Pre-municipal cities, four typologies: Part 3a, The abbey and its revenue model

June 27, 2016 | Abbeys, castles, Cities, Employer-assisted, History, Housing, New Lanark, Roman Empire, Scotland, Speculation, Theory, Trimontium, Workforce housing | No comments 33 views

 [Continued from last week’s Part 2 and the preceding Part 1]


By: David A. Smith


As we saw in the preceding Part 2, after the demise of the Roman fort model of new-town establishment came the era of the fortified castle, where a single compound served as capital city, market nexus, cultural center, and transportation crossroads.  Though the Roman fort, which was intended as an amortizing asset, one that would dissolve into a township as the new territory gradually became economically, politically, and culturally civilized (meaning Roman), the medieval castle was something quite different.  Aside from being home-grown, not externally imposed, it was also a permanent bastion, because unlike the Romans, who had invincible confidence in the endless expansion of the Pax Romana, medieval lords saw life as solitary, poor, nasty, brutish and short, so there must always be high walls, and strong men to guard them.



Even iff ve are Frrrench


Castles, therefore, were power – law, order, and taxes, all maintained with physical force.  That is why they fascinate us centuries later: because of their vast brooding rough hard presence.  But if they were an expression of physical might, people in medieval times needed a counterpoint, something to lift up the spirit and give meaning and hope to life. 


Enter the parallel community, the abbey, and its wonderful model of a mixed-use, mixed-income campus-style community.


Senanque Abbey amid its fields of lavender


1. Abbeys propagated via franchise networks.  From the beginning, the great abbeys were cellular networks, each abbey a node with links back toward the center – the original founding abbey, like Citeaux, with the expanding constellation of daughter abbeys, each set from the others at the optimum communications distance – a day’s ride from the next.



A magnificent alternate world where abbeys rule the planet


The abbeys were franchises: the Cistercians, the Dominicans, and the Benedictines. 



A famous early alum: St. Bernard of Clairvaux


Each abbey saw itself as part of a larger community of belief, and with a workforce loyalty that many a Theory Z organization would envy, they were able to maintain message and behavioral discipline across far-flung institutions.  Much of this was accomplished through standardization, starting with language.  Just as English has become the language of the Web and Twitter, Latin became their lingua franca – though no one’s first language, it was everyone’s second language, so a monk could take up a new post and be confident of adapting to his new surroundings. Thus, like the Romans (and quite unlike the medieval lords), the monasteries represented the closest thing to a global conventional wisdom and source of news and insight.


The replicable franchise also extended itself to the built environment: the abbey’s campus model.


abbey_layout abbey_key

Built from standard ‘blueprints’, with slight regional variation


2. Abbeys were self-financed on a vision. Like Roman forts, abbeys were established in the wilderness, though unlike Rome the abbots and monks came not to conquer but to homestead.  They chose remote land both to escape the temptation and sin of forts and castles and villages, but also (more practically) because in remote locations, land was free and could be homesteaded without opposition. 


For the initial team of monks sent out from a mother abbey to found a new daughter one, free land was the good news; the bad news was everything else.  No physical defenses, no structures to inhabit, no fields to till, no food sources, no labor force, and no endowment.  All he had to sell was the vision, but what a vision that was.



Wouldn’t you like a pew in God’s heavenly church?


3. The abbeys’ main product was salvation.  Though never couched in such terms at the time, abbeys were factories manufacturing an intellectual product – salvation and eternal life:



Fully trained monks are ready to pray for you, 24/7/365


Moreover, not all prayers were equal: the best prayers came from monks commissioned for the purpose:


The church taught that intercessory prayer … and masses offered by the living could hasten the soul’s progress to heavenly bliss. 


Not only was the intellectual product unique and not copy-protected, benefits were subject to recapture (excommunication) right up to the moment of death, and like the best weaponry, this one could be wielded from far away, arrive through the mails, and pinion even a monarch in place.



You can’t divorce me, Henry, only the Pope can annul this marriage, so if you remarry you are eternally damned


4. The abbeys’ revenue model was subscription-based fee-for-service.  While God might be everywhere, the best place to connect with Him was in His office – the church and its larger successor, the cathedral. 



The higher floors are the most valuable


Though cathedrals were always oriented to the east (for morning sunlight, essential to illuminating stained glass), their hierarchy can be better appreciated if they’re rotated a quarter-turn, so that east is up.  When this is done, the plan looks like a normal residential high-rise: the top floors have the most expansive views and command the highest prices



The higher floors are the most valuable


So when the Lancastrian Henry Bolingbroke killed the Yorkist king Richard III and established himself as the first Tudor king, Henry VII, what better way to sanctify his place that by building out a cupola to God – the Henry VII chapel.


