Posted by David in Economics, Personal stuff, Politics.
Tags: Immigration, Richard Florida
One of the worst features of the old East Bloc governments was that they prohibited most people from leaving. The Iron Curtain and the Berlin Wall were built not to keep out evil western capitalists, but to prevent eastern Europeans from enjoying the benefits of leaving for more prosperous and open societies. It is no exaggeration to say that the countries of Eastern Europe constituted the world’s largest prison camp before 1989. Curtailing the freedom of exit has perhaps been the most important way for authoritarian governments to insulate themselves from pressures to improve their human rights records or their economic policies.
But the freedom to exit is not enough. There also has to be freedom of entry to make exit rights effective. While liberal democracies are universally associated with freedom of exit, they have at best a mixed record on freedom of entry, which is what immigration laws regulate. One of the great achievements of the European Union (or the European Economic Area to be more precise) has been to give people within that region the right to choose in which of 30 jurisdictions they want to live (the 27 EU member states plus Norway, Iceland, and Liechtenstein). As regards global migration, Canada probably has had the least restrictive policy, which among other things has resulted in Toronto becoming the most ethnically diverse city in the world, with 12% Asian Indians, 11% Chinese, 8% Afro-Caribbeans or Africans, 4% Filipinos, 3% Latinos, and 3% Arabs in 2006.
Free entry and exit is not just a matter of human rights. It is also an economic freedom on a par with free trade in goods and free capital flows. In fact, it may be even more important than those other economic freedoms. This was the message of a 2003 speech by Richard Florida that I discussed with four students at a research seminar yesterday. Florida’s idea is that immigration encourages innovation by facilitating the mixing of diverse ideas and also that it encourages tolerance, at least in the long run. His message for San Diego, which was where he gave his speech, was that the best regional development policy would be to abolish border controls between San Diego and Tijuana. I couldn’t agree more.
I remain mystified as to why so many self-described pro-market economists and politicians focus so much more on the benefits of free trade than on free migration. For example, both economic freedom indices (Fraser Institute and WSJ) include freedom to trade internationally as a key indicator of economic freedom, while immigration regulations are not even included. But then the distinction between ”economic freedom” and “non-economic freedom” is itself spurious, as has been shown by property rights theorists such as Armen Alchian or Harold Demsetz. If people care about freedom of speech, it will affect migration patterns and land values. The freedom of people to start a business or negotiate employment contracts or buy housing is compromised if residence permits are at the discretion of politicians. And most politicians are even worse than economists when it comes to neglecting the dynamic benefits of immigration.
Conservative politicians often claim that they are more “pro-market” than liberals, socialists or greens. And they usually point to the benefits of free trade and international capital flows more often than their political opponents. But conservatives are often the most restrictive when it comes to immigration. Hardline anti-immigrant rhetoric is much more likely to come from Republican candidates in the US, Conservative candidates in the UK, Gaullists in France or Christian Democrats in Germany than from candidates of any other mainstream party. The abominable immigration policies of the British Labour Party administration - rejecting most non-European immigrants as well as almost all applicants for refugee status - was criticized as being too lax by Conservative Party politicians! And in the coalition negotiations with the Liberal Democrats, the Tories stated clearly that a more restrictive immigration policy was one of only a handful of non-negoitiable election promises.
A policy of free migration (unrestricted emigration and immigration) would be an even more important free-market policy than free trade becuase it does not just lead to a greater division of labor and the demise of substandard products and wasteful production processes. It also has an even greater potential than unrestricted international trade in goods to encourage creativity, innovation, and tolerance as different world views and habits come into contact with one another. Perhaps transaction costs would increase somewhat. But this would be a small price to pay for the vibrancy and dynamism of truly cosmopolitan cities, the benefits of which gradually spread to all parts of the economy.
There are political movements that have anti-migration policies as their top priority. The Front national, the Dansk Folkeparti, the British National Party and so forth have put immigration at the top of their respective policy agendas. Isn’t there a need for a countermovement that prioritizes the liberalization of migration regulations with similar passion? I have always voted for the party with the most liberal immigration policy (and switched parties in response to changes in migration policy), but unfortunately these parties don’t tend to put increased immigration as one of their key election promises. Wouldn’t it be great if migration enthusiasts could be as loud and clear as the anti-immigrant populists?
