Tuesday, October 2, 2012

The Empirical Social Balance

I found Galbraith's discussion of the social balance, or the equilibrium between privately produced goods and public goods, quite refreshing - though many economists and philosophers alike have discussed and broken down this issue, Galbraith's perspective was novel and very straightforward.

In particular however, many of the issues he brings up (the difficulties associated with maintaining a workable, effective social balance) are short-term issues.  Yes, it is a struggle to introduce the infrastructure and public policy necessary to curb LA's awful smog; yes, funding the police force is not always easy.  But what about in the long-term?  Galbraith's explanation does not directly address, but I believe assumes, that over the long-term, societies are able to maintain a balance (at least for a time).  Even if we are not perfect at achieving it, we are able to approximate what it takes to be a "community where public services have kept pace with private production" (191).  Else we would not survive long enough to face the short-term difficulties.

Empirically, the evidence supports my claim.  Several researchers from the Santa Fe Institute (they do some really cool stuff! I was creeping around) looked at the relationship between population and a very wide range of city variables, for over 360 cities.  They found that for all of these metrics - crime rates, GDP, number of patents, the surface area of roads, to name a few - the relationship was the same.  Crazy!

This graph shows only some of the variables they studied.  It's log-log, indicating that a % change in population leads to a similar % change in the particular metric.

There are several important ideas in these studies - first, is that these cities are following power laws in an incredible number of variables.  Income grows exponentially, not linearly, with population. The SFI, home to many researchers with backgrounds in biology, has found that cities follow some of the same growth laws that organisms do.

Second (and closer to home to Galbraith) is that while there is some variation, generally speaking all of these metrics grow with population at approximately the same rate: public and private.  The 'laws' of cities keep these things growing to the necessary size, whether it's the number of gas stations or the dimensions of a city's sewer system.  These struggles to maintain the social balance are by all means very important - but in the long-run, the forces pushing the public goods to keep up with population (and with the private goods) are stronger than the forces hindering them.

Here's the paper (short, 2 really interesting pages) that the above graph is from: http://www.nature.com/nature/journal/v467/n7318/full/467912a.html

As well as a very interesting NYT article on this research: http://www.nytimes.com/2010/12/19/magazine/19Urban_West-t.html?pagewanted=all

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