As soon as the abbeys were founded, they were in the fundraising business, and quickly established the practice of enabling the nobility to buy what we might call ‘Heaven pre-check’



Pre-destination – the ultimate pre-check – came only centuries later


Such as the illness and death of Robert the Bruce, where the Church cashed in:


In October 1328 the Pope finally lifted the interdict from Scotland and the excommunication of King Robert the Bruce.  The king’s last journey appears to have been a pilgrimage to the shrine of Saint Ninian at Whithorn; this was possibly in search of a miraculous cure, or to make his peace with God. At the end of March 1329 he was staying at Glenluce Abbey and at Monreith, from where St Ninian’s cave was visited.  Early in April he arrived at the shrine of St Ninian at Whithorn. He fasted four or five days and prayed to the saint, before returning by sea to Cardross. 


Robert summoned his prelates and barons to his bedside for a final council at which he made copious gifts to religious houses, dispensed silver to religious foundations of various orders, so that they might pray for his soul, and repented of his failure to fulfil a vow to undertake a crusade to fight the ‘Saracens’ in the Holy Land. 



The purpor5ted death mask of Robert the Bruce at Rosslyn Chapel


Robert’s gifts are not unlike those of plutocrats making large donations to expand the built environment of two modern temples of morality and faith – the hospital and the university – whose present forms echo their millennium-earlier forbear not just in revenue model but also in built-environment and housing paradigms.



Which would you prefer: a triptych, your own chapel, or your name on the institution?


[Continued tomorrow in Part 3b]

Pre-municipal cities, four typologies: Part 2, The medieval castle

June 22, 2016 | Abbeys, castles, Cities, Employer-assisted, History, Housing, New Lanark, Roman Empire, Scotland, Speculation, Theory, Trimontium, Workforce housing | No comments 86 views

 [Continued from Monday’s Part 1]


By: David A. Smith


[Apologia to readers: having spent five of the last seven weeks out of town, I exhausted my inventory of blog posts and am slowly rebuilding it as I unbury my desk.  Reliable daily service will resume shortly.  Thanks for your patience!  – Ed.]



From residue of Roman fort to fortified stone castle: Hermitage


Spend enough time looking at the surviving Roman structures, many of them two millennia old, and as we saw yesterday one cannot help but admire the Romans’ capacity for organization and management, and for civilization’s sake regret Rome’s fall – but fall it did, a victim to the invention of the stirrup, the emergence of a new fearsome fighting force, the mounted cavalry, and the subsequent evolution of a new superhero: the mounted knight.



Iron man, thirteenth century


Against a mounted knight in the field there was no practical defense.  Artillery had not advanced to the point of military utility – at this stage bombard weaponry was human-powered, as via the trebuchet (another clever Roman engineering invention).  The fall of Rome came at the hands of mounted cavalry, and as long as such practical superheroes existed, they were unstoppable – though they required a massive capital infrastructure to sustain them.  Armor was expensive to make, requiring high-quality iron and steel.  A horse to bear both rider and armor was likewise a considerable investment. 



Porcupine, human-style


Hence, not for the first time, economics dictated military hierarchy: unarmored men-at-arms could wield a pike (needing only a steel spear point) and advance in formation; men with a sword, shield or some light chain mail (the middle-class accoutrements) could be part of light infantry, and pay for their protection by serving in their liege lord’s campaigns that he used in service to his liege lord, the earl, duke, or king.  At the apex, the killer weapon, the mounted armored knight. 


For a while (I think; this is my own reinterpretation of history), Europe’s revenue model was kidnap and pillage.  (Something similar is happening now in Venezuela, where gangs in slums have become a power more effective than the government; I may post on the subject if I can get caught up on the blog.)  That didn’t very work well for anybody – it never does.  It’s short-term gain leading to longer-term impoverishment – and the result was the shaky bottom-up-evolved order known as the feudal system: serf to local lord, lord to liege, liege to sovereign. 



Guarding the waterway


Feudalism, with its delivery of basic protection at the cost of taxation, created the economic cryptobiotica to stabilize some bases for revenue production – and the quid pro quo as between small self-employed entrepreneur (serf or craftsman) and liege lord was protection.  That’s the basic business model the Romans offered, just rebuilt bottom-up using the new killer app of the mounted knight, with one critical difference: instead of a fort guarded by thousands of infantry largely alike in their armaments, the defensive model was a shielded perimeter inside which mounted knights could not penetrate – the medieval castle.



