Creative Class

Adam Smith in the Wealth of Nations suggested over 200 years ago that what makes us human was the fact that we exchange. Dogs do not. Well, today we know that sometimes animals do exchange according to an article in a recent issue of the Economist Magazine (February 21, 2009 p. 80).

In a recent book, Richard Wrangham, an anthropologist at Harvard University believes that what makes homo sapiens unique is that their food is so often cooked. In a new book Catching Fire he explains that what makes us truly human is cooking food. We are the only species that cooks food. But what is really interesting is that cooking, especially meat, is what led to our big brains. Without cooking the human brain, which consumes 20-25 percent of the body’s energy, could not keep running. Without cooking, raw food cannot feed the brain. Cooking softens food and makes it easier to digest so even the tough stuff is easy to use. Cooking also increases the food digested in the small intestine from 50 percent to 95 percent.

What is really interesting is do we have a connection between cooking and the creative class? Most creative cities and regions we know have lots of gays, bohemians, and immigrants. But what role does cooking play in all of this? Do we not find that most of the creative places also have great eating places? Is this the immigrant connection? I do not mean the simple fast food restaurants, but really good cooking and good food. What is the connection between these two activities?

Does culture and therefore cooking and food also act as a part of the social capital that drives creativity and the creative class? Give me a good bowl of pasta, a nice bottle of wine, and the creative juices will start to flow because we are feeding the brain. Give us bad food and obesity develops, the brain does not develop, and we have no creative class.

Food for thought.

Over the past few weeks, I have been taking a longer view of things, more like 100 years, to the end of the 21st century. However, 10 years of it is already almost gone! So when I read a recent issue of New Scientist on how to survive the rest of the century, I was rather surprised. In an article on “Surviving in a Warmer World,” under very simple conditions, a 4 degree C rise in global temperatures, results in the abandonment of most cities, the desertification of most of the world, the death of five billion people and the end of life as we know it. Although we do survive.

This is of course a simulation model, but I am not sure how many of us have focused on just the recent financial collapse and the global depression with the hopes that if we get out of this in the near term our troubles are over. Not only are our troubles not over, but getting out of the depression and surviving the present century are intertwined. For what a depression tells us is that the current consumption and investment trends are unsustainable financially. As Richard points out, the current investment in housing is not sustainable.

The current crisis comes from an over-investment in housing and all that goes with it and now under-consumption because of consumer debt. Society needs to put these two crises into perspective, and the way to move forward in this crisis is not just to reflate the economy at all costs (read: money expansion) but to stop consumption-led growth and start to focus on investment for the future – energy, environment, clean cars, etc.

This message is starting to sink in. Joseph Stiglitz, in a recent issue of the FT, pointed out that we can have several shots at the financial crisis until we get it right, but we only have one shot to get the environmental story right. I would argue that we do not have too many shots to get the economy and the environment right. The huge investments needed for the future cannot be put into the wrong place. If they are we might all be dead in the long run.

If one is going to invoke the creative class, and they are not going to destroy the financial sector, perhaps we can ask if the incentive structure is right to get them to focus on saving the environment from total collapse.

Map by Sloshspot via NYT Economix.

A University of Michigan study find that neighborhoods with more fast food restaurants have higher rates of stroke. Taking into account demographic and socioeconomic factors, the study found that:

• Residents of neighborhoods with the highest number of fast-food restaurants had a 13 percent higher relative risk of suffering ischemic strokes than those living in areas with the lowest numbers of restaurants.
• The relative risk of stroke increased 1 percent for each fast-food restaurant in a neighborhood.

Richard writes about the need to make all work creative, but he’s generally talking about the manufacturing or service industries. However, America’s declining agricultural sector is making a comeback in many areas, largely because of the creative class on both the producing and consuming ends.

In many cities, close-in farms are switching to organic methods and raising a wider variety of crops to sell at farmer’s markets, co-ops, or natural food stores. Some large producers are profitably making this switch but much of the growth is small family farms, many run by immigrants. As consumers’ preferences move beyond just organic to buying local, the smaller close-in farms start to have an advantage. And even in recessionary times, growers selling at farmer’s markets can price competitively.

The creative class component on the consumer end is obvious, the demographics for both Whole Foods and farmer’s markets lean toward creatives. Both “exotic” (bok choy) and “heritage” (beefsteak tomatoes) produce are popular with creatives, although the heritage also has an attraction to the farmer’s market bargain shoppers who remember their parents’ gardens.

On the other side of the equation, producers are also increasingly creative in their approach. I got to thinking about this the other day when a friend had a piece on a NY Times blog about his brandy business, which was launched partly to market the pears from his family orchards.

In this story he mentions the growth of local cheeses, wines, and other products which have taken underperforming crops and made them profitable products. Another friend who used to have a Bonsai business outside Boston would come to Oregon to buy nursery stock. There are undoubtedly thousands of examples, each one showing creative thinking in this oldest of industries.

One often mentioned but little analyzed aspect of Obama’s budget is the cuts to agricultural subsidies for farms with annual sales of over $500,000. Like the tax breaks for the rich, these benefit only the top 5 percent of farms and have contributed to the growth of agribusiness and squeezing out of family farms. While the political future of this proposal is uncertain, it might cause “rent-seeking” corporations to leave farming and open the field for the little guys, who are agriculture’s creative entrepreneurs.

