Josef Konvitz, Chair, PASCAL International Observatory was recently interviewed by Richard Florida, co-founder and editor at large of CityLab and a senior editor at The Atlantic:

Source: The Atlantic | Citilab

Donald Trump in America, Rob Ford in Canada, Brexit in the U.K., and (maybe) Marine Le Pen in France—as I wrote on Tuesday, populism is tied to a cultural backlash reinforced by our increasingly uneven geography. These growing divides generate the anger and backlash that translates into backward-looking, reactionary populist politics.

The economic strategies of populists are territorial: walls, immigration restrictions, and rules based on national origin. But populism’s rise in Europe as well as the United States is less a product of economic inequality per se or even of economic anxiety; it is a cultural backlash against urbanism and the values of openness, globalism, tolerance, and diversity that are the hallmark of great cities.

I last spoke with Josef Konvitz, author of the book Cities and Crisis, here in May. A former head of urban affairs and regulatory policy at the Organization for Economic Co-operation and Development, Konvitz recently gave a seminar at the OECD on the forces driving this populist uprising and the fates of cities caught up in it; our follow-up conversation on what has been happening in the U.S. and Europe since has been condensed and edited.

First, tell us what is meant by the geography of discontent? How do you measure it? What lies behind it.

The current discussion focuses primarily on stagnant or declining real incomes, and hence on widening disparities between most people and the top 1 percent or 5 percent by income. Productivity is increasing at a lower rate. And, as Robert Gordon argues, we seem to be living off innovations that are decades old. Thomas Piketty’s Capitalism in the Twenty-First Century and Angus Deaton’s The Great Escape, both published in 2013, emphasized a long historical perspective, the importance of cultural values, and the impact of meta-events, usually overwhelming catastrophes, that separate one phase, often lasting decades, from another. These studies, however, look at large social categories and the unit of the nation-state, ignoring spatial variations within countries or in the distribution of social and cultural groups.

The decline of the middle class and the broken escalator of social mobility are no fiction. Before the 2016 U.S. election, Le Monde published maps about the geography of disparities in the U.S. Did you know that the size of the middle class shrank by more than7 percent between 2000 and 2013 in New England, New Jersey, Delaware, Virginia, the Carolinas, Mississippi, Ohio, Indiana, Illinois, Wisconsin, Minnesota, North Dakota, Oregon, Washington, Nevada, Colorado, New Mexico and Arizona? Some of these were red states, others blue. But the trend shaped the political narrative.

Another map showed that the chances of a child born into a family at the lowest level of poverty ever reaching the upper level of income were under 6 percent in virtually all parts of the South, as well as much of Michigan, Ohio, Kentucky, and Indiana.

The spatial perspective comes into sharper focus when we look at indirect measurements such as the higher cost of rental housing, declining real incomes, the burden of debt for home ownership, the cost of commuting by car, pressure on infrastructure capacity—things that matter in daily life and for which people have no elasticity, meaning that they cannot find better or less expensive ways of doing things. Pressures build up. These indirect indicators highlight how the organization of housing and work in particular places can generate problems that accumulate. As Jane Jacobs famously said, when this happens, problem solving has broken down.

What are the general ways the geography of discontent is shaping our politics across the advanced world?

A correlation between economic disparities and populism is too simplistic: The Dutch economy is performing better than that of the U.S., but Wilders still made a strong showing; Scotland’s economy is underperforming that of the U.K. as a whole, but Scotland voted overwhelmingly to remain in the EU.

There are times when rational, well-educated societies lose a sense of perspective, and become overly sensitive, reacting emotionally. We are at peace; the post-2008 recovery, although shallow, is underway. But the general atmosphere, conditioned by fear of terrorism, is pernicious. Studies show that people are poor judges of the risks they do face, exaggerating some which are highly unlikely, underestimating others for which the odds of probability are great. Meanwhile, the security state keeps expanding through a combination of rules, mandates, and direct expenditure. We have to look at what is on the front page of the news, and it is not the economy. Is it any wonder that people feel their way of life is under threat?

“Some people thrive on stress—it’s part of what comes with living in a big city. Others find stress to be a threat.

Some people thrive on stress—it’s part of what comes with living in a big city, or having with a job with responsibility. Others find stress to be a threat. My guess is that our tolerance for stress is declining, and with it, our ability to cope with change. Mental health is even more of a problem than obesity, but we do not talk about it. We need to understand a lot more about the emotional and social skills people need for the 21st century.

Even before the crisis of 2007 and ‘08, the electorate was polarized, leaving countries governed by parties without a strong mandate. The lack of trust in government, reinforced by the long-delayed recovery, created opportunities for politicians on the edge of mainstream parties to peddle simplistic messages to audiences that other politicians in the center had ignored. And these audiences are often in rural areas or in small and medium-size cities, and areas with an economic monoculture, be it farming, natural resources, or a single industry. Large cities, where people from 100 or more nations live together, appear foreign and threatening to them. The urban-rural divide is back in a big way. If younger, better educated people move to the big city—a path followed by generations—what will happen to the communities they left behind?

In the U.S., protectionism is what is left when government does not offer a bold strategy like the New Deal era; in Europe, the far right peddles an expansion of the welfare state. Different policy tools, but a similar message: The state will take care of you first.

How is the geography of discontent registering itself in the United States?