Caerlaverock castle today


Just like its predecessor, the Roman fort, the medieval castle represented not merely a physical space, natural landmark, and hence natural crossroads of commerce, but also the tangible expression of a pre-municipal form of government: city hall with arrow slits and machicolations.



Not exactly a welcome mat: Caerlaverock’s entrance


For medieval lords, the revenue model of government was the natural heir to the Romans’ fort model, but with one key difference: whereas the Romans imported order from afar, setting up what were essentially concessionary outposts of empire (replicating centuries later as the Western trading concessions in India, China, and Japan), and expecting over time to dissolve the need for forts by incorporating the outposts into the ever-expanding and peaceful Roman Empire, the castle model was a permanent presence, and its physical form akin to that of a tortoise.



Safe if fully closed


The castle could be an economic unit only when it was expanded beyond the shell and vulnerable, but it could rapidly retreat into a defensible shell, albeit at the cost of suspending all economic activity.  This idea – retreat in rounds to progressively more hardened positions – is reflected in every aspect of castle design, because they were designed outward in concentric rings from the tenth century’s panic room – the upper keep.



Soon the siege will be over


Ring 1: Protect the CEO (lord): the upper keep.  The upper floors were better because they had to be mounted via spiral staircases, nearly all of which ascend clockwise so that defenders had room to swing their right arms while attackers would find the right arm blocked.



All mod cons, vertically arranged


I have found no record of a troop of left-handed attackers, but it’s a logical specialized countermeasure akin to the over-representation of lefthander pitchers in baseball.



To stereotype lefthanders as flakes is unfair to flakes


Ring 2: Protect the board of directors (the household): the main keep/ castle building.  The keep/ main castle itself was likewise fortified: few apertures and a strongly held main gate with a portcullis, often a murder hole above,



From up here we’ll drop or fire things on you


Ring 3: Protect the executive team and operational infrastructure (the core managers and their families): castle courtyard.  Within the castle courtyard were found the first manager’s quarters, plus the core infrastructure: well, granary, forge, and arsenal, to name the most important. 


All this operated not unlike the survival bunkers scattered about the American West, or modern houses designed to handle everything up through a hurricane or major earthquake. The only real differences related to technology:


3a. Building materials.  No rebar, obviously, and with iron scarce no ability to use it to maintain internal roof tension.  So walls were thick, made of stone, and canted inward.


In thickness is strength


3b. Heating, lighting, and ventilation.  The fireplace was invented sometime in the thirteenth century, but even with it, fire was a precious commodity, and stone has a minimal R factor.  So you tapestried the walls (insulation), wore multiple layers of clothing, had beds with canopies and curtains (to keep in what little body heat you’d generate, and generally shivered.



Vertical insulation: the unicorn tapestries of Cluny


3c. Water.  Water was a precious commodity, the more so because the logical site for a castle – up a hill – also placed subsurface water the farthest away.  So, aside from siting castles where natural defenses (e.g. rivers) created the ability to harvest water and then store it in cisterns built into the castle compound, the digging of wells was a strategic imperative.



Key bit of infrastructure: the castle well (Hermitage)


3d. Sanitation.  This was easier: people in Medieval times were basically filthy (doubtless a major contributor to their short life spans, people were always dying of gripped, cholera, pneumonia, and everything else).  Sanitation came via pit toilets with cold seats, set into the castle walls so they would gravity-chute into charming crap piles outside the battlements.  Hence the original French term, garde-robe, keep your robe on and its later evolution, wardrobe, when the ‘water closet’ was in fact in a closet.


Ring 4: Temporarily protect the rank-and-file workers: Outer courtyards.  Not only were castles designed from the keep tower outwards, they were also built in that fashion, just as modern homeowners by a starter home and that remodel, or self-building slum dwellers create first a secure single room and then expand in as many directions as permitted by their rate of finding, scavenging, or buying building materials and having the time and energy for their own on-site labor.



Nine hundred years of ring-building, starting with the Conqueror’s Keep


Likewise, before undertaking improvements, both home owners and slum dwellers define the perimeter of their property – how much land they will claim – and because human beings are primates, the aspiring home owners and medieval lords they marked the territory.  For suburbanites, that is the white picket or natural log-and-post fence; for medieval lords, it would have been a wooden palisade: easy to construct, readily reparable, and enough of an obstacle to deter casual assaults and give the defenders a chance to organize themselves.


