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« Rightie Elsewhere | Main | Things They Donít Tell You About Modern Art »

May 06, 2004

The WTC and Free Enterprise

Dear Friedrich --

As you've probably read, Larry Silverstein, the tycoon behind the World Trade Center, has lost his bid to receive a double insurance payout. (He spent $100 million in legal fees to achieve that result.) As a result, the rebuilding of the site is likely to be a less gargantuan thing than anticipated.

But what caught my eye in Julia Vitullo-Martin's good piece about the future of the Ground Zero plans in today's WSJ (not online) was one particular passage. A surprising number of people I talk to seem under the impression that the often-awful forms American cities and American suburbs take these days represent the free enterprise system in action. Strip malls? Barren plazas at the base of towers? Sprawl? Too bad, but hey, it's The People expressing their preferences freely. Um, er: can we talk about tax breaks, highway subsidies, bizarro regulations, high-level cronyism, etc etc?

As an admittedly dramatic example, here's Vitullo-Martin spelling out some of what was involved in the creation of the WTC:

The World Trade Center had never been the monument to capitalism the terrorists believed it to be. Rather, it was the product of the Port Authority of New York and New Jersey's peculiar brand of government gigantism -- immense office towers built on private land acquired under eminent domain, exempted from city building codes, and freed from all taxes to compete with the private sector. Despite the status of Mr. Silverstein and his partners as leaseholders, the Twin Towers were never truly privatized -- which in normal terms would have meant "sold." Instead they were merely leased for 99 years to maintain such Port Authority privileges as tax exemption and freedom from city regulatory codes.

Another reason why architecture-and-urbanism is so much fun to follow: politics.



UPDATE: Laurence Aurbach, a better researcher than I, found the Vitullo-Martin article online. It can be read here.

posted by Michael at May 6, 2004


Oh yeah, there's not nearly as much free enterprise in the US as is widely supposed, here and elsewhere.

Let's see, major industries that are very regulated include transportation (airlines, automakers, aerospace, road building, etc.), finance, building and construction (ye gads, zoning laws ALONE are insane!), pharmacuticals, medicine, law, most of education. I know I'm certainly missing some.

My point? That only after you pass the regulatory hurdles set in Washington (and/or your statehouse, and county commisioners) do you get to play in the 'free' market and compete.

All of which is very handy for established competitors. I've seen this (our!) system described lately more and more as a 'corporatist' capitalist system. Which is a polite way to refer to the older name for that economic model: fascist!

No, not National Socialism, Hitler wasn't a very good fascist at all; Mussolini adhered much more to it's theoretical model, both politically and economically, and here I'm using the term in it's purely economic sense: a system where the govt. strictly regulates under which conditions an enterprise in a particular industry may be started.

Why do I suspect that there aren't many high school economics teachers like him around any more? Note also that he didn't have a political axe to grind (no tinfoil hat lefty is he!), as he also really enjoyed telling us (over in govt. class) how, in at least a diluted form, nearly all of Marx's list of ten reforms for industrialized nations to adopt, list in the Communist Manifesto, were enshrined in Federal law or regulation.

I just checked the list, and that supposition is largely correct (the list is near the end of section II).

Who was it that said we become the worst in what we hate?

Posted by: David Mercer on May 6, 2004 2:24 PM

I would never go to far as to say that strip malls are simply a function of free preferences of individuals. But neither do I think that the quintessential American landscape to which New Urbanists object is fundamentally a function of bad zoning, odd subsidies and sneaky politics.

Put another way, if economic and political markets were in fact completely free and efficient, I can't imagine we never would have had strip malls and would have had Duanyvilles instead. People like their cars too much, for one thing. At least they have historically--maybe we'll see preferences change over time, with fewer strip malls and more Duanyvilles in our future, and I'd like that.

Also: Manhattan is a tough place to use as an example of anything which would aspire to general application. The normal rules don't apply in this quasi-socialist real estate wonderland, but it oddly seems to work most of the time.

Posted by: fenster moop on May 6, 2004 2:53 PM

FM, what do you mean "it seems to work most of the time"? It works within it's own "quasi-socialist real estate wonderland", with various subsidies, etc. And g-d only knows how much maneuvering and "sneacky politics

Posted by: Tatyana on May 6, 2004 3:11 PM

Oops - darn clicking syndrome again. Michael, can you erase that?
What I meant to say - it works only within weird socialist subsidized world - in vampire fashion, and is a classic example "how not to do things", because very few other places can rely so much on state and government support and heavy local taxing. Take away "local rules" - and this fake "structure on crutches" will collapse with big boom.