Posted by David in The Social Sciences.
Tags: creative cities, Gay Index, Knowledge society, Richard Florida, Tolerance
Richard Florida stresses the importance of tolerance in post-industrial creative cities, since tolerance encourages creativity and imagination. He has become associated with a “Gay Index,” which measures the gay proportion of the general population in different metropolitan regions. He argues that gay people are attracted by tolerant environments, and thus they tend to flock to the most tolerant cities. And it’s exactly a tolerant environment that is needed for creativity, entrepreneurship, and innovation. Consequently, he argues that his Gay Index is a good predictor of regional economic performance in the post-industrial economy.
This assertion is not without its critics. It goes without saying that people associated with the US Religious Right are unimpressed. But there have also been more scholarly critics, such as Ed Glaeser of Harvard, who claims that the only thing that matters is human capital as conventionally measured, as has always been the case.
In my new book (English translation of title: “The Future of the Oresund Region: The Values of a Young Generation”), I set about investigating tolerance as a value (not as an assumption with observable revealed-preference outcomes, which is Florida’s approach). First I did a macroanalysis at the national level, comparing six different types of tolerance by looking at simple correlations with different measures of economic development, particularly the Human Development Index, the Corruption Perceptions Index, the Press Freedom Index, and an index of scientific publications per capita.
The analysis revealed correlations in the +0.5 to +0.8 range for all studied tolerance measures, using results from the World Values Survey. The tolerance measures were the following: justification of homosexuality, divorce or prostitution, and acceptance of gay, immigrant or other-race neighbors. I also included Inglehart’s postmaterialism index (correlations between 0.5 and 0.6). There was an important conclusion: the single best predictor of development, whether measured as HDI (income/health/education), absence of corruption, freedom of expression or science production is the degree of justification of homosexuality, closely followed by acceptance of gay neighbors! This was followed in turn by justification of divorce, postmaterialism, justification of prostitution, acceptance of other-race neighbors, and acceptance of immigrant neighbors. Moreover, partial correlation measures also supported tolerance toward gays as the most important variables.
I then proceeded to analyze tolerance among young people in the Oresund region. Generally speaking, most young people can accept gay neighbors (between 85 and 90 percent). But it was still the single best predictor of a host of variables associated with the post-industrial society. Not unexpectedly, tolerance toward gays is most strongly associated with women in college-track educational programs. More interesting is the fact that tolerance toward gay neighbors has a strong positive association with the attractiveness of knowledge-oriented occupations (e.g. scientist, engineer, physician) and an even stronger positive association with the attractiveness of “artist/entertainer.” It has a strong negative association with manual occupations (construction worker, car mechanic etc.). In addition, tolerant students are over-represented among those who list “interesting work” and “music/art” as among their four top life priorities. Tolerance toward gays is also positively associated with geographical mobility and with other kinds of tolerance.
A geographical analysis revealed that the overwhelming majority of young people in Zealand (Denmark) and of young women in Scania (Sweden) can be described as tolerant. But there is a sizable intolerant minority among young Scanian men. Intolerance is especially over-represented among men in vocational schools. Landskrona, Helsingborg, Angelholm and other municipalities in the north-western part of Scania are especially well-endowed with intolerant young men. In some of these places, as many as a third of the population of 19-year-old men do not only reject gay neighbors, but also Jewish, other-race, or different-language neighbors. Even greater shares reject Muslim, immigrant or Romani neighbors.
Analyzing the statistical association between general intolerance and one’s favored society (among male students) produced a remarkably clear result. Among those who accept all kinds of neighbors, 80 percent did not think that “industrial society” is the most attractive type of society. They favored the given alternatives, which were “the knowledge society” and “ecological society.” Among students who disliked at least 5 of 10 mentioned “out-groups,” the corresponding result was that 60 percent prefer an industrial society, which was described as a society where manufacturing is the most important economic activity.
I think values regarding homosexuality is a very useful complement to Florida’s gay index. Florida claims that gays are over-represented in places with “talent and technology.” I claim that the relative justification of homosexuality and acceptance of gay neighbors are the two best indicators of national standard of living, absence of corruption, freedom of expression, and scientific output. And acceptance of gay neighbors (the justification question was not included in the questionnaire) is the single best predictor of the attractiveness of knowledge-based and creative occupations, the willingness to move to another city, and the importance attached to work content (relative to salary). It is also a very good predictor of other types of tolerance and postmaterialism, but these latter measures are not as good at predicting non-tolerance variables.
