Books@DailyFinance: A Bold and Worrisome Vision of the Post-Meltdown World
The upside: designer furniture, health-club access, maid service and all the accoutrements of motel life. The downside: all the not-so-great accoutrements of motel life, including alienation, the company of strangers and the absence of your funky, real-life possessions. But Florida thinks the concept has possibilities. "If you get a new job or simply want to move, no problem," he writes. So what if there's no community? It's an approach "that will facilitate the flexibility and mobility today's economy needs."
That's the kind of thing that worries me about The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity (Harper, $26.99), Florida's attempt to find a silver lining inside the cloud of our current economic malaise.
'The Great Reset'
There's much in this book to provoke thought. Surveying previous great economic meltdowns, the author asserts that "crises inevitably give rise to critical periods in which an economy is remade in ways that allow it to recover and begin growing again." Such a "Great Reset," as he terms it, is likely to "take shape around new infrastructure and systems of transportation [and] give rise to new housing patterns.... Eventually, it ushers in a whole new way of life."
But as in Florida's previous works, including The Rise of the Creative Class and Who's Your City?, this book seems at times to celebrate a Darwinian survival of the hippest, most youthful and most flexible sector of the global workforce. Kids, families, roots -- who needs 'em?
I don't want to overstate the book's shortcomings. After all, Florida, who teaches at the University of Toronto's business school, must be commended for his optimism, for taking the long view and for making an attempt to figure out what lies ahead in the not-so-distant future. This volume is certain to prompt plenty of stimulating discussion, both on the airwaves and in business circles.
Depression Brings Innovation
The author begins with succinct and well-researched examinations of two previous economic crises, the so-called Long Depression of 1873 and the Great Depression of the 1930s. Along with the suffering in each case, he discovers immense technological advances, featuring inventions from the modern bicycle to the research laboratory and Fordist mass production. He says we may look for such innovation to follow in the wake of our own crisis.
Each earlier period also brought a geographic redistribution of the U.S. population -- the rapid growth of urban areas at the end of the 19th century and the burgeoning of suburbia as a consequence of the recovery from the 1930s depression. (Strangely, Florida has little to say about World War II, which also profoundly reshaped the society and the economy.) These reshufflings of population are central to Florida's analysis.
Drawing upon the work of geographer David Harvey, Florida argues that "technological fixes are insufficient to solve economic crises" and "the solution also always involves new patterns of real estate development and of economic geography broadly." It's just such a "spatial fix" that we must expect in our current recovery, argues Florida. Bye bye suburbia, especially in the Sunbelt. Hello, resilient postindustrial cities.
At this point, the book may begin to seem a bit familiar to those who have read the author's previous works. Florida surveys city after city, finding promise in such places as New York, the District of Columbia and Charlotte, North Carolina, and dim prospects in Detroit, Akron, Elkhart, Indiana and more. He also lists the many advantages of Toronto, while deriding the Sunbelt, where he says "whole cities and metro regions became giant Ponzi schemes" thanks to the housing bubble. Florida's followers will find little that's truly novel in such chapters, but that's OK. The author is simply building upon and refining his previous work.
How will the anticipated "new way of life" look? That's difficult to say, Florida admits, even as he makes an attempt. A new economic landscape must "power new kinds of demand and undergird a new round of growth," just as the suburbs did for the auto age. Among the prominent features of this new landscape: High-speed trains to transport us and congestion pricing of roads to discourage auto use.
"Megaregions" such as "Char-lanta" (Atlanta, Charlotte, and Raleigh-Durham) and "Hou-Orleans" (Houston and New Orleans) are already emerging as "the seeds of a new spatial fix." Work must be enriched, especially given that 45% of today's jobs are in the low-paid service sector. The author says we must, as a society, de-emphasize the predatory finance sector and shift from "a trading to a building orientation." Finally, there must be a new social compact that emphasizes flexibility (especially with portable benefits) and personal development.
Altogether, it's a libertarian vision that favors creativity, youth, diversity (he's down on immigration restriction) and local government. And what of the financial bailout? Government "squanders precious resources that could support...future-oriented, prosperity-boosting efforts when it chooses to bail out old industries, breathe life back into outmoded institutions, or place Band-Aids on problems" such as those of Wall Street and Detroit automakers. It seems there's little place for ex-autoworkers or laid-off bond-traders in the Great Reset.