false to me in this article, though, is the bit about parallel parking competence. My experience is resolutely the opposite to the point of ridicule. After a decade I can count on two hands the number of successful parallel parking attempts I have observed (i.e. made by locals, not me) in The Hague requiring 3 or fewer moves. 7, specifically. I keep score because on my bike I am often obstructed by people attempting to park and it baffles me how people who do this so regularly can be so bad at it.
I think the central thrust of the article - which I agree with - is that what works in NL works because there is political buy-in from the voting public for meaningful restrictions on the activity of real-estate developers with specific, desired outcomes.
Now that society is a lot less cash based, this practice is very uncommon as it comes to wages in normal jobs. It still exists in exactly the type of work you describe: any type of contracting where a private individual (home owner) is the client. Cleaners and gardeners working for private individuals may also be entirely paid this way.
These last remaining pockets of untaxed money continue to exist as the cost of regulation is higher than the reward. For example, cleaners typically do it as a side job, and they'd simple stop cleaning altogether when taxed on their low income. So it's better to just tolerate it.
Further, black money is considered spending money. You can't really hoard it and buy a house with it. You'd have to explain to the IRS where this money comes from. So it's considered "extra" money, money to directly spend in the economy, so it flows back in any case.
(In English: https://bicycledutch.wordpress.com/2017/09/05/when-there-is-...)
I assume one needs to reach an agreement.
The country is tiny (3x smaller than the state of New York) but differences are huge by area. For example the "1 (or 1.5) car per house" thing you describe only applies to some neighborhoods in specific cities, people that live there choose to live with that but it's definitely not a country wide thing. As a counter example I live 20 minutes outside Amsterdam, can park both my cars on my own driveway plus more than 10 visitor spots less than 50m walk from my house.
As for the permission to build: That only applies to the outside of the house never the inside, so the bathroom example doesn't exist. And even on the outside it's not for small things like a dormer. The practical restrictions are not that different from what most HOAs in US suburbs put in their contracts. And if you live outside a city you don't have any of these restrictions, because there are no neighbors to be inconvenienced.
Zoning and regional transportation planning are not the central planning to which Hayek is talking about. And one only has to look at the farmer protests of 2019-2020 to see the popular response when the government overreaches.
Additionally all of the dunks on the US are misguided. The Netherlands is a country of 18 million people, in one of the flattest countries in existence with >90% of the population in urban areas. “We love bikes.” Well, duh.
Don’t forget it’s much less scorching and/or humid in the summer than most of the US, and much warmer in the winter.
The non-coastal regions of the US are more like Eastern Europe where you can get 35 degrees in the summer and -20 in the winter.
Seriously, climate in Netherlands is in no way comparable to most of US.
And even here, you find that the Dutch also instituted the first real central bank[0], which laissez faire folks would tell you lead to panics and recessions.
Tulipmania[1] happened about twenty years later, but I'm open to believing that was a coincidence.
But who wants to listen to that, right?
The newest keynesian variant, modern monetary theory, isn't a "modern" theory of money... it's a theory of modern money systems. These aren't based on gold coinage.
Austrian macro is centred around the idea that interest rates are prices. Some people have a desire to consume now. Others have a desire to consume later, interest rates are the price they negotiate. No second order effects. No money supply. No interest in where money comes from. No money, in fact. Money is just a trade good.
There were two must-do-somethings" that "killed" Austrian economics, outside of dissident goldbug circles: the great depression & WW2. Their answer to "how do we win the war?" was "we can't, not enough money." The same applied to "how do we rebuild europe & japan?"
Meanwhile, post war economists were aware of these theories. Yet, they often observed "non clearing markets" in the form of unemployment in places where Austrian economics reckons there shouldn't exist.
Implement... different story. Actual skepticism is a conundrum... notoriously difficult to adhere to. The tables turn when you need to defend your price theory of business cycles... you need to claim to know things.
This pamphlet is as good an example as any. It claims knowledge of what lies down which path... in a way that sounds quite naive to a modern reader, no different than the peers he was chastising.
