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The Jane Jacobs theory of “import replacement”

In previous days I’ve argued that having a strong industrial/manufacturing base isn’t as important to a nation as it once was. But lately I’ve wondered if a loss of that base has greater implications than we think. I’m not a Jacobs devotee like many urban-minded Torontonians are, but I did think that this summation of her theory of “import replacement” is a very good explanation for why we may want manufacturing to stick around.

The Millions – Fifty Years On: Jane Jacobs and the Rebirth of New York

Why did a city like New York recover when a city like Detroit, which had a more durable industrial base, fell into blight and decay? The answer, Jacobs argues in The Economy of Cities, turns on the ability of a city’s inhabitants to innovate. Cities grow, she says, through a process she calls “import replacement.” This occurs when local tradesmen produce for themselves the goods and services they had previously been importing and then use the skills learned from this local production to create new products, which they can then export in great bulk.

Detroit, she notes, began as a port for shipping flour across the Great Lakes. Soon, local manufacturers were building their own steamships to make the lake crossings and got so good at it they began making ocean-going ships for use in other cities. This not only put money into local coffers, but supported the dozens of local engine-parts makers Henry Ford drew upon when he founded the Ford Motor Company.

But here’s the rub: the auto industry was so successful that once Ford arrived at his greatest innovation, the assembly line, the industry so dominated Detroit’s economy that there was no local market for further innovation, and, as Jacobs points out, it was only a matter of time before another city – in this case, cities in Japan – improved upon Ford’s ideas and made better, cheaper cars.

The Economy of Cities came out four years before the gas crisis that set Detroit’s long tailspin in motion, but it eerily predicts the dilemma the city faces today, in which a moribund auto industry, out-innovated by foreign competitors, had to be bailed out by the U.S. taxpayer to avoid collapse.

Like Detroit, New York began as a port city, but in New York’s case a principal byproduct of its shipping trade was a robust banking industry, which survived the city’s manufacturing collapse. Even as New York was begging for a bailout from the federal government in the mid-1970s, young hotshots like Ivan Boesky and Michael Milken, many of them children and grandchildren of immigrants who had filled the ghettos earlier in the century, were inventing new ways to own and finance large companies. Think of all the financial innovations of the last thirty years: junk bonds, hedge funds, leveraged buyouts, asset-backed securities, credit derivatives, subprime mortgage markets, and on and on.

Yes, bankers are evil, and, yes, the banking industry required a federal bailout even larger than that of the auto industry’s, but like it or not, New York is the safest large city in America, with a vital private sector and a buoyant real estate market, largely because the living, breathing organism we call Wall Street has spent the last thirty years innovating its way out of obsolescence.

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Street style (August 1944)

In France, an American officer and a French Resistance fighter are seen engaged in a street battle with German occupation forces during the days of liberation, August 1944, in an unknown city. (AP Photo)

— In Focus – World War II: The Allied Invasion of Europe

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A family resemblance

PTV (a television network in Pakistan) did a half-hour feature on some of my grandfather’s films. Lots of black and white film acting and dancing can be found within. You can make the family connection in the fact that at one point a grown man cries, wails and gestures using a chicken he’s holding in his hands.

Nasim Haider Shah interview for PTV about Haider Shah from Sajid Qureshi on Vimeo.

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USS Enterprise, May 1942

Aircraft carrier USS Enterprise at Ford Island in Pearl Harbor, Hawaii, in late May 1942, being readied for the Battle of Midway. (U.S. Navy)

— In Focus – World War II: Battle of Midway and the Aleutian Campaign

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A twelve-minute clip of every gruesome, gory death in the Final Destination series

The wonderful Screened.com has put up a compilation video of every death in the Final Destination series. I’ve not seen a single one, and had no idea it was so gory.



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Ideas for how to put the unemployed back to work

On my commute to the office yesterday I saw a link to a feature being run by The Atlantic called The Great Jobs Debate: Ideas for how to put the unemployed back to work. In their words, they’ve “brought together some of the top minds in business, government, and the world of ideas, each to answer the same question: What is the single best thing Washington can do to jumpstart job creation?”

There are some good ideas and some bad ideas, mostly depending on what your personal ideology is. Personally, I thought these two were great:

Megan McArdle: Create a Special Job Credit for the Long-Term Unemployed

How to get employers to hire people who have already been out of work for too long? Traditional government solutions like job training have an absolutely dismal record. The only government solution to long-term unemployment we’ve ever found was to have World War II, and for various reasons, we’re probably not going to reauthorize that particular program.

One suggestion is to give them direct incentives to choose the long-term unemployed over those who are already in work, or out of work for only a short time. How? We could exempt new hires from both the employee and the employer sides of the payroll tax, one month for every month that they were unemployed.

The result is a direct wage subsidy of more than 10%. But it is a time-limited subsidy, and one carefully targeted to those who need it the most. By the time the tax relief expires, these workers will have been reintegrated into the labor force. This will cost the government something of course–but not nearly as much as supporting them on welfare, disability, or early retirement–or the prison system.

