|AFP Hong Kong|
To be sure, I am just a silly blogger, and know little and less about the ways of business.
Yet a short wiki-walk through my own post about crony capitalism led me to an obscure term...
Dirigisme is an economy in which the government exerts strong directive influence. It designates a mainly capitalist economy with strong directive, as opposed to merely regulatory, economic participation by the state. (Wikipedia)
...which led me in turn to reflect more seriously upon a skepticism and a notion I've been harboring for years.
Major developments nowadays (at least around here?) are conducted with a very high degree of centralization, consolidation and dirigisme. We identify and cultivate huge tracts of undeveloped land (e.g. the North Shore, the South Side Works, the Lower Hill, the Allegheny Riverfront and the Bakeries Square) then we seek out a single Developer to assume all costs and risks (minus those which taxpayers shoulder through various incentives). That developer goes on to do the lion's share of planning, to recruit all the business tenants, and to retain a continuing stake in the maintenance, management, and profit equity for the whole shebang.
The commercial and civic success of such development has been mixed, with room for debate.
The physical plant of these developments tend towards huge internal uniformity, cost-efficiency, modernism and stark contrasts with neighboring parcels. The commercial makeup tends toward inviting mainly affluent patrons and highly capitalized vendors, discouraging internal competition (no direct competitive rivalries), and tolerating vacancy for long stretches rather than allowing rents to fluctuate more naturally.
Leftists bemoan the "suburban blandness" of these dirigiste developments with its overtones of gentrification; that enervating atmosphere of a "business district" in a "neighborhood" is usually absent. It can feel like a "strip mall".
Rightward thinkers meanwhile are aggravated by the lack of competition, the central planning and singular basket of venture eggs, and the interpersonal and political barriers to entry. Furthermore, supplemental public-sector investments tend to accumulate over time.
Folks who have checked out my Blogger Profile may have noticed that one of my very favorite books is Tai-Pan by James Clavell, more famous as the author of Shōgun. This gripping historical novel about the origins of Hong Kong as a province of the British Empire centers around "Dirk Struan" (the Tai-Pan or unofficial Supreme Leader) who is a tea and opium trader, a pirate-turned-developer, a major political contributor to Parliament and an aggressive lobbyist for free trade and other human freedoms.
In the book it was Struan's notion (though not presented as an unorthodox or unexpected one) for the Viceroy and Plenipotentiary to divide up the undeveloped island of Hong Kong into various lots of various sizes -- large and small, premium and back-alley -- while making allowances for necessary public amenities like streets, the harbor and the Church, and then to hold a land auction. The auction would ensure optimal profit for the Crown while fostering a hustling, bustling trading hub with vast opportunity for traders and other business owners to jockey ruthlessly and, for those skilled enough, profitably. And it comported with the English sense of fair play, injecting confidence on all sides.
Never mind that Dirk finagled the appointment of his own son Culum as chief auctioneer. Culum resented his dad and gifted the high knoll lot to the Church, thereby saving Noble House from a ruinous bidding war against Brock & Sons. The state can always head a few predictable bad arrangements off at the pass, even as the business community can lend its expertise in drawing the boundaries.
Is such a wide open model viable nowadays for urban redevelopment? To foster wild and woolly commercial competition by drawing out a skeletal map of public amenities as well as commercial parcels of various sizes and zoning classifications, by offering incentives such as subsidies and tax breaks piecemeal and disinterestedly, and by hosting something unpredictable like a public auction -- letting each winning bidder build to their own tastes and preferences within parameters? Placing the eggs in a multitude of baskets and letting them all sink or swim as autonomous agents?
The auction / open playing field model would certainly rob the "developer" sub-community of several accustomed opportunities, and in so doing hand a lot of crucial creative responsibility for wide-angle city planning over to, well, City Planning. Some would say those responsibilities would merely be restored.
I'm not sure. Hong Kong has certainly enjoyed an impressive record of success and investment. That white devil cutthroat Dirk Struan certainly didn't have any use for dirigisme in his own plans to become a merchant prince.