The comment thread under my original post has broached a variety of subjects, and touched upon many implications, actual, potential, or imagined, following from the arguments sketched therein. Rather than attempt to respond to each one these in the original thread, leaving the matter of the responses' connections to the original queries ambiguous - who raised this issue?, to what is this a response? - and thus cluttering up the thread, I thought it preferable to group them together in a new thread, where they might better be clarified.
The question of nature of the currency, and of its backing, has arisen. It is beyond all caviling that the monetary policies of the Greenspan Fed provided a crucial material cause for the development of the financial bubble, and thus, the subsequent collapse. The broad recognition of this reality has precipitated a renewed interest, if only on the right, in the gold standard particularly, and perhaps also in more complicated currency systems backed by a combination of precious metals. I'm not entirely unsympathetic to the interest, but though I am unreservedly critical of the role of monetary policy in the generation of the crisis - and of the attendant manipulations of fundamental economic data concerning inflation and unemployment - it does not appear to me that the gold standard, or any other hypothetical metallic-based currency system, suffices either to preclude the ruinous cycles of boom and bust characteristic of modern capitalistic economies, or to preclude the possibility of deleterious consequences proceeding directly from the monetary system itself. The historical record of the gold standard in the nineteenth century was rather dismal, if one is concerned to have some sort of monetary prophylaxis against cycles of bubble and bust. Moreover, the relative fixity of the quantity of currency under a metallic standard renders rather difficult the entrepreneurial function, inasmuch as, if one posits a relatively static money supply and and expanding cycle of trade - which the entrepreneur must - then it follows that prices must decline as the economy expands. This is, to say the least, a confusing sort of economic signaling; few entrepreneurs will be willing to invest in the expectation of.... falling revenues, profits, and income. Now, of course, businesses were routinely started under the gold standard, but that merely leads into the second difficulty engendered by the relative fixity of the monetary base under a metallic standard. If the supply of money is static, or relatively fixed, in the sense that it expands slowly and fitfully, with new discoveries of specie, or new acquisitions by a central bank, and the economy is assumed to expand for a time, then it follows of necessity that the relative value of existing debts increases, and that this increase is highly correlated with falling prices. Apologetics for the gold standard often emphasize this latter aspect of the system, and, in my estimation, practice a bit of evasion with regard to the former, for it is the former aspect that proved to be the achilles' heel of the system in operation, as the periods of expansion would result in the appreciation of existing debts, a process which sooner or later become utterly unsustainable. This intrinsic feature of the gold standard served as a contributing material cause of the political ferment of the late nineteenth century, particularly among farmers, who found the real value of their debts appreciating more or less simultaneously with the collapse of agricultural commodity prices. Bankrupted by debts impossible to discharge, their properties would be foreclosed upon - and this raises the final, insuperable problem with the gold standard: it is regressively redistributive, effectively, over the cycle of expansion and contraction, redistributing wealth - often real and tangible, as opposed to merely notional - from its possessors, often smallholders and small businessmen, to those who had the good fortune to possess capital to lend at t1. Given that one of the preconditions of our present financial crisis was, shall we say, an insufficiency of resources among the broad middle of the economic spectrum, owing to politico-economic trends of the past two generations, and given, moreover, that any durable solution to our economic predicament must result - at least in the medium term and beyond - in both a rising median income and greater income stability among the middle classes, a monetary system which features regressive redistribution is a non-starter.
This is not to argue, however, that our present financial apparatus is at all ideal. We have already remarked in passing upon its complicity in the creation of the crisis. What tends to go unremarked is that an inflationary system, or at least a monetary system which permits inflation to expand beyond the rate of economic growth, is also regressively redistributive, albeit in a manner altogether subtler, and thus less likely to arouse popular discontent. As the expansion of the monetary base devalues the currency, raising nominal prices, it might be assumed that the effects are uniform and global; but this would be a mistake. There are always sticky factors such as wages and compensation, that might not adjust to the inflation in a linear manner. The additional monetary supply, in essence, must enter the economy in some locations or sectors before others, such that these points will experience inflation before others. And an expanded monetary supply, essentially, enters circulation through certain actors and institutions. In the case of the United States, any increase in the monetary base is passed from the Fed and Treasury through innumerable government programs and the largest financial institutions, meaning that the government and the major banks have the opportunity to spend and/or invest these notional values before the inflationary effects have ramified throughout the economy as a whole; in effect, these entities have the opportunity to purchase goods, services, influence, etc. with the pre-devalued currency, even though the very act of purchase effectively initiates the devaluation. Hence, the hidden tax. But it is also a redistribution. In an era in which both government and the great banking concerns are waxing ever stronger, debauching the economic system and degrading the republican qualities of our political system, transforming the Republic into a mere notion, and leaving in its place a grotesque, hybridized plutocracy, we can scarcely afford a monetary policy resulting in a rate of inflation excessive relative to actual economic growth. I leave it to the reader to infer what sort of monetary policy is, in my estimation, the worst conceivable, save for all the others.
