One groups wants to preserve the traditional way of living, with an extended family dwelling in little single-family homes. Another group wants to embrace progress, erecting soaring futuristic skyscrapers:
We’ve seen this dynamic play out over and over again, all over the world. What might surprise you is that in this case the progressive group that wants to build massive skyscrapers is a Native American tribe, while the people who wish to live according to the old ways are the European and Asian residents of Vancouver, Canada.
This reminds me of Connecticut, another state full of complacent westerners that wish to preserve things just the way they’ve always been. A few decades ago, a group of Native Americans saw a huge unmet need for gambling services, and erected some truly enormous facilities in the countryside of eastern Connecticut.
In Vancouver, the residents of the affected neighborhood are fighting the new development, but according to The Economist they will almost certainly lose. You can’t fight progress when someone else has sovereignty over the area in question:
It’s easier to elect a pope than to approve a small apartment building in the city of Vancouver,” says Ginger Gosnell-Myers, of Nisga’a and Kwakwak’awakw heritage, and formerly the city’s first-ever indigenous-relations manager. Such is the power of local NIMBYS that it is difficult to build new homes, and legions of young people are doomed to live with their parents for years, if not decades. But on some land the normal rules do not apply. No one can tell the Squamish First Nation, an indigenous group, what to build on their territory.
One patch of its reserve is in Kitsilano, a ritzy part of Vancouver. Despite being close to the city centre, it is full of single-family homes and duplexes. Residents fiercely resist the construction of tall buildings. But they cannot stop the Squamish from erecting 59-storey skyscrapers. This year could see the ground broken for Senakw—12 towers containing 6,000 flats, mostly for renting.
There is a serious point to all of this. Regulatory competition can be good. It might sound “efficient” to have a provincial, national or even supra-national organization set all the rules. But if they make the wrong call then people have no option to do things a different way. If you have many competing jurisdictions, then any attempt by one area to stand in the way of progress will simply push people toward nearby areas where enterprises are willing to respond to their needs:
In 2019 the city vowed to put up 20,000 new rental units. Senakw would meet roughly a quarter of that target, points out Ms Gosnell-Myers. “The Squamish Nation is more responsive to average Vancouverites than Vancouver city hall.”
READER COMMENTS
zeke5123
Apr 6 2021 at 5:55pm
Great post!
One thing I would add is that often it isn’t clear what the right policy is. But the brilliance of “regulatory competition” or federalism is that it minimizes the cost of errors.
Assume government policy is like roulette. You could have 50 entities each betting one chip on black or red. Alternatively, you could have 1 entity betting 50 chips on black or red.
If you of course knew ahead of time if black or red were to come up, then it likely is more “efficient” to have one bettor. But if you didn’t know (maybe had some educated guesses) then it could make sense to have 50 entities; especially if the game is dynamic and the losers could learn from the winners.
Scott Sumner
Apr 6 2021 at 6:58pm
You said:
“especially if the game is dynamic and the losers could learn from the winners.”
Exactly.
Floccina
Apr 7 2021 at 3:57pm
Reminds me of an idea I’ve been pushing lately: For the Federal Government to send all the money they would have spent on healthcare to the states and require that the state Government’s cover at least the elderly and poor. The money would be sent on an age adjusted per capita basis. The state Governments would be allowed to spend the money as they wish as long as they choose cover those over 65 years old and the poor, as Medicare and Medicaid do today
Arizona has much lower medical spending than do Massachusetts, New York and California so they might be able to cover everyone in the state without adding money or have money spend elsewhere. The states do most of the healthcare regulation and it looks to me like a lot of regulation increases spending. This would motivate the high spending states to regulate with more of an eye toward keep spending down.
Michael Rulle
Apr 8 2021 at 11:53am
It is either ironic, or “chickens coming home to roost”. But many tribes on reservations have taken advantage of their separate reservation status. They are similar to states —-except have more independence. Gambling is their most dominant example of independent power. It is great to see they have expanded into other areas—-such as real estate—-as you have described.
Forget the name of the tribe in Minnesota——but the are incredibly wealthy and very savvy. And they own properties outside the reservation and are diversified. Hard to believe, but I have read each of the 500 people who live on the reservation each get $1million a year. They also have a 99.5% unemployment rate. Unemployment!
Now that is a socialism I can live with!
Michael Rulle
Apr 8 2021 at 12:09pm
Further, your point that there is much we can learn from many of these examples is excellent. But the tribes have sovereign treaties. Perhaps, we should do the same with each state. Yes, it will never happen.
Not really saying it should. But we are moving in the opposite direction. More centralized power. I believe our political gestalt is such that it is as if all decisions result in zero-sum outcomes. If the benchmark of zero sum were within the framework of maximum growth (eg., the Whole grows at 10% and zero-sum is who gets what percent of the growth) that would be acceptable. But we literally think in terms of no growth zero sum. At least our politics acts that way.
It really is depressing, or distressing. Something is inherently wrong—-but I cannot begin to understand why we are what we are—-except perhaps it is all human nature. Fortunately, free markets have been the savior—-just not as good as it could be.
Gene
Apr 9 2021 at 11:08am
Generations of miseducation of the American public?
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