In addition to transport arteries, I would also mention the importance of setting aside space and access points for sewage, electricity, and information arteries. It’s not even necessary that government provide these services or even the plan itself (private planning of large urban areas is also possible) but a plan has to be made. By reserving space for services in advance of development, developers and residents can greatly improve coordination and maximize the value of a city.
I think there is some truth to this, but it is more complicated. Planning is something that never stops. What is the plan for the planning process? How do you keep the planning process from being captured by NIMBYism or other rent-seeking forces? How do you keep it from becoming stifling? How do you enable a city to adapt to new circumstances?
>> “Planning is something that never stops”
Great articulation of the market discovery process. Seems like it’s a constantly evolving schema. Changing individual preferences, resource constrains, technological shocks etc.
The economic problem indeed seems to be how to enable an institutional arrangement which will continue to optimally adjust and restructure various capital components to a constantly evolving premise.
“Urban Expansion is an exception to the usual rule that an economy does not need a plan.” – See more at: http://marginalrevolution.com/marginalrevolution/2015/08/romer-on-urban-growth.html#sthash.70Vv9sGf.dpuf
I suspect, the above formulation is apt to mislead.
In the below important regard, urban expansion is no different from organising a stock exchange or other market-type institutions and processes.
A lot of planning goes into both of them (I have been involved in the creation of the German Options and Futures exchange, formerly DTB, now Eurex). In both cases, involved are complex social networks and contentious and contingent issues that require far more than what can be achieved by bilateral transactions of the market type. A lot of politics is needed – like it or not. And a lot of politically generated planning. Just think of the resource-pooling aspect (when many parties are to contribute to the establishment and maintenance of a market), which inevitably requires collective decision making rather than bilateral transactions.
What is misleading in the above formulation, in my reading, is the idea that planing is necessarily planing of the macro type, while, of course, even elements of such macro planning go into urban or stock exchange planning, e.g. fundamental legal changes of nationwide validity.
The misleading paradigmatic juxtaposition is market versus planning of the command economy type.
In reality, the relevant distinction is (A) market against comprehensive macro planning, which latter we do not wish to have, but not (B) market versus extensive (always politically charged) market (or other project) planning, which we must engage in to achieve our goals.
Every market is exceedingly political, at its conception, its birth and throughout its further life-cycle.
This is why libertarian positions, I feel, tend to hover consistently on too high a level of abstraction, from which the political nature of markets remains invisible. Yes, we ought to avoid the road to serfdom (which argument of Hayek’s refers to the scenario that I have indicated as (A) above), but avoiding the road to serfdom is not a valid excuse not to face the mixed economy in which we actually live, where politically organised planning is extensive, inevitable and highly welcome if reasonably well conducted.
Except many people say they prefer the older cities built before the car and some built without much urban planning.
As far as Germany is concerned, urban planning and regulation would have been at least as strict and detailed in the old towns as today. Don’t get me wrong, there is tons of rubbish generated by urban planning, which one ought to do something about. But – attenuated by space and population density – I would expect a lot of politics and planning to be involved as soon as people begin to agglomerate in palpable adjacency.
And there is not only the downside, there is also progress. German cities that used to be dumps in my youth have become beautiful. Politics and planning have been very careful in restoring the charm of our towns and cities from olden times. And they have done a good job, making plenty of mistakes in the process, like over regulating the protection of historic buildings etc.
What is the opportunity cost?
Also, you can plan anything you want. But other than having captive customers, what on earth makes you think it is going to work?
How do *you* do all those things? *I* don’t! How does *one* do all those things? That depends. Who is *one*? How much political power does s/he have?