Ring 5: Self-build the undefended spontaneous community with only portable assets.  Beyond all these hardened targets, there grew up around virtually every medieval castle (except those like Hermitage built solely as defensive battlements) an informal community that spread outward, all of whose inhabitants relied on the castle for their economic livelihood.  While information on this is scanty [You mean you haven’t bothered to research it – Ed.], I expect the capitalized value of these dwellings to have been minimal, with the only real wealth the households possessed being portable chattel: livestock, tools, coins, housewares (even these were rudimentary and few), and of course the family. 


Should danger approach, even at speed, all this chattel could in short order be grabbed and transported into the castle, there to hunker down (in a manner not unlike a Midwestern tornado cellar) for as long as the attack lasted.



Holds ten in a pinch


Except, of course, when there was a siege, and this too influenced the castle’s revenue and business model as a form of pre-municipal government.  If the mounted knight was the killer-app on offense, and the fortified castle the killer-app on defense, then the siege became the synthesis: the only means of defeating an enemy that refused to fight in the lists.



Think of it like WW1 flying aces, except grounded


Setting aside all the wonderful siege assault gear – bombarding a castle’s weak point to create a breach, tunneling under the foundations with hopes of undermining a wall, trundling siege towers for orc-like battlements assault – a siege was basically economic warfare: blockade on land.  It sought to kill the defenders through starvation and thirst, by denying them any commerce with the outside world. 


Though history doesn’t record [You mean you’re being lazy again – Ed.] how the besiegers maintained their cordon around the castle, but anyone walking the grounds of these ruins can readily deduce that few sieges were airtight: it would always be clearly possible to run a few people in or out in the dark of night.  As long as the imports of water, food, weaponry, and money were held to a minimum, sooner or later the castle for go the way of today’s Venezuela: it would run out of capacity to sustain its population, and they would either die, flee, or surrender.


Indeed, of the critical economic units of production in the castle-town model, I know of only one that was always outside the walls: the local mill.  Mills were critical capital assets that could not be inside the walls, because they depended on a continuous flow of water.  So not only were they carefully situated downstream from a reliable river, upriver from the mill a da m would be built, creating a mill pond, whose outflow could be directed into the mill or away from it, so as to provide a regular rate of flow and hence a reliable constant turning of the mill.  In turn, mills covered areas like castles, with each independent entrepreneur (also known as the peasant farmer) being in the domain of one and only one mill, whose prices were set (in Scotland, anyhow) by thirlage, where the mill owner received a fee in kind, say one-thirteenth of the ground flour – our modern analog is public utility pricing.


Eventually some castle-model communities became actual towns, such as Edward I’s bastides scattered throughout France, but the legacy of fortifications compacted urban spaces persists to this day.



The only way in is to drive


Lest you think the castle model of governance is entirely absent from our world, consider the gated-community homeowners’ association, the massive mixed-use metroplex (of which Detroit’s Renaissance Center was the 60s-Robocop paradigm), and the ultimate in enclosed reality, the Las Vegas casino.


The pre-municipal city, Type 2: The medieval castle


·         Products or services.  (1) Law, order, protection of property and personal rights.  (2) ‘Safe house’ against hazards.  (3) Enabling environment for peaceable subsistence.  (It’s not much but in 900 AD it beat the alternatives.)

·         Higher level of authority.  The liege lord.

·         Value proposition.  Would you prefer rape and pillage?

·         Revenue model.  (1) Local taxes.  (2) Tolls for safe passage.  (3) Payment-in-kind through crop-sharing from tenant farmers (serfs).  (4) Partnership share of conquest/ plunder (when raising an army to join the liege lord’s campaigns).

·         Natural features selected for.  (1) High ground with steep approaches.  (2) Underground water source reachable by pit well.  (3) Astride a communications artery (e.g. river).

·         Housing typology.  Income pyramid model: (1) Luxury compound (keep).  (2) Shelter capacity (inside the outer walls).  (3) Scattered homesteads and live-work facilities (shops, craftsmen).

·         Household type.  (1) Inside the walls, extended family.  (2) Outside, workforce housing.

·         ‘Anchor tenant’ major capital asset.  The castle’s defensive walls, wells, granary/ bakehouse/ cistern.

·         Franchise models.  The architectural kit of castle design.

·         Modern echoes.  (1) Construction worker housing in Gulf states.  (2) Planned communities for extractive-industry workers.  (3) Detroit’s Renaissance Center (think Robocop). (4) Las Vegas mega-hotels.