Mike Haynie: Unlock Capital for Small Business

The United States should create a national microlending program positioned to provide ready access to capital to small business. It is widely acknowledged that small business represents the engine of job creation in this country. Small business accounts for approximately 50 percent of all private-sector jobs, and roughly 70 percent of all new jobs created in the past decade.

In today’s environment, banks have much less incentive to extend a traditional small-business loan ($5,000 to $25,000), because the relationship between the transaction costs associated with processing that loan and the return on that investment to the bank often doesn’t make economic sense. It’s all about opportunity cost.

For example, consider that the transaction costs associated with processing a $10,000 loan to a small business and a $5 million loan to a large business are roughly the same. Also recognize that the return on investment to the bank (that is, the interest paid on the loan) increases proportionally with the size of the loan–the larger the loan, the more interest income generated relative to the “cost” of issuing and servicing the loan. Therefore, whether you are a large public bank with a fiduciary responsibility to shareholders or a small credit union responsible to its membership, there is an incentive to focus on larger and thus more profitable loans. Banks are in business to make a profit.

Research highlights that most small businesses, especially over the first five years of operation, require only small and incremental infusions of capital to sustain positive growth. A national microlending program positioned to provide capital infusions of $1,000-$20,000 to small business–created as a partnership between government and community-based lenders–would represent an compelling channel for small businesses to access start-up and growth capital.

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Diversity makes us uncomfortable

I’ve heard people reference this study a number of times recently and finally decided to track it down. For an expanded explanation of Mr. Putnam’s findings, see his article E Pluribus Unum: Diversity and Community in the Twenty-first Century.

Boston.com – The downside of diversity

It has become increasingly popular to speak of racial and ethnic diversity as a civic strength. From multicultural festivals to pronouncements from political leaders, the message is the same: our differences make us stronger.

But a massive new study, based on detailed interviews of nearly 30,000 people across America, has concluded just the opposite. Harvard political scientist Robert Putnam — famous for “Bowling Alone,” his 2000 book on declining civic engagement — has found that the greater the diversity in a community, the fewer people vote and the less they volunteer, the less they give to charity and work on community projects. In the most diverse communities, neighbors trust one another about half as much as they do in the most homogenous settings. The study, the largest ever on civic engagement in America, found that virtually all measures of civic health are lower in more diverse settings.

“The extent of the effect is shocking,” says Scott Page, a University of Michigan political scientist.

The study comes at a time when the future of the American melting pot is the focus of intense political debate, from immigration to race-based admissions to schools, and it poses challenges to advocates on all sides of the issues. The study is already being cited by some conservatives as proof of the harm large-scale immigration causes to the nation’s social fabric. But with demographic trends already pushing the nation inexorably toward greater diversity, the real question may yet lie ahead: how to handle the unsettling social changes that Putnam’s research predicts.

“We can’t ignore the findings,” says Ali Noorani, executive director of the Massachusetts Immigrant and Refugee Advocacy Coalition. “The big question we have to ask ourselves is, what do we do about it; what are the next steps?”

The study is part of a fascinating new portrait of diversity emerging from recent scholarship. Diversity, it shows, makes us uncomfortable — but discomfort, it turns out, isn’t always a bad thing. Unease with differences helps explain why teams of engineers from different cultures may be ideally suited to solve a vexing problem. Culture clashes can produce a dynamic give-and-take, generating a solution that may have eluded a group of people with more similar backgrounds and approaches. At the same time, though, Putnam’s work adds to a growing body of research indicating that more diverse populations seem to extend themselves less on behalf of collective needs and goals.

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Points (pt) to pixels (px) conversion chart

Chart courtesy of Suresh Kumar. I don’t believe the relationship to em is correct in all cases, but the rest is quite useful.

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Deploying a BlackBerry WebWorks app to the PlayBook from Windows

Back in 2007 I wrote a BlackBerry OS application to perform a simple e-mail routing health check procedure. It turned out to be a hellish process, and not just for the fact that I’m not much of a Java developer (I don’t include Java in my list of skills on my resume). That was a minor problem compared to the overly involved process that had to be undertaken in order to simply compile the damn app and deploy it to a handheld for testing. On top of all that, Research In Motion at that time required that any developer who wished to use certain parts of their API, even just to test on their own device, to register at the cost of $200 USD. My employer paid this fee on my behalf, but it capped off an unpleasant process.

Times have changed and RIM has learned a few lessons. Developers no longer have to pay RIM merely for the pleasure of developing an app, but they do still face an unclear process for deploying to a test device. For both my own sake and for other developers, I’ve attempted to do a comprehensive write up of the process of deploying a BlackBerry WebWorks app to a PlayBook tablet. It consists of ten rather involved steps, but after the first time you do it once the process shrinks down to just the two last steps.

All right – let’s both take a deep breath and get started.

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