Tag: history

The grocery and the mountain

When should a community gather up its resources and provide a service to all members? And when should individuals be turned out into the world to navigate on their own dime? These debates cross all levels of government.

Some provisions are accepted as a government thing, like piped water or sewer. Even basic universals like education attract conversation about private options. Roads are sometimes (although truly not very often) toll roads. Bridges are mostly a public venture, as are parks. What takes a good out of private production and places it in the receivership of a bureaucracy?

Fear usually. Police and firefighters are in place to ensure personal safety. The New Deal was to alleviate fears against a repeat of depression era outcomes. When society risks a loss that compels a human response, society steps forward with a safety net.

Mamdani, New York Cities new mayor, sold the people on a fear of escalating grocery prices and thus the need for a government run store. This seems different than when a small community rounds up a helicopter rescue for a mountain climber who ventured up a nearby peak alone and unprepared.

So who gets to pick what there is to fear? Not everyone does this well. Hereโ€™s Mises (from Theory and History)

They recommend some policies, reject others, and do not bother about the effects that must result from the adoption of their suggestions.

This neglect of the effects of policies, whether rejected or recommended, is absurd. For the moralists and the Christian proponents of anticapitalism do not concern themselves with the economic organization of society from sheer caprice. They seek reform of existing conditions because they want to bring about definite effects. What they call the injustice of capitalism is the alleged fact that it causes widespread poverty and destitution. They advocate reforms which, as they expect, will wipe out poverty and destitution. They are therefore, from the point of view of their own valuations and the ends they themselves are eager to attain, inconsistent in referring merely to something which they call the higher standard of justice and morality and ignoring the economic analysis of both capitalism and the anticapitalistic policies. Their terming capitalism unjust and anticapitalistic measures just is quite arbitrary since it has no relation to the effect of each of these sets of economic policies.

Taking over a grocery is sure to fail financially without ensuring any additional food security for those who need it. Itโ€™s a vanity project. Wouldnโ€™t it be like telling the mountaineer that a government representative would need to participate in the planning and execution of his climb? Yet here, the little community bears a disproportionate cost for the climbers’ foolishness.

It seems that the risk to persons and the community happens to various degrees. Whether the risk triggers community involvement has to do with its extreme and the distance between the risky step and all the other steps in between.

London- a late bloomer in the water department

No one in the western world really questions whether water provision is best suited to the public or private spheres. Being hooked up to city water and sewer is unanimously considered a good thing. Was it always that way? Well- no. Londoners purchased water from private suppliers through the end of the nineteenth century.

John Broich gives an excellent history of how the desire for water provision shaped London.

His account tells how secondary cities in the British Isles adopted a municipal water system decades before the great capital on the Thames. In fact, the continued delays in accomplishing this civic feat help exemplify the many facets of interests and the levers in play. There are issues of pollution and health concerns, there are networks of private providers, and the wealthy who buy their way to what they want. There is petty jealousy and the pride of belonging to an international city. And most astonishing, there is no government structure to handle such infrastructure outside of the walls of ancient London.

For provincial water reformers, the principles on which the administration of water was based-as well as the engineering principles on which water provision was based-were meant to make their cities more modern in the sense expressed by Avery, the Birmingham councilor.

“When water is under the control of private companies, the chief desire of the directors is to obtain good dividends,” said a Bradford town councilor in 1852. “When the Town Council possesses the works,” he continued, “their chief object is to make the works instrumental to the promotion of cleanliness, the health, and the comfort of all classes of citizens.”57

Water administration by a directly representative body was to provide an obvious contrast to the commercial companies that made independent decisions about water quality, abundance, and price based on the profit motive.

It is an excellent story depicting the nature of what is public and what is private. For a literary companion piece, consider reading Dickens’s Bleak House.

Mobil Homes

There continue to be mobile home parks across the metro offering one of the most affordable form of housing. The structure is considered a vehicle and licensed as such. The home is anchored on a lot in a mobile home park and rent is due every month in a similar fashion to association dues. People like to talk about tiny homes now. Still, manufactured homes can be reasonably constructed in a factory and meet the same quality and amenities as RV’s, another acceptable form of shelter.

:Here are some current listings and recent sales:

Few mobile home parks rise to the level of civic engagement that can be seen in Landfall Terrace, a community on the eastern side of the metro. As with many good things it starts with its history.

James and Mitzi Olson used to own all of the land in Landfall. They moved here in 1953 into a cottage that was hardly better than a log cabin.ย …The Olsons had lived in a mobile home during World War ll and knew that there was a shortage of affordable housing, so they developed their site into a mobile home park. As it was on the early highway between St. Paul and Hudson, Landfall developed several businesses, including a truck stop, restaurant and nursery, most of which left when Interstate 94 was put through and access became limited.

Often successful things are born out of a basic need of local people. But it is only through nurturing and ongoing maintenance that group projects survive. Especially one a s successful as this.

Landfall is a city in Washington County, Minnesota, United States. The population was 843 at the 2020 census and it is the smallest community in Washington County in terms of area. It lies on the eastern shore of Tanner’s Lake on Interstate 94.

Landfall is an incorporation of a manufactured home community, contributing to its reputation as the most affordable community in the Twin Cities. In 2008 & 2010, the city was named one of the 100 best communities for young people by America’s Promise.

Landfall is one of only two incorporated cities in America that consist primarily of manufactured housing. 

What a grain elevator could say

The grain elevator was the most ubiquitous commercial building in Minnesota’s small and medium towns during the mid to late 1800s.

In most towns in western Minnesota, grain elevators were the dominant feature of the skyline 1837 Treaty | Minnesota DNR. As railroads expanded westward in the 1870s-1880s, grain elevators sprang up along every railroad line to store wheat and other grains before shipping them to Minneapolis and beyond.

This makes perfect sense given Minnesota’s economy at the time. Wheat farming dominated the landscape, and Red Wing held the title as the world’s largest primary wheat market in 1873, exporting 1.8 million bushels valued at more than two million dollars United States v. Sioux Nation of Indians – Wikipedia. Every town with railroad access needed a grain elevator to collect, store, and load farmers’ harvests onto railcars.

Typically, small services would pop up alongside the tall wooden structures. Or an eating and drinking establishment. Sometimes a church was erected down the road a bit. And for decades, the railroad infrastructure supported a node of activity in remote rural areas.

A shift occurred once the interstate system was established in the 1950s. Rail is still most beneficial for long hauls, whereas trucks carry the grain for shorter distances, typically under one hundred miles. With fewer stops, the isolated wooden elevators fell into disrepair. Often they fell for the useful purpose of serving as a training exercise for local firefighters.

The purpose of this short vignette is to show how land uses are tied intimately with public infrastructure. And these types of projects are engaged over long time frames. A slow natural progression of the property from peak usefulness to decline can be led by aging owners, people who can view themselves in a steady state for another decade or more. The insight for the outside observer to understand where in the process a parcel finds itself. And then to implement policy in relation to the receptive impulses of that moment.

When asked about Polanyi’s Double Movement- Claude said:

Polanyi’s Double Movement and the Evolution of Economic Thought

The Household Foundation โ€ข Original containment: In household economies, the tension between acquisition (growth, accumulation) and protection (equitable distribution, waste prevention) operates within manageable, face-to-face relationships โ€ข Natural limits: Family/clan structures provide built-in mechanisms for both encouraging productive activity and preventing destructive excess โ€ข Embedded economics: Economic activity remains subordinated to social relationships and moral obligations

The Great Transformation: Market Economy Emergence โ€ข Dis-embedding: Economic activity becomes separated from social relationships and moral constraints โ€ข Fictitious commodities: Land, labor, and money become treated as market commodities despite not being produced for sale โ€ข Double movement emergence: Society’s protective response to market fundamentalism becomes institutionalized

Evolutionary Responses in Economic Thought

Adam Smith (1776) โ€ข Market optimism: Invisible hand suggests self-interest can serve social good โ€ข Early recognition: Acknowledged moral sentiments and social bonds as necessary counterweights โ€ข Household parallel: Like family moral economy, broader society needs ethical framework alongside market mechanisms

Karl Marx (1867) โ€ข Protective critique: Exposed capitalism’s tendency toward crisis and worker exploitation โ€ข Systemic analysis: Showed how market expansion undermines its own foundations through overproduction and underconsumption โ€ข Double movement insight: Predicted capitalism would generate its own contradictions requiring protective responses

ร‰mile Durkheim (1893) โ€ข Social solidarity: Distinguished mechanical (traditional) from organic (modern) solidarity โ€ข Integration challenge: Modern division of labor requires new forms of social cohesion โ€ข Protective institutions: Professional associations and moral regulation needed to prevent anomie

Rosa Luxemburg (1913) โ€ข Accumulation limits: Capitalism requires constant expansion into non-capitalist areas โ€ข Imperial protection: Advanced economies use state power to secure markets and resources โ€ข Global household: Imperial expansion recreates household-like extraction relationships on world scale

John Maynard Keynes (1936) โ€ข Market failure recognition: Markets alone cannot ensure full employment or stability โ€ข State intervention: Government must provide protective functions through fiscal and monetary policy โ€ข Embedded liberalism: Markets need social and political frameworks to function sustainably

Friedrich Hayek (1944) โ€ข Spontaneous order: Complex economies require market coordination beyond human planning capacity โ€ข Anti-protection warning: Government intervention threatens individual freedom and economic efficiency โ€ข Market fundamentalism: Pure market logic as protection against totalitarian planning

Contemporary Double Movement Tensions

Neoliberal Expansion (1980s-2008) โ€ข Market fundamentalism: Hayek’s vision implemented globally through deregulation and privatization โ€ข Household disruption: Traditional protective mechanisms (unions, welfare states, community institutions) weakened โ€ข Global reach: Market logic penetrates previously protected spheres (education, healthcare, environment)

Protective Responses (2008-present) โ€ข Financial crisis: Market failure triggers protective interventions (bailouts, regulation) โ€ข Populist movements: Political responses to economic dislocation and inequality โ€ข Environmental limits: Climate change forces recognition of growth’s destructive potential โ€ข Digital economy: New forms of commodification (data, attention) generate protective responses

Synthesis: The Persistent Tension

The household analogy reveals how economic thought has grappled with scaling up the balance between acquisition and protection:

โ€ข Smith to Marx: Recognition that market expansion requires moral/social counterweights โ€ข Durkheim to Keynes: Development of institutional mechanisms for social protection โ€ข Hayek’s challenge: Market efficiency versus social protection trade-offs โ€ข Contemporary crisis: Global markets outpacing protective institutions’ capacity

The enduring question: How can societies maintain the household economy’s natural balance between productive growth and protective distribution as economic relationships become increasingly complex and geographically dispersed?

Market Failure was used as the signal– but what now?

In days of yore, there was the market and the state. Two separate spheres of activity coexisted. And when private industry did not come through for the people, in the way they thought it should, market failure was the name given to assign blame. When the market failed, it was up to the state to address the lack of supply in areas such as medical care, poverty alleviation, housing, and the like.

One of economist Tyler Cowen’s first books addresses this trigger for state action in a compilation of thoughts on The Theory of Market Failure: A Critical Examination. But he isn’t convinced. He seems to say that when you look so closely at a tiny segment of a large system, you don’t see anything at all.

Consider externalities, a key signal that the market is merely pushing a problem onto some unsuspecting observer. He claims that (nearly) every single transaction has a positive or negative external effect. And, if you think about it, it’s true. We are social creatures. Although many consumptions are deeply personal, in the end, we always touch the lives of others.

The scope of the externalities/nonexcludability issue is vast. Nearly every concern of economic policy, from environmental considerations to research and development, involves externality problems. No one would claim that every instance of an externality warrants state intervention. There is no doubt, however, that the existence of externalities is one of the most powerful arguments for public sector involvement in the provision of public goods.

This isn’t the proper trigger for government intervention.

What about when the price seems too high, as in housing, or too low, as in wages? Whether a good is mediated through the private or public sector, prices still carry the most valuable form of comparative value information.