Austrians were as loud and involved as anyone in building institutions.
Personally I think all economists should study history and psychology, but they prefer their fancy numbers.
As a Dutch person, it would be easy to feel a bit flattered and proud. But instead I'm gonna have to take the modest pill and call bullshit. Building is sort of my hobby, I've stripped (to the studs if it were American ;)) down and rebuilt my house in the past 4 years, and while doing so have watched endless youtube videos of builders, many american.
From my perspective there's only one thing in that paragraph that's correct, and that's that in the US you wouldn't trust the water authority to keep the water level. That's not even an American thing per se (although the US is infamous for aspiring to be independent from government), but mostly a Dutch thing. My house is 5 meter below sea level, a window being 6" above the water line is just not a big deal when you've got that in mind. It's not just I'm at risk of a moldy basement. If the government fucks up, everything would be under meters of water.
The U.S.'s has excellent building quality and whenever something is not up to snuff locally you just import from Germany. The U.S. is also not as homogenous as the tiny Netherlands are, you could have a cardboard sheathed house in Texas, or you could have a thick walled brownstone house in Chicago.
Also we don't have as many talented tradespeople. Our education system is geared towards getting people to work desk jobs, I think the U.S. system spreads the talent a little bit more evenly. In the past 30 years or so, we've mostly been building cookie cutter houses, the only thing you could say is we've been working on fancier cookie cutters.
Probably unheard of in most other countries, but every building owner in the Netherlands pays what translates to Regional Water Authority tax. That money is used directly to fund the pumps and employees needed to keep the water at the right level. More accurate levels (not needed everywhere) obviously cost more to implement, so the cost varies by region.
a handy list of things we know markets can't solve in societies best interest ( 1: at some specific scale , 2: given a certain moral framework )
-Violence (police , jails)
-Firemen
-Healthcare(/insurance)
-Currency
-Transport / Infrastructure
-schooling
And probably a couple more I missed.
This is a pretty big stretch, considering what it costs the public to provide and the results it achieves for that price.
Thomas Sowell's[0] latest book has a fair amount of evidence to the contrary.
[0]https://en.wikipedia.org/wiki/Charter_Schools_and_Their_Enem...
It's still entirely possible that if done right some of it could work and it's even possible that there already are examples you are just not aware of
To me it's a moot point: it doesn't matter if there's central planning or rule-based federal coordination or whatever. if you have toxic (foreign) capital using housing as investment objects, that'll drive up the price for everyone and create an affordability crisis.
Housing is only the kind of attractive investment vehicle you describe in an environment where the price is artificially inflated by constrained supply from zoning and other regulations.
I promise you, if the price wasn't rising so rapidly and reliably, investors would find other places to park their capital.
Build housing to meet demand and the investors will go elsewhere.
At its basis, its the scarcity of land versus the ever growing demand. The current outlook is that an additional 1 million homes have to be built before 2030.
This mismatch between supply and demand has been here since forever. As such, prizes rise as far as the maximum affordability stretches.
For example, the transition from single income families to double income families has resulted in prices skyrocketing. More generous loan conditions lead to higher prices.
The government may then conclude that young people are priced out of the market, and lower property taxes. This extra room is then immediately used by the market to rise prices even further.
To put some numbers on this: we now crossed the average home price of 400K EUR, or 476.000$. For a young couple both having median salaries, they can't afford it. They'll need a significant cash donation from parents.
If they're lucky to have that, they still need to outbid other buyers by some 30K at least.
And the most bitter thing is that if they overcome all that, they still have a shit house. Smallish, in a busy street, maybe even just a row house, hugging the neighbors.
At 400k that's not a "maybe" but a "definitely" in all the major cities in the Netherlands.
The internet has essentially no regulation. It's firewalls that protect against those who are "liberal" in what they send and voracious in what they accept.
There's some planning, but it's not centralized except in the large-scale walled gardens like mobile service providers and the big cloud providers.
Sort of renders the whole article unnecessary to me.