Ryan Avent points to this finding from a 2006 report from the Center for Housing Policy, which documents the share of income people devote to housing and transportation. It’s higher than you might think.

BusinessWeek’s Michael Mandel writes:

• Our problems are structural, and there’s still a huge force behind the status quo.
• If the last 10 years was just an accumulation of massive debt and stagnating salary, then the next decade going to be hell on Earth!!
• What’s held us back is tech, tech is the next logical step for this economy.
• I would argue that the last decade was one in which we tried to maintain a standard of living way beyond our means by massive borrowing and that the next decade will be the tough one because we are in the beginning stages of having to pay the piper. In the long run we will have to learn to live within our means…
• [Y]ou are touching on the essential question of the postmodern economy: how do we create enough new consumption markets to keep everybody employed?

Agreed: The essential question. It’s not just tech or even the creative destruction of industries. Economic recovery will require a massive shift in how and where we live. Breathing life back into the industries, behavior patterns, and lifestyle arrangements of the old, fordist order won’t work because it simply cannot create new demand and consumption patterns. We actually need to reduce the costs of the old fordist housing, energy, and transport nexus so that these new markets can open. Until we begin to understand this, and think and act – and design public policy with this in mind – we will go absolutely nowhere. Why such a massive failure of intellect and imagination on this score?

The Freakonomics blog in the New York Times has a brief article (and a spirited discussion section) considering how people’s spending patterns might adapt to changes in income. While the conjecture about which products and services might be more or less income-elastic is certainly interesting, the first two paragraphs contain two very curious words which add up to a pretty big unchallenged assumption: “presumably,” as in “a (presumably) temporary decline in income during the recession; and “the short run.”

In the short run, Daniel Hamermesh is probably right: lots of things get short shrift when income shrinks, including his list of “postponable luxuries” like plastic surgery, participation in the Austin Marathon, and pediatric visits (not my idea of a postponable luxury, but to each his own). But I am not convinced that we’re in a short run situation at all, and that we are witnessing the presumptive temporary decline in personal income.

This may not be a recession. We may be in Act I of The Great Reset. If we are in a recession, the standard economist playbook holds. If we are in uncharted waters, all bets are off.

So, what do you think? Is this a permanent or temporary setback? What are you you postponing, or planning to forego entirely?

The deepening economic crisis has many casualties. As the NY Times David Segal writes, Americans’ love affair with malls is “on the rocks.”

Here, ladies and gentlemen, is the crux of the problem: We are reliably informed that whatever part of the economic crisis can’t be pinned on Wall Street — or on mortgage-related financial insanity — can be pinned on consumers who overspent. But personal consumption amounts to some 70 percent of the American economy. So if we don’t spend, we don’t recover. Fiscal health isn’t possible until money is again sloshing into cash registers, including those at this mall and every other retailer.

In other words, shopping was part of the problem and now it’s part of the cure. And once we’re cured, economists report, we really need to learn how to save, which suggests that we will need to quit shopping again.  So the mall we married has become the toxic spouse we can’t quit, though we really must quit, but just not any time soon. The mall, for its part, is wounded by our ambivalence and feels financially adrift.  Like any other troubled marriage, this one needs counseling. And pronto, because even a trial separation at a moment as precarious as this could get really ugly.

So we have come to this 4.2-million-square-foot behemoth — the mother of all malls, a pioneer in the field of destination retailing, and a sprawling, visceral economic indicator — for some talk therapy with shoppers, retailers and management. We let people vent, grumble and sift through their feelings. They catalog their anxieties, describe their fears and express the surprising varieties of guilt that only dysfunctional relationships can produce …

There are roughly 1,500 malls in the United States, according to the International Council of Shopping Centers, many of them ailing, some of them being converted into office buildings, and others closing their doors for good.

At Web sites like deadmalls.com, the carcasses of these abandoned buildings are photographed and toe-tagged, along with tributes from former shoppers. All this as the worst retail environment in decades continues to sag in a sickly economy.

Revitalizing the growing ranks of dead malls will make the challenge of downtown retail seem like a walk in the park.

The New York Times notes that the crisis is turning design from decoration and frivolity to function.

The pain of layoffs notwithstanding, the design world could stand to come down a notch or two — and might actually find a new sense of relevance in the process. That was the case during the Great Depression, when an early wave of modernism flourished in the United States, partly because it efficiently addressed the middle-class need for a pared-down life without servants and other Victorian trappings.

Patrik Jonsson in The Christian Science Monitor notes that the crisis may be ending the McMansionization of the suburbs and some cities (via Planetizen).

With housing prices off by 18 percent in 20 US cities in the last year and new home starts at a 26-year low, bulldozers have slowed their march across American cities and towns. In Westport, Conn., teardown permits are down in the last year by 33 percent – a figure that experts say can be extrapolated nationwide, though teardown trends do have significant regional variations. Analysts expect the lull to last at least five years, perhaps 10.

My own hunch is that we are witnessing a sharp turn toward quality and functionality. The Great Reset will mean smaller, better, more efficient spaces, and an emphasis on higher quality design from the artifact to the city and regional scales. Call it wishful thinking, but the logic of the economy is at least pushing in the right direction.