Cities, Mathematics and Human Action

Below is an interesting talk by physicist Geoffrey West at the TED forum on Cities.

Some points he makes;

-It’s hard to kill a city.

-He places tremendous emphasis on the scalability phenomenon where he connects size with social impact, e.g. bigger city bigger wealth more AIDs

-However he says that optimism bias tends to prevail over the city’s growth dynamics where people tend to see ‘wonderful things and forget the ugly and bad’

-He rightly points out that social networks are key to the growth of cities; ‘We are the city’ which is a result of people’s “clustering interaction”.

-Further he says that for cities to develop it needs ‘faster innovation in a continuous basis’.

-Lastly he says that he can predict the size of a city or company given the sublinear scaling from ‘sigmoidal growth’

Here are my thoughts

It’s interesting to see how mathematically inclined people try to quantify people’s actions.

In the past killing a city or a decline of relevance or marginal utility of a city comes in the form of war (Nineveh, Babylon, Selucia, Carthage, Rome, Pagan and Angkor Wat as examples), change in economic patterns (introduction of Cape Good lead to the decline of Venice) natural calamity (Pompeii) or cyclical-behavioral-political elements- such as overconfidence, which led to overexpansion or lack of diversity (fall of Rome).****

In addition, scale does not automatically translate to magnitude.

In history, autonomous small cities played vital role as Amalfi, Cadiz, Goa, Batavia, Geneva, Abu Dhabi and Monaco.*** Today we have semi-independent city states as (pre-China) Hong Kong and Singapore.

Social network is indeed important. But Professor West does not specify how social network would result to “clustering interaction”. Are cities politically or economically driven?

In the past, strong arm societies depended on the capability of leaders, such as Alexander the Great, Attila the Hun, Genghkis Khan, Timur, Akbar, and Kublai Khan***. When they passed away so did their respective empires and cities.

History shows that many cities emerged from trading routes and proximity thereof, particularly in coastal areas (Tripoli, Sidon, Carthage, Athens, Marseille, Syracuse, in recent centuries Venice, Famagusta, Genoa, Constantinople, Kafffa, Lisbon and etc.)***

Many factors are involved in city dynamics: some of the important ones are economic growth cycles, legal systems, economic freedom, infrastructure, adherence to property rights, (in the past) military power [Assyrians, Romans, Mongols], political climate or conditions (interaction between minority and majority, in the past conflict resulted to dislocations which have caused diasporas of Jews, Huguenots, Armenians) innovation and intellectual tolerance.

To quote the legendary investor Marc Faber***,

A dynamic society arises where there is also intellectual tolerance freedom of conscience, social mobility, freedom of ideas, and the expression of ideas which may be hostile to established beliefs or to the government. Where intellectuals, scientist, and philosophers were persecuted, imprisoned, tortured or murdered, they fled. But it is in their know-how on which progress depends.

Deidre McCloskey would call this the Bourgeois Virtue.

And it is upon this climate of free interaction by people which induces Professor West’s innovation dynamics.

An example from the local setting:

In the Philippines, Manila as the Philippines’ capital played a pivotal role economically (Manila-Acapulco Galleon Trade) and also had been politically important; under American rule Daniel Burnham planned a government center spanning Luneta to Taft which almost like every centrally planned projects failed.

Today, Manila’s relevance has been apparently declining, in terms of population growth and per capita income.

While Manila still has the second largest population second only to Quezon City, the growth rate has been stagnating and relatively underperforming against a vibrant Quezon City according to the 2007 census. The fastest growth rate is seen in Taguig, Paranaque and Kalookan City.

Manila still has the largest population density

However, in terms of per capita GDP, Manila ranks 5^th to the following order Makati, Mandaluyong, San Juan and Muntinlupa (Wikipedia).

The obvious point is that city scale and magnitude while having some correlation does not exhibit strong causation. The huge gap in Professor West’s talk is how social interaction has led to city dynamics.

I have stated why I am a skeptic of centrally planned urbanization as this runs contrary to the forces of technology enabled decentralization. The obvious evidence can be seen in several 'huge' but empty ghost cities in China which are products of politically induced bubble cycles.

Finally Professor West says that he can predict growth dynamics of companies and cities from “sublinear scaling”.

My guess is by now he should have bettered the record of Warren Buffett as an investor.

I am reminded by the admonitions of the great Ludwig von Mises of relating natural sciences with social or human actions,

Nothing could be more mistaken than the now fashionable at­tempt to apply the methods and concepts of the natural sciences to the solution of social problems. In the realm of nature we cannot know anything about final causes, by reference to which events can be explained. But in the field of human actions there is the finality of acting men. Men make choices. They aim at certain ends and they apply means in order to attain the ends sought.

***Nury Vittachi Doctor Doom Riding the Millennial Storm

Example Of How The Welfare State Destroys The Individual

This is a graphic example of how the welfare state destroys the individual or the intermporal effects (short term gain, long term costs) of welfarism.

Gerry Garibaldi writes [hat tip: Dan Mitchell] (bold emphasis mine)

Connecticut is among the most generous of the states to out-of-wedlock mothers. Teenage girls like Nicole qualify for a vast array of welfare benefits from the state and federal governments: medical coverage when they become pregnant (called “Healthy Start”); later, medical insurance for the family (“Husky”); child care (“Care 4 Kids”); Section 8 housing subsidies; the Supplemental Nutrition Assistance Program; cash assistance. If you need to get to an appointment, state-sponsored dial-a-ride is available. If that appointment is college-related, no sweat: education grants for single mothers are available, too. Nicole didn’t have to worry about finishing the school year; the state sent a $35-an-hour tutor directly to her home halfway into her final trimester and for six weeks after the baby arrived.

In theory, this provision of services is humane and defensible, an essential safety net for the most vulnerable—children who have children. What it amounts to in practice is a monolithic public endorsement of single motherhood—one that has turned our urban high schools into puppy mills. The safety net has become a hammock.

And this applies to the Philippines as well.

For instance, in terms of demographics and education, public schools relieve the personal responsibility of the “poor” to have children, since the entrenched impression is that the state provides “free” education. So family planning becomes less of a priority because of such skewed incentives. I have personally spoken to many ‘poor’ people whose brains appear hardwired to the state’s ‘free schooling’.

And this seems backed by statistics which shows that the highest fertility rate is seen among the poorest in the society.

And this also departs from the layman’s opinions who mostly see that the “poor people have less to do except make babies”.

Of course, I am quite sure that there are many other laws which contribute to the distortion of people’s behaviour. The essence of which are that these laws (welfare programs) essentially abdicate personal responsibility and are substituted for government dependence, with the provision that individual freedom is compromised or curtailed in return for “safety nets” and votes.

Furthermore, people hardly know that there is no free lunch and such law distorting behaviour will eventually lead to an entitlement crisis. Yet politicians and their apologists continue to sell promises which they don't intend to fulfill.