Additionally, the propriety of singling out, first, housing generally, and, second, suburban development specifically, when the entire economy could be characterized as penetrated and conditioned by government in innumerable ways, has been questioned. To this, what response can one offer but that the financial crisis had its origins in a real estate bubble, itself facilitated by lax monetary policy and a legion of occult financial instruments? More specifically, the bubble had a peculiarly suburban character, at least on its residential side; while commercial real estate has also experienced a bust on the suburban side, many upside-down commercial properties are also in urban areas. As regards the latter, I should state that the implication of my original post, which apparently went unremarked, is that, already having a gross surfeit of commercial real estate, it is a colossal misallocation of resources to be building more of it, especially given that much commercial development is, as originally indicated, transitory and predatory, and eschews the utilization of perfectly serviceable existing facilities. As regards the former, suffice it to state that the foreclosure crisis is concentrated in the so-called sand states of Florida, Nevada, Arizona, and California, with the financial instruments associated with these properties figuring disproportionately among the reams of toxic paper. The bulk of that development cannot be characterized as other than suburban in nature, whether of single-family homes, townhouses, condominiums, or what have you. It was emphatically not urban in nature, let alone high-density, mixed-use. Yes, these were vast swathes of suburbia, and one could factor out foreclosed row homes in Detroit, or high-rise condos which served as speculative objects for property flippers in Miami, and still be left with a decade of malinvestment in.... suburbia. The much-vaunted "ownership society" was at once a speculative society and a suburban society, the animating political calculus being that home ownership would cement new segments of the population to the GOP's economic agenda, by imparting to the new homeowners a sense of having a stake in the national enterprise.
This calculation was not at all unprecedented. The emergent Republican party of the mid-nineteenth century had as its slogan, "Free soil, free labor, free men"; while opposition to slavery and its expansion is usually recognized as the bedrock of this nascent ideology, the labour component is often reduced to a mere gloss on the anti-slavery aspect. However, in historical context, free labour meant more than merely the absence of slavery; it referred to the Republican effort to defuse the revolutionary ferment thought to lurk within the then emergent industrial economy of the North. Millions of wage-labourers, many of whom a generation earlier would have been either subsistence farmers or moderately prosperous farmers producing largely for local markets (or weren't even in the United States, having only immigrated beginning in the 1840s) , and who would have regarded the social independence of this estate as consonant with the republican ideals of the nation, chafed under the disciplines of wage-labour, not only because, in the decades prior to labour legislation, it was little better than servitude, but because its regimentation was felt, profoundly, to be a contradiction of American ideals of republicanism. Looking nervously across the Atlantic at the abortive revolutions of 1848, the Republicans hit upon the expedient of encouraging the settlement of the West, hoping thereby to defuse the tensions created by industrialism, and to create a new class of independent yeoman who, owing their good fortune to the Republican party and its programmes, would be amenable to sending Republicans to high offices as their representatives. It obviously didn't work out that way, both because the legislation providing for the land grants did not require that a tract be held by the original claimant, thus enabling lurid speculative frauds, replete with serial perjurers, and because the intersection of gold-standard economics and free trade in agricultural commodities resulted in a situation of falling crop prices and increasing debt valuations, with the consequence that enormous percentages of farmers were eventually reduced to penury and servility, in the end. The influence of the railroads, which received their own grants, only served to exacerbate the situation, as the grants typically included millions more acres than were required for rights-of-way and, owing to the atmosphere of corruption which suffused the entire process, were often disclosed to the connected well before their scope was made known to the public, enabling the politically-favoured to buy worthless land moments before it was made valuable by political fiat, profiting from Republican-engineered primitive accumulation. These transactions served only to increase the speculative impetus behind Westward expansion, forming a sort of speculative gravity drawing to itself every confidence-man, grifter, and mountebank who thought he could enrich himself by converting the public trust into private gain.