As noted earlier, the theory of public goods and externalities implies that if a good is characterized by nonrivalrous consumption, allowing additional individuals to consume it entails zero marginal cost. Demsetz’s arguments (1964; 1970) imply that this is only true in the presence of perfect information. Otherwise, allowing additional individuals to consume a good free of charge results in the abandonment of the price system in that sphere of activity. Since the publication of Hayek 1945, the role of prices in communicating information has been well known. In the provision of public goods as well as private goods, sacrificing such information may entail significant costs.

Prices are the most critical form of encapsulation of what groups of exchangers say about an exchange. We may not always conduct a thorough analysis of prices. That might be where the problem lies.

For instance, the exchange might be telling something vital about a group of people that others are simply not attuned to. People join various clubs throughout their lives. And these associations create structures of value.

The next two selections in section 2 of this volume discuss the nature of local public goods. Because such goods, by definition, can be provided to only a segment of a nation or community, determining which individuals will receive them becomes part of the economic problem. Once club or community membership becomes endogenous, many of Samuelson’s conclusions do not hold.

When people leave or join a club, when they exit or stay loyal, they impact how much of a surcharge the group of people in the club can charge.

The Tiebout model avoids the preference revelation problem; an individual’s preferences are revealed by his choice of location. It also avoids the free-rider problem; those who choose to belong to a given community are subject to the taxes or user fรฉes that finance the provision of goods. Nor is pricing inefficiency a problem. If an individual is inefficiently excluded from the use of a public good or service, he can simply move to a community where that exclusion is not practiced.

The introduction written by Tyler Cowen is comprehensive. To the engaged observer, he dispels the dichotomy between industry and the state. There’s something pluristic out there. It’s big, messy, and complicated. It dovetails into many of the things people talk about under the titular of institutions. But it has structure– once you stand back and take a look.

That’s the project of the moment: a unified theory of price.

Tolstoy, and the X side of warfare

A topic under examination that runs through War and Peace is the analysis of warfare. What were the keys to Napoleonโ€™s success? The size of the army, or the genius of the man? Or something else.

In Part 15, chapter II Tolstoys starts us we thinking in terms of individual agents.

ONE OF THE MOSt conspicuous and advantageous departures from the so-called rules of warfare is the independent action of men acting separately against men huddled together in a mass. Such independent activity is always seen in a war that assumes a national character.

The author then tells us the accepted view is that it is about counting soldiers, guns, and supplies.

Military science assumes that the relative strength of forces is identical with their numerical proportions. Military science maintains that the greater the number of soldiers, the greater their strength.

Butโ€ฆ

Military science, seeing in history an immense number of examples in which the mass of an army does not correspond with its force.

And thus Tolstoy suggests there is something else. He wants to be scientific about this thing. He calls it X.

One has but to renounce the false view that glorifies the effect of the activity of the heroes of history in warfare in order to discover this unknown quantity, x.

X is the spirit of the army, the greater or less desire to fight and to face dangers on the part of all the men composing the army, which is quite apart from the question whether they are fighting under leaders of genius or not, with cudgel or with guns that fire thirty times a minute.

It seems that what is important here is that soldiering with X is something different than soldiering in general. To fulfill a duty with X is not the same as a run-of-the-mill fulfillment of the same task. It does not quantify in the same way or lead to the same results. Labor with a purpose or a shared ambition deserves a subscript of x.

Beyond the Numbers: The Hidden Social Triggers Behind Arizonaโ€™s SB 1070

I was at a family gathering this week in Montana, and somehow the conversation landed on the 2010 immigration controversy in Phoenix. Following a period of lax immigration enforcement, the people of the Grand Canyon State rose up and said, “No more.” They passed the most restrictive immigration legislation, SB 1070. While several factors are credited for triggering the political backlash, the perception of increased crime is among the leading ones cited. Opponents of enforcement are quick to point out that, on paper, crime was steady. But does that tell the whole story?

While official statistics showed no dramatic rise in crime prior to the passage of Arizonaโ€™s SB 1070, itโ€™s a mistake to assume that public concern over disorder was baseless. The real story lies in the rise of unreported, low-level disruptions and the erosion of civic reciprocityโ€”factors that rarely appear in data but deeply affect social life.

In neighborhoods experiencing rapid demographic change, residents noticed shifts in everyday norms: unfamiliar languages, informal labor markets, overcrowded housing, or changes in how public space was used. These behaviors werenโ€™t necessarily illegal, but they violated shared expectations around cleanliness, quiet, parenting, or neighborliness. What was being felt wasnโ€™t crime in the strict senseโ€”it was a breakdown in social trust.

At the same time, public institutions like schools and emergency rooms were absorbing new burdens, often without visible new funding. To some longtime residents, this looked like one-way civic obligation: they paid in, others drew out. Whether or not that was accurate, it felt unfair, especially in the wake of the 2008 recession. That resentment built a political appetite for laws like SB 1070โ€”not just to target undocumented immigrants, but to restore boundaries between insiders and outsiders, contributors and perceived free riders.

Support for SB 1070 was less about a spike in violent crime and more about a sense of dissolving norms and a loss of control. The law functioned as a signal: that the state would step in to defend social order where federal and informal mechanisms had, in many peopleโ€™s eyes, failed.

About Buchanan, faith in people, and self-governance

Me: It sounds like he (James M Buchanan) wants to believe in self-governance, yet he doesnโ€™t have faith in the distribution of the groupings, hence โ€˜free ridingโ€™, so in the end he supports the cohesion of the state after all.

Grok:

Your observation captures a tension in James M. Buchananโ€™s work thatโ€™s worth unpacking. Youโ€™re suggesting that while Buchanan champions self-governance and individual liberty, his concern about free-riding and coordination problems leads him to rely on formal institutional structures, which might seem to endorse the cohesion of the stateโ€”potentially contradicting his critique of the organismic view. Letโ€™s explore this interpretation, addressing whether Buchananโ€™s focus on institutions implies support for state cohesion and how it aligns with his belief in self-governance. Iโ€™ll keep the response concise yet thorough, tying it to your previous questions about the organismic concept and group cooperation.

Buchananโ€™s Commitment to Self-Governance

Buchanan, a classical liberal and founder of public choice theory, strongly advocates for self-governance, meaning individuals should have maximum control over their choices and the rules governing their interactions. His rejection of the organismic conceptโ€”where collectives like โ€œthe stateโ€ or โ€œsocietyโ€ are treated as unified entities with their own goalsโ€”stems from his belief that only individuals have preferences and agency. He envisions governance as a system of voluntary agreements among individuals, not top-down control by a cohesive state. Key points:

โ€ข In The Calculus of Consent (1962, with Gordon Tullock), Buchanan proposes that political systems should emerge from unanimous or near-unanimous consent at the constitutional level, where individuals agree on rules for collective decision-making. This reflects self-governance, as the stateโ€™s authority derives from individual agreement, not an inherent collective will.

โ€ข His concept of โ€œpolitics as exchangeโ€ sees government as a mechanism for individuals to cooperate for mutual benefit (e.g., providing public goods like roads), not as a monolithic entity imposing order. This contrasts with organismic views that assume the state naturally serves a unified โ€œpublic interest.โ€

The Free-Rider Problem and Institutional Needs

Your point about Buchananโ€™s lack of faith in the โ€œdistribution of the groupingsโ€ (i.e., how individuals naturally organize) and his concern about free-riding is spot-on. Buchanan recognizes that self-governance faces challenges in large groups due to:

โ€ข Free-Riding: Individuals may benefit from collective goods (e.g., clean air, defense) without contributing, undermining cooperation. For example, someone might enjoy a community-funded park without paying taxes if contributions are voluntary.

โ€ข Coordination Problems: Diverse preferences and large group sizes make spontaneous cooperation difficult without agreed-upon rules. Informal norms work better in small, homogeneous groups but falter at scale.

To address these, Buchanan emphasizes formal institutions, particularly constitutional rules, to facilitate cooperation. In The Limits of Liberty (1975), he argues that a social contractโ€”a set of rules individuals consent toโ€”prevents free-riding and ensures fair contributions to collective goods. For instance, a tax system with constitutional legitimacy compels everyone to pay for public goods, solving the free-rider issue while respecting individual agreement to the rules.

Does this mean Buchanan lacks faith in self-governance? Not quite. He believes self-governance is possible but requires designed structures to align individual incentives with collective outcomes. His focus on constitutions is about enabling individuals to govern themselves through agreed-upon rules, not deferring to a centralized state.

Does Buchanan Support State Cohesion?

Your suggestion that Buchananโ€™s reliance on institutions implies support for the โ€œcohesion of the stateโ€ is a nuanced critique. Letโ€™s break it down:

โ€ข Not State Cohesion in the Organismic Sense: Buchanan explicitly rejects the idea of the state as a cohesive, sentient entity with its own goals (the organismic view). He sees the state as a collection of individualsโ€”politicians, voters, bureaucratsโ€”each pursuing their own interests. His work in public choice theory, especially in The Calculus of Consent, models government as a system of checks and balances to prevent it from becoming a monolithic, coercive entity. For example, he warns against a โ€œpredatory stateโ€ that exploits citizens under the guise of public interest.

โ€ข Institutions as Tools, Not State Worship: Buchananโ€™s support for formal governance is about creating minimal, consensual frameworks to enable cooperation, not endorsing a strong, centralized state. His ideal is a limited government constrained by constitutional rules that individuals have agreed to, ensuring that state actions reflect individual preferences rather than a supposed collective will. For instance, his admiration for Knut Wicksellโ€™s principle of โ€œjust taxationโ€ requires taxes to be tied to benefits and approved by near-unanimous consent, minimizing state overreach.

โ€ข Tension in Practice: Youโ€™re right that Buchananโ€™s reliance on formal institutions could, in practice, lead to a state with some degree of cohesion, as enforcing rules (e.g., tax collection) requires authority. Critics of Buchanan argue that his constitutional framework assumes a level of rational agreement thatโ€™s hard to achieve, and the resulting institutions might take on a life of their own, resembling the cohesive state he critiques. However, Buchanan would counter that this risk is mitigated by designing rules that prioritize individual liberty and limit government power.

Reconciling Self-Governance and Institutional Reliance

Buchananโ€™s position is that self-governance is not spontaneous but requires deliberate institutional design to succeed at scale. He doesnโ€™t distrust individualsโ€™ ability to cooperate but recognizes practical barriers like free-riding and coordination costs. His solution is a two-level governance framework:

1. Constitutional Level: Individuals agree on rules (e.g., voting systems, tax policies) to structure cooperation. This is self-governance in action, as the rules reflect individual consent.

2. Post-Constitutional Level: Within these rules, individuals make choices (e.g., voting, paying taxes) that produce collective outcomes. Institutions enforce these rules to prevent free-riding, but their legitimacy comes from prior agreement, not state supremacy.

This framework contrasts with the organismic view, which might assume society naturally coalesces around shared goals without needing explicit rules. Buchananโ€™s skepticism of such assumptions drives his focus on institutions, but he remains committed to individual liberty and minimal state intervention.

Addressing Your Critique

Youโ€™re correct that Buchananโ€™s concern about free-riding and group coordination could seem to undermine his faith in pure self-governance, pushing him toward formal institutions that resemble state cohesion. However, he would argue that these institutions are tools of self-governance, not endorsements of a cohesive state. The stateโ€™s role is to enforce rules individuals have chosen, not to act as an independent entity. His ideal is a decentralized system where individuals retain maximum control, but he acknowledges that some formal structure is necessary to make self-governance scalable and sustainable.

Conclusion

Buchanan believes in self-governance but sees formal institutions, particularly constitutional rules, as essential to overcome free-riding and coordination challenges in large groups. This doesnโ€™t mean he supports state cohesion in the organismic sense; rather, he advocates for a limited, consensual state that enforces individual-agreed rules to enable cooperation. His focus on institutions reflects a pragmatic solution to make self-governance work, not a retreat to statism.

Warfare commitment 200 years gone by

After reading Anna Karenina last August, our reading group decided to tackle War and Peace in 2025. It’s a behemoth. But with all the war talk, I was curious to know what percentage of the male population was tromping across Europe and how many young men were left for other pursuits closer to home. It turns out a lot- although Chat is quick to say that the data is complex to pinpoint due to inconsistent records.

Summary

โ€ข France: ~50โ€“60% of males aged 18โ€“55 served, driven by universal conscription and mass mobilization (2โ€“2.4 million from 3.6โ€“4 million).

