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6 Aug 2009

Paul Romer on Charter Cities… can you spot the flaws?

Am home for a couple of days, and spotted that some of the TED talks have started going up. Here, as a sort of Transition Culture Summer Homework, is Paul Romer’s talk on ‘Charter Cities’ which I was so critical about in my write up. It offers a fascinating taste of unbridled human hubris, of an economist with no sense of economic or resource constraints, no sense of living within our means or of peak anything, no sense that perhaps unbridled neo-liberal free trade economics have been anything other than to the dazzling wellbeing of everyone.  Have a look.  Be fascinated to hear your thoughts on it.  My two highlights are his raising the question as to why no-one else has thought of building cities in deserts, and the bit near the end where he says …“there is no roadblock, there is no impediment, other than a failure of imagination that will keep us from delivering on a truly global win win solution”.   See what you think.

Categories: Economics, TED Talks

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7 Aug 12:46am

The first hurdle would be peak energy, but after that I can think of a number of others…. not to mention the problems in the past of “terra nulius”…
The speaker includes the assumption of permanently increasing Gross National (and International) Product and I have never understood how this will work with finite resources and energy. Arguing with the laws of physics is not productive at all.

JC Francois
7 Aug 9:20am


This is indeed an astonishing and scary display of ignorance of some basic constraints that limit development. I especially liked the picture of the African desert with the comment: “there’s lot of land in Africa. A land like this could easily accommodate hundreds of millions of inhabitants”.

However I have to say that the principle of having a zone where a different set of rules apply that people freely join is an appealing idea. It gives the opportunity to develop a “micro-economy” with different economic, financial and production systems as a testbed for a future society. Its success or failure would be highly visible and would certainly influence decision makers much more than the complex economic models that failed to foresee the current crisis.

8 Aug 2:19am

An increase in the demand for dwindling resources…

I have to ask, is the academic discipline of economics too abstract to connect meaningfully with objective reality?

This almost had the same effect on me as Glenn Beck. Yuck.

JMB, Vermont
8 Aug 3:13pm

I thought this talk was what Transition was endorsing -until I read your comment. I was shocked by Romer’s condescension and arrogance, “We can build the first charter cities and go on from there building many more.” There was no dialogue here only a presumption of ‘my idea is right, we should implement it.’ The proposal itself is a modification of our existing paradigm, rather than a new paradigm suggestion for a future society.

Having said that, there were some good sound bites. Good “partnerships,” as one example, are critical for global cooperation, however not in the way he describes. Global alliances of Transition Towns with global alliances of sustainable cities are an emergent example of good partnerships. There are many others.

Transition Towns endorses the UN declaration of Human Rights and Sustainable Cities endorses the Earth Charter. These are charters of good and wise guidelines – not rules. what is also needed is a global wisdom that can really begin to rethink a sustainable and a more humble approach to an ecology of systems.

Ann Monroe
8 Aug 10:07pm

The thing that strikes me is that he seems to be assuming that we can indeed write good rules for governing society and – implicitly – seems to think the US has them. What is he smoking? The US (of which I am a citizen so entitled to complain) is the only developed country in the world without universal health care, without any requirement that employers give vacations, with more people in prison than any other, with guns running rampant, and with a legislature that because of our insane campaign finance system, has been bought and paid for. And he thinks we just sit down and write rules and we’ll have safe streets, well-built affordable houses, and whatever else was on his list? Umm – has he ever heard of human venality? Of the ingenuity of human venality? Of human greed?
Give me a break!

Dan Kolis
9 Aug 12:50am

Well, what about the ad hoc success of some odd places…

Its always seemed an amazing thing Hong Kong could be at such variance withthe P.R.C. to me. Haiti and the D.R.


You seem to have a big bag of rocks to thow at something which, in reality, at least works parially, some of the time, accidentally.

I live in Toronto, and it is an ad-hoc nation state totally. But the locals who execute it as a plan, refuse to admit it. that is would cause inward destructive forces, to discuss it.

Now what folks.

10 Aug 3:38am

Paul Romer’s approach is considered by Thomas Homer-Dixon in his book ‘The Ingenuity Gap'(esp ch 9), which is summarised here.

