Will Byrnes's Reviews > The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity

The Great Reset by Richard Florida
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's review
May 31, 2010

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bookshelves: non-fiction, economics
Read in April, 2010

Richard Florida covers a lot of turf here, arguing that systemic economic changes happen infrequently, but dramatically, changing not only the technology that supports us, but the geography in which we live our lives. Florida posits that because some natural level of innovation is suppressed by a lack of capital investment during dark economic times, it builds up and and bursts forth once things start to improve.

Florida posits a “Spatial Fix” element to resets, noting mostly the suburbanization of the 1950s, as part of a post WW II reset, but says that spatial fixes are only one element of a reset and that when they reach their limits, the cycle begins again. He argues that, geographically, the current or impending reset will involve the rise of megaregions. The Boston-New York-Washington, or BosWash megalopolis is the one most familiar to American readers, but there are many others, both globally and within the USA. Although they may not be knit together politically, they cohere economically, are the driving force behind most economic growth and will continue to surge as engines of future development.

One point Florida raises is our national focus on home ownership. He says that one effect of our high rates of such attachment is that it keeps many people from moving on when they are no longer viable in a particular locale. If people cannot sell their homes when they might want to move to a more lucrative career opportunity, such attachment serves as a brake on not just personal freedom, but innovation overall. He suggests we rethink the tax advantages we heap on home ownership, and increase the percentage of housing used as rental.

I take issue with a lot of what Florida uses as backup. He cites increasing productivity of labor during the 30s but makes no mention of the slave-wages workers were getting or the complete lack of job security. Of course productivity was rising, but the benefits were not going to the workers. Also, government was helping out business as Democrats were busy saving capitalism from its own excesses. No mention of that here.

Re New York and London as financial capitals, Florida sees them remaining where they are atop that pile for quite some time, based on the diverse economies that underlie them both. He cites Jane Jacobs liberally here, arguing for diversity as a key to urban vitality. Tokyo, for example, with only 1 percent of its workforce non-Japanese will never be able to offer the diversity of a place like New York. “It is somewhat ironic that in this era of supposedly frictionless communication and highly mobile talent, the local cultural and social life determines who gets the talent. Even though talent is mobile and can flow freely, the issue remains: where does it want to go? That’s why I’m betting that New York and London will remain the key global financial centers for the foreseeable future.” (p 60) He sees generational change as places like Detroit, heavily reliant on manufacturing and home to an increasing proportion of working class people, will, in the natural course of events, eventually depopulate considerably. They cannot sustain the populations they had when they were meccas of production. So what should the government do re directing aid? Should it try to prop up declining locations or direct aid to individuals, try to offer educational opportunity to the displaced and let them land where they may? He believes that large urban renewal projects and govt bailouts of industries are counter-productive. He urges investment in small entrepreneurship, and in developing arts and culture. He adds in developing high-speed rail as a way to link rust belt cities into hubs. Pointing to what he sees as increasing importance of “megaregions” in economic affairs, both nationally and globally. The high-speed Rail systems will help knit these regions together.

While I take issue with how Florida goes about supporting his notions, he has a lot to say that is very thought-provoking. I do wish he would have offered some nods toward the benefits of unionization as a means of helping real flattening of economic pyramids. But the needs of labor that is not in his creative sweet spot does not seem to stimulate much interest.

So, is a reset inevitable? What happens if there is not a reset? Should government encourage a reset? How to cope with the downside of reset? It is an interesting read. Not, perhaps, entirely convincing, but worth a look.

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