With the feudal castle system having established a basic sort of county-level order across Europe, space then arose for the third form of pre-municipal urban living, one that depended for its survivability not physical strength, but spiritual.


[Continued in tomorrow’s Part 3]

Pre-municipal cities, four typologies: Part 1, The Roman fort

June 20, 2016 | Abbeys, castles, Cities, Employer-assisted, History, Housing, New Lanark, Roman Empire, Scotland, Speculation, Theory, Trimontium, Workforce housing | 1 comment 111 views

 By: David A. Smith


Spend two and a half weeks in Scotland looking at centuries-old ruins, and a person obsessed with housing and urbanization inevitably organizes what into a Grand Theory of Pre-Municipal Cities that encompasses four typologies.


Compared with rural living (the farmstead), a village, a suburb, or even a town, a city is a fundamentally more complex and structure form of human congregation; in fact it must be so, due to the shared-structure aspect of city living.


Cities versus towns: the ‘shared structure’ observable algorithm


In a city, most people’s dwellings share a structural surface with another household’s.  One man’s ceiling is another man’s floor; my wall is your echo chamber. 


In a non-city (town, suburb, or rural), most dwellings are freestanding homesteads.


Aside from its observable verifiability (cities are places where strangers live companionably adjacent to each other), this shared-structure definition has two causal bases: engineering and law.  Engineering because multi-dwelling structures confront challenges of verticality and gravity that force formalization.  Law because the common or distributed ownership of shared land and building infrastructure must be separated from the rights of private property and equitably apportioned.


Law in turn presupposes not only a code of conduct but also a valid and effective authority to enforce that law.



Prolog from the Code of Hammurabi


In the modern, developed world, the adjudicator of real estate law is the government and its court system, and in the English common-law model, land issues are adjudicated at the lowest level of government: the municipality and its companion traveling court, the circuit judge, which dates back to Henry II and includes among its number Abraham Lincoln.  What, I wondered while standing in the Newstead light rain of typical Scottish weather, came before municipal government? 



A reminder of the glory that was Rome.


Before there were cities, the land was not empty – at least, not devoid of people nor of claims and uses.  Over the land was spread an invisible tessellation of claims, like air traffic control towers or Joshua trees; all land was owned, with none of what Maine calls Unorganized Territory.  Pre-municipal ownership, however, recognized different levels of claim and divisible rights: rights to farm, rights to forage (as in whatever washed up on the beach), rights to build, rights to occupy.  The undeveloped land was nevertheless divided up for suzerainty, and at the center of the suzerainty area was the pre-municipal city: a complex multistory built environment that created an urban community suitable to house those who came to establish it.




All four of these typologies built a city for a purpose, and in their way they tell the story of the evolving purposes of a city, starting with the first typology: the Roman outpost fort, such as Trimontium in Scotland, at the farthest extent of the Roman Empire’s reach into Britain:



In 79 AD, Trimontium was probably built by the Ninth Legion during Agricola’s northern series of campaigns ending in the victory at Mons Graupius in 83 AD. About 10.5 acres in extent (double the size of a small fort) it was built of turf and timber and defended by an enormous rampart of earth cast up all round the playing-card shape of the fort from the 20 feet wide ditch.


About 86 AD the Agricolan fort was extended to 14.5 acres and its defences strengthened (rampart now 43 feet wide and 25 feet high). The timber-walled buildings were now placed on stone footings for longer life.



The main gatehouse of a Roman fort, recreated at Lunt


Like all Roman forts, this was built to be a contained compound or outpost, but operating generally with its gates open so that it formed the nucleus of what Roman intended and expected would be an expanding and flourishing community:



A = Stables.  B = Fort walls and watchtowers, with a ditch surrounding.  C = Granary.  D = Principia (command post, office building, vault).  E = Baths.  F = Praetorium (commander’s house).  G = Barracks.  H = Civilian houses outside the fort.  Source here


In this objective the Romans were successful, as many of Britain’s great cities today are outgrowths of the original Roman forts (London out of Londinium, York out of Eburacum, Lincoln from Lindum)l




Trimontium was an outpost, one of Rome’s northernmost fortified outposts, taking orders from and communicating with Eburacum (York) 150 miles to the south – and among the benefits Rome’s outpost forts brought was a globally dominant infrastructure, the Roman road.



An unrestored Roman road in Britain, 1900 years after it was laid


Roads were key to Rome’s success, for they moved information, goods, and people, so the empire could move legions at great speed from one place to another, could supply ore supply them as needed, and the empire and the emperor could know where the legions would be needed. 