โ€ข Russia: ~20โ€“30% served, with serf-based levies mobilizing 1โ€“1.5 million from 3.5โ€“5 million, supplemented by militias in 1812.

โ€ข Austria: ~40โ€“60% served, with 1โ€“1.5 million mobilized from 2โ€“2.6 million, using selective conscription.

โ€ข Prussia: ~40โ€“65% served, with 500,000โ€“800,000 mobilized from 1โ€“1.25 million, increasing after 1813 reforms.

โ€ข Britain: ~25โ€“40% served, with 400,000โ€“500,000 mobilized from 1.2โ€“1.5 million, relying on volunteers and naval press-ganging.

In the Context of War and Peace

The novel reflects these varying conscription rates through its portrayal of Russian serf-soldiers and officers like Andrei and Nikolai, contrasted with the French Grande Armรฉeโ€™s mass-conscripted forces. Russiaโ€™s lower percentage reflects its selective serf levies, while Franceโ€™s high rate underscores the levรฉe en masseโ€™s impact, as seen in the exhausted French troops during the 1812 retreat. The differences in mobilization rates highlight the social and military dynamics Tolstoy explores, with Russiaโ€™s feudal system and Franceโ€™s revolutionary conscription shaping their respective armies.

Note: These percentages are estimates based on historical data and demographic assumptions, as precise age-specific military participation rates are not fully documented. Variations across campaigns and years (e.g., 1812โ€“1814 being the deadliest) affect the figures.

Conscription is a type of forced labor. A citizen’s time is donated to the public good in exchange for some compensation (or at least room and board for the serfs). One can see why, in two hundred years, boots-on-the-ground warfare is unpopular. Too many human hours could be devoted to other public goods or to earning a wage in the commercial market. The opportunities to leverage capital even further should the young men choose to invest in education or learn a trade.

War also produces wounded. This can also shift the stage-of-life abilities of a young, able-bodied male. The labor costs of war are too dear.

Compare, Contrast, Visualize

This is an excerpt from my working paper, which examines how contemporary economic realities challenge conventional price formation models. Traditional price theory, rooted in neoclassical equilibrium models, struggles to explain modern markets characterized by digital platforms, behavioral anomalies, and network effects. Rather than viewing prices solely as equilibrium outcomes, this section explores price as an information system and coordination mechanism shaped by institutional contexts and evolutionary market processes, proposing alternative approaches that better capture the dynamic nature of pricing in today’s economy.

B. Comparative Analysis: Evaluating Theoretical Frameworks

This section provides a systematic comparative analysis of the proposed philosophical framework against conventional economic approaches to price theory. By examining how different theoretical perspectives conceptualize the relationship between price mechanisms and social dimensions, we can better understand both the limitations of current approaches and the potential advantages of the proposed integrated framework.

Conventional Economic Frameworks: The Separation Paradigm

Mainstream economic theory has predominantly operated within what might be termed a “separation paradigm” that artificially divorces economic processes from their social contexts. This approach has taken several forms, each with distinct philosophical underpinnings but sharing a common tendency to externalize social dimensions from core economic processes.

The neoclassical framework, beginning with Marshall (1890/1920) and formalized by Samuelson (1947), represents the most influential expression of this separation paradigm. This approach treats social costs and benefits as “externalities”โ€”phenomena that exist outside the market mechanism and require correction through policy intervention. As Pigou (1920) argued, these external effects constitute market failures that prevent the price system from achieving social optimality. While this framework recognizes the existence of social dimensions, it philosophically positions them as external to the fundamental operation of price mechanisms.

The public choice tradition, exemplified by Buchanan and Tullock (1962), maintains this separation while focusing on the strategic calculations of political actors. As Tullock (1965) argues in “The Politics of Bureaucracy,” individuals navigate institutional structures to advance their interests, with social dimensions treated as constraints within a fundamentally individualistic calculus. This approach offers valuable insights into how individuals respond to institutional incentives but maintains the philosophical separation between private calculations and social contexts.

The social capital literature, following its evolution from Loury (1976) through Coleman (1988) to Putnam (1993), increasingly adopted what might be termed an “instrumental network” approach. This perspective treats social connections as resources that individuals can access and deploy strategically, maintaining a philosophical separation between the autonomous individual and their social networks. While recognizing the importance of social factors, this approach treats them as external assets rather than constitutive elements of economic valuation itself.

The Integrated Framework: Embeddedness and Unified Valuation

In contrast to these separation paradigms, the proposed philosophical framework offers what might be termed an “integration paradigm” that recognizes price as inherently incorporating both private and social dimensions of value. This comparative analysis highlights several key distinctions:

1. Outcomes vs. Processes

Conventional frameworks focus predominantly on outcomesโ€”the results of market transactions as measured by efficiency or utility maximization. The Pigouvian approach to externalities exemplifies this orientation, focusing on the divergence between private and social outcomes while giving limited attention to the processes through which valuations emerge. Similarly, Coase’s (1960) analysis, while introducing the importance of transaction costs, maintains a focus on the efficient allocation of resources as the primary outcome of concern.

The proposed framework, in contrast, emphasizes processesโ€”the embedded social practices through which valuations emerge and evolve. Drawing on Zelizer’s (2012) analysis of how economic practices constitute social relationships, this approach recognizes that price mechanisms do not simply produce outcomes but actively construct social meanings and relationships. For example, the organic food market is understood not merely as generating a price premium that reflects environmental benefits but as constituting a set of social relationships and meanings around food production and consumption.

This distinction becomes particularly evident in analyzing wind turbine effects on property values. Where conventional frameworks focus on measuring the divergence between private and social costs as an outcome, the proposed framework examines how property valuations emerge through processes of social negotiation that inherently incorporate both dimensions. The hedonic price model becomes not merely a method for measuring externalities but a window into how social values become embedded in market valuations through processes of negotiation.

2. Calculation vs. Negotiation

Conventional frameworks conceptualize price formation primarily as a process of calculationโ€”the aggregation of individual utility functions or the balancing of marginal costs and benefits. As Becker (1976) argues, this approach extends the calculative paradigm to social domains by treating even non-market behaviors as the result of rational calculation. While powerful in its analytical clarity, this approach imposes an artificial separation between the calculating individual and the social context in which calculation occurs.

The proposed framework, drawing on Callon’s (1998) analysis of market devices, understands price formation as a process of negotiationโ€”the ongoing social construction of value through interaction. This perspective recognizes that prices do not simply reflect pre-existing preferences but actively constitute relationships and meanings. For instance, when a business owner decides to provide flu vaccinations, they are not merely calculating financial costs and benefits but negotiating a complex set of relationships among employees, customers, and the broader community.

This distinction helps explain why conventional approaches often struggle to account for phenomena like voluntary green premiums or corporate social responsibility initiatives. These practices make limited sense within a purely calculative framework but become comprehensible when understood as negotiations of meaning and relationship that inherently incorporate both private and social dimensions of value.

3. Autonomy vs. Interdependence

Conventional frameworks generally assume economic actors as fundamentally autonomousโ€”making decisions independently based on their preferences and constraints. This philosophical stance, most explicitly articulated in Arrow’s (1951) impossibility theorem, treats social choice as the aggregation of independent individual preferences rather than the expression of interdependent social relationships. Even when acknowledging social influences, this approach maintains a conceptual separation between the autonomous individual and their social environment.

The proposed framework recognizes economic actors as fundamentally interdependentโ€”embedded within networks of relationship that constitute both their understanding of value and their capacity for action. Drawing on Davis’s (2003) critique of the “separative self” in economics, this approach understands economic decisions as emerging from interconnected patterns of relationship rather than isolated individual calculations. When consumers pay premium prices for organic products, they are not making autonomous decisions but acting within interdependent networks of meaning and relationship that shape their understanding of value itself.

This distinction helps explain why conventional approaches often treat environmental values or social justice concerns as external to economic valuationโ€”they maintain a philosophical commitment to autonomous individuals whose interdependence is treated as secondary rather than constitutive. The proposed framework reverses this priority, recognizing interdependence as the fundamental condition from which economic valuations emerge.

4. Strategy vs. Meaning

Conventional frameworks typically conceptualize economic behavior as strategicโ€”actors making choices to advance their interests within given constraints. This understanding, exemplified in game-theoretic approaches to externalities (Dasgupta, 1982), treats social considerations as strategic factors within an essentially competitive calculus. While offering valuable insights into how individuals respond to incentives, this approach tends to reduce social dimensions to strategic considerations rather than recognizing them as constitutive of meaning itself.

The proposed framework understands economic behavior as inherently meaningfulโ€”constituting social relationships and identities through exchange. Drawing on Bruner’s (1990) concept of meaning-making, this approach recognizes that economic actions are not merely strategic moves but expressions of meaning that constitute social worlds. When a business owner provides flu vaccinations, they are not simply making a strategic calculation but participating in the construction of meaningful workplace relationships and identities.

This distinction helps explain why conventional approaches often struggle to account for the emotional and symbolic dimensions of economic behaviorโ€”they maintain a philosophical commitment to strategic rationality that marginalizes considerations of meaning. The proposed framework incorporates these dimensions as intrinsic to economic valuation rather than treating them as irrational anomalies or external constraints.

Comparative Empirical Implications

These philosophical distinctions generate substantively different empirical expectations and interpretations. Where conventional frameworks predict that social costs will appear as externalities requiring correction, the proposed framework predicts that market participants will often incorporate social dimensions into price mechanisms through their embedded decision-making processes.

The hedonic pricing model provides a useful comparative lens. Conventional approaches interpret price differentials near wind turbines as evidence of uncompensated externalities, emphasizing the divergence between private and social costs. The proposed framework interprets these same differentials as evidence that market participants are already incorporating social dimensions into their valuations, demonstrating the integrated nature of price mechanisms rather than their failure.

Similarly, the willingness of consumers to pay premium prices for environmentally friendly products receives different interpretations. Conventional frameworks treat this as either an anomaly requiring explanation through modified preference functions or as evidence of externality internalization through separate transactions. The proposed framework recognizes this behavior as the natural expression of embedded valuations that inherently incorporate both private and social dimensions.

Integration with Existing Economic Insights

While the proposed framework challenges fundamental aspects of conventional economic theory, it does not require rejecting valuable insights from existing approaches. Rather, it offers a philosophical foundation for integrating these insights within a more comprehensive understanding of how price mechanisms operate.

The framework incorporates Coase’s (1960) insight that transaction costs matter but extends this recognition to the social relationships that constitute economic exchange rather than treating them as external constraints. It integrates Arrow’s (1963) analysis of information asymmetries but recognizes that information itself is socially embedded rather than objectively given. It acknowledges Williamson’s (1975) focus on institutional structures but understands these structures as constitutive of economic behavior rather than merely constraining it.

This integrative approach offers potential pathways for resolving persistent theoretical tensions in economics. For example, the divide between behavioral economics’ empirical findings and neoclassical theoretical foundations becomes less problematic when economic behavior is understood as inherently embedded rather than anomalously constrained. Similarly, the tension between institutional and individual-focused approaches finds resolution in recognizing institutions as constitutive of rather than external to individual decision-making.

Comparative Philosophical Robustness

A final dimension of comparative analysis concerns philosophical robustnessโ€”the capacity of theoretical frameworks to accommodate complex realities without artificial simplification or ad hoc modifications. Conventional frameworks have demonstrated remarkable flexibility in addressing new empirical findings, but often at the cost of theoretical coherence. As anomalies emergeโ€”from voluntary carbon offsets to corporate social responsibilityโ€”these frameworks typically accommodate them through preference modifications or externality redefinitions that preserve the underlying separation paradigm.

The proposed framework offers greater philosophical robustness by recognizing the inherent integration of private and social dimensions in economic valuation. Rather than treating phenomena like green premiums or ethical investing as exceptions requiring special explanation, this approach understands them as natural expressions of the embedded nature of economic decision-making. This philosophical coherence allows the framework to accommodate diverse empirical realities without sacrificing theoretical integrity.

In summary, this comparative analysis demonstrates that the proposed philosophical framework offers substantive advantages over conventional approaches in understanding how social dimensions operate within price mechanisms. By shifting from outcomes to processes, calculation to negotiation, autonomy to interdependence, and strategy to meaning, this framework provides a more comprehensive and coherent account of how prices already incorporate social costs and benefitsโ€”not as external corrections but as intrinsic components of economic valuation itself.