Whereas Romer comes at the issue from an Individualist perspective (nature is eternally bountiful; the key is ingenuity), Homer-Dixon is very much the Egalitarian (nature is fragile and depleting; the key is sharing). To summarise his argument even further: Increasingly complex societies require us to produce ingenuity at an ever-increasing rate. This feat we are struggling to achieve, resulting in an ‘ingenuity gap’ where the problems currently without solution mount up, affecting the poorest and most marginalised first.
While Romer’s critique of the ‘peak everything’ analysis might be: there’s no shortage of ideas, followers of Homer-Dixon might well ask: what about peak ingenuity? H-D writes:
‘there’s one overriding imperative: we must reduce the rate at which our requirement for ingenuity is rising. We have to ease up on the global accelerator pedal. Because if we don’t slow down and simplify things voluntarily—if we allow the complexity, speed, and unpredictability of the systems we’ve created to go on increasing, unchecked—these systems will sometimes fail catastrophically.’

Dan Kolis
10 Aug 5:28pm

Well, looking thru all the items. The first response easiest to compose… (Running out of energy for a charter city.) It’s no more energy intensive intrinsically steady state to move millions of people once and forever then leave them sit. Using a 650 Ft^2 living space per 2.2 people and using infrastructure estimates I get > 3 years and < 10 years before it’s energy break even. In principle, newer place could be more energy efficient, so after that its better then break even anyway.

A quarter of a gram of any matter knocks a city flat; (Hiroshima).

The problem in schemes involving people, is always people. Specifically the instantaneous contents of there brains; (or lack thereof).

Next! This ingenuity / resource gap has a long vintage. Romans 650 BC wrote up how any idiot could see the end is near. The teenagers are lazier then we were, The forests are depleted, the water is polluted. It’s over… Also always, "too many people". The end is always near. Add a little geometry and you get Malthus in there 1800 years later. Add some spreadsheets now, and you get: now. Same thing.

I was impressed by the charter city 'idea' and then was horrified (as another writer wrote-up-too) a little of this is based on the USA generally, and even worse, California. (Charter cities is in the grab bag of California political experimentation, you see). Charter cities there are little attempts to evade California tort law and some of the worse government outside of (you pick) Zimbabwe or Haiti, plus Wolfgang Puck food at retail. Trying to repel bad ideas + lawyers with idea, in California is a hopeless situation. Blech.

Oh.. Anyway I was really smitten for a few hours with the Charter Idea, but it’s not sound, but its not completely unsound, either.

I think all the areas need complete status as errors of history so all the participants need a vague feeling they tripped into a good thing, and can screw over everybody else with speculation.
When you write it up as a plan, its no longer a secret plan. There are lots of planned cities in the world, Most of them slightly better then plopped by the sea by history ones.
But not incredibly so. As mentioned, I think it might be worth doing. But that is a different open issue then fixer-of-all-things class ideas; (which might not exist, as we all suspect I am sure).

I think it’s pretty obvious any project like this needs a historically credible sad story to 'go with it'… the British stink, the Ibo tribe are naturally lousy managers, whatever. Doesn't matter what the belief is, as long as it has a long throw into the past and is interesting.
The place needs borders, (for jumping over). So islands are best. Nothing like a good "no trespassing" sign to increase foot traffic.

The I.M.F. has tried this endless "best practices" transplant Idea, and they inflict it on any country desperate enough to be forced to listen to them.

Maybe the charter cities idea is similar in scope. Most good intentions + organization generate tragic results anyway.

regards to all,
Dan K

11 Aug 3:13am

I don’t understand how he thinks these desert-based new cities will obtain food and fresh water. He seems to be counting desert as ‘arable land’. While I have heard of rare successes in reclaiming some desert land to farming, this is difficult and surely would require a fresh water supply (just for starters). If they are going to build huge desalination plants along the desert coast to supply industry and urban population with water, this has a horrendous effect over-salinating the coastal waters.

Or perhaps he hasn’t even thought about such trivial matters as food and water for these huge population centres and their factories. Mere details!

Dan Kolis
12 Aug 12:38am

Ahhh, well, yes they are details. The central belief system is … what is the general blocking resource to properity.

If you don’t know the answer, or think its some kind of Rock, Watt or fluid, you might as well relieve yourself of the burden of reading this material.