Posted by: Tatyana on May 6, 2004 3:21 PM


I retract my comment about New York City. Semi-facetiousness is one of the hardest attitudes to communicate on the web, without body language. Sure, the City is dippy. Whether it remains the engine that it does in spite of or because of its artificial rules I don't know. I've lived there but the place always flummoxed me in that regard, so I'll leave that question to others.

I would say, though, that your own logic seems askew. After all, if "local rules" keep it afloat, wouldn't that be a good argument for having them? Would it be preferable to get rid of the local rules and have it collapse? Or maybe you are being semi-facetious?

Posted by: fenster moop on May 6, 2004 4:39 PM

David -- Sometimes seems that it's all done for their convenience and not our pleasure, doesn't it?

Fenster -- You write, "if economic and political markets were in fact completely free and efficient, I can't imagine we never would have had strip malls and would have had Duanyvilles instead." I can't either, and I'm certainly no believer that a NewUrb utopia would take form if only it weren't for restrictive laws. But the fact still is that we're often nearly locked into certain forms of development, which at least some people find disagreeable. Opening the market to new products (and doing some taste-educating, which admittedly might backfire, but still) can't hurt, in any case. At least folks'd get a chance to make some kind of choice.

Tatyana -- I find NYC's development arrangements almost completely beyond my comprehension. Can you make sense of them?

Posted by: Michael Blowhard on May 6, 2004 4:52 PM

Not really, FM: the blanket is not sretchy enough to cover everybody. These local rules only survive on account somebody else/somewhere else being milked for the benefit of the local redistribution, artificially. And who are you going to milk next, if milking your neighbor became standard practice for everyone? Too familiar for any former Russian Federation citizen: *we are to work, and Moscow's to enjoy the fruits of our labor*.
I wouldn't mind, really, if local regulations [even ever so gradually] collapse. I suspect rents, f.ex., wouldn't be so fantastically high if rent control will be abolished. Or at least not for long.

Posted by: Tatyana on May 6, 2004 5:11 PM

I happily defer to any former Russian Federation citizen on irrational aspects of things like rent control, which I quite agree creates ver bad cul-de-sac.

Posted by: fenster moop on May 6, 2004 5:33 PM

Michael, I'm not an architect, and have almost no contact with developers and/or zoning regulations per se (only in capacity of the homeowner), but what echoed communications I got my small knowledge from, it is indeed weird and complex.

Consider the fact, f.ex., that no architect or developer will dare to file new construction in the building department, as the law requires, by himself. There are so many conflicting regulations and obscure hurdles, that there is a SEPARATE PROFESSION of Expeditor. It's a person who gets paid (by architect, who later is reimbursed by the client) to take your drawings, check them for compliance to ever-changing local laws and to go thru the motions with clerks at the DoB. Like that "seasoned" solicitor personage from some Dickens novel. Talk about middleman, piling construction costs and free architectural expression...

There are some things I can say about ADA codes and required union labor in NYC, too - later, if you're interested. For now I rather intend to employ my mouth as cocktail-downing device. Ciao!

Posted by: Tatyana on May 6, 2004 5:47 PM

"Expeditor" -- love it. A Chicago friend who had a house built told me about similar folks. Evidently it's such a complex, annoying process to do what you need to do to get your house built that you wind up hiring ... guys who used to work in the department whose sign-offs you need to build your house. What a great deal: retire with pension, that start up a parttime second career helping people deal with the people you just retired from.

Cocktails sound good! And sensible.

Posted by: Michael Blowhard on May 6, 2004 5:56 PM

The whole question of what is architecturally beautiful or appealing and what isn't is dicey. I mean we're all supposed to shudder at the very word stripmall; and ooh and ahh at old dense redbrick or brownstone city streetscapes.
I grew up in NYC, with the usual prejudice against suburban sprawl. But I don't know: having lived in a less dense world, with newer buildings, for about a decade, I've come to appreciate the milder larger spaces between buildings and even the look of large low wide structures; even the pleasing way the world looks from the perspective of my gliding car.
Peasants rule!

Posted by: ricpic on May 6, 2004 8:52 PM

The Wall Street Journal article is online at

Plenty of people love strip malls, and that's fine -- there are plenty of strip malls to enjoy! The point, however, is that 95 percent of what's being built in this country is the same product. Together, our political, financial and administrative systems amount to a smooth and well-oiled franchise operation. Landowners and developers can convert raw land into conventional suburban formats quickly, profitably, and with little creative thought or innovation required. That's what the operating system in the U.S. is set up to deliver, and anything that does not conform is terrifically difficult for most localities to deal with.

Posted by: Laurence Aurbach on May 7, 2004 10:01 AM

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