Local Theater Facts

We just saw a super adaptation of Cabaret at the Guthrie Theater.

So I asked Grok for some observation about our theater community.

Yes, Minneapolis is widely recognized for its vibrant and robust theater culture, often considered one of the most significant in the United States, second only to New York City in terms of per capita theater attendance. The cityโ€™s theater scene is characterized by a mix of world-class professional theaters, diverse community and nonprofit theaters, and historic venues, supported by strong public funding and a theater-savvy audience. Below, I provide a detailed analysis of Minneapolisโ€™s theater culture, incorporating relevant insights from the provided web results and tying in governance aspects (e.g., government capacity to support cultural infrastructure) The response includes quantifiable outcomes where possible to align with your interest in measurable metrics.

Overview of Minneapolisโ€™s Theater Culture

Minneapolis, along with its Twin Cities neighbor St. Paul, boasts a thriving theater ecosystem that includes:

  • Major Professional Theaters: Iconic venues like the Guthrie Theater, Ordway Center for the Performing Arts, and Hennepin Artsโ€™ historic theaters (Orpheum, State, and Pantages) host Broadway tours, world-class productions, and original works.
  • Diverse and Inclusive Theaters: Companies like Penumbra Theatre (Black-focused), Theater Mu (Asian American), and Mixed Blood Theatre prioritize underrepresented voices, enhancing cultural richness.
  • Community and Nonprofit Theaters: Smaller venues like Jungle Theater, Theater Lattรฉ Da, and Childrenโ€™s Theatre Company cater to niche audiences, including young people and local communities.
  • Independent Movie Theaters: Venues like Riverview Theater and Parkway Theater blend cinema with live performances, adding to the cultural fabric.
  • Festivals and Events: The Minnesota Fringe Festival and events like Art-a-Whirl showcase experimental and local talent, drawing diverse audiences.

According to Amazing MN by Lee Lynch, cited in Meet Minneapolis, โ€œOn a per capita basis, the Twin Cities are second only to NYC in number of theater tickets soldโ€ (Pollstar). This highlights Minneapolisโ€™s exceptional theater attendance relative to its population of approximately 425,000 (2023 estimate). In 2022, U.S. nonprofit theaters, many concentrated in Minneapolis, had 16 million attendees, with the cityโ€™s theaters contributing significantly.

Key Features of Minneapolisโ€™s Theater Culture

  1. Major Venues and Their Impact:
    • Guthrie Theater: Located at 818 South 2nd Street, the Guthrie is a cultural landmark designed by Jean Nouvel, featuring three performance spaces and hosting everything from Shakespeare to modern masterpieces. It attracts national attention, with popular shows often selling out. Its 2025โ€“2026 season includes productions like Cabaret, noted for its โ€œexplosive and dazzlingโ€ quality. The Guthrieโ€™s economic impact includes millions in annual revenue from ticket sales and tourism.
    • Hennepin Theatre District: Comprising the Orpheum (2,579 seats), State (2,181 seats), and Pantages (900 seats), these historic theaters, built between 1916 and 1921, host Broadway tours, concerts, and comedy. The Orpheum, restored in 1993 for $10 million, premiered shows like Disneyโ€™s The Lion King. Hennepin Arts, a nonprofit, manages these venues, ensuring accessibility through open booking.
    • Ordway Center for the Performing Arts: Located in St. Paul, itโ€™s home to the Minnesota Opera and Saint Paul Chamber Orchestra, hosting Broadway tours and original productions. It contributes to the Twin Citiesโ€™ reputation as a premier arts center.
    • Childrenโ€™s Theatre Company (CTC): The nationโ€™s largest and most acclaimed theater for young audiences, CTC won the Tony Award for Best Regional Theater. It serves preschoolers to teens, premiering works like A Year with Frog and Toad.
  2. Diverse and Inclusive Theaters:
    • Penumbra Theatre: Founded in 1976, itโ€™s one of only three professional African American theaters in the U.S. with a full season, focusing on the African-American experience. It also offers educational programs and equity trainings.
    • Theater Mu: The second-largest Asian American theater organization in the U.S., Theater Mu produces works celebrating AAPI stories, such as SIXPACK, a play about Hmong volleyball culture. It fosters community through performances and student ensembles.
    • Mixed Blood Theatre: Founded in 1976, it emphasizes inclusivity, featuring disabled, trans, Somali, and Latinx artists. It aims to make theater accessible to marginalized communities.
    • Ten Thousand Things: This company brings theater to underserved audiences (e.g., homeless shelters, correctional facilities) by performing in simple settings with lights on, ensuring inclusivity.
    • Jungle Theater: Known for gender inclusivity and diverse casts, it produces new works like SIXPACK and supports local playwrights. Its 2019โ€“2020 season featured all-female directors and/or playwrights.
  3. Independent and Community Theaters:
    • Smaller venues like Theater Lattรฉ Da (Northeast Minneapolis) focus on musical theater, winning national awards for innovative productions.
    • The Parkway Theater, a 1930s art deco venue, combines films with live performances, hosting themed movie nights and comedy events. Tickets range from $9โ€“$12, making it accessible.
    • Theatre in the Round, operating since 1952, offers affordable tickets and community-driven productions.
    • The Southern Theater and Illusion Theater focus on experimental and socially driven works, often touring to schools and communities.
  4. Public Funding and Government Capacity:
    • Minnesota leads the U.S. in per capita public arts funding, spending $9.62 per person in 2024, enabling theaters to thrive in smaller population bases. Strong public funding reduces the population needed to sustain theaters, as subsidies offset operational costs.
    • The Minnesota State Arts Board provides operating support grants, funded by legislative appropriations, which Hennepin Arts and other organizations utilize to maintain historic venues and support new works.
    • Rothsteinโ€™s Impartiality Index is relevant here, as Minnesotaโ€™s equitable distribution of arts funding ensures diverse theaters (e.g., Penumbra, Theater Mu) receive support, fostering inclusivity and cultural vitality.
  5. Audience Engagement and Economic Impact:
    • Minneapolisโ€™s theater scene draws 16 million annual attendees to nonprofit theaters nationwide, with the Twin Cities contributing a significant share. The Guthrie alone generates millions in ticket sales and tourism revenue, with shows like Cabaret attracting diverse audiences.
    • The cityโ€™s theaters are known for standing ovations, reflecting a โ€œtheater-savvyโ€ audience, as noted by performer Betty Buckley at the Orpheum.
    • The economic impact includes job creation (e.g., actors, technicians, front-of-house staff) and tourism, with visitors spending on dining and lodging near venues like the Guthrie, located in the Mill District.

Quantifiable Outcomes

Drawing on your interest in quantifiable outcomes and scholars like Kaufmann, Rothstein, and Muralidharan:

  • Attendance Metrics:
    • Nonprofit theaters in the U.S. had 16 million attendees in 2022, with Minneapolisโ€™s theaters (e.g., Guthrie, CTC) contributing significantly. For example, the Guthrieโ€™s three stages host ~400,000 attendees annually across 100โ€“150 performances.
    • The Orpheumโ€™s opening week in 1921 drew 70,000 guests, and modern Broadway tours attract 2,000โ€“2,500 per show.
  • Economic Impact:
    • Minnesotaโ€™s theater market is worth $9 billion, with ~4,000 theater businesses, many in Minneapolis. This reflects Northโ€™s concept of institutional efficiency, as theaters drive economic activity through contracts and tourism.
    • The Guthrie and Hennepin Arts venues generate millions in ticket sales and local spending (e.g., $15 parking at Riverfront Ramp, dining at nearby restaurants like Fogo de Chao).
  • Public Funding Efficiency:
    • Minnesotaโ€™s $9.62 per capita arts funding (highest in the U.S.) supports theaters in populations as small as 20,000โ€“50,000, compared to 50,000โ€“100,000 elsewhere, aligning with Kaufmann and Kraayโ€™s Government Effectiveness (high scores enable cultural infrastructure).
    • Rothsteinโ€™s Impartiality Index suggests Minnesotaโ€™s equitable funding allocation (e.g., to Penumbra, Theater Mu) ensures diverse theaters thrive, with measurable outcomes like sold-out runs (e.g., Interactโ€™s Hot Funky Butt Jazz).
  • Service Delivery Metrics (Muralidharanโ€™s lens):
    • Efficient bureaucracies streamline permitting and funding, reducing operational costs for theaters. For example, the Minneapolis Community Development Agencyโ€™s purchase and restoration of the Orpheum in 1988 enabled large-scale productions, boosting attendance and revenue.

Population Base and Theater Sustainability in Minneapolis

Your earlier question about the population needed to support a theater is highly relevant here. Minneapolisโ€™s population of ~425,000, combined with the Twin Cities metro area (~3.7 million), easily supports its large theater culture. However:

  • Smaller Theaters: Community theaters like Jungle or Theatre in the Round can thrive with 5,000โ€“20,000 people in their catchment area, especially with public funding. Minnesotaโ€™s $9.62 per capita arts spending lowers this threshold compared to less-funded regions.
  • Major Theaters: The Guthrie and Orpheum require 50,000โ€“200,000 to fill their 2,000+ seats regularly, but Minneapolisโ€™s metro area and tourism (e.g., near Stone Arch Bridge, U.S. Bank Stadium) ensure viability.
  • Independent Movie Theaters: Venues like Riverview or Parkway need ~10,000โ€“20,000 in their immediate area (3โ€“5-mile radius) but benefit from Minneapolisโ€™s cultural draw and niche programming (e.g., cult classics, sing-alongs).

The cityโ€™s strong government capacity, as measured by Kaufmann and Kraayโ€™s Government Effectiveness Index, enables subsidies and infrastructure (e.g., skyway access to Orpheum and State Theaters), reducing the population needed compared to less-supported regions.

Why Minneapolis Stands Out

  • Historical Investment: Minneapolis has restored historic theaters (e.g., Orpheum, State, Pantages) since the 1980s, with public-private partnerships ensuring longevity. The Minneapolis Plan for Arts and Culture, updated regularly, formalizes support for venues like the Northeast Arts District.
  • Cultural Diversity: Theaters like Penumbra, Theater Mu, and Mixed Blood reflect Minneapolisโ€™s commitment to inclusivity, aligning with Rothsteinโ€™s emphasis on impartial governance to support marginalized communities.
  • Audience Engagement: Posts on X highlight Minneapolisโ€™s โ€œwarm, theatre-savvyโ€ audience, with standing ovations common and performers like Betty Buckley noting the cityโ€™s enthusiasm.
  • National Recognition: Minneapolis is the third-largest theater market in the U.S., behind New York and Chicago, with over 400 stages across Minnesota. The Twin Citiesโ€™ reputation as a โ€œpremier arts centerโ€ is bolstered by awards (e.g., CTCโ€™s Tony, Theater Lattรฉ Daโ€™s Drama Desk).

Challenges and Considerations

  • Competition: Streaming services and nearby venues (e.g., St. Paulโ€™s Ordway) split audiences, requiring theaters to diversify (e.g., Parkwayโ€™s live events, Guthrieโ€™s community programming).
  • Gentrification: The Warehouse Districtโ€™s rising rents in the 1980sโ€“1990s displaced some artists, though areas like Northeast Minneapolis remain vibrant arts hubs.
  • Economic Viability: Smaller theaters rely on donations and grants (e.g., Jungle Theaterโ€™s community funding model), while larger venues need consistent attendance to cover high production costs.

Conclusion

Minneapolis is undeniably known for its large and vibrant theater culture, rivaling major U.S. cities on a per capita basis. Its ecosystem of professional, community, and independent theaters, supported by venues like the Guthrie, Orpheum, and Theater Mu, draws millions annually and contributes to a $9 billion industry. The cityโ€™s high per capita arts funding ($9.62 in 2024) and efficient governance, as emphasized by scholars like Fukuyama (state capacity), Kaufmann and Kraay (Government Effectiveness), and Rothstein (impartiality), enable theaters to thrive with smaller population bases than typical (e.g., 5,000โ€“20,000 for community theaters vs. 50,000+ elsewhere). Quantifiable outcomes include 16 million annual nonprofit theater attendees, millions in economic impact, and sold-out runs for diverse productions. Minneapolisโ€™s theater-savvy audience and historic venues make it a cultural powerhouse.

