Adam Smith to Guide Comprehensive Planning Process

AdamSmith.gifBased on the constructive criticism offered by Chamber of Commerce President David Ludescher (“Free men in a free market environment are the best judges of what kind of development people want.”), the Northfield Planning Commission is changing horses in mid-stream and basing the revisions in the Comprehensive Plan and Zoning Ordinances on the theories of the Father of Classical Economic Theory, Adam Smith.

Smith came to fame with the publication in 1776 of his book The Wealth of Nations. In this work, Smith argued that the ideal economy would be a self-regulating market system. He believed that an “invisible hand” would lead all people, in the pursuit of their own self-interests, to produce the greatest benefit for society as a whole.

It was certainly a rosier view than Smith’s predecessor, Thomas Hobbes, who in his book Leviathan, described the market as a “war of every man against every man”, using violence to make themselves “masters of other men’s person, wives, children, and cattle”, ultimately resulting in a life that was “solitary, poor, nasty, brutish and short”. It was also more optimistic than the work of Smith’s contemporary, David Ricardo, who in his Principles on Political Economy and Taxation viewed the market system as a struggle between landowners on one side and workers and capitalists on the other side, with the growth of population and capital coming up against a fixed supply of land resulting in high rents and low wages and profits.

Another of Smith contemporaries, Jean-Jacques Rousseau, in his Discourse on Political Economy, wondered if man’s “natural goodness” had been destroyed by industrialization and the resulting loss of the “natural state” caused him to summarize the situation with “man is born free and everywhere in chains” and thus required the creation of a “Social Contract” that encouraged an inter-personal dedication to the “General Will”. Finally, Smith’s successor in the Classical School, John Stuart Mill, in a move that was later considered a philosophical off-shoot known as Utilitarianism, concluded that although the market might be efficient in the allocation of resources, it was less effective in the distribution of income and suggested that it was necessary for society to intervene.

By the time I was studying economics at Wesleyan in Middletown, the latest paradigm suggested that the Classic Economists were basing their theories on a mechanistic model instead of a biological system. Among the criticisms leveled against the Original Economic Philosophers were that they did not adequately calculate the exhaustion of natural resources or the collateral costs of some processes of industrial production.

However, let’s not quibble about details, the Planning Commission is sincerely committed to doing whatever it can to assure that the Comprehensive Plan can contribute whatever possible to making Northfield more business-friendly. In a visible acknowledgement of this commitment, Planning Commissioners will be wearing powdered wigs at future meetings.

9 thoughts on “Adam Smith to Guide Comprehensive Planning Process”

  1. I should mention that I’m reading this in suburban L.A., which is a great example of free market development. Maybe I’ll post some photos of the expanding vistas of concrete, the big signs on stilts that tower over everything, the automobile detritus ….

  2. I think you both need to read “Heaven On Earth: The Rise and Fall of Socialism” (Joshua Muravchik) to get a reminder of what happens when idealism trumps reason. And before you get too theoretical on us, remember the basic lesson we learned from Prohibition, the war on drugs and other attempts to control the free. As stated in “Jurassic Park”, life will find a way. And as cities like Boca Raton have discovered, the lawyers will be the bloodhounds that help in that finding.

  3. Good Golly, Bruce…

    You really don’t know me at all.

    After four years on the Planning Commission, I’ve lost the last remnants of my idealism. I now measure our meager gains with the battered yardstick of pragmatism.

    I think that you’ve got the guys in powdered wigs confused with the dinosaurs; they’re not that old and they’re certainly not extinct.

    Frankly, I prefer more optimistic reading, that’s why I’m sticking with “Freedom Just Around the Corner” by Walter McDougall, picked up as a bargain book at River City.

    See you at the Cow,

    Ross

  4. Free market vs. government regulation is oversimplifying the issue here.

    For large scale development (a business park, 100 acre residential development, e.g.), the cost to the city for maintaining the infrastructure (which may entail more city staff or equipment), managing downstream effects (increased traffic, additional development at the edges of the new development, pollution…) is large and may or may not be offset by add’l property taxes. The city is a market player here and, I believe, has in its best business interests and the interests of current residents to make demands on the developers to meet the city’s development criteria. More regulation is more appropriate here.

    If an individual business wants to expand or move, the city’s costs are low and the business is taking on the burden of the risk. Here, the city should do as much as possible to stay out of the way or, better yet, assisting our valuable business “residents” in meeting their goals.

  5. One thing that the Chamber is going to try to identify are the average ecomonic costs of various kinds of development. I know from my own experience that I pay about 3 times as much on my office space as I pay on my house. My office uses substantially less gov’t services than my house.

    When you ask me, or any other business person if they are interested in increased gov’t services, most would be opposed because that would mean that he or she had to pay 4 times as much as their neighbor. That intrinsic unfairness sometimes is lost on those wanting to have restrictive development principles.

    Just so no one is confused, I am an east-sider, with a business downtown. We moved to Northfield for everything it had to offer. Not only am I concerned about the cost of living for me and all businesses, but I am concerned that the principles not impose one person’s of utopia on all of the rest of the people, especially when those individuals have no intent on ever being part of the development. Development principles imposing subjective values, such as “small town feel” are not capable of being implemented with any clarity.

  6. Oh, I forgot to ask: If the Planning Commission doesn’t wear wigs at the next meeting, does that mean that the Commission is not committed to business-friendliness?

    P.S. Nice catch on the Adam Smith quote. You were paying attention!!

  7. David:

    I’ve been doing my best on the wigs, perhaps I’ll have to inquire at the Arts Guild. At the very least, I’ll have a copy of The Wealth of Nations. It’s been almost thirty years, so I’ll have to review the chapter on zoning ordinances.

    Ross

  8. LOL! Ross, you’re great at seasoning history and economics with humor (and powdered wigs) here.

    I tend to think Adam Smith and his invisible hand were instances of unrealistic optimism that foreshadowed the irrational exuberance of the 1990’s (one of those moments in history when the invisible hand got drunk, again).

    I’ll take John Stuart Mill over Adam Smith most days of the week. Thanks for the fun.

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