Creative Class

There’s an excerpt from Brink Lindsey’s terrific new book, The Age of Affluence, over at Reason Magazine. I read the book in galleys and must say I strongly recommend it. The piece, titled "The Aquarians and the Evangelicals," deals with the breakdown of post-war culture in the late 1950s and simultaneous rise of the counterculture and the religious right in response. On balance, I think he is right.  This explains the dualistic pattern found by Ron Ingelhart in his work and our own cultural divide and political polarization. The US is really two separate nations - one shaped by the values of the counterculture, the other by the socially conservative response to it.

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Roger Martin. Dean of the University of Toronto’s Rotman School of Management,and Gord Nixon, President and CEO of the Royal Bank of Canada, outline a detailed strategy for Canadian competitiveness in our era of "transformational globalization."

In a 2005 Atlantic Monthly article titled ‘The World is Spiky’, Richard
Florida countered Mr. Friedman’s flat world hypothesis by showing that
economic activity in the world is incredibly spiky as is innovation
activity, measured by patents. Mr. Florida showed convincingly that
talented people agglomerate in a limited number of regions in the world
where they work for innovative organizations that dominate their
industries. …As these industries get intensely spiky, a country is either
a player or not; there is not an in-between. … We think that Canadian policy is largely
indifferent to, if not ignores, the transformation that is going on
today. While things may turn out fine with a policy of indifference, we
think that the likelihood of that is sufficiently low and the downsides
so devastating for Canada that we will argue that Canada needs to take
positive action now.

The full story in the Globe and Mail is here.

While this debate is taking place in Canada and elsewhere around the world, America’s attention is drained away by Iraq and the so-called "war on terror". Major global transformations come together in rapid tipping points. The opportunity costs of lapsed attention can be great.  We’re not there yet, but the clock of history continues to tick away. Or as Paul Romer likes to say, "A crisis is a terrible thing to waste."

As we posted yesterday, I’ll be a guest on the Colbert Report on
Monday, July 16th (11:30PM EST, Comedy Central). 

I’d love your help
getting ready. Please send along suggested subjects, one-liners, and
repartee I might use to engage Stephen. 

The always interesting Jim Kuntlser sees suburbia on its last legs:

I get lots of letters from people in various corners of the nation
who are hysterically disturbed by the continuing spectacle of suburban
development. But instead of joining in their hand-wringing, I reply by
stating my serene conviction that we are at the end of the cycle — and
by that I mean the grand meta-cycle of the suburban project as a whole.
It’s over. Whatever you see out there now is pretty much what we’re
going to be stuck with. The remaining things under construction are the
last twitchings of a dying organism. The rest is here.

Ross Douthat, invoking Joel Kotkin, sees suburbia as the future:

The suburbs are a triumph,
not a torture chamber: They’re the place where "we’ve created the first
mass middle class in the history of the world where people own their
own land and their own homes," which is an achievement to be celebrated
and sustained, rather than denigrated and abandoned. People love living
in them: Suburbanites are happier and enjoy a more vibrant civic life
than other Americans, and it’s not just bigoted whites hiding out in
gated communities; immigrants, in particular, are voting for the
suburbs with their feet, to the point where the best ethnic cuisine in
the country is increasingly served way out in the exurbs. I’ll end this post with his most provocative suggestion, which came
on the heels of a discussion of telecommuting and the ways in which
work will increasingly revolve around the home, rather than a distant
office. "Post-industrial society," he remarked, "will look more like
pre-industrial society than anyone ever expected." More here.

Somehow, they end up in the same place.

Matt Yglesias weighs in.

Me, I don’t think post-industrial society and geography will look anything like our pre-industrial one.  The economic gains to clustering, the rise of the mega-region, the onset of a spiky world convince me that our new world will be denser and spatially concentrated than the old one.  The resurgence of American-style suburbia is a pipe-dream. Indeed, one of the biggest drags on US competitiveness will be its stretched out spatial structure which not only consumes gasoline and other natural resources, it consumes time.

Your thoughts?

Lots of interesting stuff in print and on the web.

Rebecca Solnit’s essay, "Detroit Arcadia: Exploring the Post-American Landscape" in Harper’s Magazine (sub req).

Duncan Merrell on New Orleans, abandoned also in Harper’s Magazine.

Seed Magazine on the Santa Fe Institutes’s research on urban metabolism (discussed here previously).

Click here for an interactive map of the top 20 counties with the highest average expenditures per household.  Marin County, California is first, followed by Fairfield, Connecticut and Fairfax, Virginia.  The New York metro is home to 7 of the top 20. Greater DC has 4.  California has 3.

In an increasingly spiky world, The Economist argues they do.

These days mayors seldom tackle an issue of national significance
without pointing out how incompetent the federal response has been.
Climate change is an especially fashionable stick with which to beat
Washington. Two years ago, as the Kyoto protocol went into effect
without America, Seattle’s mayor called on other cities to reduce
greenhouse-gas emissions by 7%—the same cut that would have been
required of the nation. More than 500 have since signed the “cool
mayors� agreement. Mr Bloomberg, for his part, has signed up more than
200 mayors for his gun-control alliance.