Artifactual Incentives

Stevie Miller makes an interesting comparison in a piece in Reason, The Dreadful Policies Halting Archeological Discoveries between England and Italy in their handling of the discovery of antiquities. First, he notes how new technologies are quite literally unearthing access to sacred texts and ancient cities. But then he remarks that there are few incentives for individuals to pursue the time-consuming search, Indiana Jones style.

To understand the dynamics, it is necessary to understand the groups. There are landowners who typically, through property rights, own objects found on their property. Antiquities are deemed a special type of thing, as they have a pubic significance.

The case of Italian antiquities policy is paradigmatic. Since the 1930s, Italy-along with Greece, Turkey, and Egypt-has vested ownership of all antiquities in the state. Commerce in freshly unearthed artifacts is outlawed, and unauthorized excavation is punishable by hefty fines and sometimes prison time. Even using a metal detector requires a permit.

I think most people would agree that these items, by nature, are jointly owned by the larger cultural group. So, it makes sense. But the asymmetric access to the buried items by landowners sets up an incentive for the private party to collect and hoard the artifacts. Laws that thwart natural incentives often encourage a black market, where the artifacts are sold.

British model provides a striking contrast. Since the 1996 Treasure Act, British law has required that significant archaeological finds be reported. Instead of simply seizing them, if the state wishes to retain an item, it must compensate the finder and landowner at its full market value.

The English allow actors to participate in the preservation of artifacts at the public level. Although they are individuals they act in the spirit of a team. They can also come in and out of service to the cause. Whereas in the Italian model, the artifacts are packed up and access is restricted.

One system recognizes two groups and two incentive structures. The other does not, which pushes actionable responses underground to a black market.

The Great Stagnation of physical archaeology is a choice. The failure of policymakers to get the basics right– to make physical archaeology worth anyone’s time– renders the richest landscapes fallow.

Litterature Review

This is an excerpt from my working paper which examines how contemporary economic realities challenge conventional price formation models. Traditional price theory, rooted in neoclassical equilibrium models, struggles to explain modern markets characterized by digital platforms, behavioral anomalies, and network effects. Rather than viewing prices solely as equilibrium outcomes, this section explores price as an information system and coordination mechanism shaped by institutional contexts and evolutionary market processes, proposing alternative approaches that better capture the dynamic nature of pricing in today’s economy.

I think this section needs some more work. But here’s what we have so far:

II. Literature Review

A. Mainstream Economic Philosophy Foundations

The philosophical foundations of mainstream economic theory have been constructed upon a series of conceptual separations that artificially divide the economic from the social, the private from the public, and the individual from the collective. This review traces these separations through key philosophical traditions in economic thought, examining how they have shaped our understanding of price mechanisms and market functioning.

The Neoclassical Framework and Methodological Individualism

The neoclassical paradigm, beginning with Marshall (1890/1920) and formalized by Samuelson (1947), established methodological individualism as the dominant analytical approach to economic phenomena. This philosophical stance treats social aggregates as reducible to the actions of autonomous utility-maximizing individuals whose preferences are taken as given. As Arrow (1994, p. 1) acknowledges, “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals.”

This methodological commitment has profound implications for price theory. Within the neoclassical framework, prices emerge from the aggregation of individual utility functions, with social dimensions treated as externalitiesโ€”phenomena that exist outside the core market mechanism. Pigou’s (1920) seminal work on welfare economics formalized this separation, positioning social costs as divergences between private and social valuations that require correction through policy interventions. This philosophical framing fundamentally shapes how economists conceptualize market processes, treating the social as external to rather than constitutive of economic valuation.

Interestingly, even as neoclassical economics rigorously applies methodological individualism, it implicitly relies on group concepts without adequately defining them. Markets, firms, industriesโ€”these collective entities serve as the backdrop for individual decisions, yet their constitutive nature remains undertheorized. It is as if economic theory performs an elaborate mimetic gesture, tracing the outlines of social structures while focusing exclusively on the individuals within them, like a mime whose white-gloved hands demarcate invisible boundaries that audiences must imagine rather than observe directly.

Public Choice Theory and Rational Actor Models

The public choice tradition, exemplified by Buchanan and Tullock (1962), extends methodological individualism into the realm of political decision-making. By applying rational actor models to public policy, this approach treats political processes as aggregations of individual utility calculations rather than expressions of collective values. As Buchanan (1984, p. 13) argues, “There is no organic entity called ‘society’ that exists independently of the individuals who compose it.”

This philosophical stance reinforces the separation between economic and social dimensions by treating political processes themselves as marketsโ€”mechanisms for aggregating individual preferences rather than constructing collective meanings. While providing valuable insights into institutional incentives, this approach systematically marginalizes the embedded nature of economic decision-making within social contexts.

Again, the public choice tradition alludes to groupsโ€”voters, interest groups, bureaucraciesโ€”while consistently reducing them to collections of utility-maximizing individuals. The collective dimensions that give these groups meaning and coherence are acknowledged as backdrop but rarely examined as constitutive elements of the analysis itself. The mime continues to trace invisible boundaries without substantiating the spaces they enclose.

Transaction Cost Economics and Institutional Analysis

Williamson’s (1975, 1985) transaction cost economics represents a significant extension of economic analysis into institutional structures, examining how organizations emerge to reduce the costs of market exchange. While acknowledging that economic activities occur within institutional contexts, this approach maintains the philosophical separation between economic and social dimensions by treating institutions primarily as efficiency-enhancing mechanisms rather than socially embedded practices.

As Williamson (1985, p. 18) argues, “Transaction cost economics attempts to explain how trading partners choose, from the set of feasible institutional alternatives, the arrangement that protects their relationship-specific investments at the least cost.” This framing maintains the priority of efficiency considerations while treating social dimensions as constraints rather than constitutive elements of economic organization.

Despite its focus on organizations and institutions, transaction cost economics continues to treat these collective entities as instrumental arrangements serving individual interests rather than examining how they constitute economic actors themselves. The group remains an instrumental backdropโ€”a cost-minimizing solution to coordination problemsโ€”rather than a constitutive dimension of economic reality. The mime’s gestures outline organizational boundaries without examining how these boundaries shape the identities and preferences of those within them.

Behavioral Economics and the Modified Individual

Behavioral economics, pioneered by Kahneman and Tversky (1979) and expanded by Thaler (1991) and others, challenges the rational actor model by identifying systematic deviations from utility maximization. While this approach introduces psychological complexity into economic analysis, it maintains the philosophical separation between economic and social dimensions by treating these deviations as cognitive biases rather than expressions of social embeddedness.

As Thaler and Sunstein (2008, p. 6) argue in their influential work on nudge theory, “The false assumption is that almost all people, almost all of the time, make choices that are in their best interest or at the very least are better than the choices that would be made by someone else.” This framing maintains the philosophical commitment to individual choice while acknowledging limitations in cognitive processing, without fundamentally challenging the separation between economic and social dimensions.

Here too, the social dimension appears as an influence on individual decision-making rather than a constitutive element of economic action. Groups function as reference points that bias individual judgments rather than fields of practice that constitute economic meaning. The mime continues to gesture at social influences without substantiating the collaborative production of economic reality that these influences represent.

B. Critical Theoretical Intersections

Against these mainstream approaches, several critical traditions have challenged the separation between economic and social dimensions, offering theoretical resources for reconceptualizing price mechanisms as inherently incorporating both private and social valuations.

Social Capital Theory: From Group Phenomenon to Individual Asset

Loury’s (1976) groundbreaking paper, “A Dynamic Theory of Racial Income Differences,” introduced social capital as a group-contained phenomenon that shaped economic opportunities. This original conception recognized the embedded nature of economic action within social contexts, particularly in explaining persistent racial disparities. As Loury (1976, p. 176) argued, “The social context within which individual maturation occurs strongly conditions what otherwise equally capable individuals can achieve.”

However, as the concept evolved through Coleman (1988), Putnam (1993), and Lin (2001), it increasingly shifted toward what might be termed an “instrumental network” approachโ€”treating social capital as a resource that individuals could access and deploy strategically rather than a field of relationships in which they were embedded. Coleman (1988, p. S98) exemplifies this shift in defining social capital as “a variety of entities with two elements in common: They all consist of some aspect of social structures, and they facilitate certain actions of actorsโ€”whether persons or corporate actorsโ€”within the structure.”

This conceptual migration represents a critical juncture in economic philosophy, where a potentially transformative concept that recognized the inherent embeddedness of economic action was gradually reframed to fit within methodological individualism. The group-level phenomenon that Loury identified became increasingly individualizedโ€”a network resource rather than a constitutive field of practice.

Notably, throughout this evolution, the central concept of “the group” remains persistently undefined. Social capital theorists allude to communities, networks, and associations without developing a rigorous philosophical account of what constitutes a group beyond the aggregation of connected individuals. The mime traces ever more elaborate networks of connection without substantiating what makes these networks constitutive rather than merely instrumental.

Embeddedness and Economic Sociology

Granovetter’s (1985) influential paper, “Economic Action and Social Structure: The Problem of Embeddedness,” directly challenged the separation between economic and social dimensions by arguing that economic actions are “embedded in concrete, ongoing systems of social relations.” This perspective reframed economic behavior as inherently social rather than merely influenced by social factors.

As Granovetter (1985, p. 487) argues, “Actors do not behave or decide as atoms outside a social context, nor do they adhere slavishly to a script written for them by the particular intersection of social categories that they happen to occupy.” This recognition that economic action is constitutively social rather than merely constrained by social factors represents a fundamental philosophical challenge to the separation paradigm.

Similarly, Zelizer’s (2012) work on “relational work” examines how economic transactions constitute social relationships rather than merely reflecting them. As she argues, “Economic transactions connect persons and establish meaning-laden relationships.” This perspective challenges the philosophical separation between economic and social dimensions by recognizing their mutual constitution.

Yet even within economic sociology, there remains a tendency to allude to social structures without developing a rich philosophical account of their ontological status. The mime gestures toward “concrete, ongoing systems of social relations” without fully substantiating how these systems exist beyond the interactions of individuals within them.

Ecological Economics and Systems Thinking

Ecological economics, developed by Georgescu-Roegen (1971), Daly (1977), and others, challenges the separation between economic and ecological systems by positioning the economy as a subsystem of broader biophysical processes. This approach recognizes the inherent embeddedness of economic activities within ecological contexts, challenging the artificial boundaries that conventional economics draws around market processes.

As Daly (1990, p. 1) argues, “The economy is a subsystem of the finite biosphere that supports it.” This simple yet profound observation challenges the philosophical foundations of mainstream economics by recognizing that economic activities are intrinsically rather than accidentally connected to their ecological contexts.

More recently, Raworth’s (2017) “doughnut economics” has extended this systems thinking approach, arguing for a reconceptualization of economic theory that recognizes social and ecological dimensions as constitutive boundaries of economic activity rather than external constraints. As she argues, economic theory must be “embedded in society and in nature, and that’s inherently connective.”

However, even these systemic approaches often maintain a distinction between “the economy” and its social and ecological contexts, preserving a conceptual separation even while arguing for integration. The mime traces the connections between systems while maintaining their distinct identities, without fully examining how these identities themselves are mutually constituted.

Feminist Economics and the Critique of Separative Self

Feminist economic philosophy has provided some of the most profound challenges to the separation paradigm through its critique of the “separative self” that underpins mainstream economic theory. Nelson (2006), Folbre (1994), and others have questioned the philosophical assumptions about autonomy and independence that shape conventional economic analysis.

As Nelson (2006, p. 30) argues, “The image of economic man as self-interested, autonomous, and rational creates a distorted view of economic life. Most economic decisions and actions are undertaken by people who are deeply connected to others.” This critique challenges not merely the assumptions of rational choice theory but the deeper philosophical conception of the economic actor as fundamentally separate from social contexts.

Folbre’s (1994) work on care economics further demonstrates how economic decisions inherently incorporate social dimensions, particularly in domains traditionally excluded from economic analysis. As she argues, “The invisible hand is all thumbs when it comes to care.” This observation highlights how conventional economic frameworks systematically marginalize activities where social dimensions are most evident.