The significance of the historical antecedents, as regards the late financial bubble, lies in what they disclose, namely, the coincidence of property ownership, the felt imperative of expanding property ownership, and rank speculation, at inflection points of American history. We have been here before, each time heedless of the social costs, indifferent to the corruption, and contemptuous of those who would summon to consciousness the environmental costs (It should not be forgotten that, as the nineteenth century drew to its inglorious denouement, and agriculture in the American Midwest was increasingly concentrated, wedded to commodity-crop monoculture, and heedless of the environmental peculiarities of the prairie, the conditions were set for the Dust Bowls of the 1930s. Hostile to the ecology of the region, and the interlocked systems of plants which held the soils, and to the means of sustaining those soils, as evidenced by the agricultural practices they followed (monoculture, absences of wind-breaks, uprooting of most native grasses), American farmers facilitated the loss of billions of tons of soil, first to the Mississippi river basin, and the Gulf of Mexico, and later, to the atmosphere and the planet generally...). Analogously, today, the environmental costs of unrestrained suburban expansion are significant, involving the increasing concentration of an already unsustainable mode of industrial agriculture and the intensifying reliance on modes of transportation dependent upon declining resources. Analogously, as well, the costs of such speculative excesses are visible in the misallocation of resources, the corruption intrinsic to contemporary haute finance, now encompassing even political insurance of its imperatives, and the declining material fortunes of broad sections of the middle classes, the bulwarks of republicanism.
Underlying this discussion has been, it would appear, a solicitude for the suburban way of life, and a claim, perhaps only implicit, that the development of suburbia has occurred in accordance with 'market forces'. There are senses in which this is manifestly false, and a sense in which this is true, albeit trivially so. Any given configuration of 'the market' is artifactual, a contingent product of the intersection of law, custom, innovation, prudential judgment, the market positions of relevant economic actors, the political influence of those actors, and the cunning of history, that mysterious sense of 'oughtness' that transforms 'ideas in the air' into millions of discrete actions which appear as though concerted, because they reinforce emergent trends or path dependencies. To engage in trucking and bartering is natural to man, and indeed necessary to man; but is this is to say nothing more than that man is finite, resources are limited, and men must cooperate in some fashion if civilization and culture are to be possible, and to be sustained; and any actualized system of exchange will not be a brute transcription of natural, pre-political impulses or processes into some formal, social mode (one mustn't thus presuppose social contract theory in attempting to understand social and economic phenomena), but by the very fact of its existence at all will presuppose the political as its condition of possibility. For any concrete system of exchange requires, at a minimum, prudential judgment as to the application of intuitions of justice and equity to particular, contingent circumstances, and the sense of these procedures as having customary authority, which implies some notion, however ad hoc or ambiguous, of enforcement. Whatever one might hypothesize about the natural law and its relation to exchange and commerce, the natural law does not become actual and effective except as mediated by prudence, which is to say, by some form of positive legislation, for this people in these circumstances, having in mind the preservation/perpetuation/attainment of those objects. All of which is to say that it is a kind of category error to blandly inquire about the relationship of a given set of policies to 'market forces', as though those forces were somehow pre-political, apolitical, or natural in a sense that cannot be given to the political. When we are discussing something such as housing policy, and the political engineering underlying the housing market, and wondering whether these things are consistent with the market, we mustn't be mislead by language to imagine that we are wondering whether the political realm is consistent with something primordial lying outside of the political, outside the scope of negotiation, prudence, and the weighing of goods; what we are discussing in such cases is two aspects or components of this inherently political and human thing, society, being out of phase with one another. Attempts to invoke 'the market' are typically attempts to naturalize the historical and contingent, and this to short-circuit any deliberation over the objects of policy.
With regard to housing and the encouragement of both home ownership and suburbanization, there is another sense in which the references to market forces, and whether we have 'interfered' with them, is incoherent. For generations, governments at various levels have utilized, to throw out a partial list, the tax-deductability of mortgage interest, property taxation, zoning regulation (particularly the trend away from mixed use zoning towards single use zoning, which trend is the veritable prototype of suburban developement), monetary policy, lending regulations, urban redevelopment, highway construction (a de facto subsidy to the automobile culture, and a material precondition of suburbanization), the tax deductability of transportations costs borne by agribusiness concerns (rendering it economically viable to both pursue concentrated monoculture in a few regions of the country and to transport the produce to far-flung corners of the country, in which agriculture has dwindled; this is another subsidy to both the car culture and the suburban lifestyle, enabling the denizens of suburbia to enjoy the sorts of things that their development has purged from a region), and other policies, to encourage the development of suburbia. Doubtless readers could come up with other policies which have abetted such development. Given all of these things, it would be vain to protest that only more recent political innovations, be they the GSEs or the federal encouragement of subprime lending, as a vehicle for the expansion of minority homeownership, constituted political interventions in, and deformations of, the housing 'market'. Abolish these things at a stroke, and you would not have a pure, unadulterated market, but a different configuration of laws and policies favouring differing outcomes in the distribution and incidence of property ownership.