We can also say something about the geography of the future on the basis both of Florida’s Gay Index and my New Gay Index. According to Florida, the future belongs to cities like San Francisco, San Diego, Austin, and Boston. On the basis of nation-level data, it seems as if the future belongs to Scandinavia, Switzerland, the Netherlands and three English-speaking countries: Canada, Australia, and the UK. And on the basis of my microlevel data it seems to belong to college-educated women in creative occupations in large cities and college towns. The people of the past are working-class men in areas with high unemployment (but that’s not really a surprise, is it?)
Posted by David in Economics, Politics, The Social Sciences.
Tags: creative cities, Richard Florida
We have now received the titles (and abstracts) of 27 out of 28 chapters for the forthcoming Handbook of Creative Cities (Edward Elgar, 2011). I’m one of the editors of what I hope will become a standard reference and introduction to the field. The preliminary TOC looks like this:
Introduction: Creativity and Urban Development
David Emanuel Andersson (NSYSU) and Charlotta Mellander (JIBS): “Analyzing Creative Cities”
Åke E. Andersson (JIBS): “The Economics of Creative Cities”
Dean Keith Simonton (UC Davis): “Big-C Creativity in Socio-cultural Context”
Part II: The Creative Class and the City
Richard Florida (U Toronto), Charlotta Mellander (JIBS), and Patrick Adler (U Toronto): “The Creative Class Paradigm”
Jason Rentfrow (Oxford U): “The Open City”
Todd Gabe (U Maine): “The Value of Creativity”
Tara Vinodrai (U Waterloo) and Meric Gertler (U Toronto): “Better by Design? Understanding the Dynamics of Creative Cities in Canada”
Karen King (U Toronto): “Technology, Talent and Tolerance and Internal Migration: Migration Propensities of the Creative, Service, and Working Classes in Canada”
Alessandra Faggian (U Southampton) and Roberta Comunian (U Southampton): “Higher Education and the Creative City”
Michael Fritsch (U Jena): “The Evolution of the Creative Class in Urban Centers”
Part III: Creative City Networks
Christian Wichmann-Matthiessen (U Copenhagen), Annette Winkel Schwarz (DTU), and Soren Find (DTU): “Research Metropoles of the World: A Bibliometric Analysis of Cooperation Patterns”
Terry Clark (U Chicago) and Dan Silver (U Toronto): “Scenes, Innovation, and Urban Development”
Elizabeth Currid (USC) and Kevin Stolarick (U Toronto): “The Symbolic Differences between Los Angeles and New York as Global Cultural Capitals: A Study of Network Structures”
Charlie Karlsson (JIBS): “Clusters, Networks, and Creativity”
Martin Andersson (JIBS): “Firms in Creative Regions”
Carol Marie Kiriakos (Helsinki School of Economics): “Why Being There Matters: Finnish Professionals in Silicon Valley”
Part IV: Creative City Planning
David Emanuel Andersson (NSYSU): “Creative Cities and Urban Development: The Case for Decentralization”
Stefano Moroni (Milan Polytechnic U): “Land-use Regulation for the Creative City: The Fact of Complexity and the Liberal-Democratic Ideal”
Fred Foldvary (Santa Clara U): “Contract, Voice, and Rent: Voluntary Urban Planning”
Samuel Staley (Reason): “Planning for Freedom and Innovation in the Creative City”
Gus diZerega (FSSE) and David F. Hardwick (UBC): “The Emergence of Vancouver”
TBA
Part V: Creative Markets
Randall Holcombe (Florida SU): “Cultivating Creativity: Market Creation of Agglomeration Economies”
Virgil Henry Storr (GMU) and Arielle John (GMU): “The Sociability of Market Settlements”
Pierre Desrochers (U Toronto), Frederic Sautet (GMU), and Samuli Lippala (Turku School of Economics): “Resilient Local Economies: Reinforcing the Case for Economic Diversity”
Peter Gordon (USC) and Sanford Ikeda (SUNY Purchase): “Does density matter?”