The central premise is: Bad ideas inside people stop things. Bahrain is prosperous, Japan has no hard good resources. Manhattan is a terrible site for millions of daily commutes.

It does matter. People stand on ocean floors in breathing apparatus breathing unnatural mixes of gases at weird pressures.

They do it, because when they get off the ocean floor, somebody pays them a lot. AND nobody stops them from spending it.

For crying out loud, your siezing on a single example. This is a general premise here…

Anyway, I think the problem is insufficent access to trickery. Ahhh one last site you might consider is Las Vegas. You have an urban planner who likes that placement, not Boloxie, Indiana.

Ahhhh a libral (non)-framework of non-law enabled it. If you can pay for it, somebody someplace will go without and sell you water… or Watts, etc.

You notice there is an oversurplus of oil, and following it is a crisis in oversupply of natural gas? Mining? No shortages there either.

Its about the big guy who says “no to you”, ,thats what this is about.

Herr S
12 Aug 10:03pm

… Well, it’s all about buying the right to use a piece of territory deemed fairly worthless by the host nation… Don’t see how it could hurt… Would mean that a few hundred square kilometers are rented by the charter city… Not such a terrible thing.

Dan Kolis
14 Aug 6:47pm

It seems like the natural experiments along these lines have highly variable outcomes generally.

I mean, Panama (regions of), Hong Kong, Israel and Tibet, Lousiana (about 1/4 of the contential USA in actuality), all have had some 3rd party mix/match of pay and take creation acts.

Of course, if you go back indefinitely, all human settlements at some time in the indefinite past had somebody move form someplace, with a relative absence of ability ot move the jurisdictions as fast as the move itself.

I gather the essence of this idea is that is applies, narrowly, to the relative immediate time frame, within ones of decades form now. NOt nessessarily when earth has 10 billion people (for instance), or in the aftermath of the next world war, to name two disruptive eventualities.

Is there are candidate place at this moment really on the book for this? Some mix of rules rollback anfd land reform, some razor wire, a little concrete, etc… A heap of scheming people with a little excitement in their systems, etc??

Dan Kolis
14 Aug 6:51pm

Maybe start small and try Gary, Indiana. Add land reform to the malquiadora’s in Mexico? Dunno.

Its interesting to plan for less planning. Its like a systematic goal to apply a little anarchy… Or a day of worship for aethists.

Dan Kolis
14 Aug 10:11pm

When I re-read this material, I noted Ann M said:
“The thing that strikes me is that he seems to
be assuming that we can indeed write good rules
for governing society”

My perception was, its polite to say “new rules”, but we all know he means almost without exception: “Far fewer rules”. This is what I think is (one of) the secret thing your just supposed to know.

Is that not right? Absolutely no idiot in the galaxy would (in general) want to emulate the United States at this point. Am I missing the general idea really? Its just the wild west as a plan, not as an accident, with a little embellishment here and there like land deeds and so on… Maybe some doodling like fixed min and max wages and specific currency considerations, but a broad swath of stupid baggage logic removed? No? Yes? what?

Ann Monroe
14 Aug 10:36pm

Perhaps it’s because I come at it from a US perspective, but everything he said about rules sounded to me like code for rampant I guess he does mean fewer rules (except when he – at the same time – seems to assume that WITH fewer rules you can produce a safe place to live where everyone is protected and treated fairly). Sorry, but the US is living proof that rampant capitalism and a safe, fair society do not easily (if at all) mesh. Unless, of course, the fair and safe part was just lip service and he really DOES mean the wild west.

Dan Kolis
15 Aug 9:38pm

the sub-text is the “first we kill all the urban planners”, school of logic, that all sorts of little rules on where you stick your fish markets creates some conceptual brain clog, and nobody tries hard any anything. That if we just layed of fthe guys who hand out parking tickets, maybe the next Intel would start right here in this storefront.

The general idea a bunch of people who don’t get much forgein Xchange, etc, poor and not many prospects, hop up and get after it is a issue worth far more study then it gets.

Ahhh, Like intrinsic motovation. Every high school teacher just can’t believe the high school students are more interested in Guitar hero scores then the 6 really important things about Iceland some middle manager decided to force them to grok.