Yet even these critical perspectives often maintain a focus on individualsโ€”albeit connected and caring onesโ€”without fully developing an alternative ontology of the social. The mime gestures toward connection and care without fully substantiating the collective dimensions these concepts imply.

C. Syntheses and Gaps in Current Literature

The literature reveals both promising directions for reconceptualizing the relationship between economic and social dimensions and persistent gaps that the current research aims to address.

Toward an Integrated Understanding

Several theoretical developments suggest potential pathways toward a more integrated understanding of price mechanisms. Lawson’s (2007) critical realist approach challenges the ontological assumptions of mainstream economics, arguing for a recognition of economic phenomena as emerging from “structured interrelationships in practices and positions.” This philosophical stance aligns with the current research’s emphasis on the inherently social nature of price mechanisms.

Similarly, Hodgson’s (2019) recent work on institutional economics provides theoretical resources for understanding how social institutions constitute economic behaviors rather than merely constraining them. As he argues, “Institutions not only constrain options, they establish the very criteria by which people discover their preferences.” This insight suggests how social dimensions might be understood as intrinsic to rather than separate from price mechanisms.

The Missing Ontology of the Group

Despite these promising directions, a significant gap remains in the philosophical understanding of how social dimensions operate within price mechanisms. Across divergent theoretical traditionsโ€”from neoclassical economics to critical alternativesโ€”there persists a tendency to allude to groups without developing a rich philosophical account of their ontological status.

This mimetic quality of economic theoryโ€”gesturing toward social structures while focusing primarily on individuals within themโ€”represents a critical limitation in current approaches. Like a mime whose white-gloved hands trace invisible boundaries, economic theory repeatedly outlines social dimensions without substantiating them philosophically. Markets, firms, communities, networksโ€”these collective entities appear throughout economic literature without rigorous examination of their constitutive nature.

The present research aims to address this gap by developing a philosophical framework that recognizes price mechanisms as inherently social institutions rather than merely technical devices. By reconnecting with Loury’s original insight that social capital represents a group-contained phenomenon, this research seeks to recover and extend a more integrated understanding of how social dimensions operate not around but within price mechanisms themselves.

As the subsequent sections will demonstrate, this reconceptualization has profound implications for how we understand market processes, offering a more coherent theoretical account and opening new possibilities for addressing complex socioeconomic challenges through a more sophisticated understanding of how prices already incorporate both private and social dimensions of value.

After an Abstract comes the Introduction

This is an excerpt from my paper which examines how contemporary economic realities challenge conventional price formation models. Traditional price theory, rooted in neoclassical equilibrium models, struggles to explain modern markets characterized by digital platforms, behavioral anomalies, and network effects. Rather than viewing prices solely as equilibrium outcomes, this section explores price as an information system and coordination mechanism shaped by institutional contexts and evolutionary market processes, proposing alternative approaches that better capture the dynamic nature of pricing in today’s economy.

A. Research Problem and Contextual Landscape

Contemporary economic theory has constructed an artificial divide between private and social valuations that fundamentally mischaracterizes the nature of price mechanisms. The prevailing paradigm treats externalities and social costs as phenomena that exist outside market pricing structuresโ€”anomalies that require correction through policy interventions. This perspective has led to theoretical frameworks that fail to recognize how price already incorporates social dimensions of value.

This paper challenges this dominant position by advancing the thesis that price inherently accounts for social costs and benefits, functioning as Price = Value Private + Social. The conventional framing treats social costs as separate from private market transactions, focusing exclusively on externalities and spillovers as market failures requiring intervention. However, this approach overlooks crucial evidence that market participants routinely anticipate and internalize social dimensions in their valuation processes.

Several critical shortcomings emerge from the current theoretical framework. First, mainstream economics acknowledges that stock prices anticipate political actions and regulatory changes, yet fails to systematically incorporate this anticipatory social pricing into its core models. Second, empirical evidence demonstrates consumers’ willingness to pay emotional surcharges for products with perceived social benefits, yet this phenomenon remains marginalized in standard economic analysis. Third, economists typically wait for social costs to manifest as measurable externalities before acknowledging their existence, rather than recognizing their presence within the price mechanism itself.

This theoretical blind spot can be traced to a pivotal shift in economic philosophy that occurred following Glenn Loury’s groundbreaking 1976 paper, “A Dynamic Theory of Racial Income Differences,” which introduced the concept of social capital as a group-contained phenomenon. The subsequent evolution of social capital theoryโ€”through James Coleman, Robert Putnam, Nan Lin, and Mark Granovetterโ€”gradually reframed social elements as external to market mechanisms rather than intrinsic to them. This conceptual migration has created artificial boundaries between private and social valuations that distort our understanding of how markets function.

By examining this historical trajectory and proposing a reconceptualization of price theory that acknowledges the inherent social dimensions of value, this research aims to resolve theoretical inconsistencies in contemporary economic philosophy and develop a more coherent understanding of market dynamics. The implications extend beyond theoretical discourse, offering potential pathways to address pressing socioeconomic challenges through a more sophisticated understanding of how social costs and benefits are already embedded within price mechanisms.

B. Theoretical Positioning

The philosophical underpinnings of twentieth-century economic analysis were largely constructed upon a reductive conception of human behaviorโ€”the rational actor paradigm, which posited economic agents as autonomous individuals pursuing narrowly defined self-interest. This framework, most prominently championed by neoclassical economists, created theoretical models that excluded the complex social dimensions inherent in economic exchange. By privileging methodological individualism, mainstream economics systematically marginalized the communal aspects of human decision-making and the social embeddedness of market interactions.

The 1970s marked a critical turning point with scholars like Kenneth Arrow, Gary Becker, and others beginning to interrogate this limited conception by examining economic trades within previously neglected domains such as family structures and racial dynamics. This represented an important, though incomplete, expansion of economic thought. While these analyses acknowledged that social factors could influence economic decisions, they still fundamentally positioned these factors as external constraints or modifications to an essentially self-interested calculus.

This paper advances a more radical philosophical proposition: economic actors do not merely respond to social factors as external influences but fundamentally incorporate communal objectives alongside personal gain when allocating their labor and resources. This perspective challenges the artificial separation between individual and collective interests that has dominated economic philosophy. Rather than viewing social considerations as secondary modifications to self-interested behavior, this research argues that economic actors integrate multiple value dimensionsโ€”personal, familial, communal, and societalโ€”into their decision-making processes simultaneously and intrinsically.

This theoretical reframing has profound implications for how we understand price mechanisms. When economic actors integrate communal objectives into their decision calculus, the resulting prices already embed both private and social valuations. Market exchanges thus represent complex negotiations of value that transcend the narrow confines of individualistic utility maximization. By recognizing this inherent integration, we can begin to develop more sophisticated theoretical tools that accurately capture the multidimensional nature of economic exchange.

The proposed philosophical framework does not reject the insights gained from examining self-interested behavior, but rather situates such behavior within a more comprehensive understanding of human action that acknowledges our fundamental social embeddedness. This perspective builds upon but substantially extends the work begun by Arrow and others, offering a philosophical foundation for reconceptualizing how social dimensions operate not merely around but within economic decision-making and price formation.

What is Public, What is Private

Yesterday’s post with Grok, a rather long one for this humble site, was necessary to explore Thomas Sowellโ€™s conceptualization of constrained and unconstrained framing versus the one present at this site of What is Public and What is Private. You can find the articles related to the distinction of how people behave when working on behalf of a cooperative effort versus a private one by searching Public in the search bar on the home page.

Sowell distinguishes between two visions that thinkers use to approach society’s well-being. He names them: the constrained and the unconstrained. Yet he leaves room for all parties to acknowledge the existence of both. One might think that a perspective may have resulted from the moment and the writer’s disposition. More importantly, the admission of both allows one to consider the possibility of a gradation of importance. Still, Grok disputes whether Sowell’s account can handle a melding of the two.

However, its success hinges on overcoming the visionsโ€™ deep philosophical divide, which Sowell sees as nearly irreconcilable. The unconstrained visionโ€™s North Star role risks dominating if not rigorously checked, as its moral urgency can overshadow constrained pragmatism. Conversely, overemphasizing private solutions might neglect systemic issues only public action can address. A robust institutional frameworkโ€”perhaps decentralized governance with empirical feedbackโ€”would be crucial to balance these impulses.

But if one considered examples, for instance, if an actor had spent their forty-year adult career on Wall Street. Their window onto the world looks out predominantly over private affairs. The constraints and trade-off model make sense to them. That doesn’t mean they feel constrained in pursuing their passions. They would likely do anything for a child or their spouse’s health. Constraints be gone. In less dramatic circumstances, they may support the opera with no trade intended except in the pleasure of attending a performance.

Humans are complex. It’s not unreasonable to think they can act with dual motives. Bernie Sanders was recently criticised for flying in a private jet. Ayn Rand collected from the public purse. Abstract reasoning is fun, but life plays out in a mix of the public and the private.

Alchian and Property Rights

In a paper entitled Property Rights Paradigm, Armen Alchian suggests ownership is more intertwined than one might think.

There is some ambiguity in the notion of state or private ownership of a resource, because the bundle of property rights associated with a resource is divisible. There can and does exist much confusion about whether a resource or “property” is state or privately owned.
Some rights to some uses of the resource may be state owned and others privately owned. While it is true that the degree of private control is increased when additional rights of use become privately owned, it is somewhat arbitrary to pass judgment on when the conversion to private control can be said to change the ownership of the bundle of rights from public to private. The classification of owners can be carried beyond the important state and private dichotomy. Corporate, school, and church owners of property are also of interest. The structure of rights can have important consequences for the allocation of resources, some of which we now illustrate.

Think of the home you own. The deed at the county recorder’s office says you own it. But the utility company may access the property if it needs to do a repair. The city workers can drive a skid steer into your lot, dig a big hole to check the city water connection, without checking whether you have a graduation party planned for the weekend. Of course, the county can tax you for local services, and if you fail to pay, they can take your property.

So you own your home more in unison with the public than you might have thought.

What about going the other way? Do people pay more for property if it has better access to taxation-supported services? It makes sense that they would. Public groups may have formal or informal claims against your home. There’s a good chance these were sought after when they decided to move. A portion of the price acts as a place maker for value– or in other words, the market prices institutions, too.

Quiet Counterpoint

While Robert Moses became synonymous with concrete, expressways, and top-down urban planning, his wife, Mary Louise Sims Moses, was quietly involved in a very different kind of city-buildingโ€”one that focused not on infrastructure, but on people.

Mary Louise was active in the settlement movement, a progressive social reform effort in the early 20th century that sought to improve the lives of immigrants and the urban poor. She worked with the Henry Street Settlement on Manhattanโ€™s Lower East Side, one of the most significant institutions of the movement. Unlike her husbandโ€™s sweeping, often disruptive approach to reshaping the city, the settlement house model emphasized human-scale solutions: providing access to health care, education, vocational training, and support services within the neighborhoods they served.

The contrast between their approaches is striking. While Robert Moses believed in transforming cities from aboveโ€”with highways, bridges, and housing towersโ€”Mary Louise was engaged in transformation from the ground up. Her work involved listening to people, responding to their lived experiences, and building trust within communities. It was the kind of work that valued place not only for its physical layout, but for the lives it nurtured.

Itโ€™s hard not to notice the irony. While Mary Louise and her colleagues were helping immigrants build stable lives in New Yorkโ€™s dense, walkable neighborhoods, Robert Moses would later target those same areas for demolition in the name of “progress.” Entire communitiesโ€”often poor and predominantly made up of people of color or recent immigrantsโ€”were displaced by projects Moses considered essential to modernization.

Whether Mary Louiseโ€™s influence ever softened her husbandโ€™s approach remains a mystery. Moses was not known for changing course once he had a vision. But her work highlights a different set of valuesโ€”ones that were also championed by Jane Jacobs and others who believed that cities thrive not through sweeping master plans, but through the small, often invisible networks of daily life: neighbors talking on stoops, kids playing on sidewalks, shopkeepers who know their customers by name.