Börje Johansson (JIBS) and Johan Klaesson (JIBS): “Creative Milieus in the Stockholm Region”
Philip Morrison (Victoria U Wellington): “Wellington: Distributional Implications of the Creative City”
I’m really looking forward to reading all the manuscripts!
Posted by David in Economics, Politics, The Social Sciences.
Tags: creative cities, Richard Florida
One of the more exciting things that I’m involved in at this time is the planning and editing of a new book, entitled “Handbook of Creative Cities.” It is to be published by Edward Elgar in 2011 (hardcover) and 2013 (paperback). My co-editors are Charlotta Mellander and Ake Andersson, both of the Department of Economics at Jonkoping International Business School. Charlotta Mellander is a frequent traveler to Toronto, where she is doing research within projects initiated by Richard Florida (in fact, she is used as an example of a “creative class” mother in Florida’s latest book; “Who’s Your City?”).
One of my aims as co-editor is to stimulate discussion about the roles of planning (both public and private) and markets in urban development, and how the balance may shift with the emergence of post-industrial society. To this end, we have invited contributors with different theoretical perspectives, with a possible clash of ideas, which I would find very exciting.
While I don’t want to divulge the identities of the contributors yet, suffice it to say that they are a diverse and creative lot, and they represent the following creative or not so creative cities as residents: Chicago, Copenhagen, Jena, Jonkoping, Kaohsiung, Kyoto, London, Los Angeles, Milan, New York, San Francisco, Stockholm, Toronto, Vancouver, Washington, and Wellington.
Posted by David in Economics, Politics, The Social Sciences.
Tags: Gay Index, Inglehart, Postmaterialism, Richard Florida, Tolerance Index, World Values Survey
Inglehart likes to argue that postmaterialist values are strongly associated with democracy (see my preceding blog entry). Inglehart further contends that postmaterialists – according to his four-item, eight-item, or twelve-item indices – will be increasing as a proportion of the population as long as there is sustained economic growth and peaceful external relations. This should reflect a stable cohort effect where values are established during childhood socialization processes.
While I agree with the thrust of Inglehart’s arguments and hypotheses, I think that the latest wave of the world values survey demonstrates that other measures are better at identifying cohort effects than any index of postmaterialism. For example, the percentage of American WVS respondents who identified strong defense forces as their top priority – one of the key materialism indicators – was 15.5% in 1990, 14.3% in 1995, 16.0% in 1999, but 29.0% in 2006. Meanwhile, “protecting freedom of speech” – a key postmaterialism indicator – was 22.6% in 1990, 21.2% in 1995, 25.4% in 1999, but then went down to 17.8% in 2006. This is not what we would expect from a stable cohort effect — instead I suspect that the perceived insecurity of adulthood rather than childhood explains the greater proportion of materialists in the United States in 2006 than during the 1990s.
However, Inglehart’s charts indicate that intolerance is as strongly associated with modernism as postmaterialism is with postmodernism. But tolerance seems less susceptible to external shocks such as terrorist attacks or preparations for war. For example, the percentage of Americans that would not like neighbors of another race than their own was 8.7% in 1990, 6.6% in 1995, 8.0% in 1999 and 4.1% in 2006. A similar downward trend is for the most part evident for the percentage wishing to avoid gay neighbors: 38.6% in 1990, 29.5% in 1995, 23.3% in 1999 and 26.0% in 2006. And I think the greater stability of the tolerance measures makes a lot of intuitive sense: why would an economic recession or a war make me less willing to have gay neighbors, assuming that I grew up in a non-homophobic environment? On the other hand, it is plausible that a recession would focus my attention on the prospects for economic growth and that a war would make me worry about the nation’s defense capabilities (admittedly the second scenario is not plausible in my case; I have always been an admirer of the defense policies of Costa Rica, the Norwegian territory of Svalbard and the autonomous Finnish island of Åland).
To back up my hypothesis, I have spent the last week estimating associations between tolerance and various measures of institutional performance that I believe are relevant for anyone with broadly democratic values: freedom of the press (Freedom House), political rights and civil liberties (Freedom House), corruption (Transparency International) and the Democracy Index of the Economist magazine. I also looked at a performance measure that appeals beyond committed liberals or democrats: the Human Development Index of the United Nations, which reflects per capita GDP, life expectancy, and literacy; to complete the picture I then looked at a favored measure among classical liberals: the Economic Freedom Index of the Fraser Institute. Finally, I combined all these indices into an aggregate index that should reflect combined performance in terms of civil liberties, democracy, rule of law, economic freedom, and material standard of living (I call it the Socio-economic Development Index, or SDI).
