Robert Fulford's column about The Nature of Economies by Jane Jacobs

(The National Post, March 28, 2000)

In the handsome old Annex district of downtown Toronto, where it is said that some streets have more professors than houses, business is not often described as a beneficial activity. Hardly anyone speaks of it with enthusiasm. You are of course free to buy and sell in the Annex, just as in the outside world, but on some streets, and at certain dinner parties, you will gravely endanger your reputation if you express enthusiasm for commerce, trade, the market or (this one would ruin you for sure) "free enterprise." It is probably not going too far to say that many Annex people, in their wistful moments, still occasionally wonder whether state ownership of the means of production might not be worth one more try.

This is what makes Jane Jacobs, who at age 83 is the most admired resident of the Annex, such an anomaly. She made her name in the early 1960s with The Death and Life of Great American Cities, an attack on large-scale urban planning, and a decade later she inspired the campaign to cancel the Spadina Expressway, which would have ruined downtown Toronto, starting with the Annex. Her admirers are aware that she has not since changed her mind about the big projects of big governments. But what's not so well known is her great affection for the entrepreneurial spirit, in which she sees the spontaneity, originality and energy that bring a community or a society to life.

The idea of building a business that makes a profit, far from being alien to her, actually excites her. The idea of a city or region making itself prosperous by trade thrills her. But she knows that there are huge institutions and ideologies standing in the way of this process. She disapproves of state monopolies, even in public transportation, and for many years she's been a severe critic of Ontario Hydro, the largest state-owned corporation in Canada.

She doesn't admire labour monopolies, either. In 1991 I was sitting beside her when someone noted that a postal strike appeared imminent and wondered what should be done about Canada Post. Jane Jacobs didn't hesitate. "Close it," she said, "and see what replaces it." She has no time for "failed enterprises kept on life support." She has little use for most foreign aid, which misfires as often as it succeeds.

It seems to me that much of what I have read about her, and much of what I have heard said about her, ignores these crucial aspects of her thinking, perhaps out of a fear that they might add up to something truly dreadful -- conservativism. In the Annex it is assumed that all decent persons despise everything covered by that word.

Her affection for business is not the theme of her most recent book, The Nature of Economies, but it's the foundation on which most of her ideas stand. She wants to demonstrate that economic life, far from being superimposed on the natural world, is a part of nature. Economic and natural systems are entwined, and economic life is ruled by processes and principles we humans didn't invent and can't transcend, such as evolution. "The more we learn of these processes and the better we respect them, the better our economies will get along." An economic system makes itself up, out of need and spontaneity. "The weather is like that. Evolution is like that. Economies, if they aren't inert and stagnant, are like that ..."

In her arguments she incorporates whatever crosses her mind and appears relevant: a clipping from a recent issue of The Economist; a book on chaos theory (which clearly enchants her); an anecdote that someone told her in New York in 1937. Her subjects range from Canadian fish-management (which made cod cheap with huge subsidies and encouraged disastrous over-fishing) to China's one-child birth-control system (which, she predicts, will create vast problems for the future).

Her book focuses on "economically creative people," who have initiative and resourcefulness, "qualities abundant in the human race when they aren't discouraged or suppressed." But bureaucrats make a habit of discouraging and suppressing precisely those qualities. She points out that in the Soviet Union, economic development was in the hands of bureaucrats, so what developed was ... bureaucracy. In the end, she notes, it took eight million people to manage the Soviet economy into the ground.

In the March issue of Saturday Night, Paul Wilson asks her opinion of Western corporations that pay 20 cents an hour to workers producing running shoes. Her answer ("this sounds like a cold-blooded thing to say") is that those low wages are better than anything the people can get another way. They should be considered an opportunity: "The notion that you make slaves of people by paying them low wages in place of no wages is nonsense." They become slaves only if they do this work passively and fail to create methods of improving their societies.

In The Nature of Economies, she expands on that point; Taiwan's major exports two decades ago were low-wage toys and garments, but the systems and skills created in making those products, and in making the necessary machinery, created a versatile workforce, which soon led to a sophisticated economy. That argument illustrates the way she thinks: When discussing economic issues, she assumes we can learn by studying success rather than shaking our heads over failure.

The Nature of Economies is a kind of sequel to her last book, Systems of Survival: A Dialogue on the Moral Foundations of Commerce and Politics (1992). In both of them, several agreeable people discuss crucial issues by ruminating, theorizing and telling one another significant stories. The five characters in The Nature of Economies have varying ideas, but they are all versions of Jane Jacobs. This means that the book consists of Jane Jacobs talking to herself, to my mind a superb conversational group.

I can't imagine anyone who won't learn from what she says. Those readers who will learn the most are those who absorb and use her way of thinking, and those who discover she is a more complicated and challenging thinker than they imagined.

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