It was a spectacular feat of vision and organization and engineering, and the lines the Romans drew are still in use today, with ancient Dere Street now traversing the Scottish Borders as the B 6275.




For the local inhabitants of the territories Rome conquered, this made a compelling value proposition:


Once you get over the shock of being part of an empire, we offer law, order, protection of property rights and personal rights.  Yes, it was law by the Romans, but law to be sure.


For the Roman fort as a city, the revenue model was imperial funds transfer, supplemented by what appear to have been affordable taxes:


The Roman empire was based on two things: lip service to the emperor, and payment to the army. As long as you acknowledged the imperial cult and paid your taxes, Rome did not really care how you lived your life.


Further, the Roman city offered opportunities for entrepreneurship, advancement, and citizenship:


In one respect, there were very few ‘Romans’ in Britain. There were Batavians, Thracians, Mauretanians, Sarmatians: all brought in through service in the army, and all eventually granted citizenship and a packet of land after their 25 years’ service.


Land development, land transfer, and property appreciation – all part of the value proposition of a city.


[The retired soldiers] settled all over Britain, becoming naturalised British citizens of the Roman Empire, erecting a wealth of inscriptions which attest to their assimilation and prosperity.


Most of them settled in or near the fort where they had served, staying close to their friends.


Gradually, these urban settlements outside the fort grew into townships, which were eventually granted municipal status.  In this way, the army acted as the natural force of assimilation.



A permeable barrier that became an entrepreneurial city


So good was the original Roman layout that even long after the Romans left, their streets and grid system remain, as in Chester (above and below).



The cardo and decumanus became Watergate Street, Eastgate Street, Northgate, and Bridge Street


The Roman city’s evolution also matched that of colonists: men who came and lived together in dormitories (barracks) gradually found local wives, had children and raised families – became, in a word, Britons as well as Romans. 


For the model to work, the Romans had to make major capital investments – the road system, then the fort itself, all of which could be funded only with Rome’s central revenues – and it benefited from network effects and from the Roman franchise models: both the physical city, itself no mean feat of urban design, and also the system of governance.



Roman wall in Chester, still in use as street foundation


It was a tremendous innovation, in modern parlance a category-killer, and it should be no wonder that with that fort-cum-city Rome was able not to conquer the European world but to harmonize and expand it – and to do so for over four centuries. 


The pre-municipal city, Type 1: Roman outpost fort


·         Products or services.  (1) Law, order, protection of property and personal rights.  (2) Infrastructure, especially transportation and communications.  (3) Opportunity for advancement within the platform.

·         Higher level of authority.  Rome and its legions.

·         Value proposition.  Would you prefer rape and pillage?

·         Revenue model.  Imperial transfer, coupled with taxes on order provided.

·         Natural features selected for.  Navigable waterway.  Lines of sight for enemy approach. 

·         Housing typology.  Single-gender dormitory (barracks).

·         Household type.  Single men (soldiers).

·         ‘Anchor tenant’ major capital asset.  The fort’s defensive walls.

·         Franchise models.  The Roman legion, Roman town, Roman law.

·         Modern echoes.  (1) Construction worker housing in Gulf states.  (2) Planned communities for extractive-industry workers.  (3) US military posts around the world.


But it ended, and with it fell the Roman model of urbanization, not to be superseded for another six hundred years … and Part 2 of this post.



In Jeddah

June 6, 2016 | Housing, informal communties, Jeddah, Rental, Saudi Arabia, teaching, Urban renewal, Urbanization | No comments 120 views

 By: David A. Smith



Al-Balad, the old city of Jeddah


I haven’t posted for more than a week because it’s been an incredibly busy week; first with speaking at the World Bank’s 7th Global Housing Finance Summit in Washington DC, where I talked about taking housing finance and housing affordability down the income pyramid.


Infographic - Housing For All by 2030: By 2030, ensure access fo


Then, with scarcely a pause for pause back in Boston, I traveled all the way to Jeddah, Saudi Arabia, to co-teach an executive education workshop on the challenges of affordable housing.



Tall guy squeezing an invisible beach ball:

In Jeddah, explicating the challenges of housing finance


In between the two days of teaching, our incredibly gracious and accommodating hosts arranged a personal walking tour of Al-Balad, the old city of Jeddah.