I think though the Charter cities etc is th ethin edge of the wedge for many open issue questions in how people pay and play out their life stories in a competitive world.

Sarhas Hamilton
17 Aug 8:18am

I liked the part of the talk on China and it’s implementation of so called Charter cities. This was the clearest evidence provided for his ideas. Wish he said more about this, in particular HOW LONG DID THIS PROCESS TAKE. Obviously this didn’t happen over night, so we need to know the time scale in which these things can be expected to occur.

It also seems particularly relevant with the ongoing debate about health care reform. There is so much speculation out there as to the best solution and that is because no one person really knows. Why not have a charter state as a testbed for OBama’s plan (or any other alternative), beginning with say Massachusettes. If it works, implement it in a few other states. If it doesn’t, well try something else. In either case we tested the ideas and they can inform us to change. Otherwise changing the entire national health care system requires a huge amount of public will, which only lasts for small windows of time, and are infrequent.

Overall, though naive as the presenter was on details, a very interesting and stimulating point to discuss; would definitely like to read more on the topic in a more concrete fashion. Especially an elaboration on the ‘rules(1)’, such as a states current constitution, and ‘rules(2)’ as to how to transition from old rules to new rules.

Furthermore, it did seem naive to think that a city should be started from scratch, especially in a region with scarce natural resources. Alternatively, it is probably more practical to select cities, that due to certain criteria (which must be elaborated upon), are good candidates for creating the specified changes.

A title that I think would be apt for a more elaborated form of this kind of talk would be
‘Strategies for economic and political change for a transitioning government’. It has a ‘fundamental, principled’ ring to it.

Steve Morgan
18 Aug 5:00am

Somehow relocating another billion people to cities is supposed to reduce the human impact on the earth – did anyone else catch that? Flying in the face of a few thousand years of human civilization (and his very own charts of economic consumption), Romer suggests that urban dwelling people have a lower impact than rural peasants.

Between that obvious flaw and the notion that somehow light pollution visible from space represents everything humans should strive to achieve, I am somewhat glad that this man’s grand plans aren’t likely to be implemented. Thanks for the laughs, Rob!

22 Aug 2:49am

So- why be so critical folks? Most of human progress started with a crazy idea, something everyone thought was nuts, impossible, whatever. Let the guy go and try, let the new rules appear, let’s see if if gets off the ground. DO you really think he’s so ignorant of finite resources or to suggest building in the desert b/c he has no idea why we don’t today… c’mon, he’s not an idiot. So, let the idea get out there and be tested – what’s wrong with that? Unless you are a closet mankind hatter and despise growth and health for all… please…

26 Aug 3:34am

” c’mon, he’s not an idiot.”

Opinions may differ there. A PhD is not guarantee of sanity; not even close. Nor is attention any proof against totally delusional thinking.

“So, let the idea get out there and be tested – what’s wrong with that?”

Two words: corn ethanol. Your exact argument has been given for years to justify building yet another ethanol plant; and diverting more crop to fuel.

And yet- it was known by many to be a stinker of an idea, at the outset. So. Let’s say $100 billion “invested” in ethanol from maize so far. Not really including time spent researching, lives spent studying- a certified dead end. And don’t bother mentioning the increased load on those at the very bottom of the heap. But hey- ‘give it a chance!” oh, and- a subsidy.

What do you suppose might have been done with that money- instead? Pick anything- it would be an improvement.

Bad ideas- are a waste of resources we no longer have to spare. They need to have a stake driven through their heart as soon as possible.

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Kevin Carson
4 Sep 2:33am

The thread’s moved on long since, but what the hell…

Romer has always been a sort of prophet of “cognitive capitalism.”

His model of “economic growth” and increased GDP in a post-scarcity economy is utter nonsense, unless the game is rigged by proprietary content and design owners.

The normal tendency for post-scarcity innovation to *destroy* GDP. The reason is that GDP reflects the cost of production inputs. Any innovation that reduces the capital outlays and overhead, labor time, and resources consumed to produce a given level of consumption will cause a portion of GDP to implode. The Romer (and Bill Gates, and Richard Florida, and William McDonough) model of “cognitive capitalism” depends on allowing a rentier class of “intellectual property” owners to live off the capitalized value of production cost savings, instead of passing them on to the consumer.