The U.S. really is different. The sheer size and history of the country highlight the distinctive paths of the South, the Midwest, New England—areas as large as a nation in Europe. The question of maintaining the coherence and integrity of the nation, when a government is elected on the basis of strong regional divergences and tensions, is real. That challenge is faced in the U.K., Italy, Spain, and Mexico, too.

Economic modernization on the basis of industrialization and tax incentives in the South has failed to change the importance of race, culture, and religion in that region. Social mobility remains lower there than in other parts of the country. Education, health, and safety—especially gun-related violence—which remain under the control of states, further distinguish the South from other regions. We are back to the problems of race, culture, and religion.

These are terms that make economists uncomfortable. They’re intangibles that fit awkwardly in models based on GDP per capita, workforce participation rates, unemployment, even the number of years of education. Bible reading, it turns out, is a good predictor of a vote for Republicans in 2016.

Cities in the U.S. are Democratic in states that are Republican—hence the orientation of state politics toward rural areas and suburbs at state level. Most counties in New York State voted Republican, even if the popular vote for the state as a whole produced a Democratic majority. Trump earned more votes than Romney did in old industrial cities, and even in Newark-New York City, but had majorities only in the St. Louis, Pittsburgh and Tampa metros. Many suburbs voted Republican against cities which voted Democratic: Rochester, Charlotte, Atlanta, Columbus, Cleveland, Cincinnati, Detroit, Milwaukee, Minneapolis, Dallas, Houston, Austin, Salt Lake City, New Orleans, Portland. And guess what the implications of that are for policies to control sprawl or improve public transport?

Geographic mobility in the U.S. has declined—but this could be a “so what” point. The level now is close to that of France—nothing wrong with that. Geographic mobility has been the neoliberal way of adjusting interstate differences in employment and housing prices. That worked well in the manufacturing economy, but matters less in the knowledge economy or in creative cities. If the U.S. wants to rely on an outdated model of resource allocation—moving people to jobs—housing markets have to work better. But it is unclear whether in the 21st century, a higher rate of geographic mobility will reduce inequalities—education, job skills, preventive health may matter more than the interest rate on mortgages or the size of down payments.

So what can we do about this, to counter the geography of discontent in the U.S. and across the advanced world?

I am supposed to come up with a list of wonderful innovations and feasible policy initiatives. But I cannot. It takes years for major academic research to influence policy. Data on disparities became available too late to be relevant to economic or social policy: We found out what we should have known a decade earlier. Much of the information available to policymakers then was ad-hoc, episodic; in any case their margin for policy change was, and is, narrow.

Let’s start by viewing budgets through a territorial or regional lens: how sectoral funding from different levels of government is aggregated at sub-national level. There is not a mayor anywhere who knows how much the public sector—all levels combined—is spending and investing in his jurisdiction.

“National policies are spatially blind—they treat culture, geography, language, and religion as irrelevant at best, or as handicaps at worst.

Why is this necessary? National policies are spatially blind. National macroeconomic policy treats culture, geography, language, and religion as irrelevant at best, or as handicaps at worst, barriers to the smooth workings of economic rationality. After all, these are endowments which economic trends are unlikely to affect, for better or worse.

The federal government cannot promote regional initiatives in the Midwest or the South without generating concerns that one part of the region will benefit at the expense of the rest. There is a lot that states and cities can do to streamline procedures for infrastructure projects, and to adjust land use patterns and building codes, improve public education. But in the U.S., local initiatives often require enabling legislation by states, many of which are increasingly concerned with limiting the competences of local governments in one field or another.

A massive increase in military expenditure in the U.S. is likely to become a regional development strategy by default. But communities that become dependent on military expenditure risk being locked into a monoculture. In the 1990s, people in the U.S. and Europe found how hard it can be to convert old military bases and the like into productive and useful sites. What new kinds of infrastructure will follow from a massive build-up of the military now? Parallels with the Interstate highway system fall apart quickly. In the 1950s, when the U.S. had many military bases and a decentralized industrial system, the new highway system made sense. Now the military is high-tech and spatially concentrated; its infrastructure needs are not likely to spill over into civilian uses.

We need a new transport-building cycle, the kind that linked new transport modes and networks like canals, railroads, highways, and air routes to new ways to organize cities—the most powerful instruments of job creation. Europe and much of Asia see global climate change as an opportunity, while the U.S. under the current administration acts on the assumption that this agenda hurts America.

This takes us toward the topic of resilience, or how communities, regions, firms, and institutions buffeted by unexpected and severe shocks renew themselves and recover. The capacity for resilience highlights such things as the network of volunteering, the level and quality of education, preventive health care, adequate housing, public safety, environmental protection, redundancy in transport—all sorts of things that go into a good balance of private and public goods. Unfortunately, the stock of public goods took a big hit in the global financial crisis of 2008, and further measures of deficit reduction come at the expense of rebuilding those stocks—let alone increasing them.

This problem is not new; it has been with us for most of the 20th century: how to combine policies for economic growth and innovation with investments that improve conditions in the places where people live.

Am I unduly pessimistic? Or realistic? In Cities and Crisis, I argued that things will get worse before they get better. The struggle is between countries where governments believe more control is an end in itself, and others where governments believe cooperation is part of the solution. We had better prepare for more crises before people are really persuaded that a paradigm shift is the only way forward.

Source: The Atlantic | Citylab

Josef Konvitz is Chair, PASCAL International Observatory

Richard Florida is co-founder and editor at large of CityLab and a senior editor at The Atlantic