Jeddah is in many ways Arabia’s oldest city; it’s been reliably established to have existed since at least 522 BC, which is only natural as it’s a sheltered port on the eastern bank of the Red Sea.  With Mecca only 55 miles due east, it’s the Hejazi gateway to the interior, and the most common entry point for pilgrims on the hajj.



Walls on every side, including seaward


For centuries Jeddah was a walled city on the coastline, a trading and merchant entrepot:



Jeddah, mid-1800s


Even after the Arab Revolt and the establishment of Saudi Arabia, Jeddah remained principally the walled city:



Jeddah, 1938: the wall is down but its virtual boundaries remain


With the economic boom brought by the oil era, Jeddah boomed too, its population rising well above a million and spilling north, east, and south:



Beyond the boundaries, a boom in development


The pace of urbanization in Jeddah is as fast as I can readily think of, and the city – like others in Saudi Arabia – faces an enormous challenge of housing at all levels (except the very top), and a particular challenge of affordable housing.


I write this from Scotland, on an Actual Vacation (novel concept, I know), so posting will be infrequent for the next week or so, but on returning to Boston will once again take up the mantle of proper regular reporting.



Don’t look now, we’re being blogged about

Always look on the bright side … or else (dee doo): Part 3, Afloat when they should sink

May 27, 2016 | Argentina, Capital markets, China, Economics, Exchange rates, Global news, Government, Housing, Speculation, Statistics | No comments 119 views

 [Continued from yesterday’s Part 2 and the preceding Part 1.]


By: David A. Smith


As established in Parts 1 and 2 of this post comparing an unlikely pairing, Argentina and China, using as source material the Wall Street Journal (May 3, 2016) and Significance, December, 2012; Albiceleste font), we’ve seen that Argentina’s charismatic autocrat turned incipient dictator Cristina Fernandez de Kirchner used every means at her disposal to pressure Argentina’s national statistics agency to report what she wanted reported, rather than accurate statistics.



Truth is what I tell you it is: Minister of economics Guillermo Moreno


When [Minister of Economics Guillermo] Moreno did not get the list from INDEC he began his own witch-hunt to find the establishments from which INDEC obtained price information. “For some sectors such as groceries the field is very large and identifying individual merchants was impossible. But for others, such as travel agencies, almost all of them were included in the INDEC sample.”


Whereas it took the Soviet Union 74 years to die (1917-1991), today’s worst dictators (Mugabe in Zimbabwe, the late Hugo Chavez in Venezuela and his even more sluggish successor) measure their reigns in decades or shorter. 



There is no good … except for the army and the President’s loyalists


Moreno began putting pressure on several agencies to provide “convenient” information to INDEC. “Since the price data were no longer trustworthy, I took several of them out of the index, something that again infuriated Moreno.”


This is heartening, as is the gradual dissolution of Cuba’s state monopoly on information, though North Korea remains the dictator’s dodo, the one that when dead will be seen as the last of its kind.



When I go, I’m taking the country with me


“In computing bread prices: he demanded that we give greater weighting to supermarket prices over those in small bakeries, even though over 90% of all bread consumed in the Greater Buenos Aires area is sold by small bakeries.  For clothing prices, he demanded that we emphasize cheap clothing over designer labels.  At that time there was what were called precios acordados, capped prices of certain goods that were negotiated by sellers and the government. These agreements were, at least at the onset, purely voluntary, but Moreno wanted those agreements to be reflected in the index whether or not they applied in real life.”



I’m ruler of all I survey


China cannot go the way of Argentina, because the epidemic of information has already spread through its electronics, and having gained tongues, people seldom fully muzzle themselves.


Undeterred, Bevacqua began, with twenty volunteer economics students from Buenos Aires University, to produce a more valid consumer price index, which she distributed free.


Once you decide to do professional work for free, you are in a curious way liberated to the truth, because in an internet world you can’t be gagged by losing a job where you’re unpaid, since you simply start narrowcasting from your own blog channel.


She was not alone in trying to produce genuine figures for Argentina’s inflation and gross domestic product.


It certainly is a measure of the observant herd’s wisdom when the free unofficial data is regarded as more reliable than the official statistics.



Campaigning for an index that tells the truth


Around a dozen independent consultancies researched and produced such figures for those who wanted – or needed – them.


Again, China’s nowhere near Argentina’s situation; aside from the clownish Fernandez de Kirchner, the Chinese leadership is much smoother, and much more thoroughly intertwined with its economic elites.  The touch will thus be more graceful, if no less firm:


Ms. Lin, the economist at Guotai Junan, said she started getting guidance last fall to tone down her public remarks about the Chinese currency, the yuan or renminbi – something she acknowledged at an economic forum held at Shanghai’s Fudan Universit in October.