There is a very predictable pattern that is revealed when perusing all these indices: the best-performing ten countries are almost always the Nordic countries, the Netherlands, Switzerland, Canada, Australia, and New Zealand, closely followed by countries such as the US, the UK, Germany, Belgium, France, and Spain. The exception is the economic freedom index, where the top 10 consist of English-speaking countries, Switzerland, and two well-known Asian city states, closely followed by the Nordic countries with the notable exception of Sweden.
Anyway, the correlations between a special Tolerance Index (acceptance of other-race, immigrant, and gay neighbors and general acceptance of homosexuality, divorce, and prostitution) and the various performance measures turned out as follows, including all 83 countries that took part in the WVS at least once between 1995 and 2008 with the relevant questions included:
Socio-economic Development Index: .807
The Economist’s Democracy Index: .791
Corruption Perceptions Index: .727
Freedom of the Press Index: .704
Political Rights and Civil Liberties Index: .704
Human Development Index: .667
Economic Freedom Index: .564
Partial correlation analysis revealed that the effect of the Tolerance Index remained highly statistically significant after controlling for Inglehart’s Postmaterialist Liberty Aspirations Index (e.g. .596 as the partial Tolerance Index -SDI correlation), while the reverse was not true (only .165 between Inglehart’s index and the SDI when controlling for the Tolerance Index, which is insignificant at the one-tailed .05 level). The Tolerance Index also remains significant after controlling for per capita GDP (e.g. .486 between the Tolerance Index and the Democracy Index when controlling for per capita GDP in purchasing power parity dollars).
Another interesting result is that the two measures of tolerance toward gays were almost as strongly correlated with the various freedom and democracy measures as the Tolerance Index itself. For example, the simple correlation between acceptance of gay neighbors and the aggregate SDI index is .762, which is a remarkably close association.
Inglehart emphasizes that the evolution of values, economies, and political systems are interdependent, and that consequently there is neither a Weberian priority given to values as ultimate deteminants, nor a Marxian priority of economic relationships. I agree. But what I think this simple analysis shows is that tolerance is closely associated with freedom, democracy, the rule of law, and economic well-being. This is not a new insight, but I think that the relationship is much stronger than most people (including me) would have dared hope for.
I have to admit that I am not a value-neutral analyst in this case. I actually think that tolerance is the greatest of the social virtues. And it’s great to have a good evidential argument against social conservatives: whether your priority is freedom of speech, democracy, free markets, the rule of law, or economic development it follows that social tolerance is your friend, not your enemy. And the tolerance that matters most is sexual tolerance, closely followed by multicultural and racial tolerance. In other words, intolerant goals can probably only be attained at the cost of living in a less free, less democratic, more corrupt, more regulated, and less prosperous society.
This conclusion actually echoes Richard Florida’s arguments, whose main point has been that economically dynamic and culturally creative regions require tolerant values, as well as talented individuals and high technology. Florida is of course also famous for his “gay index,” which measures regional concentrations of gay residents rather than national attitutes toward gays or homosexuality. While I was originally a little skeptical (I thought that the notion of a “gay index” is more likely to be noticed than other indices, and is therefore an attractive self-promotion strategy), I now think that Florida is really onto something with his “3T” message. And this is all to the best.
Meanwhile, these indices and results can be used to offer location advice in a globalized world:
For tolerant free-market types: Switzerland
For tolerant welfare-state types: Sweden
For intolerant free-market types: Singapore
For intolerant welfare-state types: France (ok, intolerant by OECD standards only, not by global standards)
For homophobes: Jordan, Pakistan, and Bangladesh should all be ideal, although Iran is a close runner-up.
For tolerant people who don’t like snow: Spain
In case you are wondering, the top ten countries according to the tolerance index are Andorra, Sweden, the Netherlands, Switzerland, Spain, Iceland, Denmark, Australia, Germany, and New Zealand. The bottom ten (of 83 surveyed nations) are – beginning at the bottom of the list – Bangladesh, Jordan, Iran, Pakistan, Turkey, Indonesia, Georgia, Rwanda, Nigeria, and Morocco.