Ironically, mayors’ reputations have also been helped by the dearth
of federal cash that they complain about. Before revenue-sharing ceased
in the 1980s they had a richly deserved reputation as beggars. Since
then the shrewder mayors have turned themselves into salesmen. They
lobby for corporate headquarters and sports teams and try to lure
visitors to spruced-up city centres. John Hickenlooper’s background as
owner of a pub in downtown Denver prepared him well for such a role as
mayor there.

According to the Wall Street Journal, salaries for top talent in Bangalore, India are starting to converge with those in Silicon Valley.

Several years on, the forces of globalization are
starting to even things out
between the U.S. and India, in
sophisticated technology work. As more U.S. tech companies poured in,
they soaked up the pool of high-end engineers qualified to work at
global companies, belying the notion of an unlimited supply of top
Indian engineering talent. In a 2005 study, McKinsey & Co.
estimated that just a quarter of India’s computer engineers had the
language proficiency, cultural fit and practical skills to work at
multinational companies.

The result is increasing competition for the most
skilled Indian computer engineers and a narrowing U.S.-India gap in
their compensation. India’s software-and-service association puts wage
inflation in its industry at 10% to 15% a year. Some tech executives
say it’s closer to 50%. In the U.S., wage inflation in the software
sector is under 3%, according to Moody’s Economy.com.

Rafiq Dossani, a scholar at Stanford University’s
Asia-Pacific Research Center who recently studied the Indian market,
found that while most Indian technology workers’ wages remain low — an
average $5,000 a year for a new engineer with little experience — the
experienced engineers Silicon Valley companies covet can now cost
$60,000 to $100,000 a year. "For the top-level talent, there’s an
equalization," he says.

That means that for a large swath of Silicon Valley –
start-ups and midsize companies that do sophisticated tech work –
India is no longer the premier outsourcing destination. While such
companies make up just a fraction of India’s outsourcing work, they had
been an early catalyst for the growth of India’s information-technology
business and helped the country attract other outsourcing clients.

Read the whole story here (sub req). Such is the frightening reality of a spiky world where salaries and wealth rise in the spikes, while outside them millions, and in this case billions, live in abject poverty.

Jonah Goldberg of the LA Times writes that the key to wealth is "between our ears."

[O]ur wealth is really all in our heads. Literally. In
the case of the United States, for example, less than a fifth of our
wealth exists as material stuff like minerals, crops and factories. In
Switzerland, cuckoo clocks, ski chalets, cheese, Rolex watches, timber
and every other tangible asset amount to a mere 16% of that country’s
wealth. The rest is captured by the expertise, culture, laws and
traditions of the Swiss themselves.

These numbers come from
Kirk Hamilton, a World Bank environmental economist and lead author of
a new study, "Where is the Wealth of Nations?" (available at worldbank.org).
In a fascinating interview in Reason magazine, Hamilton explains how,
when measured properly, "natural capital" (croplands, oil, etc.) and
"produced capital" (factories, iPods, roads, etc.) are the smallest
slices of the economic pie. What Hamilton calls "intangible capital,"
which includes the rule of law, education and the like, is by far the
biggest slice. The entire planet’s "natural capital accounts for 5% of
total wealth, produced capital for 18% and intangible capital 77%."

This
makes some intuitive sense. We’d all rather be the man who knows how to
fish than the man given a fish. Or think of it this way: The Malthusian
thinks only about hardware, when the money is in software and design.
China makes America’s iPods; America collects the profits. … The greatest symbols of our civilization — from
skyscrapers to libraries — not only count for a mere fraction of our
wealth, they would turn to dust and rubble if we disappeared. The
hardware is nothing; the software, everything. All that civilization is
and can become exists within us. If we forget that, we forget literally
everything.

The story is here.

According to The Economist: "As tolerance spreads,
gay life is becoming more suburban, contented and even dull." The article draws from the research of our long-time colleague and collaborator…

Gary Gates, a Californian academic, has been mining
census data to determine where gays live in America. He observes several trends.First, the number of openly gay households is growing five times faster than the
population as a whole. … The increase was most
pronounced in the Midwest, with Wisconsin showing an 81% jump in the number of
same-sex couples and Minnesota, Nebraska, Kansas, Ohio, Iowa, Missouri and
Indiana also among the ten fastest-growing states in this respect. What this
means, perhaps, is that gay America is becoming more like Middle America. “Much
of the stereotype around gays is a stereotype of urban white gay men,� says Mr
Gates. “The gay community is becoming less like that, and more like the
population in general.� Gay couples are still more likely than straight ones to
live in cities, but the gap is smaller than popularly believed, and closing. In
1990, 92% of gay couples but only 77% of American households were in what the
Census Bureau calls “urban clusters�. By 2000, the gay figure had fallen to 84%
while the proportion for households in general had risen to 80%, a striking
convergence.