However, I don't believe that critics have in minds any of these considerations when they discuss suburbanization in the reverent tones of 'the market'. What is meant, it seems to me, is that people simply desire suburbanization and its accoutrements, in which instance the terms 'market' and 'desire' are functionally equivalent; what people want just is 'the market', and vice versa. As this is a fundamentally liberal argument, both anthropologically, and politically, there really isn't much more to state. That people like something, or want something, is neither normative nor decisive; instead, what is required is a reasoned, prudential weighing of goods, hopefully conducted with reference to the Burkean and Chestertonian notion of the democracy of the dead, and the as-yet unborn. It is stupefying that self-professed conservatives would, instead of posing the question, "what is it good for people in these circumstances to pursue?", ask as blandly as any utilitarian or pragmatist, "what is it that the people seem to want?" This is a doctrine of man, and his politics, as a utility-maximizer, and one who has been lately unmasked as irrational, to boot; and it is disgusting and indigestible.
Finally, I should also note that while many Americans do, in fact, harbour the desire for a little piece of the countryside, and all of the felicities thereof, that anything which can be possessed by everyone, or, at least, anything which public policy takes as an object, so that as many as might may possess it, is something which no one of those people can truly possess, except as a simulacrum or fantasy. All discussion of externalities and squandered resources aside, it is not a legitimate object of public policy, at least under wise and prudent authority, to indulge unattainable and fantastical strivings. We shall not all be rich, and neither can we be; we shall not all possess a house in the country, vast open spaces, and a bucolic idyll, and neither can we; and it is only ideology that tells us that we may, if but we will it.
Concluding Unscientific Postscript:
To this -
On the other hand, it is another thing entirely if a guy buys the land to put in a chicken farm on farmland, and then along comes the government and says, we know this is zoned for farm use, but we don't think a chicken farm is quite what we want this close to a park down the road, so we are changing the zoning on you. Can't you see that this is a taking?
I can only respond that if it is always a taking in some illicit, invidious sense to change the zoning of a given piece of property, whenever such a change would adversely affect the economic use or exchange-value of the property, then it becomes impossible both to effect any sort of prudential balancing of goods bound up with the use and possession of property, and to alter the present, development-centric emphasis of zoning policy. Imagine an hypothetical farmer or holder of rural land on the edge of a developing suburb/exurb, where the land is zoned rural. If it occurs to the owner of this property to request a change of zoning, so that it could be sold at a substantially higher price, and that requested change were denied, the owner could protest, quite logically, that such a denial was a 'taking', inasmuch as the boundary between the two adjacent zoning types was arbitrary, along with the granting of previous zoning changes making possible the development now abutting his property. There is no logical stopping point that can account for all of the use and economic interests of property owners, while refraining from the imposition of a 'taking' upon some of them, whether actual or hypothetical, should their plans and interests change. If, however, we deny his claim of having been subjected to a 'taking', that denial must be on the grounds of the zoning being what it is, and that decision will either be arbitrary or constituted by reference to goods or objects other than those envisioned by the property owner. Which is more or less the case with someone who wanted to put up a chicken farm - which can generate significant olfactory externalities, among others - but was subjected to a re-zoning: the zoning now is what it is, either arbitrarily or with reference to other goods, such as avoiding the stench and the potential pollution of groundwater. There is no basis upon which to distinguish the cases, save the initial state of the positive law (zoning); but the fact that both cases must be decided either purely arbitrarily or by reference to ends other than those of the property owner should indicate the the real issue is not the 'old switcheroo', but rather the interests reflected in the zoning laws themselves: why one property owner gets the switcheroo he doesn't want, while the other doesn't get the switcheroo he does want, has everything to do with prudential judgment, and why both property owners would feel aggrieved is matter of their having wanted to do something they were forbidden to do.