Founded 1905 in Shanghai, the hive of Westernized capitalism


Late-era Soviet authors specialized in speaking in code, a trick requiring intelligence and education, and the Chinese economists are swiftly mastering similar skills:


“I was told by regulators not to recommend shorting the renminbi,” Ms. Lin told the gathering, “so I’m just going to recommend buying the dollar.”


This then is the principal difference between twentieth century and twenty-first century suppression attempts: in the information age, silence itself is damning and is punished. 



We’re fully confident – that’s what we’re going inside now


In February, the central bank abruptly stopped releasing data on foreign-exchange purchases by commercial banks – long viewed by market analysts as a key snapshot of China’s capital flows –a move some analysts attributed to growing worries over more money leaving its shores.


When the dog that has barked all night falls silent, something is up.



You put something in the dog food, didn’t you?


In a statement days later, the central bank said it took the step because the data were “no longer a true reflection of China’s capital flows.”


Behind the white glove is the apparatus of state security and its ability to trump up charges:


“As the person in charge of the CPI, pressure applied to INDEC was pressure applied to me. I was afraid my phones were bugged; I feared for my safety when shortly after my suspension I heard from somebody high up in administration that ‘Kirchner wants your head’. For someone who is a relatively low- ranking government employee to hear that the President of your nation might be targeting you personally can be very intimidating.” Another understatement: “terrifying” might be another description. The pressure was coming directly from Moreno, who at the time enjoyed enormous power thanks to his close association with the President.


A wise leadership uses the minimal force needed to bend the reed.


Given the climate, some are changing their tone. In mid-April, a well-known Chinese economist gave investors in Hong Kong a grim assessment of the economy.


Despite recent signs of a rebound, Gao Shanwen, chief economist at brokerage Essence Securities Co. told investors that “a lot of the official data aren’t reliable” and the economy still faces “big problems,” according to people who attended the closed-door event.


Speaking truth behind closed doors?


When it comes to pressure, what matters is less the absolute quantum than the speed with which the pressure responds to the heterodoxy:


Word of those remarks crackled across social media. Two days later, Mr. Gao issued a clarification on his public account in the popular Chinese messaging app, WeChat, saying those remarks were “made up.” He then released a report on the economy shorn of critical commentary. Mr. Gao and representatives at his firm didn’t return requests to comment.


Argentina, whose government was increasingly clumsy, used not the rapier but the cudgel:


In March 2011 seven companies were each fined 500,000 pesos – around $125,000 – for producing statistics the government said did not comply with “appropriate methodological requirements”.  In other words, for producing accurate, as opposed to cooked, statistics.


Bevacqua received the same fine. “The others are companies or foundations”, she says, “but we don’t have clients or assets. The only thing I own is my house where I live with my children.” She feared she would lose it.


There was even worse to come: criminal prosecution and the threat of jail. The charge, filed by Moreno last year [2011], was that Bevacqua and a colleague published two indices based on false technical information in order to cause price rises in the domestic market and distort the market. It carried a potential sentence of 2–6 years in prison.


The judiciary backed Ms. Bevacqua but the Administration appealed, and as far as I know the threat disappeared only with Cristina’s defeat.


“You can see they’re not happy when you tried to tell them foreign speculators are not your biggest problem,” said one of the officials who attended the meetings.


Always fun to blame the speculators; they’re easy targets.


In the financial hub of Shanghai, the city’s propaganda department recently instructed a local think tank to stop researching a planned debt-for-equity swap program aimed at helping big state companies reduce debt, according to economists familiar with the matter. 


The reason, these economists said, is that officials don’t want the research to turn up unfavorable evidence after Premier Li Keqiang and others have endorsed the swaps.


When the emperor has spoken, then it is so and must be so.


Life’s a laugh and death’s a joke, it’s true.
You’ll see it’s all a show
Keep ’em laughing as you go
Just remember that the last laugh is on you.



In the long run, we are all … economists?


Many analysts have said the plan, which would allow banks to exchange bad loans for equity in companies they lend to, could risk keeping companies afloat when they should sink while leaving banks more strapped for capital.


Obviously it will prop up politically favored weaklings.  That is its evident purpose.


Always look on the bright side of life…
(I mean – what have you got to lose?)
(You know, you come from nothing – you’re going back to nothing.
What have you lost? Nothing!)

And always look on the bright side of life (dee doo)
Always look on the right side of life (dee doo)