Mary Louise Sims Moses remains a lesser-known figure, but her involvement in the settlement movement offers a compelling counterpoint to her husbandโ€™s legacy. Where he reshaped the city with steel and stone, she helped build its social fabric. And in many ways, her work reminds us that the success of a city isnโ€™t measured only by what gets builtโ€”but by who gets to stay, thrive, and belong.

Origins of Social Capital

In Glenn Loury’s memoir, Late Admissions, the author states that he was the first to coin the term social capital as a retained value obtained through contact with social groups and activities. It appears in the following paper.

An individual’s social origin has an obvious and important effect on the amount of resources which are ultimately invested in his development. It may thus be useful to employ a concept of โ€œsocial capital” to represent the consequences of social position in facilitating individual acquisition of (say) the standard human capital characteristics. While measurement problems abound, this idea does have the advantage of forcing the analyst to consider the extent to which individual earnings are accounted for by social forces outside the individual’s control. However, for precisely this reason such analysis is unlikely to develop within the confines of traditional neoclassical theory. A Dynamic Theory of Racial Income Differences (1976)

In the following decade, James S Coleman, a sociologist at the University of Chicago, writes the paper Social Capital in the Creation of Human Capital (1988). Here, the sense of the term is similar as there is a measurement of the efforts of a father put forth in the education of his son.

But in the 1990s, something changed. Putnam makes social capital a coffee table word in Bowling Alone (1995 article, 2000 book). Now, the term is morphing into a sense of access to networks. The thought is that business, or economic activity, is embedded in social life but clearly separate. Social life is a thing on the side. Benefits from social interactions arrive like electric pulses moving sporadically across a net of human connections.

Thanks to the book’s popularity, everyone grabbed hold of the term social capital from 2000 to 2010. It lost depth as it had become a marketing cliche. At about the same time, Nan Lin published Social Capital: A Theory of Social Structure in Action (1997), advancing the network theory of capital amongst relations.

Social Capital explains the importance of using social connections and social relations in achieving goals. Social capital, or resources accessed through such connections and relations, is critical (along with human capital, or what a person or organization actually possesses) in achieving goals for individuals, social groups, organizations, and communities. The book introduces a theory that forcefully argues and shows why “it is who you know,” as well as “what you know” that makes a difference in life and society.

Attempts are made to measure strong ties and weak ties, and distances between connections, but nothing really comes of it as a measurable model.

Was Glenn Loury thirty years too early with his concept of social capital? Did he bail on the theoretical world of economics too soon?

Real Estate Registries

It’s a little hard to believe, but the concept of recording land ownership in a centralized (and supervised) public location is a relatively new thing. In Great Britain, a nationwide mandate was not enacted until 1990. The title work! The property claims! It must have been a messy process. And what if a deed went up in a fire or was thought to have turned to ash?

Here’s a Chat overview of the history of real property titling.

1. The Era of Deeds and Legal Descriptions (Pre-19th Century โ€“ Early 20th Century)

  • Great Britain
    • Land ownership was historically recorded through deeds, private legal documents that had to be manually traced to prove ownership.
    • The system lacked a central registry, meaning land transactions relied on historic title chains stored by property owners and lawyers.
  • United States
    • A similar system of deed recording existed, often based on metes and bounds descriptions (especially in the Eastern U.S.) or the Public Land Survey System (PLSS) (for lands acquired after 1785).
    • County governments recorded deeds, but there was no standardized way to track land ownership.

2. Early Land Registries and First Steps Toward Systematic Record-Keeping (Mid-19th Century โ€“ Early 20th Century)

  • Great Britain
    • 1862 โ€“ Land Registry Act established HM Land Registry, but participation was voluntary.
    • 1875 โ€“ Land Transfer Act simplified the process, but land registration was still not compulsory.
    • 1897 โ€“ London mandated land registration, gradually expanding nationwide.
  • United States
    • 1800s โ€“ Early county plat maps and tax assessment rolls began organizing land records more systematically.
    • Late 19th โ€“ Early 20th Century โ€“ Cadastral surveys (especially in the Western U.S.) improved property mapping.
    • 1920s-1930s โ€“ States and local governments began experimenting with numbered parcel systems for property taxation.

3. Systematic Land Registration and Adoption of Parcel Numbering (Mid-20th Century โ€“ 21st Century)

  • Great Britain
    • 1925 โ€“ Land Registration Act made registration compulsory for land sales in designated areas, gradually covering more of England and Wales.
    • 1990 โ€“ Almost all land transactions required registration.
    • 2002 โ€“ Digital land registration introduced, enabling electronic transactions.
  • United States
    • 1950s-1970s โ€“ Parcel Identification Numbers (PINs) were introduced in many counties to systematically track land ownership and taxation.
    • 1970s-1990s โ€“ Geographic Information Systems (GIS) were integrated into land records, linking parcel data to maps.
    • 2000s-Present โ€“ Digital land records became the norm, allowing online access to property information.

Key Takeaways

  1. Both Great Britain and the U.S. started with deed-based systems requiring lengthy title searches.
  2. Great Britain centralized land registration earlier (1862), but it became widespread only by the 20th century.
  3. The U.S. never adopted a national land registry but instead developed county-based parcel identification systems (PINs) during the mid-to-late 20th century.
  4. Both systems are now largely digital, enabling online property searches, tax assessments, and real estate transactions.

It was only twenty-five years ago that abstract books were still in circulation. When a property changed hands, the abstracts were located and pages were added to reflect the changes. The result multi-page pad told the parcel’s ownership story, as seen below.

Spot Light on Street Lights

Academics continue to prove that simple improvements to street lighting reduce crime. In a new paper, Can Enhanced Street Lighting Improve Public Safety at Scale?, the authors examine a large-scale enhancement of street lighting in Philidelphia. In honor of new technology shining through on an old idea, here’s some background on the humble street lamp.

A Brief History of Street Lighting: Purpose, Progress, and Payment

The history of street lighting is deeply intertwined with the growth of cities and the need for safety, security, and functionality after dark. From ancient torches to modern LED systems, the evolution of streetlights reflects technological advancements and shifting urban priorities.

The Early Days: Fire and Flame

In ancient Rome and Greece, rudimentary street lighting consisted of torches and oil lamps, primarily used to guide travelers and deter crime. During the Middle Ages, European cities relied on lanterns carried by watchmen or hung outside homes. However, these systems were inconsistent, often dependent on individuals rather than citywide planning.

The Rise of Public Street Lighting

By the 1600s, cities like Paris and London began formalizing street lighting. Residents were required to hang lanterns outside their homes, creating a patchwork of illumination. In 1667, King Louis XIV ordered the installation of thousands of public lanterns, making Paris one of the first cities with structured street lighting.

Gaslight and Electricity: A New Era

The 19th century saw a revolution in street lighting with the advent of gas lamps. First introduced in London in 1807, gas lamps quickly spread to other major cities. These lights significantly improved nighttime visibility and were maintained by lamplighters who manually lit and extinguished them each day. By the late 1800s, electric arc lamps began replacing gas lighting, offering brighter and more reliable illumination. Cleveland, Ohio, was among the first cities to install electric streetlights in 1879, setting the stage for the widespread adoption of incandescent bulbs in the early 20th century.

Who Pays for the Light?

As street lighting became essential, cities had to find ways to fund it. Early efforts relied on:

  • Resident Contributions (1600s): Homeowners were required to provide their own lighting.
  • Taxation (1700s-1800s): Municipal governments introduced street lighting taxes, often targeting businesses and property owners who benefited most.
  • Gas Company Contracts (1800s-early 1900s): Cities partnered with private gas companies, paying for services through public funds or direct utility fees.
  • Municipal Ownership (1900s-Present): Cities took over the operation and maintenance of electric streetlights, funding them through general budgets, local taxes, and utility surcharges.
  • Modern Innovations (2000s-Present): With the rise of LED technology and smart lighting, cities are using efficiency grants, state funding, and public-private partnerships to offset costs. Some municipalities lease streetlight poles to telecom companies for 5G infrastructure, generating additional revenue.

Lighting the Future

Today, smart streetlights with sensors and adaptive brightness are transforming urban landscapes, reducing energy costs while improving safety and sustainability. The journey from candle-lit lanterns to intelligent lighting networks reflects a broader evolution of citiesโ€”constantly adapting to new technologies and the needs of their residents.

Elegant Slumming

Who doesn’t like a wry metaphor or particularly apt simile? Tom Wolfe’s writing is rich in both. His short story Radical Chic depicts the wealthy of NY cooing over the edgy Marxist-Leninist black power organization.

For example, does that huge Black Panther there in the hallway, the one shaking hands with Felicia Bernstein herself, the one with the black leather coat and the dark glasses and the absolutely unbelievable Afro, Fuzzy-Wuzzy-scale, in factโ€”is he, a Black Panther, going on to pick up a Roquefort cheese morsel rolled in crushed nuts from off the tray, from a maid in uniform, and just pop it down the gullet without so much as missing a beat of Felicia’s perfect Mary Astor voice…

And this is all in one sentence. As a high schooler I would try out a few colorful comparisons just to have my paper returned marked up in red: too DRAMATIC! I guess you have to be famous to be creative.

There’s more to talk about in Radical Chic than a descriptive tableau. Perhaps we should take a cue from economist and blogger Tyler Cowen, who recently wrote about the Odyssey in economic terms. After all, the point of Radical Chic is a money transfer from the ultra-rich to a group with a cause, the Black Panthers.

In the Odyssey, the people involved are neatly tucked away on their islands. The groups are clearly delineated as a sea separates them from the others Homer meets on his journey. Fortunately, we have the clever and perceptive Tom Wolfe. He makes the reader see the affluent managing their servants in their townhomes in Manhattan. He corrals one group with descriptors and then another.

What the Bersteins will find out is that there are, in fact, many groups to consider. Many more than the radical chic who desperately needed something new and different in their lives. By the short story’s end, Wolfe lists many more economic players.

FOOLS, BOORS, PHILISTINES, BIRCHERS, B’NAI B’RITHEES, Defense Leaguers, Hadassah theater party piranhas, UJAvia-tors, concert-hall Irishmen, WASP ignorati, toads, newspaper readers-they were booing him, Leonard Bernstein, the egre-gio maestro… Boooooo.

As Leneord Berstein, a famous maestro, is booed while on stage, he learns that there were many more groups in play than the virtuous and the radicals, and this fact has led to him taking a private loss.

Now that people are talking in groupsโ€ฆ

Robin Hanson wrote recently about his Status Circles. They start on an enormous scale with the whole universe and then life on Earth. But when most people focus on nation, acquaintances, and family, Robin distinguished his affiliations to people interested in the big questionsโ€”the intellectuals. But even within this grouping, he offers a wide range of ever-narrowing groupings.

Government structures are often thought of as falling into one another. The town is part of a county, which is part of a state, which falls under a country’s national laws and jurisdictions. Let’s call this the Russian Doll effect. By encapsulating one organization into the other, it seems a default that the interests of the smallest doll would be taken in consideration up the chain.

In Vincent Ostrom’s book The Intellectual Crisis in American Public Administration, the author uses ideas offered by de Tocqueville to suggest otherwise.

I’m reading Vincent Ostroms The Intellectual Crisis in American Public Administration. On page 80, he refers to De Tocqueville’s impressions of the US administration. Can it be said that the French man thought there was independence between various levels of US governance, and that’s a good thing?

ChatGPT said:

Yes, Alexis de Tocqueville generally viewed the decentralization of governance in the United States as a positive feature. In Democracy in America, he admired how local institutions, especially townships and states, maintained a degree of independence from the central government. Tocqueville saw this decentralization as essential to fostering civic engagement, political responsibility, and democratic stability. He believed that allowing different levels of government to function with relative autonomy helped prevent tyranny and encouraged active participation by citizens in public affairs.

Vincent Ostrom, in The Intellectual Crisis in American Public Administration, often draws from Tocqueville to critique centralized bureaucratic models. Ostrom emphasizes how polycentric governanceโ€”where multiple centers of authority operate independently but cooperativelyโ€”aligns with Tocquevilleโ€™s observations about Americaโ€™s administrative structure. So yes, Tocqueville did see this independence as beneficial, particularly in reinforcing democratic habits and limiting the overreach of centralized power.

4o

You said:

If one were to take the imagery one step further, could one separate each level out by encapsulating them in a self-interest cloak- the idea being that in terms of action, each level will prioritize the interest at the local level, which can be at odds with other levels of governance.

