4 ms·

I was walking around my home town recently. It's more than doubled since I left in 2002. Most of the new housing was built as new, dense (10-20 stories) suburb

I was walking around my home town recently. It's more than doubled since I left in 2002. Most of the new housing was built as new, dense (10-20 stories) suburbs. Th urban architecture is not bad. Decent green spaces, so that buildings open into "garden paths" rather than streets. You can get between places using green pedestrian walkways. Conveniently located schools & creches. Most of the parking is underground. The "economic architecture" OTOH, is striking. There are 2 small malls, walking distance from eachother, where all the cafes, resteraunts and shops are. There are two big commercial/adminstrative buildings where the dentist, post offices and stuff is. There is no high street, no corner stores, or any place that a sidewalk pizza shop could exist. ..no place where an independent retail or service business could exist, not even a news stand. It occurred to me that not only is this related to "concentration of wealth" it is that concentration of wealth. Those Malls and commercial real estate can be owned by €bn funds. Street level real estate doesn't lend well to that. Now... A lot of this has to do with the structure of the financial system, how things are capitalized. A developer can approach a large real estate fund, to sell a mall "off the plan." They can then go and presell leases, to their client base.. chain stores and restaurants. There is no equivalent financial sector that could fund real estate suitable for sole traders. So, sole traders will decline. There is obviously a chicken-egg dynamic between the underlying economics (eg revenue per square meter, and hence rent) and the existence of a friendly capital market. But, I think causation runs the other way as well. In this case, it just seems very planned. The architecture and planning of a city assumes a certain economy, the urban architecture reflects that, and the underlying capital system reflects that. The three lock eachother into place. If there had been a vibrant market for financing small retailers, but not malls, then the whole city would have probably been built differently. Anyway China is unidealogical about such things, atm. They don't mind engineering a cityscape for a certain economy, engineering financial markets for a certain cityscape or cityscape or if the proverbial cat is black or white. My long winded point is that maybe it's time to "pick winners" in financial markets, subsidizing or penalising certain types of capital markets over others. Ive always been dubious about market liberalism when it comes to banks.

marcell 8y ago
Where is your home town?
- dalbasal 8y ago
  Near Tel Aviv
forapurpose 8y ago
> My long winded point is that maybe it's time to "pick winners" in financial markets, subsidizing or penalising certain types of capital markets over others. Who gets to pick the winners? Why should those people benefit and others lose? How do you prevent the massive corruption? And why is it time now, not 10 or 50 years ago or 10 years in the future?
- maxxxxx 8y ago
  The current system is not exactly neutral or not corrupt, but it's already picking winners, mainly the ones who already have plenty of money.
- dalbasal 8y ago
  ..the people who are officially not picking winners now, but effectively are. It's time now for small businesses because small businesses are now at a massive disadvantage relative to large institutions, for reasons that are unrelated to underlying economics. It's time now for the VC market, because VC capital is an essential ingredient for making the next generation of companies. If you looked at your major companies in 1978, there aren't many that needed VC to exist in order to be. If you go through the exercise now, you will find that a decent portion of your economy may have hinged on closing a few small (in financial markets terms) on getting funded by VCs at some point. The liberal purist would probably argue that the availability of VC money is directly proportional to the potential returns to that money, which is in turn proportional to the value to the economy. I'm agnostic about this in abstract terms. It might be true. In practice though, I think it isn't true. The financial market are limited by, but not shaped by economics. They exist almost outside the economy. That's why we have financial bubbles.

marcell 8y ago

Where is your home town?

dalbasal 8y ago
Near Tel Aviv

forapurpose 8y ago

> My long winded point is that maybe it's time to "pick winners" in financial markets, subsidizing or penalising certain types of capital markets over others. Who gets to pick the winners? Why should those people benefit and others lose? How do you prevent the massive corruption? And why is it time now, not 10 or 50 years ago or 10 years in the future?

maxxxxx 8y ago
The current system is not exactly neutral or not corrupt, but it's already picking winners, mainly the ones who already have plenty of money.
dalbasal 8y ago
..the people who are officially not picking winners now, but effectively are. It's time now for small businesses because small businesses are now at a massive disadvantage relative to large institutions, for reasons that are unrelated to underlying economics. It's time now for the VC market, because VC capital is an essential ingredient for making the next generation of companies. If you looked at your major companies in 1978, there aren't many that needed VC to exist in order to be. If you go through the exercise now, you will find that a decent portion of your economy may have hinged on closing a few small (in financial markets terms) on getting funded by VCs at some point. The liberal purist would probably argue that the availability of VC money is directly proportional to the potential returns to that money, which is in turn proportional to the value to the economy. I'm agnostic about this in abstract terms. It might be true. In practice though, I think it isn't true. The financial market are limited by, but not shaped by economics. They exist almost outside the economy. That's why we have financial bubbles.