I Don’t Think Joel Kotkin Understands Scarcity

Or many other things:

In much the same way as seen in California’s water crisis, many of the administration’s “green” energy policies pose a direct threat to blue-collar workers employed in extracting and processing fossil fuels. The resultant high energy prices caused by the proposed “cap and trade” system–essentially a system for creating scarcity–also will cost middle-class consumers, blue-collar workers, truckers and manufacturers. These constituencies could well face the kind of water policy-related decline that is destroying farming communities throughout central California.

Scarcity is not a bad thing. It is an economic fact of life, and the driving force of the market economy. Innovation is the process of learning to do more with less — of solving the problem of scarcity. It’s why we’re not all hunting and gathering today.

A cap-and-trade system is, actually, a means of creating scarcity. It limits the amount of carbon economic actors can emit, thereby placing a value on carbon and creating an incentive to do more, economically, with less in the way of emissions. The reason we want to adopt such a plan is because if economic actors fail to learn to do more with less carbon, then they’ll have to learn to do more with less of everything — Sierra snowpack, for instance, and water, and food. This is all very easy to understand. Millions of words have been written on the subject. Kotkin would do well to read a few of them.

I really love his conclusion, though:

In the new scarcity politics, access to land also may be sharply limited. New land regulation, ostensibly for climate-change reasons–already in place in California and being discussed as well in Washington state–could force almost all new development to follow a high-density, multi-family pattern. Over time, single-family homes–the preference of a vast majority of Americans–will become once again, as they were in the past, the privilege only of the upper classes in some metropolitan regions.

By embracing the politics of scarcity, the Obama administration seems committed to imposing a regime that could slow any sustained recovery from the current recession. Although these ideas might appear plausible at a Harvard Law Review bull session, their real consequences for millions of Americans could prove very ugly indeed.

Now, this isn’t true — California’s land-use law is about making it easier to build in dense places, not preventing anyone from living in Riverside. This means, of course, that if developers aren’t interested in building in dense places, if the demand isn’t there you know, then they’ll go right on building single-family homes. But I love, love, love, the implication that this scarcity, as embodied by the denial of the opportunity to realize the American Dream in the Inland Empire, could retard economic recovery. Where does Kotkin suppose these foreclosure capitals of the country are, exactly? They’re not in Santa Monica, I’ll tell you that.


  1. Alex B. says:

    Well, I don’t think Joel Kotkin understands much. Just add scarcity to the list, then.

  2. Christopher says:

    California has based urban limit areas in counties throughout California. ANd the consequence of both the sub-prime mortgage crisis — and the ensuing wastelands of foreclosed homes and unfinished subdivisions — and the new California environment policies — is that more and more counties are continuing to develop these policies and people are starting to thinking about this holistically for the whole state. The holistic approach has a lot to do with the main problem of the old system — sure San Mateo and Contra Costa and Marin and Sonoma can enact urban limit lines — but that means the development would just jump over that and suddenly you have people make 6 hours worth of commuting every day from Sacramento to San Jose.