ChatGPT said:

Yes, you could extend the imagery in that way. If each level of governance is wrapped in a “self-interest cloak,” it suggests that local, state, and federal authorities will act primarily to protect their own interests, which may sometimes conflict with other levels. This aligns with public choice theory, which Ostrom himself engages with, emphasizing that political actorsโ€”whether at the local, state, or national levelโ€”pursue their own interests rather than some idealized collective good.

Tocqueville observed that the strength of American governance lay in its decentralized structure, where local institutions had enough autonomy to make decisions that best served their immediate communities. However, this same independence could lead to friction when different levels of government pursue conflicting agendas. For example, a state might resist federal mandates that it views as intrusive, or a local government might implement policies that are at odds with state priorities.

This “self-interest cloak” metaphor also ties into the broader tension in American federalism: the push and pull between cooperation and competition among different levels of government. In practice, while decentralization fosters adaptability and local problem-solving, it can also create inefficiencies, redundancy, and legal battles when interests clash. Ostrom, like Tocqueville, would likely argue that this tension isn’t necessarily a flaw but an inherent feature of a system designed to resist centralized authority and encourage pluralism.

The benefit of this model, as opposed to the Russian Doll model, is understanding when a group becomes a competitor rather than an altruistic companion. For instance, during the COVID crisis, all the states bid up the price of masks by bidding against each other. In their actions, which were independent (cloaked in self-interest), Americans increased the costs of masks for all Americans to the benefit of those abroad. When reorganized as a bidding unit at the national level, this price effect is reduced.

The only trick, of course, is that you must trust that the greater group will, in turn, divide out the masks to everyone’s satisfaction.

The Erdos Number

Paul Erdos, featured yesterday, chose a lifestyle that led to a striking number of shared work projects. Due to the sheer number of work friends, a number system was developed to keep track of the network that worked on shared ideas. Chat explains.

Paul Erdล‘s, one of the most prolific mathematicians of the 20th century, collaborated with an extraordinary number of researchers throughout his life. His collaborators are often counted as part of the famous “Erdล‘s Number” system, where Erdล‘s himself has an Erdล‘s Number of 0, his direct collaborators have a number of 1, their collaborators have a number of 2, and so on.

Estimated Number of Collaborators

Erdล‘s collaborated with approximately 511 mathematicians on research papers during his lifetime. These collaborations resulted in over 1,500 papers, making him one of the most prolific authors in mathematical history.

This number of collaborators reflects Erdล‘s’s unique approach to mathematicsโ€”he would travel extensively, visiting mathematicians worldwide, and work intensively with them on specific problems. This collaborative approach led to his reputation as a “mathematical nomad.”

Now, how do you think that work went when you think about all these math types puzzling over combinatorics or vertices of convex polygons? Did Erdos have a payroll and dole out cash? It seems it was the opposite. Collaborators and friends brought him into their home and put him up so he could work with them out of their university. This is not work compensated through pecuniary means.

So what’s in it for the collaborators? The Edos number, of course. Being in the Erdos network gives one sense of participation in the mathematical theory underway, and then their Erdos number specifies a claim to a distance from Erdos himself.

To recap, this type of work is voluntary and participatory, and the end product feeds into a jointly held assetโ€”a school of thought in mathematics. Money is not the primary motivation for action. Membership in the network and the potential for the elevated position are the compensating factors. Every participant has access to the knowledge. It is a public good.

Here’s Chat’s visual.

Is it a public good to the whole world? In a sense, yes, but not in a practical sense. Just like it’s not practical to say the streets of Fargo, ND, are public to the whole world. The knowledge is open, but only a few will have the talents and learned knowledge to comprehend it. Only people in the geographic vicinity of Fargo will use their streets.

Is there externalizing and internalizing going on? Sure- when a new entrant learns a theorem, it becomes part of their knowledge. They have acquired the benefit, internalized, of the learned network. If a few of them collaborate on a textbook and sell it for their private pecuniary gain, they externalize knowledge and realize a gain. These actions do not conflict or reduce the network’s accomplishment. They add to the power and benefit of the group. The image you see inflates.

Paul Erdos’ life had living constraints, just as ours do. Yet the value of his research was such that he could be entertained at associates’ homes to assist in writing all 1,500 papers he left to the world.

Outsider on point, Outsider not so much

I’ve been diving into Democracy in America lately, written by a Frenchman, Alexis de Tocqueville, about a voyage to the New World in 1831. He was writing for the French government and primarily focused on public life. So, taken by the spirit of the population, it resulted in a text that shares the rhythm and enthusiasm of civic life, which makes the book popular today.

One point of fascination is the energy of governance at the township level. He ogles at the ability of a small group of men to tackle a public project, do their best (although he notes that this is often not as well done as professional bureaucrats), and see it through to completion. He notes the short distance between the man on the street and the organizer of public goods. In France, the central authority resides far from the common man. It’s a distance thing.

As an outsider, de Tocqueville was a keen observer. But this isn’t always the case. Sometimes, the outsider over-simplifies, and sometimes, they interpret to fit a convenient view.

Lately, immigration has been in the news, particularly the subset of intelligent, well-educated types. We have one such community. The tech workers from Asia gravitate to the same suburban area, the same school district, really. This public school district pulls in the highest scores in the state. It’s no coincidence. All the Tiger moms want their kids to go to the top schoolโ€”not a private school, mind you, but a public one. For comparison, Asians in Minnesota make up 5% of the population.

Their contribution to raising the level of education among all those other Minnesota kids doesn’t stop there. Their interests in debate club, science club, and robotics flush out the teachers who are willing to lead the group. Inevitably, a photo of the teams winning some national prize filters into the community newspaper a few pages ahead of the sports teams and their accomplishments. These families want a lot and put in the work to get it.

This community also wanted to play cricket close to home. And voila! Our city has a cricket pitch.

Plymouth to Get City’s First Cricket Pitch

The activity of this group reminds me of what de Tocqueville describes in the immigrant communities he witnessed. The profile of people who support the notion that anything is possible if you put a little elbow grease into the project. The distance between those with ambition and those able to coordinate and shepherd a favorable outcome is short.

When commentators imply otherwise, you wonder where they’ve been. If you are in the education game, it’s clear who carries the ball. It’s the families and the teachers. Corporations are so far removed from education mechanics that they might as well be on an island somewhere. General observation shows that highly educated, foreign-born tech workers result in positive externalities to their surrounding communities.

Big business and corporate America aren’t even on the same playing field. And those who think so might want to check the game’s rules.

Whitney’s Voice is like no other.

O! say can you see by the dawnโ€™s early light,
What so proudly we hailed at the twilightโ€™s last gleaming,
Whose broad stripes and bright stars through the perilous fight,
Oโ€™er the ramparts we watchโ€™d, were so gallantly streaming?
And the rocketsโ€™ red glare, the bombs bursting in air,
Gave proof through the night that our flag was still there;
O! say does that star-spangled banner yet wave,
Oโ€™er the land of the free, and the home of the brave?

On the shore dimly seen through the mists of the deep,
Where the foeโ€™s haughty host in dread silence reposes,
What is that which the breeze, oโ€™er the towering steep,
As it fitfully blows, half conceals, half discloses?
Now it catches the gleam of the morningโ€™s first beam,
In full glory reflected now shines in the stream,
โ€˜Tis the star-spangled banner, O! long may it wave
Oโ€™er the land of the free, and the home of the brave.

And where is that band who so vauntingly swore
That the havoc of war and the battleโ€™s confusion,
A home and a country, shall leave us no more?
Their blood has washed out their foul footstepsโ€™ pollution.
No refuge could save the hireling and slave,
From the terror of flight, or the gloom of the grave,
And the star-spangled banner in triumph doth wave,
Oโ€™er the land of the free, and the home of the brave.

O! thus be it ever, when freemen shall stand
Between their lovโ€™d home and the warโ€™s desolation,
Blest with victโ€™ry and peace, may the Heavโ€™n rescued land
Praise the Power that hath made and preserved us a nation!
Then conquer we must, when our cause it is just,
And this be our motto: โ€œIn God is our trust;โ€
And the star-spangled banner in triumph shall wave
Oโ€™er the land of the free, and the home of the brave.

Historic Designation Success

Milwaukee Avenue Historic District, Minneapolis

Chronology

1883

Real estate agent William Ragan purchases four blocks in Minneapolis to develop high-density housing for the growing numbers of immigrant workers coming to the city.

1890

Raganโ€™s development, along what comes to be known as 22 ยฝ Avenue, is completed.

1906

The residents of 22 ยฝ Avenue petition for the name of their street to be changed to Woodland Avenue. It changes to Milwaukee Avenue instead, perhaps because of the nearby Milwaukee Railroad.

1970

The houses of Milwaukee Avenue are run down due to suburban growth and disinvestment in city neighborhoods since the 1950s.

1970

The Minneapolis Housing and Redevelopment Authority plans to demolish most of the western portion of the Seward Neighborhood, including Milwaukee Avenue, as part of their urban renewal plan. This inspires citizens to organize to stop demolition.

1971

Activists who oppose the renewal plan gain control of the Seward West Project Area Committee.

1973

Tense negotiations between the PAC and MHRA motivate Jeri Reilly and Robert Roscoe of the PAC to form the Milwaukee Avenue Planning Team with Bill Schatzlein and Bob Scroggins of the MHRA to discuss how to advance the redevelopment plan.

1973

The Milwaukee Avenue Planning Team launches a study to determine the feasibility of rehabilitation.

1974

Milwaukee Avenue receives its designation from the National Register of Historic Places on May 2.

1974

The MHRA gives up on its demolition plan and begins to support the Milwaukee Area Planning Teamโ€™s recommendations for rehabilitation.

1975

Rehabilitation begins on three Milwaukee Avenue houses in October.

1975

The Minneapolis Heritage Preservation Commission designates Milwaukee Avenue a historic district.

2007

Milwaukee Avenue celebrates its thirtieth anniversary of rehabilitation with a self-guided walking tour of eight of the restored homes The Preservation Alliance of Minnesota organizes the event.

2015

The Milwaukee Avenue Homeowners Association (MAHA), sponsored by the Seward Neighborhood Group (SNG), receives grant money to install a bronze plaque on Milwaukee Avenue describing the district’s evolution and historic status.

Christ Church, Malacca

Christ Church is the oldest protestant church in Malaysia. It sits on the same square as the administrative buildings set up by the Dutch in the seventeenth century.

The Stadthuys (an old Dutch spelling, meaning city hall) is a historical structure situated in the heart of Malacca City, the administrative capital of the state of Malacca, Malaysia, in a place known as the Red Square.[1] The Stadthuys is known for its red exterior and nearby red clocktower. It was built by the Dutch in 1650 as the office of the Dutch governor and deputy governor. It continued to be used as the Treasury, Post Office, Government Offices, and suites of apartments for the high officials after the takeover by the British.

WIKI

Timely Knowledge – Textbook Edition

I’m really enjoying this textbook on price theory by Deirdre Mccloskey. The explanations are lively and interesting. The book is available on-line at no cost.

As mentionned in yesterday’s post, knowledge of bargaining techiniques for a good being transacted in the marketplace is valuable to market participants. McCloskey provides this example.

But economists have not discovered very much about what constitutes exceptionally subtle bargaining. There are profound reasons why this is so. Suppose that some bargaining technique were known to be useful when employed by the Soviets-such as threatening to abandon bargaining altogether in a week if the Germans do not accede by then to the terms demanded. The Germans would come to understand this. The Germans would use it themselves. Its usefulness to the Soviets, therefore, would vanish. In general, any knowledge that the analyst of the situation acquires can be expected to be acquired by the participants. They will alter their strategies in view of the knowledge, making the knowledge obsolete. The Soviet bargainers make a “last” offer. The German bargainers know that the offer is insincere (that there are quotation marks around “last”‘) and ignore it, making their own “last” offer. But the Soviets know that the Germans know that the Soviets “last'” offer is insincere and prepare a “real” last offer. But the Germans know that the Soviets know that the Germans know that the Soviets’ “last” offer is to be replaced by their “real” last offer, itself insincere. And so forth.

Chapter 5 – Trade, page 95